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May 1, 2006 12:00 AM
Our consulting firm brings together CEOs of client firms in two-and-a-half-day peer groups. Attendees determine the agenda. These peer groups have been sponsored for more than 20 years. In many cases, attendees are children of presidents who were original participants and are graduates of our firm’s S.O.B. (Sons of Bosses) peer groups.
Attendees at a peer group in 1986 all had children in the graphic arts business. All were pessimistic about the future of the industry and stated or implied a sense of guilt about allowing their children to follow in their footsteps. Our firm’s clients might not be representative of the industry, but in 2005, these children are engaged, optimistic and, for the most part, successful CEOs.
The successful CEO
It is fascinating to reflect upon the evolution of the subject matter discussed at these sessions. Today’s successful CEO is involved in reinventing his or her company. It’s rare that a company can succeed solely by putting ink on paper. In the most recent peer groups, there was little or no discussion about presses, the Great American Job Jacket, management software systems or conduct of sales meetings.
There is acceptance of the need to tackle strategic issues. Early in the session, one CEO said: “Let’s not discuss cutting plant spoilage one percent, billing another two percent of extra prepress charges, or job descriptions. Those are important, but tweaking a percent or two or three won’t address the core issues when the marketplace is changing at the rate of 25 percent a year.”
Peer group attendees spoke knowledgeably about the business operations of their important customers, another relatively recent focus. Every CEO knows and regularly meets with counterparts in customer organizations.
To the extent that equipment was discussed at the most recent group, it involved a purchase by the owner of a very successful offset printer with annual sales of less than $2 million. He was the envy of counterparts at companies 10 times his size when he revealed that he substantially leveraged profits through equipment he bought on eBay for $1,200.
The majority of the peer group dialogue involved nonprint services, especially distribution. There is recognition that these services drive printing, not vice-versa.
The traditional roles of all premanufacturing departments and the personnel in those departments are profoundly changing, especially the roles of sales representatives and customer service representatives. It is no longer possible to ignore the shift from job management to project management at print companies that offer a “womb to tomb” menu of products and services. Adoption of distribution, or post-bindery, services has implications in billing, workflow, insurance, ongoing customer communication, staff training and security/confidentiality. Unlike the good old days, these issues are of great, even paramount, interest to many buying organizations. Management of cash flow was an important topic of discussion at the peer group.
Why did I choose to write about this subject? There is stark contrast, not only with the agenda of peer group meetings in past years, but with the perceptions of many of the suppliers to printing companies. Well-run companies are as devoted to providing customers with perceived value as they are to providing satisfactory product at a competitive price.
Education of both staff and customer is a given, and printing company suppliers should understand that their salespeople should bring ideas and information, rather than donuts or a critique of yesterday’s ball game. The nature of the business challenges has changed radically.
I often am asked to describe the greatest challenge facing printers. The answer: Too many think like printers. Only producers of art prints can persuasively argue that they are in the printing business. All other companies are in their respective customers’ businesses and need to be conversant with customers’ status, objectives, culture and overall communication and promotional needs.
Graphic arts companies that haven’t made this mental transition are nearing the status of a commercial endangered species. Owners and managers who fail to recognize and address fundamental and strategic issues run the risk of becoming roadkill. This is not a prediction. It’s an observation. There already have been thousands of victims.
Dick Gorelick is president of Gorelick & Associates and the Graphic Arts Sales Foundation. He can be reached at email@example.com.