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Jul 1, 2011 12:00 AM
Until a few years ago, printers could earn a living just by being good operators — paying attention to executing well in sales and manufacturing. They weren't profit leaders but they could get by, doing the same old things a little differently.
Now, doing the same old things just doesn't work at all, and more than one third of all printers have disappeared.
The economics of a printing business are relentless. Most companies struggle so hard to support their existing business that they don't have the energy and creativity to look for greener pastures.
Other companies have taken the opposite approach and have been badly damaged in the transition, because they focused so heavily on building their new model that they failed to keep the business they already had. While they were building a model for the long term, they ran out of money and time.
How can you build a new business while coping with the realities of your existing business? Success seems to lie in taking the Goldilocks approach to managing change: not too little and not too much. Somewhere in between is just right (see “The owl & the centipede,” May 2010, http://americanprinter.com/how-to/0501-midsize-print-closes).
Firms making a healthy and profitable transition to the future have their own versions of a three-part plan:
They're fighting hard (and systematically) to preserve the worthwhile sales they have, using those existing sales as the fuel for their transition.
They've learned that redirecting their existing salesforces to sell new services rarely works well, and it also diverts their efforts from preserving or building their existing business. So they're keeping their existing salesforce focused on traditional accounts, ensuring they extract as much business as possible and holding them accountable for results every quarter. If the existing salesforce identifies opportunities to sell new services, that's great, but it can't be their central focus.
The profitable companies are building new sales around enhanced services that often have little to do with ink (or toner) on paper. But they're not getting grandiose about it.
They're picking added-value services that clients find plausible and understandable, rather than pie-in-the-sky services that might exceed their capabilities. As they add credibility and expertise, their successes lead them to new areas of opportunity.
They're building the new sales efforts around new kinds of salespeople whose selling skills have little or nothing to do with printing knowledge or experience. They're finding those new salespeople in completely different places. The good news is that that new kind of salesperson is easier to find than an experienced printing salesperson — and cheaper, too!
The top-performing firms are working relentlessly on being cost-effective and efficient, to ensure they're truly low-cost operations.
They're exerting relentless cost control throughout their companies, streamlining their operations particularly in order entry and order processing, eliminating staff and speeding throughput by automating more processes.
They're focusing on cost effectiveness, productivity and high levels of utilization in the plant. No more hanging on to “almost good enough” employees (see “A recession is a terrible thing to waste,” December 2010, http://americanprinter.com/how-to/recession-terrible-thing-1201).
Getting safely from here to there seems like pretty boring stuff — like feeding a herd of elephants every day. But the printers who will survive are feeding their elephants every day while recognizing that their real goal is to get out of the circus business altogether.
Bob Rosen is president, R.H. Rosen Associates (Pittstown, NJ), a consulting firm that specializes solely in the graphic arts.
Contact him at firstname.lastname@example.org.