Don't stop thinking about tomorrow

May 1, 2002 12:00 PM, BY KATHERINE O'BRIEN Editor | kobrien@primediabusiness.com

Maybe you've heard this one: A policeman on late-night patrol sees a man on his hands and knees under a streetlight. The policeman walks over and asks the man what he's doing.

“I've dropped a $20 bill and I'm trying to find it,” the man responds.

“Are you sure you dropped it here?” asks the cop.

“No — I dropped it somewhere in the next street,” says the man.

“Then why on earth are you looking here?” demands the policeman.

“Because the light is better here.”

Graphic-arts professionals may be similarly tempted to embrace an illogical view of the future. Business may be slow now, but pundits are talking about economic recovery. If we can hang on until the economy rebounds, maybe everything will be fine.

Unfortunately, printers' challenges considerably predate the slumping economy. Seven years ago, one pundit described the printing industry as “not very profitable, highly leveraged and having substantial overcapacity.” Sounds familiar, doesn't it?

On the bright side, we know that this industry is capable of change. “This is the industry that made a massive sea change from letterpress to offset and is now going to digital printing,” says Dr. Joe Webb, principal of Strategies For Management, Inc., a Harrisville, RI-based graphic-arts consultancy. “It went from hot type to cold type to laser printing in the span of 15 years. It went from stripping to full-film imposition to direct-to-plate in 10 years. It went from color separation by camera, to scanner, to big digital color systems, to desktop-published color in less than 20 years. In proofing, we've gone from press proofs to two major kinds of off-press proofs to digital proofs and PDF proofs in 25 years.”

We've changed our tools — now comes the harder part: changing our minds. When was the last time you re-evaluated your management style? Day-to-day concerns keep most of us so busy we hardly have time to catch our breath, let alone contemplate our futures.

CREATING MARKET DEMAND

“Traditional production-oriented sales management won't allow the time for market creation,” says Webb. “It's more obsessed with counting sales calls than finding problems and solving them. To create market demand, you need a deep understanding of your customer's business and their customer's business.”

In his book, “Winning in a Changing Environment,” retired printing executive Wallace Stettinus outlines four key strategic planning steps:

Think product
Think competitive advantage
Think operating excellence
Think profit.

To “think product,” start by identifying your most profitable core products. What functions do these products perform? What needs do they fulfill?

“Those who understand their customers' needs and how the product fulfills those needs have a shot, if they are innovative, at designing an improved product that fulfills those needs better,” writes Stettinus. “The driving force of the company can be changed to the market's needs… and market-needs-driven companies are much more apt to succeed because they are less likely to be caught unawares when their products or technologies become obsolete.”

When it comes to creating a competitive advantage, differentiation is the best way to go: “Many successful printers have differentiated themselves with a narrow focus,” reports Stettinus. “They build customer loyalty by providing a combination of top quality and service at competitive prices. They specialize in a market niche and differentiate themselves by technology and know-how to provide superior quality and service. They may also develop a cost advantage by specialized capabilities and well-run operations.”

IN SEARCH OF EXCELLENCE

Operating excellence, the third ingredient, refers to management's ability to execute the strategic plan. “It involves rethinking how you run the business; how management styles and processes are modified to reflect the changing nature of the work and workers; and perhaps most important, an increased focus on the customer. Finally, it is creating a culture that fosters continuous improvement,” writes Stettinus.

Profit is the final component of a strategic plan. “The purpose of a business is not to earn a profit, but to serve the customer,” explains the former printer. “Profit is the reward for doing that well while successfully competing in the marketplace.”

Stettinus stresses the relationship between profit and pricing. “Without a profit criterion that is integrated into the pricing strategy in a rational way, pricing becomes a reaction to the marketplace exclusively, resulting in an unmanaged outcome.”

“Winning in a Changing Environment” costs $40; to order, see www.gain.net.