Is Risk Averse Risky?

I had a long talk today with Miles Free of the Precision Machined Products Association (PMPA). Miles has heavy experience in understanding the technical problems machining companies have in the hostile world of perfect competition which relentlessly drives prices down for even the most proficient contract shops.

Quality and delivery are just the price of admission to the poker game of job shop survival.

In Miles’ view, the blood sport of contract machining makes the participants risk averse to a fault in venturing out of their area of expertise—making parts. The bidding process they live in everyday is unforgiving of even the smallest goof-up.

A missed tolerance, a botched UPS shipment, shoddy material and a dozen other possible missteps can kill a job and sabotage a relationship.

With this view of the business world it is completely understandable that metalworking folk do not want to try crazy new ideas or develop their own products. The world they live in is endlessly demanding, but at least it is the devil they know.

The sad fact is that with global competition and free flowing machining expertise it is an excruciatingly hard time to make money in contract work.

Everyday I observe brilliant metalworking technicians with millions of dollars invested, struggling to survive, and I wonder why they don’t spend more time and effort on products and brands.

To me, the biggest lesson from this awful recession is that most businesses need a distinctive presence in the marketplace to get some relief from the bludgeoning of one on one price competition.

Question: If you came up with a brilliant idea for a new product, would you have the guts to try to bring it to market?

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