Pitman celebrates its 100th birthday with a recipe for longevity

Sep 1, 2005 12:00 AM, By M. Richard Vinocur

Vinocur's Perspective

I've always been fascinated with time travel. So, early this summer when I accepted the assignment of documenting the 100-year history of Pitman Co. (Totowa, NJ), I relished the opportunity. You’ll find that account of the industry’s largest privately held distributor in the special supplement on pg. 33. Before I go any further, let me assure you that contrary to popular belief, I was not around in 1906 when Harold F. Pitman first hung out his shingle.

Surviving for a centennial is quite an accomplishment when you consider that 50 percent of small businesses fail in their first year and 80 percent close their doors by year five. As I studied the history of the company, I realized that its surviving for a full century is an incredible achievement and I began to consider the ingredients necessary for that kind of longevity. Remember that during the past hundred years, we endured two world wars that sandwiched the Great Depression, not to mention the Cold War, the Korean War and the Viet Nam conflict. In that time, the printing industry has transitioned from letterpress to offset printing—from craftsmanship to high tech. Think about the changes in the past 30 or 40 years and you can only shake your head in amazement that one company could survive all of those obstacles.

As part of my research for this project, I spoke to the current chairman of the company, Peter Schmidt. He is the grandson of the founder and the son of Paul Schmidt, Harold Pitman’s son-in-law. I also spoke to John W. Dreyer, who held the longest term as Pitman CEO from 1977 until 2000. Last, but not least, I interviewed Joe Demharter, the firm’s current president. Much of what they had to say is featured in the supplement. And as I spoke to those past and present managers, I began to formulate (with due credit to David Letterman) my top 10 contributors to corporate longevity:

Focus on customers. Speak to any Pitman manager or employee and the mantra is partnering with customers. Testimonials inundate the company’s promotions with customers commenting on how the distributor has helped the customer grow and prosper, working more as a partner than a vendor.
Consistency of management. During its first 100 years serving the graphic arts industry, only six individuals have headed Pitman Co. Considering that many companies change executives more often than they change their promotional campaigns, that fact is a rare occurrence in today’s hectic economy.
A dedicated staff. Of its more than 500 employees, Pitman has approximately 40 percent of its employees working for the firm for more than 10 years. Of that number, 28 have been with the company more than 25 years, a like number have been with Pitman more than 20 years, and more than 50 staffers have been on board for more than 15 years. I doubt that many companies can boast similar tenure for that many of its employees.
An ESOP plan. This item might be the basis for No. 3. This guaranteed savings plan is a combination of a 401K and an ESOP. Put the two together and you have a KSOP, which allows employees to be shareholders. Stock had previously been available to key employees, but in 1988 Paul and Kay Schmidt (parents of the current chairman and CEO, Peter) made an additional 398,000 shares of the company’s stock available to the plan. In 2001, an additional 157,000 were contributed. As a result, employees directly benefit from the company’s growth.
The ability to reinvent itself. Pitman began as a one-man shop. Harold Pitman manufactured and sold steel dies and copper plates to engravers. Eventually he expanded the business into chemical solutions and other tools for the engraving trade. The distribution side of the business was so successful that he phased out the manufacturing process. And, as the industry changed, so did Pitman.
Working with world-class manufacturers. The company has identified and partnered with the leading vendors in the industry, and today delivers a full range of digital imaging services and a comprehensive portfolio of prepress and pressroom consumable products.
A presence in the industry. Each CEO of the company has spent time in the field, meeting and dealing with customers in face-to-face discussions.
A vision and strategy for the future. Unlike companies that fail in the first year of their founding, Pitman executives have a vision and a strategy for the company and its customers. Granted, the vision and strategy can change as the industry evolves from one technology to another, but Pitman is ready and waiting for the change.
Ability to access information and communicate with its customers. With its rather large sales forces, the company is able to track not only its competitors, but its customers.
The company is adequately capitalized. As a result, it is able to invest in its future.

Take these 10 ingredients, add a undetermined amount of passion, sprinkle with a strong commitment to excellence and you’ve got Pitman’s recipe for longevity. It wouldn’t surprise me if 100 years from now, another industry columnist writes about the recipe that has allowed Pitman to celebrate its 200th anniversary.

M. Richard Vinocur is president of Footprint Communications. E-mail him at mrvinocur@aol.com.

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