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.

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