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The age of sobriety

Dec 1, 2006 12:00 AM


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Gorelick's Management

Few owners and managers in the printing industry would want to relive the events that began in late 2000. Bottom lines might be improving, but day-to-day life isn’t any easier. The challenges of commoditization aren’t going away and are likely to be a permanent condition. New technology is increasingly difficult to understand and afford.

Print buyers have the upper hand in today’s marketplace. Industry trade associations publish reports about the decreasing number of printing establishments, but that fails to translate into decreased competitive pressure. Two constants—the continued business of long-time customers and the ability of the most productive salespeople to continue their high level of performance—have been turned on their head. Past performance no longer guarantees customer loyalty, and star salespeople frequently have difficulty maintaining their sales volume.

The only thing that is consistent: patently incorrect, even ludicrous, pronouncements emanating from so-called industry experts. It is said that in the graphic arts industry, anything said once is an opinion, anything uttered twice is a rumor and anything stated three times is a fact.

Forget following the pack
One “truth” has the distinction of having the longest life of any of these statements. It’s the contention, consistently challenged for 25 years by yours truly, that the midsize printer is threatened—some consultants, manufacturers, and trade association printers even refer to midsize printers as an “endangered species.”

This column was precipitated by the fact that we continue to hear this mantra about the imminent undoing of midsize graphic arts firms. Besides being a largely senseless prediction usually not rooted in fact, one must ask the reason(s) this imminent demise is in its 25th, 35th or 40th year. We recently saw figures indicating that midsize firms are actually growing as a percentage of all printing establishments.

The underlying assumption of these prognosticators is that midsize print companies are in a squeeze. They are called upon to invest their limited resources in leading edge&8212;even bleeding edge—technology in order to compete with larger, more efficient companies. The other assumption is that equipment is the sole competitive weapon. In a commoditized business environment, a strong buyer-seller relationship is characterized by a value proposition that has little to do with product or equipment. This logic also says that every printer would be well served if it developed a set of annual operating figures that resembled the “profit leaders.” Lemming-like corporate behavior is the incorrect course of action. To the contrary, companies need to develop individual strategies that are meaningful, credibly differentiated from competitors.

The truth is out there
Look around. Don’t confine your observations to our industry. There is genius, there is mediocrity and there is lunacy in equal proportions in companies of all sizes. Sheer size and outstanding resources do not result in effective management. Look at airlines.

Look at the print consolidators. Not too long ago, small and midsize companies feared the juggernaut of these “roll-up” companies. Many of these consolidators are long gone. A handful have done very well. Size and equipment have not been the primary determinant of success. It has been the ability of management to create unique perceived benefits to customers. It is the undifferentiated graphic arts company of any size that is endangered, not the company that lacks the resources to buy the latest equipment. In fact, the opposite argument can be made. Looking at auction notices of companies that have gone out of business, I frequently see the latest, greatest equipment. Bankruptcy typically has more to do with the customer base than with the absence of the latest technology.

Individual companies need to rise above industry gurus who seldom let a platitude die, even when it makes little sense. Resources need to be devoted to ongoing research into customer perceptions, needs and attitudes. That requires a portion of the capital needed to buy equipment. It largely involves will rather than cash.

In the meantime, brace yourself for the endless stream of platitudes, none substantiated by evidence:

  • Every ton of recycled paper saves sixteen trees.
  • Print demand also peaks in Olympic and presidential election years.
  • The midsize printing company is endangered.
  • Traditional offset printing will die.

Dick Gorelick is president of Gorelick & Associates and the Graphic Arts Sales Foundation. He can be reached at info@gorelickandassociates.com.
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