THE FACILITATED NETWORK: A RADICAL BUSINESS MODEL
Mike Todaro, AAPN, May 15, 2018
In the Oct 2013 HBR article “Consulting on the Cusp of Disruption”, they wrote: “We have come to the conclusion that the same forces that disrupted so many businesses, from steel to publishing, are starting to reshape the world of consulting. The implications for firms and their clients are significant”. They call one future business model they forecast the Facilitated Network which would be structured to: “…enable the exchange of products and services … (where) customers pay fees to the network, which in turn pays the service provider”.
More recently, in the Mar 2018 article A Powerful New-World Buzzword by Robin Lewis, he writes, “From this day forward, we are going to seek out radical thinkers who are making radical changes in their companies, or turning them in radical new directions”.
Let me share a ‘radical new direction’ where we may have just created a disruptive new business model – the ‘Facilitated Network’. To us at the Americas Apparel Producers’ Network (AAPN), the Harvard article mistakenly took the ‘network’ for granted. Building the net took work. Here’s how we did it and the ‘facilitation’ it eventually led to this year.
Our network started as a typical association. A group of local businessmen organized industrially to lower the cost of workers’ comp insurance. The AAPN started in South Georgia in 1981 as the American Apparel Contractors Association (AACA). By the time I joined AACA in January 1995, it had 350 dues-paying members, the majority being cut/sew contractors, plus a generous workers comp income. They were all Made in USA companies.
By Jan 1997, NAFTA had hit and membership shrank to 150 members. You talk about radical changes – the loss of workers comp and 200 members hit like a nuclear bomb. We had to think our way out of this and it started with technology.
In 1996, we created the first apparel industry organization website. Then we began selling websites to our largely rural members, providing them technical support they did not have locally. This replaced the lost dues revenue. In 1998, we decided to brand ourselves, giving up the words contractor and association for the more powerful words producers’ and network because, thanks to the internet, we WERE a network.
By the late 1990’s, we were becoming a major industry player. We were invited to industry events throughout Europe. We spoke at International Apparel Federation conferences. We organized panels at trade shows. We had articles published. We attended everything possible. Then the big shift that changed us forever came in 2001.
In 2001, we opened our membership to the Americas, focusing on Central America and the Caribbean initially. Why? Because a number of our ‘Made in USA’ members had major production sites in the region. We felt we should admit it and promote it.
That same year, we were the first industry organization to endorse the new trade show Material World in Miami, which replaced the Bobbin Show. Clearly, the ‘horse had left the barn’ for domestic apparel factories, first to the Maquilas, then NAFTA and then the CBTPA favoring Central America and the Caribbean.
In 2002, we created the Sourcing Executive Roundtable, hosting it the evening before Material World, and followed it with a major reception for members-only and their customers, the sourcing executives. This was the first time anyone had recognized sourcing as a career, a profession, a skill and they loved it.
By 2003, we had morphed from a factory-centric organization into a true supply chain network – all 30 links. We created the AAPN CAFTA SUMMIT conference in 2003 and held one for each of the next 5 years in Central America with up to 400 attending each event. We became the de facto industrial organization of the Americas.
By 2005, we were taking delegations of members worldwide including Hong Kong, Taiwan and China and eventually Haiti, Colombia, Germany and Sri Lanka. That’s when we realized the world was divided into two parts, China and not-China. In the land of not-China, we were the Americas’ network.
In 2012, we created the first ever AAPN ASIA/AMERICAS REPORT CARD, 31 questions, a score of 1 to 5 for Asia and for the Americas and an explanation why. The most experienced sourcing execs in the industry completed this survey. The results were so impactful we could not wait a year to present them so we created the late year AAPN Leadership forum.
In 2013, we took our own personal tour of 9 AAPN members in North and South Carolina. They were all fiber, yarn, fabric, finishing and trim producers. What we saw was amazing – investment, innovation and, at every stop, some secret insight into the most important projects.
In 2016 we created AAPN Regional Conferences. Why? Because the young staff of our member companies, the ones doing the work in small offices nationwide, did not get sent to our Annual Conferences. So we decided to take our content to them. The regionals were the brainchild of our President, Tony Anzovino of Haggar, who had developed an internal program to ‘raise the Apparel IQ’ of his own staff.
Finally, now we can show how this sequence leads to its unique and most amazing radical new direction, the AAPN Carolinas Mill Tour of April 9-13, 2018. Before I describe it, let’s review what we had learned in the 24 years Sue C. Strickland and I have spent together at AAPN:
- TRUST – we’ve held meetings of members, their suppliers, their customers, their competitors for decades. Our members know and trust one another. Their fingers are on the pulse of the industry. Together they chart the future.
- PEERS – sourcing execs had not met with one another. Most in our industry don’t meet one another. We found that meetings of people with the same job instills confidence, pride and the knowledge each is a professional with a career path.
- THE WORLD – seeing the scale in Asia, the pipelines in Europe, the integration in the Americas opened our eyes to our own best practices and we began to share them in our conferences.
- SHOW UP – seeing is believing. The saying “80% of success in life comes from just showing up” is so true. We’re in the people business and people want to see you in their operation. We began to think of new ways to travel together.
- THE CHAIN – meeting as a chain for decades has, over time, taught us ‘the story’ of this industry. Every industry has its own story. We are one of the few who knows Apparel’s complex story “from the dirt to the shirt”.
- SMALL GROUPS – small meetings of people have always made our major decisions – the CAFTA Summits; the changes to our agendas; the Report Card; the Regionals; The Carolinas Tour – each of these came from small meetings of smart people.
- BIG ACTIONS – the Report Card showed 31 comparisons of Asia to the Americas. In 2012, Asia had the lead in 21 of the 31. For our members, this was a call to action. One result, which will open this year, was the investment by 3 of our members in a $73 million synthetic yarn spinning mill in Honduras.
- APPAREL IQ – the Regionals showed us that the next generation is hungry for knowledge, eager to learn, excited to meet one another and desperate for a safe, supporting professional network.
- THE NETWORK – the net works. The links link. The chain supplies. And each link in the network has, in turn, its own complex fragile supply chain. Who do you know, anywhere in this industry, except for the two of us at AAPN, who have spent the last 24 years being consumed in the connecting of this network?
What all of this means is that the AAPN Carolinas Mill Tour was both the toughest to organize and the truest in impact of anything we could have ever done and only we could have done it. It was the idea of Ron Roach of Contempora Fabrics. He included 3 of his suppliers, Unifi, Parkdale and Carolina Cotton Works. He added a 5th producer, A&E Thread.
We convinced 9 brand and retail members to send 23 people to us for an entire week to tour these producers. Two of the brands were actually existing customers of Contempora. THIS was a week-long version of the Sourcing Executive Roundtable; of the delegations; of the Forums; of the regionals; of having the entire chain know and trust one another; of showing that the AAPN, as a brand and a network, was safe and good. THIS could not have been done by anyone else, or by us sooner.
As Sue C. Strickland wrote after the tour, “The Carolina Tour was probably the first time we’ve organized something that our members took charge of — we were just the organizers. We arrived at a member’s mill and got out of the way and the attendees loved it”. What she is saying is we were Facilitators.
And right there you have it – The Facilitated Network. Harvard forecast it but we actually did it. The easy part was being the Facilitator. The network? THAT took a quarter century of connecting the dots. Are we at a tipping point?
On Apr 29, 2018, Seth Godin wrote in his blog, The Moment of Maximum Leverage: “It’s the moment before it tips, that split second where a little effort can make a big difference. We wait for this …. for the day when participating will truly pay off. Maximum leverage is the result of commitment, of daily persistence, of gradual and insane and apparently useless effort over time. When it works, it merely looks like we had good timing”.
Credit all of this, then, to good timing.