My $52,000.00 Payday

The biggest print order I ever handled was a mailing package for cable TV. The package consisted of nine different elements and it went to one million customers. The total print billing was over $650,000.00. Now that in itself wasn’t the incredible part. Many who might read this blog work for, or have worked for large web plants that could easily handle this job. I didn’t. I was employed by a small sheet-fed printer. Our “biggest” press was a 25″ 5/color with a CPU. At the time presses with CPU’s were just coming into the market and we were darned proud of ours.

Never Overlook the Unlikely

The customer was an unlikely advertising agency that was so small it wasn’t on anyone’s radar. They were located in my area, but not in my regular path of travel. Anytime I found myself near them, once a month, or so, I’d dropped in to say hello and see if they were anticipating any printing orders. The answer was always no.

An Estimator Can do More than Sit in the Office

One day out of the blue they called. Over the phone they described a job so complex that I felt I needed help with the specifications so collared our estimator and took her with me. I was glad I had the estimator because she had been a former press operator with our company and came up with some suggestions on the spot to simplify the job.

Persistence Beat Price

Within a few days we submitted our bid. I didn’t think that there was a ghost of a chance we would get it, but I had to see it through. When the bids were in, we were second. The lowest bidder was a well-established 40″ sheet fed printer in town. I never saw their price, but it was close enough that the agency decided that I should be rewarded for my persistence in calling on them.

Thank Goodness My Sales Manager Didn’t Hear What I Said

That’s when I said something that my sales manager would have kicked me for if he had heard it. I said, “I would love to do this job, but it really belongs on a web press and not sheet-fed.”

My customer responded with this question, “Will a web press give me better quality than sheet-fed?”

I told him, “No, but 95% wouldn’t know the difference.” Actually the 95% figure was a bit low. Without a side-by-side comparison I doubted that anyone would know.

What Made the Sales Manager Strut Like a Goose

To my surprise we were awarded the job. The next hurdle was collecting a half-down. To offer the bid we did it required the purchase of a great quantity of paper. We settled on a $360,000.oo figure with the balance due on completion.

I remember the day I went to the agency to pick up the check. Their customer had given them a cashiers check made out to us. I brought in the dough and gave it to the sales manager. He balanced the check on the upper frame of his glasses and leaned it back against his forehead and then proceeded to strut through the office, the sales bullpen, and the shop inviting everyone to see the biggest amount of money ever seen by our company.

It isn’t Over ‘Til it’s Over

Later the estimator who had been so helpful asked me, “Bill, you don’t seem very happy about this, what’s going on?”

“I am happy, but more than that I’m concerned that we’ve bitten off more than we can chew. It is going to be a nightmare around here until this project is finished. I’ll be happier when it’s done.”

Pinned by the G.A.S.F.

I wasn’t wrong. To this day I think the customer should have heeded my advice, but I got 8% commission on over $650,000.00 so in the end I have to say I did okay, and a few months later I was presented with a diamond pin for achieving the highest annual sales award given by the G.A.S.F. The money, except what went into my IRA, is a distant memory, but I still have the pin.

Note: If any reader would like to add their own favorite printing story, just go to “comments” at the bottom of this post and share it with all of us.

I don’t know about you, but I feel dispirited when I drive down the street and see yet another small business closed. Yes, there are tough brave souls starting new enterprises. Their offices decorated with optimistic grand opening banners, but most often the signs nowadays are final liquidation, lost our lease, or nothing at all, just an empty shell where a business once thrived. I’m not trying to bring you down here. This is a sad topic and I don’t know else to put it.

I’m not saying anything new when I report that the printing and mailing industries have been hard hit. Earnings have fallen 40% to 50% over the last two years. When a printing company calls it quits, you might think that the remaining shops would benefit by having less competition and the possibility of divvying up some one’s customer base. You’d think that, but it hasn’t been the case.

Unless you are in the printing business, you may not understand why it is happening, nor care. But you should care. No business stands alone. Businesses are about people and small business employs the most people. Those people when paid sufficiently buy the products and/or services of other businesses. We are interdependent.

A  business is NOT the sum total of its assets. Just go to a liquidation auction and see how much those assets are really worth–pennies on the dollar.

Why is this happening? Here are three reasons printers fail in a tight economy:

1. Printers count heavily on cash flow to pay operating expenses. No one I know has big reserves to tide them over. In fact it is nearly impossible to buildup a reserve when profits average 5% or less.
2. Printers are usually highly leveraged. To stay, or become more competitive a printer must invest in expensive equipment. The multi-color whiz-bang press they bought when times were better carries a multi-million dollar mortgage. Banks don’t care if business is down, they still demand their due.
3. Printing isn’t like the corner grocery. You can’t hire an employee for minimum wage and teach them the job in an hour. Press operators, for example, take years to train. Payrolls are relatively high because experienced people are necessary to fill critical positions. Just try to turn an inexperienced pressman loose on your whiz-bang press and at the very least you’ll be doing a lot of reprints. At the worst, who knows what costly damage could be done? I witnessed a press catch on fire one day. It didn’t do that by itself.

We are in a precarious position in the USA. Until we come to grips with the understanding that we are all in the same boat. One industry doesn’t fail to benefit another. When one suffers we all suffer.

I read in the latest AARP Bulletin that top executives especially in the financial sector are still getting increasingly lavish bonuses while at the same time cutting back on the retirement packages of other employees. I ask, who will take care of those employees when they are retired? Not the bonus babies, and not their companies. The burden will fall on all of the rest of us. A small percentage of the mucky-mucks will cruise along on their big retirements funded by extravagant bonuses leaving the worker bees to live on what the government can raise in taxes. Where does the tax money come from? The taxpayers, with the middle class carrying most of the burden.

Then New York Times in a January 9, post written by Louise Story and Eric Dash, entitled Banks Prepare for Big Bonuses, and Public Wrath, discloses the planned amounts of bonuses and  reveals that the bonuses were “earned” during 2009 when the taxpayers were bailing them out. When will we connect the dots and realize that their actions are not a victimless crime. And I think crime is the right word. They have taken away funds that could have made the country more prosperous for their own personal use. They have committed robbery by contract. If you think those zillion dollar bonuses don’t hurt you–think again. They do. Can’t we, for heavens sake, put a stop to this?

In my career I’ve had the good fortune of playing more than one side of the fence. I’ve operated a press. I’ve purchased printing as a customer when working at an advertising agency, and I’ve sold printing for heat-set web, and sheet-fed shops. Each change at the time came with its own drama, I was fired, laid-off, or resigned. The emotions were intense, but given enough time the emotions disappear. All is forgiven.

Here is an odd phenomena to contemplate, when you look forward at the beginning of your career you see the zig-zag steps you’ve taken as being out of control. When you look back, however, the career bumps and changes  form a straight line. You are today the result of those learning experiences. Perspective alters perception. It’s a little like the nature of time. When you are young, time wears on forever. As you get older time speeds up.

Where am I going with all this philosophizing? Good question. I wasn’t sure myself until I got into to it. The printing communication arena is changing faster than we are ready for it to change. Technology is coming that will blow our minds. There are two ways we can deal with it. We can grip tight and cling to outmoded business models, or we can throw caution to the wind, and go for it. You know, the only thing to fear is…(fill in the blanks)________     _________. We do not need to fear technology, we just need to figure how to turn it to our advantage.

I found this online article that explains my point. Even though it was written in 2006, and the examples cited are old hat, the thinking behind the marketing innovations is what is important.

Performance: Technological advances must be part of strategic planning Published October 12, 2006

Business owners often ask about technology’s strategic role in a business. Most companies would say that technology is not core to their business, but would say technology is “strategic” to their business. In Jim Collins’ seminal book, “Good to Great,” he addresses the role of technology in great companies by saying great companies adopt technology differently. “In great companies, technology is an accelerator, not a creator, of momentum.”

Technology is an enabler for business, so much so that it can be at the core of disruptive business models that emerge when technology is innovatively applied. Here are some examples.

Technologies can impact business models

Consider the movie rental business. Remember your independent video rental stores in the 80s?  They’re gone because Blockbuster took over with well-lit, well-stocked video stores blanketing every community. They are now being challenged by Netflix, which uses an online business model executed with technology and complex logistics. Netflix, for a flat monthly fee, allows you to have three rentals outstanding with no late fees, a much larger inventory than a local store and next day turnaround via mail.

Sensing a threat, which was both disruptive and technology-centered, Blockbuster responded with Blockbuster Online, which combines the NetFlix model, and four free local rentals per month at retail stores – something that is important if you are looking for the latest movie or want a spur-of-the-moment rental. Blockbuster’s strategy of tying the program back to local store visits can’t be matched by Netflix, assuming Blockbuster can execute the online program.

Think about digital photography’s impact on Kodak’s film business, the neighborhood film processor and Walgreens. Digital photograph technology has been causing massive disruption for more than a decade. With digital photography, you no longer create bad prints, you don’t buy film and it’s easy to share pictures with friends and family by posting them online. You can print at home or purchase prints online.

Kodak participates in this new model by creating and distributing EasyShare, an online picture portal that’s almost as inexpensive as printing at home. There’s no charge for using the software – they make money printing pictures on their paper.

And what about Walgreens (a “Good to Great” company, by the way)? How do they compete in digital photography? Walgreens created a software system similar to Kodak’s. And like Blockbuster, Walgreens leverages the value and same-day convenience of the local store. You don’t wait for the mail, you can pick up your high-quality prints (on Kodak paper) in one hour.

Phil Mydlach is the owner of Mydlach Management Advisors (mydlachmanage ment.com), a corporate planning and performance improvement practice in Waukesha. He can be reached at (262) 662-4646 or pmydlach@mydlachmanagement.com.

© Copyright 2009 BizTimes Media LLC

http://www.biztimes.com/news/2006/10/12/performance-technological-advances-must-be-part-of-strategic-planning

When you look at it with the right perspective you understand that the job of technology is to change things. Some ways of doing things will disappear and just as surely as I’m sitting at this keyboard some industry will go to Washington with its hand out begging to be saved. When they should have, and I’m talking now about GM (General Motors), led the technolgical wave. They had the electric car years ago and instead of running with the technology they crushed it.  To see the video go to http://www.pbs.org/now/shows/223/#here. It’s an eye opener.