THE OWL AND THE CENTIPEDE

A Cautionary Tale for Printers

A mid-size printer closed a few months ago. No big news by itself, but their story was especially poignant, because Alonzo Printing had been recognized in the press for doing many of the right things – establishing a name as an environmentally responsible printer, and repositioning the company as a marketing services provider.

Alonzo’s closing reminded me of the story of the owl and the centipede.

One day, a centipede was complaining to the wise old owl. “My feet are killing me. Every day. All the time.”

The owl thought for a moment, blinked, and said “Well, if you were a sparrow, you’d have only two legs, and just think how much better you’d feel.”

The centipede was thrilled. “A sparrow….great. How do I become a sparrow?”

The owl blinked again, turned his head and said “Don’t ask ME. I just deal in concepts…”

It’s easy for commentators and journalists to tell printers how much better they’ll feel when they’ve become marketing services providers. But becoming a sparrow is no easy feat for a centipede and becoming a marketing services provider is not much easier for a printer. 

Every day brings another story of a business failure – and in almost every case, the CEO is quoted as saying “We TRIED offering marketing services, and some clients went for it. But it was a long hard slog, and we just weren‘t prepared for how long it would take, and how difficult and expensive it would be to develop the new capabilities. It didn’t cost much for the equipment, it was the staffing in entirely new areas. Marketing people, designers, programmer/developers, and people to sell the new services, because most of our existing salespeople just couldn’t get comfortable with the higher-level sale.”

Alonzo’s story should serve as a warning sign to many CEOs whose companies are trying to make the transition from being traditional printers. Being successful in selling entirely new added-value services requires much more than calling yourself a “marketing services provider.” It requires an entirely new skill-set, a new way of thinking, and entirely new kinds of people who probably know very little (and care even less) about printing.

Getting comfortable in that new marketing role is not automatic, and getting clients to believe you’re a credible resource is even more of a challenge. Merely changing the tag-line on your business card isn’t enough. Nor is telling your existing salesforce “go out and sell marketing services.”

Choosing the right direction is difficult. It requires careful thinking about your company’s strengths – some of which you won’t even begin to develop until after you decide on the direction to pursue. You also must have a business proposition that is credible with customers – which can present a problem if you can’t yet do what you’re promising. So it’s no wonder that making the transition from being just a plain old printer to something grander takes a good deal of time, ingenuity and money.

The Alonzo story is a grim reminder of the realities of being caught in the midst of making such a difficult transition. It’s also a reminder that if you’ve decided to make the transition to a new business model – whatever that model may be – you must remember to pay even closer attention to your existing business, which will be paying the bills until the new business effort reaches critical mass.

If you’re moving into new territory, you must certainly commit yourself fully to making the necessary transition, but you can’t permit yourself to be so completely diverted by the new initiative that you stop fighting every day to extract every dollar of profit from your existing business – squeezing more sales out of the existing salesforce, producing the existing jobs more productively and cost-effectively in the plant, streamlining operations and adjusting staffing levels to a realistic level of sales. All of those steps can generate the profits required to fund the time-consuming, difficult and costly transition to whatever you’ve decided your company should become.

Meanwhile, our condolences to those CEOs who have gone off in search of greener pastures and run out of food before completing their journey. Becoming a sparrow is no easy task.

Bob

***Close window to return to the workshop discussion***

A RECESSION IS A TERRIBLE THING TO WASTE

The only good news from the recession
With the brutal recession showing signs of coming to an end, the only good news is that the downturn has encouraged many printers to make long-overdue changes in their business.
Printers saw their businesses steadily eroding over the past few years, yet somehow the alarm bells didn’t ring loudly enough. The seriousness of the downturn shocked many CEO's into taking a really hard look their businesses, and many have made cost cuts that were long-overdue, streamlining their organizations and eliminating some employees who hadn’t grown along with the business.
It took a sharp fall-off in sales to prove that old selling styles won't work anymore. That’s led to major changes in sales approaches – and in sales forces. We’ll examine those sales-related changes in the next discussion.
Meanwhile, it would be a shame to miss this opportunity to reshape your business. It’s not too late. Look around and you’ll find plenty of changes you can make.

You can’t save your way to genuine profits, but…
In printing, you can’t save your way to profitability. Real profits can only come from having enough of the right kinds of sales. Nonetheless, you can lighten your load so that you can spend more time figuring out where to get the new sales you need.

Reshaping your business is more than reducing head-count
Economic downturns cause everyone to take a closer look at their employees, but most companies wait too long, and then over-react. They lop off jobs without figuring out what their company needs to look like in order to meet customer needs. So why not take the opportunity to streamline your operations – making things work better, not just cutting costs
The changing shape of your business may have left some people with only parts of their old jobs. It’s not their fault, but your business may have changed enough for you to be able to combine or re-define some jobs.
Order entry is becoming more automated, and pre-press has become vanishingly small in most companies. Customer service is less technical and more focused on project management. Improved MIS has reduced the complexity of estimating and made many financial functions more routine and less time-consuming.
Aren’t there some streamlining steps you can take to move the work more quickly by having it touched by fewer hands? It’s not just about saving money. It’s about aligning your organization with the new ways you need to operate in today’s world.

Dealing with non-performing employees: here’s your chance
Reshaping your operations will be another topic for future discussion. Today, let’s address everyone’s least favorite topic: dealing with consistently non-performing employees. Every company has them, and most people hide from making a tough decision. Let the recession help you to face it.
I’ll bet you have at least a few employees who are long-time under-performers, or who no longer fit your company’s needs. They grill the burgers at the company picnic and collect toys at Christmas, but they just don’t meet the standard for doing their jobs. They’re nice and dependable – that is, you can depend on them to do a mediocre job, or worse.
Maybe you’ve coached them, or invented new jobs for them. Maybe you feel guilty or sorry for them. Or maybe you’re worried you won’t find someone better, so you’ve permitted them to continue failing. We see this quite frequently with estimators, customer service, production and financial people.
Many managers feel they’re being kind in permitting this to continue. But is it kind to let someone fail over a very long period of time? Ask yourself these questions, and try to answer honestly:
(1) Is X performing his or her job as well as we need them to perform?
(2) Are their skills well-aligned with our company’s current needs?
(3) Do they have a full job that adds enough value?

Learn how good it feels to be saved
When you’ve faced the facts, take action. If you feel badly about a termination, be helpful and generous, but do it anyway. You can’t save your way to real profitability, but you can get your company in shape to do the right kind of business in the right way.
Don’t wait. Give yourself permission to do a few painful things. It will be difficult at first, but a few months from now you’ll wonder why you waited so long. Take advantage of the downturn before it’s too late.

After all, a recession is a terrible thing to waste.

Bob

***Close window to return to the workshop discussion***