Real Life “Dunder Mifflin” Thrived in Declining Industry for Decades – Here is Their Secret
In today’s newsletter:
- Real Life “Dunder Mifflin” Thrived in Declining Industry for Decades – Here is Their Secret
- The Bear and the Bull, Social Media, and Alabama Embryos
- Talking to Strangers – How to Make Better Hiring Decisions
NBC’s hit sitcom “The Office” uses a mid-size paper and office supply company as a thinly-veiled prop for comedy – and whether you loved the show or hated it, it was hard to deny that the idea was funny.
Who needs a middleman, regional office supply company in the age of the internet, discount big box stores, and an increasingly paperless corporate America? How much does “personal touch” and “quality of service” really matter when you’re buying paperclips?
In the show, it’s taken for granted that the company is in an inevitable decline, because the industry is dying, edged out by shifting technology and huge conglomerates with economies of scale and vertical integration that just can’t be beaten. This is essentially what happened in real life, too, for hundreds of regional office supply companies around the country. They couldn’t compete, they became irrelevant, and they ceased to exist.
But one real-life company in Chattanooga, Tennessee is still standing, and it’s worth 8 figures.
Here’s how they did it.
Not on My Watch
When Henry “Skip” Ireland’s father died in 1983, he didn’t feel like he was ready to take over the family business. Skip was only 27, and his brothers were 23 and 21 respectively. But Chattanooga Office Supply had been in the family for over 40 years by that time, and they decided that no matter the odds, they wouldn’t let it go down while it was their turn to steward it.
The business had been largely propped up by their father, who was a singular salesman with deep relationships and a winning work ethic. He had brought in and maintained about 80% of their revenue at the time of his passing, and with his passing, the company was quickly in crisis.
Nevertheless, they pulled together, learned as they went, and managed to hang onto most of their clientele. The experience would serve them well, because not long after, the industry as a whole was threatened. The family business was in crisis again.
“Staples and Office Depot were on the horizon,” Skip says. “They had huge economies of scale and could afford to be very aggressive with discounts that would eventually drive many local competitors out of business.”
In an industry where the products are largely seen as commodities, it is difficult to differentiate oneself. Price and convenience are usually the only drivers of business – and it was in these two metrics that the big box stores were eating everybody’s lunch.
“They had prices we couldn’t match,” Skip explains, “and a massive team on the ground, as well as integrated shipping and distribution systems. We couldn’t compete with that. We were barely clearing $1 million per year.”
Most other small and medium-sized office supply companies were either bought out (if they were lucky), run out, or they just gave up. But three things made Skip and Chattanooga Office Supply different from the rest.
Chasing Innovation
Skip knew that his company was going to need every edge they could scrape up, so he made himself into a fanatical follower of technological development, attending conferences, sitting on industry boards, and constantly investing in new technologies to see that they would always be in early on the next big thing.
Speed counts in business.
“We were pioneers in the computer revolution,” Skip says with pride, “adopting sophisticated technology much sooner than our competitors, in order to stay ahead. It was hard, but it paid huge dividends.”
“In the early 80s,” he continues, “hardly any businesses even had a computer. We were one of the first office supply companies to embrace technology as a competitive strategy, and we put a lot of work into making our website state of the art, long before that sort of thing was common. We established a strong foothold in online sales that allowed us to compete with the big box stores in that space, because no one knows how big your company is when you’re online. We looked legitimate, we had a ‘3 clicks to an order’ policy, and our products arrived in a timely manner, usually the next business day. The computer revolution drove a lot of my contemporaries out of business, but for us, it was a gift.”
This was not a one-off lucky break, either. For decades, Skip and his team obsessively followed emerging technology – even commissioning breakthrough tech solutions. C.O.S. couldn’t compete with Staples because of their size, but technology was the great equalizer.
But, Skip is quick to point out, technology is only an equalizer for those who embrace change when it comes.
“How’s the VCR repair business these days?” he asks with a smirk. “We laugh at [that] example today, but in the past, you could make good money… Change is good if you can stay on top of it.”
Vertical Marketing Specialization
Most businesspeople have heard of “niching down,” and focusing your target market to a more specific segment of the population. That’s all well and good, but C.O.S. took it one step further. They understood the inner workings of their clients’ businesses almost as well as the clients themselves, and they were choosy about what kind of companies to target.
“We would spend months targeting every single CPA firm in Chattanooga. As a result, we became excellent at understanding the needs of an accounting firm. We could suggest fixes to their pain points, and anticipate their needs. We became a vertical market specialist before that was even a widely-understood concept.”
In other words, they spent a lot of time and analysis figuring out which kind of customers they wanted to target, and then, economically speaking, they declared war. They didn’t want one accounting firm – they wanted all of the accounting firms. The more they focused, the better they were at winning in the margins and coming up with specialized products to fit their target customer’s needs. One success led to another.
On one occasion, Skip started noticing that all of these accounting firms he and his team were meeting with liked to gripe about ordering office supplies, generally. Skip dug around for information, really seeking to understand, and he came up with an interesting insight – the way office supply companies typically invoiced for their services created a tremendous amount of unnecessary work for an accounting company. (Accountants, as you can imagine, are particular about logging and categorizing their expenditures.) Because so many different products were involved, most office supply companies, if they noticed the problem at all, didn’t bother trying to fix it. Not their problem. But skip reached out to one of his software vendors, and worked with him to develop a program that allowed them to solve the issue entirely, delivering clean, easy invoices that suited the accountants’ preferences.
“You’d have thought I had reinvented the wheel,” Skip says, of when he would present his solution to CPA firms. “They were blown away, and ultimately the finance people at these firms lobbied their superiors on our behalf… The fact that other firms could offer lower prices on envelopes was suddenly irrelevant.”
After they’d won the battle for the accounting firms, they picked another niche and mastered it. In their case, it was lawyers and legal offices. They were able to become vertical marketing specialists in three or four industries, carving out market share in a business climate that should have made it impossible for them to do so.
Flexibility
The last reason Chattanooga Office Supply is still alive and well today is very simple – though certainly not easy.
“We had a willingness to constantly reinvent ourselves,” Skip explains. “We asked ourselves, ‘What is Staples unwilling to do for a customer?’ And when we knew the answer, we said, ‘We’ll do that.’ Then, we got more daring and asked, ‘What is Staples unable to do for a customer?’ Once we’d identified their weaknesses, we decided that was where we would strike.”
For C.O.S., that meant, at various times, expanding into office furniture sales, offering technical support, focusing on technology-supporting products, selling sanitizing and janitorial products during COVID (a product line they continue to sell, with good success), and always offering customized solutions.
It’s a difficult way of doing business, both practically and mentally, always thinking, striving, and looking around the corner. But for Skip and C.O.S., it paid off in a big way.
Today, the world has undergone more change, and the giants like Staples and Office Depot are starting to falter. Chattanooga Office Supply (now C.O.S. Business Products and Interiors), amazingly, continues on at a brisk pace, living off of the hard-fought marketshare that they sacrificed to obtain, and they guard it vigilantly.
Michael Scott wasn’t much of a businessman in “The Office.” If Dunder Mifflan had been led by Skip Hudson, however, they’d still be going strong today.
Lessons for Christian Leaders
Skip’s story isn’t one of divine revelation, a thundering voice from the clouds, or a mountaintop experience. It’s a testament to the challenges of life and the rewards that come long term from living in humility, diligence, and faithful stewardship. Skip’s integrity served him well over the years, because he was able to win the trust of his vendors and clients – and his humility served him well because he wasn’t afraid to admit a mistake and make it right.
Sometimes, as we pray for our businesses and seek success, we want it to be immediate, or at least very short term, and it can feel like a defeat if the process is grinding and difficult. What Skip’s story shows us is that, even in the face of tremendous adversity, we can come out on top if we follow timeless principles and don’t get too distracted by short-term considerations.
Certainly, the scripture is about more than business, and the end goal of the prophet Micah’s instructions is not for us to make more money – but the way this company succeeded sounds to me like adhering to the simple, fundamental principles of “Do justly, love mercy, and walk humbly with your God.”
You can check out Skip’s book, Not on My Watch, here.
INDUSTRY INSIGHTS
The Bear and the Bull, Social Media, and Alabama Embryos
The Bear and the Bull
Jan Hatzius, chief economist for Goldman Sachs, isn’t always a bull on the market, but he is one currently. Having developed a following after correctly predicting a severe recession leading up to 2008, Hatzius remains firmly in the “soft landing” camp, calling a 2.3% GDP growth, unemployment below 4%, and only a 15% chance of recession. His predictions, however, make some nervous as the January inflation report was hotter than expected, and one of his recent reports was actually titled “This cycle is different,” a sort of “famous last words” phrase on Wall Street. The bears, on the other hand, such as Jeremy Grantham, continue to call a recession.
This is, in large part, because of the prescient indicator called the “Leading Economic Index,” which reliably predicts a coming recession when it falls. The index has fallen for 23 consecutive months. Strangely, however, the Conference Board (the organization that puts together the LEI) has just dropped its longstanding recession call despite the indication of the LEI as a whole. Some argue the timely arrival of viable AI technology is growing the economy enough to avoid a deep slump. Maybe this cycle really is different, but only time will tell.
Social Media
According to recent survey data, YouTube is the most widely used social media platform in the United States, with fully 83% of U.S. adults saying they use the site. Facebook isn’t too far behind, at 68%, but its growth in the U.S. has been stagnant for the last eight years or so and recently has even declined slightly. TikTok, while still used by just 33% of U.S. adults, is growing rapidly – faster than its competitors – and only half of TikTok users have ever posted on their profile. Most are just there to watch. Instagram claims about 47% of U.S. adults, though their user base is more heavily skewed by generation than other apps, with 78% of 18 to 29-year-olds reporting that they use the app. Social media is where the eyeballs are, so digital marketers naturally capitalize on the opportunity. Ads on these apps are effective despite users reporting some advertising fatigue.
Alabama Embryos
The fertility industry has been thrown into a panic after a decision by the Alabama Supreme Court ruling that unborn children are children. In response, at least 3 Alabama clinics have paused IVF treatments already as they worry that the storage – and sometimes destruction – of fertilized embryos in the IVF process could expose them to legal trouble. Despite their concerns, Alabama Attorney General Steve Marshall has said that he does not intend to use the ruling to bring charges against IVF families or providers. Both parties in the state legislature are in the process of drafting new legislation that would stipulate that frozen embryos are not to be considered children under the state constitution – though that could theoretically be struck down by the court. In the wake of the decision, Christians debate the complexities that the ruling brings up. Leaders such as Albert Mohler have spoken out against some IVF practices as immoral, specifically when excess fertilized embryos are purposely created and then destroyed if they are not wanted. Wayne Grudem of The Gospel Coalition has previously published an article describing how IVF could be moral if steps were taken to ensure the protection of all created life. The Catholic Church, on the other hand, is against IVF altogether. The global fertility industry produces over $22 billion every year and is on track to grow precipitously.
Sunday School
Q. When Jesus miraculously fed the crowd, did He feed 5,000 or 4,000?
A. Both, on separate occasions. There is deep symbolism in the numbers and in the fact that Jesus fed the 5,000 on the Jewish side of the sea and the 4,000 on the Gentile side, signifying that He is enough for both Jew and Gentile. See here for a deeper explanation.
“You went to Harvard, hold the world record for the 100-meter dash, and invented the cotton gin?! You, sir, have yourself a job!”
TIPS & TRICKS
Talking to Strangers – How to Make Better Hiring Decisions
In Malcolm Gladwell’s book Talking to Strangers, he chronicles a humbling truth about human beings:
We think we are good at sizing people up during short interactions, but the data says we aren’t.
In fact, we’re awful at it.
This shouldn’t be a surprise to Christians. After all, our own scriptures warn us that the heart is difficult to understand (Jer. 17:9). In the Parable of the Wheat and Tares, we’re taught that the righteous and the wicked often look the same on the outside for a while, and it’s not clear who is who until it’s time to see the fruit (Matt. 13:24-43).
Judging the heart of a person is a tricky proposition, even in less spiritual, more practical circumstances like a job interview, a courtroom, or an interrogation.
Even police officers, judges, and diplomats struggle to correctly sense when people are lying or misrepresenting themselves, and often, we mistakenly peg a good person for a bad one if they happen to be a little quirky.
Why does this matter to us? Because, generally speaking, every time we hire someone, we are essentially judging a stranger. We want to know if they will be honest, trustworthy, hardworking, and creative. A good hire can be a tremendous boost to a small business. A bad hire can be devastating – and expensive.
So, how can we ensure that we are judging people correctly as they sit in the interview chair? How can we improve our odds of making sound hiring decisions?
Quantify the Process
We tend to focus on the wrong things when evaluating a stranger. We might trust someone of the same ethnicity as ourselves more than others, even unconsciously, or we might be more likely to hire a physically attractive person. Those things tend to be subconscious biases that don’t help the business, and as Christian leaders, we ought to be on guard against that sort of thing anyway. “Man looks on the outer appearance, but the Lord looks on the heart” (1 Sam. 16:7).
On the other hand, we want to see that a job candidate has a winning personality because he or she will be interacting with clients or will have an effect on office morale – and those things are legitimate. The problem is, as one commentator once put it, you aren’t speaking to the real person when you interview someone for a job. You are speaking to their “representative.” You’re speaking to the version of themselves that wants to land a good gig, and often, that winning personality degrades quickly, as it was never a genuine depiction of how that person is.
In order to avoid some of these pitfalls, it is important to quantify the process. As Gladwell demonstrates in his book, meeting a stranger face to face can often be detrimental to our decisions about them (looking at the outer appearance). When we focus on the facts and the data, we tend to make better, more informed, less biased decisions. So, make a list of qualities, expertise, and values that you need to see in the ideal candidate, and rate candidates according to their resume, C.V., and references before you get them in the room. An in-person impression should be given less weight than someone’s past performance, references, and skills.
Trust but Verify
One of the reasons we often make bad calls about strangers is something called the Truth Default Theory (TDT), which says that we generally assume others to be telling the truth, and we will explain away red flags unless there are so many red flags that we can no longer just brush them aside. The problem is those one or two red flags that we can explain away often would have saved us from making a bad decision had we investigated those red flags seriously.
We cannot afford to be cynical and trust no one. After all, business operates at “the speed of trust.” But what we can do, especially in a hiring situation, is make a protocol for investigating a few key aspects of a candidate’s application. We tend to just accept that a candidate really did go to school where their resume says, for example. But if someone lies about going to college or a particularly prestigious university, that could be an indicator of larger deception. So, pick one or two verifiable claims on the resume and make a couple of phone calls.
A Different Process
At the end of the day, the best way to avoid making bad calls about strangers is to not let them be strangers at all. That doesn’t mean that three interviews will make them less of a stranger than two interviews – but if you can have an opportunity to actually work with the candidate in a limited trial capacity, that can be of tremendous value. Don’t be in a rush to hire; gather input from others, and when possible, hire based on referrals and headhunting.
If you have not looked into specific methodology in hiring practices, learn about Core Behavioral Competencies and David McClelland’s work for some guidance on what attributes really are most important in a high-achieving worker. And at the end of the day, never assume that your gut feeling about someone you’ve just met is a reliable indicator of their character.
It isn’t.
Quick Hits
- Hillsong founder Brian Houston suggests his X account may have been hacked after an embarrassing tweet. The Sent To Win team isn’t buying it.
- In response to mounting pressure, some major U.S. companies are quietly backing away from association with ESG and DEI.
- In response to the release of Open AI’s text-to-video application, Tyler Perry has paused his $800 million studio expansion project in Atlanta.
- The Christian prayer app “Hallow” now occupies the #1 spot in Apple’s app store.
Guess the Prompt
Our “Dunder Mifflin” graphic was generated using AI prompts. Guess the prompt for your chance to win Sent To Win gear. Just reply to this email with your best guess.
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