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Peering into better business

Apr 1, 2001 12:00 AM


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Printers can be challenged, supported and empowered in peer groups

THE ROUTINE CAN BE PRETTY GRUELING: EACH DAY BEGINS AT 6:30 OR 7 A.M., AND PARTICIPANTS DON'T GO TO DINNER UNTIL 7 P.M.

A word of warning to the uninitiated: Peer groups are not for everyone. Be willing to check your ego in at the door, and your experience in a peer group could prove beneficial. Rationalize your way of doing business to the point of ignoring others' advice, and you may be asked to leave.

“It's a boldfaced look at your company,” explains Don Cortez, owner of First Impression Printing and Graphics (Howell, MI), a $1.2 million small commercial printer and a peer group member. “You must have a big set of shoulders to weather the storm, so to speak.”

Indeed, John Stewart, principal of Q.P. Consulting, Inc. (Melbourne, FL), observes that some quick-print owners have quit their peer groups “because they find it impossible to accept or follow through on the recommendations of the group.” He says participants must truly be willing to make changes in their businesses — “even if it goes against what they have done in the past.”

But printers who follow those guidelines can benefit beyond expectations. “We're miles ahead of where we were,” says Cortez, whose business recently moved from its 15-year location to a new 6,000-sq.-ft. building and is planning a Heidelberg DI installation.

A HELPING HAND FOR ONE ANOTHER

“WE ARE THERE FOR PERFORMANCE AND PROGRESS. IF WE'RE NOT PROGRESSING, THERE'S NO POINT.”

Peer groups started popping up in the printing industry as early as 20 years ago. Some are founded informally by printers who meet at industry shows or conferences, or through other personal connections. Nick Strickland Sr. of Quick Print Plus (Jackson, MS), for example, became involved in a peer group 12 years ago that formed on its own. During a golf outing at a PrintImage meeting (then called the National Assn. of Quick Printers), he and some other quick printers began talking about the industry's fast-changing pace and decided to form a group. They initially had eight members, representing various areas of the country; each had a $1 million business with multiple locations. The group has since evolved to 14 members with average business sales of about $2.5 million.

Peer groups are also organized by printing associations or consultants, who maintain varying degrees of involvement throughout the group's tenure. PIA's (Alexandria, VA) peer group program, the Printing Executive Network (PEN), consists of 11 active groups. PEN was established in 1988 at a conference in St. Louis where interested printers were grouped according to size, sales volume, process and product.

According to Diane Koch, director of educational services, PIA serves as the initial facilitator for the groups, assisting in the coordination of the first meeting and suggesting an agenda for future gatherings. The association's involvement after the first meeting is minimal — groups are contacted by PIA only if a printer is looking to join.

STRICT REGIME

Cortez is in a peer group run by Crouser and Associates (Charleston, WV). Principal Tom Crouser began coordinating peer performance groups as an extension of his consulting practice in 1985. Each participating printer is a former or current client; the network serves as a next-step/maintenance program.

Crouser, by his own admission, instills a strict regime. He changed the name from “peer” to “performance” to emphasize the groups' purpose. “We're there for performance and progress,” he stresses. “If we're not progressing, there's no point.”

Every meeting is moderated by a Crouser associate, and each group is assigned a mentor, a senior participant in the program who also attends the group meetings. While Crouser's groups meet twice a year, group members must provide complete financial statements each month. Finally, a team from Crouser conducts an annual on-site evaluation of each printer's operations to ensure that improvement is ongoing.

HOLDING YOUR FEET TO THE FIRE

Improvement may be the name of the game. Being in a peer group “holds your feet to the fire,” acknowledges Cortez. “There is someone behind you saying, ‘You said you were going to do this; why didn't you?’”

Peer groups can fulfill the role that a board of directors would — perhaps better than a board, since everyone in the group has firsthand, in-depth experience of running a print shop. “In a small company, you really don't have a lot of people you can bounce ideas off of,” comments Luke Slaton, co-owner of Slaton Press Inc. (Moulton, AL), which offers both non-heatset web and multicolor sheetfed services. “I won't go to printers around me and ask if I should hire a new salesperson or buy a new press.”

None of the members in peer groups should do business in competitive markets or have conflicting interests. Such parameters are considered during the initial stages of a group's formation or when a prospective member has requested entry into an established group. Printers wishing to join are typically asked to provide a detailed company profile, including financial statements, information on plant procedures, policies and products. Some groups also require members to sign confidentiality agreements.

Peer groups are usually organized according to company size in terms of annual sales and the type of work that is produced. Location is another factor that plays into the assembly of printers, albeit in different ways. According to Q.P. Consulting's Stewart, shops with smaller revenues tend to prefer conferring with printers in closer proximity, within five to eight adjacent states, to keep travel expenses down.

Other printers prefer the insight that geographic diversity lends to discussions. “Things start faster in California than Mississippi,” says Strickland of Quick Print Plus. “For example, variable data is becoming a big part of business in major markets. The West Coast members are figuring out how to do it now. By the time it's in demand here, I won't have the learning curve they do.”

STRUCTURED POWWOWS

Peer groups have as few as five members and as many as 15, although the norm is probably more between eight and 12. Stewart, who has helped launch a few peer groups and led sessions for others, recommends 12 as the maximum number of participants, based on the limited amount of time that groups have during sessions. “Allowing each firm to report on its current situation and allowing the remaining companies to respond in round-robin fashion easily takes up a day and a half,” he explains.

Gatherings are typically held for three or four days, beginning on a Thursday or Friday and extending over a weekend. Some groups set aside time for social activities, such as golf outings, sporting events or dinner parties at restaurants, while others maintain a business-only policy.

Groups meet two to four times over the course of a year — to provide members enough time between meetings to implement recommendations, according to Stewart — and each has a strategy for where members conglomerate. Gordon Knowles, owner of Perfect Image Printing (Charlotte, NC), says that his group rotates meetings at each member's location, so that a half-day can be devoted to a plant tour and critique. Sometimes sessions are scheduled to coincide with industry events. Its last meeting was held in conjunction with the 2001 PrintImage show in Orlando.

Most groups devote at least one day to an update of each shop's activity and a roundtable problem-solving session. Some design more specific agendas in advance of the meeting — if there is a particular issue that members identify as a problem or area of interest, time can be set aside to specifically address that topic. It is common practice to invite a guest speaker who can provide insight on a certain area, be it an industry or non-industry consultant, vendor representative, outside printer, attorney, investment banker, advertising agency or motivational speaker.

Strickland's group maintains a strict format. Members fly to the meeting location on a Wednesday morning and usually golf in the afternoon. There is a tour of one of the members' shops on Thursday morning, and a tour of another printer's facility in the afternoon. On Friday, the group invites speakers (past speakers include the assistant dean of the University of Michigan business school, suppliers and industry leaders); Saturday is reserved for discussion on marketing, sales and financials. Members plan their agenda for the next gathering on Sunday, and depart for home later that day.

Strickland admits the routine can be pretty grueling: Most of the time, members are meeting for 12 or more hours each day. Each day begins at 6:30 or 7 a.m., and participants don't go to dinner until 7 p.m., which they're required to go to together.

The PIA-organized peer group that Slaton is involved in, on the other hand, is more “free-form,” according to him. The group meets three times a year, generally starting on a Thursday night for a social dinner. Fridays involve plant tours, and Saturdays, “we get down to work,” Slaton says. “Some meetings we will have a specific topic to discuss. Usually, we'll each take a couple of hours to talk about our challenges and any particular problems we're having.”

SHARING FINANCIAL DATA

Each member also shares his or her business' financial statements at each meeting. Prior to a gathering, members send out a one-page “catch-up” e-mail to tell others what's been happening with their businesses.

An essential element of the peer group process is the examination of each company's detailed financial data. Many printers submit the requisite information in advance of the meeting to an outside source for single-format compilation, which enables easier comparison of the data. “It's important that everyone has the same or similar chart of accounts for analysis,” says Jace Prejean, president and owner of Bayou Printing and Graphics (Houma, LA), a $760,000, 7.5-employee operation that is currently refocusing its business on four-color process work. “I think that a meeting would be useless without them.”

According to Stewart, most peer groups require that not only the presentation of the data be the same, but that actual accounting practices be standard amongst members. The consultant knows of a printer that was asked to leave a group because of his insistence on implementing cash-instead of accrual-based accounting, against other members' practices.

BENEFITS VS. COST

Some groups rely on outside facilitators to coordinate the details of the meeting, from reserving space for congregation to fulfilling catering needs. The cost of those services is split equally amongst members.

“IT'S WELL WORTH THE MONEY TO HAVE THESE RELATIONSHIPS AND THE AVENUE TO BOUNCE IDEAS OFF OTHERS.”

Stewart estimates that it costs printers anywhere from $50 to $300 per month to belong to a peer group, not including travel expenses. That covers shared expenses, such as the fee for renting a meeting space, guest speakers, coordinators' services and meals throughout the duration of the gathering. Travel expenses can increase group-associated costs up to $8,000-plus per year, depending on the frequency of meetings and geographic destinations.

Prejean acknowledges that the extra expense of belonging to a peer group is a potential disadvantage, but he says that he and his company have gained enormously from that investment. He recalls the group's involvement when he installed a new press: “We discussed the purchase in great detail. I redid our income statement and balance sheet based on what would happen after we bought it, and it was amazing how accurate the projections were,” he says. “You can get kind of blind when you see something you want. It's good to have others give you a reality check.”

Cortez also attests to a greater understanding of his own company's financial standing since joining a peer group. “There is no way we'd be looking at purchasing this press (Heidelberg DI) if it weren't for the processes we go through in the group,” he says. “We had no way of knowing about our financial well-being before we started with the group.”

The advantages of the peer network extend beyond the financial side of the business. Knowles says that his group is in constant communication, through an e-mail list-serv or via phone calls between gatherings. “There have been times when I've stumbled and run into trouble, and the other members were right there, looking over my profits and losses and even coming to the shop,” he says. “We've developed that kind of relationship.”

Some groups have expanded their scope from just discussion and support by engaging in activity that will benefit their businesses in different ways. Peer groups have enlisted advertising and design agencies to create promotional material for their shops. Because participants do not operate in competitive markets, everyone can use the same piece. And by splitting the cost of the agency, the members receive the service for a fraction of the usual price. Groups have used this same strategy in hiring professional website designers.

NOT JUST FOR OWNERS

Although peer groups are usually populated by shop owners, or in the case of larger companies, the highest executives, other employees can directly benefit from and be involved with the group.

Strickland's group has established separate meetings for member companies' sales representatives and general managers. Those separate sessions are constructed similarly to the meetings that the owners attend, although the topics of discourse are customized to the duties and concerns related to the positions of the individuals attending. Only one owner attends the sales and manager sessions, to act as a facilitator.

The peer network can also provide job opportunities for members' employees. Strickland recalls a sales manager who had run out of room to grow within his Mississippi-based company and accepted a promotion from one of his cohorts in the peer group. The employee moved to Maryland to take the position.

“After so many years, you get to know one another very well,” Strickland summarizes.

HAPPILY EVER AFTER?

It should be noted again that not all printers experience an instant synergy with fellow participants. Despite the careful — even stringent — screening processes, it can be difficult to find a good fit. It is relatively common for printers to leave some groups and enter others, for various reasons. Stewart estimates that about 10 percent to 15 percent of the members in each peer group may elect or be asked to resign within the first four meetings.

Crouser says that while the main criteria for organizing groups is business size and type of product produced, there are other factors that play into a printer's experience in a peer group. For example, he recently recommended that a husband and wife team move into a group with other shops run by married couples.

“There are lots of other situations to consider. A group could consist of companies with a certain sales level that are transitioning, or companies that deal largely with outside sales,” Crouser says.

When should you consider changing peer groups? Stewart advises that if you are putting in more effort and sharing more expertise than you are receiving, you should explore other options. “Everyone needs to bring something to the table. Participants can bring some troubles, and most of them do have troubles, but they need to bring something positive to the group,” he insists.

The general consensus, however, seems to be that peer group involvement is worth the money and effort. “It takes a little time, and it costs $2,000 to $3,000 a year just to go to the meetings,” says Slaton. “But I really look forward to it, both socially and for business. It's well worth the money to have these relationships and the avenue to bounce ideas off of others.”

Where to join a peer group

Want to form your own peer group? Check with your local printing association or visit some online communities. PRINTWEB.ORG was created specifically for owners of quick print shops. It offers instant camaraderie and features lively and informative discussions. PRINTPLANET.COM is best known for its CTP forum, but it also offers online communities for quick printers. Key information for some other popular groups follows.

CROUSER PERFORMANCE GROUPS | For more information on these groups, call (304) 342-5100 or e-mail Tom Crouser at: tomcrouser@crouser.com. See www.crouser.com.

PRINT AMERICA | 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.

INTERNATIONAL ASSN. OF PRINTING HOUSE CRAFTSMEN (IAPHC) | Contact Kevin Keane at (800) 466-4274 or see www.IAPHC.org.

PRINTIMAGE INTERNATIONAL | Contact Steve Johnson, executive director, at (312) 321-8015 or see www.printimage.org.

NATIONAL ASSN. FOR PRINTING LEADERSHIP (NAPL) | Contact Robin Schabacker, director of management consulting, at (201) 634-9600, ext. 1307 or see www.napl.org.

PRINTING INDUSTRIES OF AMERICA (PIA) | Diane Koch, director, educational services, at (703) 519-8183 or e-mail: dkoch@printing.org.

JOHN STEWART | Owner of Paragon Printing (West Melbourne, FL) and president of Q.P. Consulting Inc. Call (321) 727-2444 or see www.quickconsultant.com.

WANTED: young printing professionals

PrintImage International (Chicago) is forming a peer network specifically targeting younger printers. The group, Young Printing Professionals (YPP), held its inaugural meeting at the association's annual conference this past February.

If you're interested in joining, contact PrintImage International headquarters at (312) 726-8015 or visit www.printimage.org.