Keynoter Rasey: Shift happens, so shift with it

Feb. 18, 2011

Shawn Rasey is no stranger to giving the keynote speech at the Tire Industry Association’s Off-The-Road Tire Conference.

In 2007, he was the keynoter at the conference in San Diego, Calif. This year, he gave the keynote address at the 56th annual event, held in Miami, Florida.

“Just think for a moment about how much change our industry has experienced in just four short years!” said Rasey, president of the Bridgestone Americas Off Road Tires division of Bridgestone Americas Inc., to attendees on Feb. 18, 2011. “It seems everything is changing and shifting faster than ever.

“One thing is for sure,” he said. “More changes and shifts are coming, and they'll likely keep all of us a little edgy and ill at ease from time to time.”

Rasey said the key is accepting and even embracing change. Harvey Firestone, Henry Ford, Thomas Edison and Apple Inc. co-founder Steve Jobs “didn’t just wait for things to happen to them, nor just (sought) ways to expand existing markets. Their vision was bigger. They decided to create markets that had never existed!”

Here is an abridged copy of Rasey’s speech.

2010 challenges

“Let’s picture in our minds for a moment just some of the forces that continued to change and challenge the off-road tire industry this past year:

* the continuation of rapid industrialization and growth of the BRIC countries -- Brazil, Russia, India and China;

* continued exponential growth of the Internet, creating a flatter and faster world than most of us might have ever imagined;

* a global mining and petroleum boom -- as the industrialized nations of the world compete for raw materials, food and the intellectual capital to drive their economies ahead’

* continued and unprecedented skyrocketing raw material and operating costs.

“Personally, I’ve never seen anything like it… as I speak to you this morning, the price of natural rubber has risen 92% in just one year. In fact, the price of natural rubber is up almost 250% from November 2009!"

Mining industry

“You know, the mining market has truly been a phenomenon. For many years, it was highly diverse. This diversity contributed greatly to wide swings between supply and demand.

“However, that is changing quickly. More recently, mining has shifted from a diverse base to rapid consolidation, and far more specialization, creating much better control and integration between supply and demand.

“I see steady and consistent growth in mining overall in the future. And I see far greater globalization in mining and far fewer mining customers than ever before as mining consolidations continue.

“Petroleum prices are once again pushing skyward at an alarming rate. And with the growing unrest in the Middle East, who knows where the price per barrel of crude might go?

“Fasten your seat belts and get out your wallets, folks, as the price of oil continues to climb!

“Business operating costs continue to spiral out of control especially by healthcare insurance, putting many bottom lines on life-support. Unfortunately, I see no relief in sight.

“Capital markets… aren’t capitalizing. Yet small business is the very engine of our growth, and the very lifeblood it relies on -- whether you call it “line of credit,” “cash flow” or both -- is becoming increasingly harder to find.

“We have stimulus bills that aren’t stimulating. (We have) the continuation of two wars, with the prospects of even more conflict in a rapidly changing and unstable world.

“And when you add all that up and throw in the raw material issues we’re facing, well, my guess is there’s a lot of us here that are packing Advil, Alka-Seltzer and a speed dial on their Blackberry to a local psychic!"

2011 opportunities

“(Just) like 2010, 2011 looks like it’s going to be another year full of challenges -- but perhaps opportunities, too!

“So, what the heck is going on in the off-road tire industry? What’s driving it? And, where could it all be headed in the future?

“Let’s take a look at just a few of the forces changing our business models, challenging our intellects, and, I believe, that might provide more opportunity than ever before to grow our businesses and our industry.

“Just so no one misunderstands, I’m really not talking about ‘dark forces’ as in the “Star Wars” variety, but rather what I’ll call forces of disruptive innovation.’

“Disruptive innovation is the process by which a product or service takes root initially in simple applications at the bottom of a market, and then relentlessly moves ‘up market,’ eventually displacing established competitors. Think Facebook or the Flip HD video camera.

“Disruptive innovations are occurring in the off-road tire industry, too. These forces of disruptive innovation will likely change many of the products we manufacture, changing with the very markets we serve, and the ways we serve them.

“These disruptive forces are not necessarily a bad thing either, but rather a natural evolution of human ideas, ingenuity and progress, driven by startling world population growth, dwindling material and energy resources, emerging global environmental concerns, the continued explosive growth of the internet, and the race between countries, companies and people across the earth to compete within it all.

“And so, one of the first key ideas I’d like to offer this morning is this: Change happens. Shift happens. All of us must decide whether we’ll be players or spectators.

“We’re either going to be part of the innovative disruptions that take our industry to the next level, or subject to it. Either way, these disruptions will continue, and shift will happen.

“So, what innovative disruptions can those of us here create that make shift happen for us, rather than to us? What new innovative disruptions and markets that have never existed in the off-road tire industry will we create?

“I suggest to you that if countless people in other industries can do it, so can we!

“Here's just a few of the things (in our industry) that weren’t even here 10-years ago: significant growth in the oil sands of Canada; a 63-inch tire; a haul truck capable of carrying 400 tons; a front end loader capable of moving 53.5 cubic yards in a single bucket; GPS mine production software; in-service/out-of-service mining equipment analytic software; Homeland Security port management.

“I haven’t even scratched the surface of all this. Just in mining alone, mine operators are increasingly adopting larger equipment to lower operating costs and improve productivity, creating ‘innovative disruptions’ and driving all new classes of ultra-large machinery, and ‘ultra-class’ sized tires.”

Rasey went on to tell attendees that machines are getting larger, more specialized or both. As the demand for more specialized machines increases, “all of us must become more specialized than generalized if we’re going to grow along side these evolving segments.”

“This innovative disruption in machine evolution will require us to shift quickly, from being all things to sell many to being far more ‘solutions driven performance consultants.’ We’ll need new and specialized capabilities to apply our products, technologies, people and services in more meaningful ways to every customer.”

He said competing in the OTR market will require “a mega leap” in design technology, manufacturing expertise, performance analytics and service modeling.

“None of us who manufacture off-road tires; especially the largest ones, can afford to guess what our customers will want or will buy in the future. It’s never been more critical for all of us to get closer to the customer.”

The four-day OTR Tire Conference will run through Saturday, Feb. 19.