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Oct 1, 2009 12:00 AM
Each year the National Assn. for Printing Leadership (NAPL) (Paramus, NJ) presents graphic communications companies with its Management Plus awards. This year, 16 companies were recognized with Gold, Silver and Merit awards, along with Hall of Fame winner Wordsprint (see “The right type,” August 2009).
Management Plus allows a graphic communications company to analyze specific areas of its operation as a tool to judge individual management performance vs. industry standards. After completing a self-analysis, companies may choose to enter the awards competition based on their results. The Management Plus program is sponsored by AMERICAN PRINTER, manroland and Compass Capital Partners.
In Part I, we spoke with William K. Marrinan Hall of Fame Award recipient Bill Gilmer, president of Wordsprint (Wytheville, PA). In Part II, we've highlighted three additional honorees. Here are their stories.
A few months ago, the executive management team at Harding Poorman Group (HPG) convened an unusual meeting in the company's parking lot. They weren't squabbling over parking spaces or admiring the exterior view of HPG's 83,000-sq.-ft. operation. Instead, senior management donned their old clothes, grabbed some sponges and buckets of soapy water and invited the company's 127 employees to have their cars washed.
The car wash celebrated an HPG safety milestone: 365 days without time lost due to a work related accident. Last year, when the company achieved 90 days toward this goal, the company opened up the vending machines and invited employees to help themselves. This sounds like an exceptional management style.
Twenty years ago, however, David Harding, the company president and CEO, recalls a very different version of himself. “I used to be an autocratic jerk who kicked the trash can when we screwed up an order. Then I realized that when there are problems with a company, the first place to look is the guy in the corner office. I got an executive coach who taught me to develop a purpose. Now our purpose is shown on a sign in the lobby: ‘To Make a Meaningful Difference in the Lives of Our Employees.’”
When Harding was dissatisfied with his company, he looked inward and changed his business approach. It is this self-awareness and concern for others that characterizes the company's management style and contributed to HPG's Management Plus Gold Award.
HPG was founded in 2003 when Dave Harding and Bob Poorman purchased general commercial printing company SPG and wide-format specialist Ropkey Graphics. Both men are veterans of the printing industry, having each sold previous companies to consolidators in the late 1990s. With this company they were determined to do things differently: “We envisioned what we could do if we started all over,” Harding says.
Harding and Poorman realized they needed to focus on their employees. “Public companies sometimes get too concerned with the price of their stock and not what is best for the business,” says Harding. “Our industry has lost a lot of great employees. We've lost many in recent years as the industry has changed. Where will we find new employees in the future?” From the start HPG was determined to retain employees by offering good benefits, competitive pay and continuous training.
Harding thrives on HPG's employees' accomplishments. “Any business owner should be proud of watching the excitement as employees grow personally and professionally. One of my proudest moments has been taking one of my employees, a single mother of three, to the bank to open her first checking account. As a result, she improved her credit score and was able to buy a home and a car this year.”
Every employee knows his or her role in HPG's success, “We share our financials with everyone in the building,” says Harding. “Finances are reviewed at our monthly managers meeting and our quarterly staff meetings. They know how — and why — we make money, and we share 14 percent of the profits via our profit bonus.
We also have a Stock Appreciation Rights program anda bonus related to reduced spoilage. In 2008, our bonuses totaled over $500,000.
Acquisitions have played a key role in HPG's growth. In addition to SPG and Ropkey, the company includes Full Court Press, Education Connection Publishing and Discom Technologies as well as an interest in Miles Printing on Plastics. Its portfolio of services includes offset printing; UV printing on plastics; digital printing; variable data services; CD and DVD duplication; and automated packaging, fulfillment, mailing, bindery and wide-format signage.
Many companies struggle with the process of merging two cultures, redistributing responsibility and taking on new employees associated with acquisitions. “Sharing overhead is the biggest key to success,” says Harding. “Our vision is for the Harding Poorman Group to support a group of diverse companies. Support services include HR, accounting and marketing. Normally when we look at an acquisition, it looks more palatable when we take out some of the overhead and support service costs.”
While Harding believes in moving acquired companies to HPG's headquarters quickly, he stresses the importance of having a financial plan in place. “Put together a budget,” he advises when asked about successful acquisitions. “If staff cuts are needed, do them before the company moves to your facility. If the budget is correct, and if the company performs as planned, there should be no more cuts. Move the company to your facility as soon as practical. Your new employees need as much attention as possible.”
Treat employees from the acquired companies with respect and hospitality. “Assign them a buddy, post welcome signs, and talk to them frequently,” Harding urges. “Many times they come up with great ideas because they have [an outsider's perspective].”
Harding expects employees to take initiative. Employees participate in focus groups to work through problems, and training sessions to learn everything from the latest industry techniques to how to be a better manager. They also take part in an annual company survey, and the results of that survey help determine company goals the next year.
“Our performance reviews are more objective than the traditional [approach],” says Harding. “We use facts and goal achievement as key performance indicators. For example, one of the measures for our client services team is accuracy of job tickets. Measures for our managers include how they score on our annual employee survey, a departmental cleanliness score from our 5S program, productivity and efficiency.”
To maintain its high performance standards, HPG carefully evaluates potential hires. Applicants must pass multiple interviews, pre-employment tests and tests of specific skills related to the position. Once hired, all employees go through an extensive orientation process.
“Empowerment” is a popular buzzword at many companies, but it's standard operating procedure at HPG. “We don't have a plant manager,” says Harding. “Every plant manager I've ever met was a nervous wreck, because all the other managers put their monkeys on his back. If you hire the right people, who aren't competitive or territorial, you don't need a plant manager. We let our managers run their department, and they are responsible for the results.”
This is Harding Poorman's third Management Plus Award, but its first Gold. Harding says participation in the Management Plus program is one of the keys to his company's success. “It's a great way to benchmark your company against the best companies in our industry. NAPL gives us a report each time we enter the competition and we use that report to improve. You have to constantly get better at what you do to compete in this industry.”
Harding predicts some dramatic changes on the technical side of the business. “We think presses will be an afterthought for us in the future,” he says. “Conventional printing will represent less than 50% of our sales volume. We believe the greatest growth will come from digital, variable-data printing, mailing and fulfillment. We may also be in businesses we can't even fathom today,” says Harding.
Twenty-six years ago, two press operators on the night shift at a small print shop in North Carolina contemplated their futures. Both had taken a break from college and were pondering their next move. With little money and even less management experience, they boldly opened a printing business. On April 15, 1983, they launched Classic Graphics with a whopping $600 in the bank for operating capital.
Today, David Pitts and Bill Gardner are older, wiser and Management Plus Gold Award winners. From their modest start, Pitts and Gardner have grown Classic Graphics to a 132,000-sq.-ft. business with state-of-the-art Komori LS 40 presses.
“Bill Gardner was challenged by a finance professor at UNCC,” recalls Pitts. “The professor insisted that starting a business was something that should be done while you are young. Bill took him to heart and somehow I got talked into joining him.”
In retrospect, Pitts believes youthful naiveté helped. “We were young enough not to understand the risks or what would be required to make a company successful,” he explains. “Ignorance was an important factor in our early success. We didn't know it was hard.”
As Pitts and Gardener gained experience, their definition of success evolved. “First I thought it was owning a certain type of press, or having a certain size building,” says Pitts. “Now I think more in terms of profitability, sustainability, and strategic position in our marketplace.”
Classic Graphics enjoyed impressive growth in its early years, but Pitts concedes that expansion brought its own set of challenges. “From 1983 until 2000, we grew at an average annual rate of 37% per year,” he says. “We basically doubled the size of the company every three years. That kind of growth hides a lot of sins. By the time we figured out how to manage a 20-person company, we had a 40-person company. By the time we figured out how to manage that one, we had an 80-person company. We actually peaked at about 190 employees at one point. We were wildly inefficient because the only way we knew how to solve problems was to hire more people.”
Ultimately Pitts and Gardner hit their management stride. “When we finally peaked and started back down, we began to make reasonable profits. We began to substitute process improvement for bodies and it made a big difference,” says Pitts. “We discovered that a printing company could be profitable when properly run. Two percent profits are unacceptable. We have stopped thinking of that as good enough and now we do a lot better than that.”
Mailing, fulfillment and other new services have helped the company stay on track. Classic Graphics added Opus Direct in 2003, and Pitts believes diversification is a major reason for the company's more recent financial growth. “The days of 35% growth for a printer just putting ink on paper are over,” he says. “Adding these services and integrating them for our customers is a big part of the reason we have grown to $30 million in sales since then.”
Under an Employee Stock Ownership Plan (ESOP), employees hold 40% of Classic Graphics. Turnover is low. “When good people find a really good place to work, they stay,” notes Pitts. “When they stay, they keep getting better and better, and more and more efficient. That, eventually, results in pretty significant profitability.”
Steve Spencer, the company's first employee, remains on staff. “Steve came in as a general helper and has run a press and bindery equipment. He has been bindery manager, job planner and served as our IT department,” says Pitts. “Now he's a programmer, writing code for customer facing and internal Web-based applications.”
David Pitts has big plans for Classic Graphic's future.“We want to be an integral and indispensable part of our customers' marketing success,” he says. “I know it sounds like a sales pitch, but if we don't accomplish that then we will continue to be the purveyor of a product that is becoming increasingly commoditized. That won't result in the success of our company or our employee owners. We have been successful in doing this for a few of our customers and we are learning how to do it for more and more of them.”
The year is 1979. Patented Printing is a small company, just beginning establish its reputation in Dayton, OH. Thirty years, later, the company, now called Think Patented, is one of the largest cross-media marketing service providers in the Midwest. How did the company do it?
Think Patented's mission statement offers some insights: “Solving challenges and exceeding expectations through motivated people, flexibility and trust.”
“We are absolutely committed to providing the maximum value for our customers' money,” says Ken McNerney, president. He explains that the company meets with customers, asks about their goals and tailors its services to meet each customer's specific needs.
“We received lots of feedback,” he says. “We learned that our customers wanted their supplier to do more for them — to provide more services such as mailing, fulfillment and digital wide-format printing. They were looking for a one-stop shop.”
Over the past five years, Think Patented has transformed from an ink-on-paper supplier to a full service graphics communications company. “We've added mailing, fulfillment, design, and both static and variable digital services,” says McNerney. “But Think Patented is evolving. Although we still serve a very large commercial sheetfed market, we are building our digital work with in-store programs, POP and retail applications.”
McNerney says Think Patented's willingness to rethink and transform its capabilities is what keeps it competitive during tough economic times. “The industry continues to downsize,” he says. “Many commercial printers are struggling because they haven't done a good job of adding value. We must provide more value-added services in order to survive and thrive.”
McNerney he has a unique perspective on long term success. His future goals are measured in neither machines nor money, but in day-to-day accomplishments. “I love what I do: our company, our employees and our customers,” he says. “Technology is important, but long-term success is really about having better employees and better customers than anybody else. We commit to being the best we can every day.”
Michelle Ruby interned with AMERICAN PRINTER during the summer of 2009 and currently is completing her studies at Marquette University.
This is the second article in our two-part Management Plus Series. In the first article (“The right type,” August 2009) we spoke to Bill Gilmer, president of Wordsprint in Wytheville, VA, and winner of the William K. Marrinan Hall of Fame Award. Three Management Plus Gold Award winners are profiled in this article: Harding Poorman Group, Think Patented and Classic Graphics.
William K. Marrinan Management Plus Hall of Fame Award
$1 to $5 million in sales
Wordsprint (Wytheville, VA)
$10 to $25 million in sales
Harding Poorman Group (Indianapolis)
Think Patented (Dayton, OH)
Over $25 million in sales
Classic Graphics (Charlotte, NC)
Portland General Electric (Portland, OR)
$10 to $25 million in sales
Daily Printing (Plymouth, MN)
Omaha Print (Omaha, NE)
Western Graphics (St. Paul, MN)
Over $25 million in sales
Printingforless.com (Livingston, MT)
Hammer Packaging, (Rochester, NY)
RR Donnelley-State (Columbia, SC)
Dome Printing, (Sacramento, CA)
$1 to $5 million in sales
C L Graphics, Inc. (Crystal Lake, IL)
Printing Spectrum (East Setauket, NY)
$5 to $10 million in sales
McClung Companies (Waynesboro, VA)
Over $25 million in sales
Allen Press (Lawrence, KS)
ColorDynamics (Allen, TX)
Portland General Electric Print & Mail Services took home another Gold Award. See the in plant's 2008 profile: “They're the tops,” (October 2008).
The National Association for Printing Leadership (NAPL) Management Plus Award competition is entering its third decade. Judges evaluate overall business practices, operational excellence and financial performance. The Management Plus program is sponsored by AMERICAN PRINTER, manroland and Compass Capital Partners.
For the first time, the awards competition will utilize NAPL's Best Practices Assessment. “We realized that Management Plus is not just an award program, but a continuous gathering and sharing of management best practices,” says Bill Woods, NAPL senior vice president. “Our new Management Plus Best Practices Assessment is a tool that will help many in our industry identify areas for managerial improvement.”
The awards deadline is November 6, 2009. See www.napl.org.
NAPL's Top Management Conference will be held Feb. 14-17, 2010 on Marco Island, FL. See www.napl.org.