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MEMBERSHIP HAS ITS PRIVILEGES

Oct 1, 1999 12:00 AM


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Deep down, some graphic arts execs understood what happened to Jean Van de Velde. The French golfer blew a three-stroke lead on the final hole of the British Open. Not only did he blow it, he slapped the ball around in spectacular Sunday-duffer fashion, taking a scenic seven-strokes to complete what is supposed to be a 487-yard-par-four. Not only did the Carnoustie collapse occur in front of thousands of spectators, it provided unanticipated hilarity for whole continents of television viewers flipping around during Baywatch commercial breaks. But graphic arts managers felt pangs of sympathy--after all, there are no mulligans in the executive suite, either.

Just as a golfer must contend with nerves, water hazards, deep rough and sand traps--printing firms execs are bedeviled by an unending stream of challenges. How is your financial performance? What about cash flow? Have you set realistic personal and professional goals? What services should you add? Do you have succession issues? What equipment should you buy? What should you know before expanding your current facility or moving?

A golfer confers with his or her caddie--a printing company top exec can seek the counsel of the management team. But ultimately, the chief must draw the club back and let fly. And, as Julius Boros admonishes, it's drive for show, putt for dough--your long and short game has to be consistent.

Given the unrelenting pressure of running a company, how do execs avoid succumbing to a massive case of the yips? If Tom Kite is struggling on the course, he frequently will ask fellow professionals on the practice range for advice. Some pros take private lessons with a teaching pro or swing doctor. Similarly, printing execs turn to fellow executives for counsel as well as moral support. Unlike Kite, however, most are wary of sharing concerns (or tips) with a competitor. For some, peer groups provide a confidential forum for discussing business issues.

What is a peer group? "Improving profits may not be the sole goal of the group, but it must be the primary goal," observes John Stewart, president, Q.P. Consulting, Inc. (Melbourne, FL). "First and foremost, a performance group consists of owners who gather on a semi-regular basis to improve individually and collectively the profits of its members."

The Printing Industries of America (PIA) describes its peer groups as "small permanent networking groups. . . for printing executives who meet periodically for the purpose of exchanging ideas, problems and solutions."

Why join a peer group? Success breeds success. The National Assn. for Printing Leadership (NAPL) Print Economic Research Center reports peer group membership is a common trait among the fastest-growing and most profitable printers.

Bill Treadaway is the executive director and secretary treasurer of Print America, a peer group of $10 million+ noncompeting printers located throughout the U.S. "Our motto is 'participation and sharing,' " says the director. "The group gets together to share successes and participate in buying programs. Members are very free in exchanging information because they aren't sitting across the table from competitors. It's a close-knit group." Print America currently has 10 members "from Boston to Sacramento," according to Treadaway. How do peer groups impact members' success? Some participants cite the candid discussions. While nobody at the home office is going to tell the Big Boss his or her financial projections are way off, peer group members can and do challenge each other.

Also, since a key feature of most peer groups is reviewing companies' financial performance, peers hold each other accountable for meeting stated goals. One printer describes it as "having my own board of directors."

Jim Shultz, president and CEO of Great Lakes Lithograph Co. (Cleveland, OH), is a member of the Peer Group, a group whose members have an average of $12 million to $14 million in yearly sales. The exec values getting an outsider's perspective--advice on new equipment purchases, for example, as well as suggestions for improving the appearance and operation of his plant.

How do peer groups form? According to NAPL, peer groups are formed "primarily through contacts made by participating in print industry trade associations, which includes such activities as attending conferences and programs and joining board of directors."

While the trade associations don't manage their members' peer groups, they offer some basic guidelines and can refer prospective members to groups. NAPL members currently comprise three peer groups, while PIA has 13 active Printing Executive Network (PEN) groups. Each group consists of 10 to 12 non-competing printing company presidents, vice presidents or key executives. The groups are similar in size, sales volume, process and product, and each draws members from across the U.S. and Canada.

"It's very important that the members be owners or top-level executives," notes Robin Schabacker, director of management consulting at the NAPL. "Some of the groups may have concurrent meetings of their financial people or vice president of sales, but for the main group, it should be the CEO or president." Otherwise, explains Schabacker, the group will have disparate priorities--a production manager might keep raising press performance issues while a CEO would prefer to discuss company financials.

How do you join? Most of the groups are small to permit in-depth discussions of each participant's business. If the group is seeking members and you meet its criteria, you will probably be invited to sit in on a meeting. Prospective members are then evaluated on a professional and personal level.

On a professional level, potential group members have to be competent managers at companies with similar annual revenues. If a member lacks basic management skills, the group will spend more time giving remedial advice to one person rather than serving the needs of the group as a whole. For the same reason, if one group member's annual revenue's are significantly smaller than the majority's, the other members may feel they are giving more advice than they are getting.

On a personal level, group members have to feel comfortable confiding in each other. "Members have to like each other and be willing to be completely open about their business and personal life," says Joe Becker, a CPA and a PIA Solutions OnSite consultant who helped organize a peer group of printers in the $15 million+ range about four years ago. "They're all entrepreneurs and many are family-run businesses. They have to feel free to say anything."

Becker also advocates having the CEO--rather than production or sales personnel--attend. "These guys don't care how fast a printing press runs," explains the consultant. "It's not one of their big issues."

If you can't find a compatible existing group, you can always emulate David Wilson, president of Ventura Printing (Ventura, CA), and take the do-it-yourself route. "I had heard of the peer group concept several years ago through the Printing Industries Assn. of Southern California (PIASC)," Wilson explains. "PIA had a list of people who were interested in forming a peer group. There were a lot of interested parties, but nobody was taking steps to create one in our size range, which at the time was $3 million to $5 million. So I got the list and started calling around."

How often are meetings held? Groups typically meet three to four times a year, with members taking turns hosting meetings at their plants. Most meetings are conducted from Friday afternoon to Sunday morning. The agenda includes a plant tour/critique, an all-day business meeting and a brief concluding session. Wilson's group currently has six members and conducts three yearly meetings. On Friday, members tour the host's plant and have dinner together. On Saturday it's all business. On Sunday, the group may have a breakfast meeting before members depart for home.

Prior to the meeting, members are required to fax Wilson their most pressing issues so that the Saturday agenda can be set. "At our last meeting, two company presidents discussed the need for hiring a full-time operations manager," reports Wilson. "They discussed how the position relates to the existing production manager's job, the best person to move into the job, outside recruiting, etc." Other popular topics include the pros and cons of acquiring another company and the details of new equipment purchases.

Becker's group meets three to four times a year. Twice a year, financials are reviewed. If a member is having trouble with cash flow, the group might offer suggestions for dealing with outstanding receivables. "You have to report back at the next meeting about what you've you done to address the situation," relates Becker. "That's called peer pressure."

Similar to other peer groups, Print America members visit each other's plants and critique financials. Members also can use the group as an extension of their business. "We have a directory that tells everybody who's got what kind of equipment," explains Treadaway. "If you deal with a national customer, you can tell that customer you belong to Print America and Print America has facilities throughout the U.S."

Group moderators help ensure that one or two people don't monopolize the discussion. "It's a difficult balance," notes Becker. "You want the meeting to be as free-flowing as possible--that's where you get the most benefit. But on the other hand, you can't have one person dominating."

In between meetings, members exchange emails, faxes and phone calls. Some members also encourage their staffs to utilize the group's resources. For example, one plant manager might visit another member's plant to see its scheduling system or observe its production workflow.

What does it cost to participate in a peer group? If you belong to a consultant-run group, you obviously must pay for professional services rendered. Some groups assess quarterly dues to retain facilitators who may also perform administrative duties. Participants in member-moderated groups generally pay only their airfare and lodging costs. If additional expenses are incurred, the host invoices the guests.

"Finding and/or joining a peer group is practical for almost all sizes of firms," claims Stewart. "Nonetheless, firms need to be prepared to make both a financial commitment as well as a commitment of time if they expect to benefit from joining such a group. The financial commitment can range from a modest $4,000 annually to upwards of $8,000 or more depending upon the frequency of meetings and required travel arrangements."

What about non-industry specific peer groups? Some execs belong to groups such as The Executive Committee (TEC) and Young Presidents' Organization (YPO). Unlike the previously discussed groups, these national organizations bring together executives from many different industries. In some cases, in addition to the main group, members can participate in special-interest subgroups. Groups typically meet once or twice a month. As with the printers' peer groups, prospective members must meet certain professional qualifications.

Donald Samuels is managing partner of Pictorial Offset, a $40 million web and sheetfed printer in Carlstadt, NJ. He belongs to the YPO. "I joined in 1982 because I thought it would be a way for me to be a better executive. Basically, it was for the educational opportunities."

Samuels says he spends at least one evening a month with 10 other company presidents--none of whom are in the printing business. What has he learned? "One of the people in my group is the chairman of a Fortune 10 company. Three or four years ago, I asked for his advice on building and structuring our company. He recommended an organizational consultant to us who has been the architect of our growth. We've more than doubled our size--growing more than 20 percent every year."

Samuels also belongs to a printer's peer group within the YPO organization. A printer in Kansas City created this subgroup or "forum" about 11 years ago. "He'd bought a press that wasn't working," recalls Samuels. "He looked through the YPO directory and called all the printers."

Pictorial Offset went through a similar situation with another press manufacturer. Samuels suggested a strategy for resolving the situation while avoiding litigation. Other YPO printers chimed in as well.

Later, when the Kansas City printer called everyone back to report his progress, another YPO printer-member suggested the group meet in person at Graph Expo. They did and a peer group was born.

"The group has been meeting three to four times a year around the country for the past 11 years," relates Samuels. "I don't think anybody feels that it hasn't paid off. Before we built a new plant, we walked around and took pictures at different plants and saved millions of dollars."

Milt Vine, president of Seattle Bindery, joined TEC in 1994. Similar to YPO, TEC brings together senior managers from diverse industries.

Before buying Seattle Bindery, Vine, a CPA, had no graphic arts experience. Having taken the plunge into the post-press world, the exec found he had few people with whom to discuss business issues. He was in the process of setting up an advisory board when a customer (and TEC member) told him about the group. Vine cites getting "monthly input from 11 been-there-done-that executives" as a key advantage of participating in the group. He also credits the group with shooting from its collective hip. "TEC is a place you go to get your answers questioned," explains the exec. "If you get up in front of the group and your plan doesn't wash, they'll stop you. They'll say that's baloney, give it to you straight and that's wonderful."

TEC membership requires an initiation fee and quarterly dues that Vine calls reasonable. There is no contract--members can drop out at any time.

Vine also is a fan of trade association participation, having joined the Pacific Printing and Imaging Assn. (PPI) about seven years ago. He's also the immediate past president of the Seattle Craftsman Club. Participating at this local affiliate level eventually led to a two-year stint on the national group's finance committee. "It gives you a broader perspective to hear how things are going in other parts of the country," relates the bindery exec. "Plus you're dealing with forward-thinking people. You get to know the industry and the other players."

Joining PIA led to Seattle Bindery's involvement in the Binding Industries of America (BIA). Vine subsequently attended a BIA conference where he found himself lunching with fellow bindery owners. "It was remarkable, the things we were able to talk about," recalls Vine. These were people who had not just walked a mile in your shoes, but lived in them."

As a result of that lunch, a peer group was organized. "We have four trade binderies of about the same revenue and product mix and we want to add a couple more," reports Vine.

What about Internet-based peer groups? Online communities lack the confidentially factor many printers say is a key element of successful peer groups. Nonetheless, sites like the CTP-oriented http://MainZone.com or www.printweb.org (for owners of quick print shops) offer instant camaraderie and feature lively and informative discussions.

Peer groups aren't for everyone. But for some execs, these groups make it a lot less lonely and a lot more profitable at the top.

"I don't want to belong to any club that would have me as a member," declared Groucho Marx. Graphic arts industry execs, by contrast, are a gregarious bunch. You will find them at Craftsmen and Litho Club meetings, at local and national trade association gatherings--all fertile grounds for planting the seeds of future peer groups. Key information for some popular groups follows.

International Assn. of Printing House Craftsmen (IAPHC)--"Share your knowledge" is the motto of this Minneapolis-based group. Members can tap into the Knowledge Network for fast answers on industry concerns. Contact Kevin Keane at (800) 466-4274 or see www.IAPHC.org.

National Assn. of Litho Clubs (NALC) stresses education. Members "seek to improve themselves in the mastery of their art, advancing the individual progress of its membership and the progress of the industry in general." Club members include management, technical production and mechanical personnel who are associated with some branch of the graphic arts. Local clubs receive their charter from the national association based in Cincinnati. Call (513) 793-2532 or see www.graphicarts.org.

National Assn. for Printing Leadership (NAPL)--Contact Robin Schabacker, director of management consulting, at (201) 634-9600, ext. 1307. Print Image International--Contact David J. Steinhardt, executive director, at (312) 321-6886.

Printing Industries of America (PIA)--Diane Koch, director, educational services, at (703) 519-8183; or e-mail: dkoch@printing.org.

Print America is a peer group of noncompeting commercial printers located throughout the U.S. Member size varies from $10 million to $40 million. Contact Bill Treadaway, executive director, (704) 663-5808.

Crouser Performance Groups--Consultants Tom and Pamela Crouser work with quick printers. The Crousers start with the basics: principles of accounting, finance, organization, family-based business and leadership. Once these topics have been covered, participants review the principles of sales, marketing and operations management. For more information, e-mail Tom Crouser at tomcrouser@crouser.com or call Clark Workman at (304) 342-5100. See www.crouser.com.

TEC (The Executive Committee) bills itself as "an international community of CEOs." It has more than 6,000 members in major metropolitan areas throughout the U.S., Australia, Brazil, Canada, China (Hong Kong), Great Britain, Malaysia, Mexico, Singapore and South Africa. TEC offers two programs for CEOs, company presidents and business owners. CEOs of companies with $3 million or more in annual sales and 25 or more employees qualify for membership in a TEC group. Those with sales of $750,000 to $3 million and five to 25 employees are eligible for membership in a TEC for Emerging Entrepreneurs group. Call TEC at (800) 274-2367 or see www.tecceo.com.

Young Presidents' Organization (YPO)-- Founded in New York in 1950 with 20 members, YPO currently has 160 local chapters worldwide. The group's members are drawn from diverse industries--including the graphic arts. For more information, see www.YPO. org or write to: Young Presidents' Organization, Attn: Membership Services, 451 S. Decker Dr., Irving, TX 75062.