Checklists Support Quality Timber Investment Decisions

Each year, when we teach our process for tracking and analyzing timber prices, wood demand and forest supplies at Forisk’s “Timber Market Analysis” class, we highlight the use of checklists for organizing projects, working with data and conducting information interviews. Checklists protect us from “boiling the ocean” – analyzing everything – in evaluating opportunities or new markets. In forestry, this is especially the case with first-time investors in the industry. Rather, we need structure to focus resources based on clear criteria and available resources.

How Important are Checklists?

Checklists can literally save lives. For example, Joseph Schmitt, a spacesuit technician who supported NASA operations during the early years of orbiting the Earth and landing on the moon, worked a life-preserving list for items such as air-leaks, communication lines and the security of over-gloves and helmets. Astronauts trusted their lives to the work of people like Mr. Schmitt, and he relied heavily on the use of checklists to focus resources, manage quality and minimize risk. As with any pilot working a pre-flight list and surgeons such as Atul Gawande (who wrote the bestseller The Checklist Manifesto), checklists saved lives.

Beyond space exploration, checklists also support quality work for less life-dependent activities like real estate closings, kitchen recipes and the analysis of timber markets and wood baskets. Our team has published presentations, articles and white papers on the analysis of timber markets for over fifteen years.

A successful timber market analysis answers the question “what matters, and what does not, in this timber or wood raw material market?” While we care about forest inventories and supplies, wood demand and competition, and stumpage prices and forecasts, we do this systematically against a proven process where we identify if we need more materials or how will it be transported. To do this we do a checklist to identify the key variables that let us:

• Understand historic relationships between prices and flows;
• Assess future impacts as changes occur; and
• Make investment decisions based on relationships as we interpret them.

From there, we can make clearheaded decisions that best meet our timberland investment objectives.