Commentary & Analysis
FREE: The Printer's Perspective on Association Consolidation
WhatTheyThink has received many comments from printing professionals relative to Frank Romano&
By Cary Sherburne
Published: December 17, 2003
WhatTheyThink has received many comments from printing professionals relative to Frank Romano’s article on association consolidation which appeared yesterday. The majority of comments were from printing professionals who were members of one or more associations, although a few indicated that they were members of none.
As the associations—and their members—continue to mull over these important issues and develop their strategies for the future, the “Voice of the Printer” should be a critical element of those deliberations. The thoughtful comments from our readers ranged from supportive to highly critical, and contained a good deal of constructive criticism and advice. We thank our readers for taking the time to write to us on this subject. Note that a few printers declined to be named as they serve on boards of the association and did not want their personal view to be confused with the company view for which they work for.
How Does the Public Printer Weigh In?
Our Public Printer, Bruce James, of the Government Printing Office, shared his views on this topic with WhatTheyThink. As the leader of our “national” printing body, James has taken on the challenge of reinventing the Government Printing Office, and brings what may be a broader perspective than most to this discussion. No stranger to controversy, James makes his views clear:
I've always liked the variety of association experiences available in our industry which I believe contributes to growth, vitality and diversity. As the industry changes, new associations pop up to explore new opportunities. The danger inherent in a "master association" is that over time it will act as a cartel looking inward to protect the interests of members and eschew innovation and business regeneration. Rather than merge a dying association into another, I say let it die a natural death—without resuscitation. Make way for the future, make way for a new association more geared to changing needs.
Associations as a Microcosm
Several of our readers expressed the opinion that what is transpiring relative to the associations is simply a representative microcosm of the print industry, an industry that is characterized by a large number of relatively small entities often scrambling to survive in a volatile business environment. Brent Moncrief, Chief Marketing Officer of Capps Digital, summed these sentiments up by saying, “I think association consolidation is a natural evolution that mirrors the consolidation within our business. The combination of M&A's and the democratization of electronic prepress has significantly reduced the number of entities in our sector. This consolidation should not be viewed negatively; instead, fewer associations should be able to attract a larger and more diverse mix of participants.”
Patrick Nugent, President of AdColor, added his perspective: “The fact is that as the industry consolidates trade groups will, too. There will be less emphasis on the craft of printing and more on business management. The historic distinctions between design, prepress, photography, printing and fulfillment will continue to erode. It's happening very quickly and will be reflected in our trade associations.”
Joe Metzger from Metzger’s Printing & Mailing, reflected the view of many of the printers that responded when he said, “Much like the technology boom that supposedly ‘recently’ hit the printing industry in the past four years... Us Type, Prep and Service Bureaus have been feeling this stuff since the mid 1980s!” He points out that he has seen the associations in the prepress segment “change, merge and transform themselves into something new, different and updated to keep up with the times.”
He concludes, “Change is constant for the members’ day to day businesses, and it will also continue for the associations. It is critical that the associations bring more and more to the table for their members, as every buck counts these days!”
An Embarrassment of Riches
A common theme throughout most of the comments we received was the belief that our industry has too many associations, and that consolidation in some form is not only necessary, but inevitable. Christopher DeSantis, President of Royal Impressions, represented the majority opinion when he said:
I feel Association consolidation is very good because it will be much easier to navigate in this continuously changing industry. There are just too many Associations out there seemingly doing the same thing...providing education, training, consulting, etc. The power of a small few representing a larger number of firms would be much more effective…In this case, less is better, making it easier to manage to get the proper support both internally and externally, especially now during these very difficult times.
For members of franchise and other networks, Carl Gerhardt, who serves on the board of PrintImage International and is a member of the Allegra executive team, offers this piece of advice relative to how a franchise or “corporate” function can help individual operators sift through the vast amounts of information, often redundant and sometimes conflicting, that is available to them from associations and other sources:
One of the multitude of services we provide our franchisees is "distilling" the vast information available from various trade associations. This type of support enables our center owners to concentrate on running their business, as we help them apply that information to their own market situation. Thus, the overlap of information is minimized for our franchisees because of the role we play as a franchisor.
The fact that a franchisor would need to invest in resources to perform this function speaks volumes about the redundancy that exists. He goes on to point out that in the past, when PrintImage International had discussed the potential of merging with one of the larger associations, the membership overwhelmingly felt that “being a part of a larger association, … the quick and small commercial printers would be ‘lost’ and treated as a stepchild by the large commercial companies that dominate the decisions of the other associations.”
This comment points to what came out as a key requirement for any consolidation, that all constituents of organizations being consolidated must continue to have their critical needs met within the framework of any new organization. He concludes, “It is time for an active discussion on this issue. An industry that is in a period of rapid consolidation can ill afford too many overlaps or inefficiencies. The answer is not a simple one.”
Meeting the Needs of the Members
A number of respondents indicated that they felt consolidation was inevitable, but expressed concern about the ability of a consolidated association model to meet their individual business and professional needs. Here are a few of those remarks:
Consolidation benefits the membership only when it is done to further meet the needs of the membership. Association leaders can get tunnel vision just like the membership. Leaders should be leading the members into the future. Our industry is going through a major technological upheaval and many printers will be left behind. Some of the trade associations will be left behind also as their usefulness declines. Good, bad or ugly, association consolidation will happen naturally as technology continues to change our industry.
Tim Levy, Pel Hughes Printing, LLC
Our studies have become the rock on which our most successful shops run and [which] others use to improve themselves. These cost money and time. They are 100% designed to fit our membership and a major reason why I am a member. I know PIA/GATF refuses to do a pricing study, as they feel it may break some anti-trust laws. We (PrintImage) do and it is the #1 study we produce and we will always do one…I believe if PII merged and did not do some of the things that make us unique, we would see a new group show up the next day.
John M. Henry
Mitchell Printing & Mailing Company
And Gordon Griffiths, President of Mail-Well’s Commercial Segment, had this to say:
We are familiar with the work of the NAPL, PIA, GAMIS, GAPTRAC, GATF, EMA, the regional PIA's and various other associations such as AF&PA that provide relevant information to those involved in graphic arts. Each has a distinct offer and unique value. If any of these associations do merge we hope they will continue to provide us with data that permits us to effectively monitor trends, stay current, do our long-range planning and provide a forum for dialogue, education and a united voice where it is needed.
We note that many associations that provide industry data have different ways of reporting on industry trends and use different models and assumptions in arriving at their conclusions. If consolidation among the associations does take place we believe the industry would benefit from a reconciliation of the models. We would get more factual, rounded and ready to use research information.
Who Will Survive?
Our readers also voiced the strong opinion that the associations must focus their efforts on understanding evolving industry needs and articulating a clear vision and value proposition to their members. And many felt that an organizational structure that has both national and local elements is a critical enabler to accomplishing these objectives. Here’s a sampling of what they had to say:
Surviving trade associations, like surviving print businesses, will be the ones that clearly communicate their vision, tie that vision to perceived value for their customers, and then measure their product/service delivery to prove that they are walking their own talk. This seems to me to be a good thing. But regardless of my opinion or anyone else's, the marketplace will drive the process.
My concern is with the down side (of consolidation). I feel you might need either two associations, one at a national level that can draw larger turnouts and hold major events, and another one at a local level which would provide many more local events or a national organization and a local chapter to accomplish the same… If consolidation can keep the local presence, then it’s okay by me. If they lose it, then I believe total service to the members will decline.
Dennis Dater, Vice President CAPB.
Allegra Print & Imaging, San Diego
The overwhelming majority stated that they saw too much overlap between and among the current associations. One representative of a large Midwest printer had this bit of survival advice, specifically directed at PIA/GATF and NAPL, indicating that while his company is a member of both associations currently, he believes he will be terminating his membership in one or the other in the near future. He says that since access to industry and business information is so much easier today, he finds that these organization have more overlap then ever. In order to eliminate some of the redundancy, here is what he suggests:
Strategically, if I were them and wanting to survive as separate entities, I would hold a high level planning meeting with members of each of the boards [to develop a] long range plan between them … for one of them to be the voice for industry standards, research and technology and one of them to be the voice for industry data and development of human capital.
And another reader echoed Public Printer James’ sentiments relative to the need to be forward-looking and to foster innovation:
I hope the surviving trade associations brand themselves with force and clarity regarding their vision and value proposition. If the best or only way I as a customer can recognize a trade group is by knowing who they used to be, then they face backward and offer me primarily the opportunity to repeat history…Ideally trade associations will help us learn from history, and will point in new directions based on methodologically sound analysis of the industry and the economy within which it operates.
What Does it All Mean?
Jesus J. Rodriguez, Ph.D., Professor and Chairman of the Department of Graphics and Imaging Technologies at Pittsburg State University, pointed out, “It comes back to leadership, communications and sharing the scope and direction of the old and new organization and being willing to [live up to] the expectations and insist on credibility down the road.”
Gordon Stanley, GM & VP of PathForward did a nice job of summing up the feedback we received at WhatTheyThink, echoing the belief that much of the success—or failure—of any consolidation will lay on the shoulders of association leadership.
The consolidation of associations has pluses and minuses just as the merger of corporations. Gains come from leveraging the size and power of the new organization, and the interaction of various groups as they merge, which provides new ways for members see varying viewpoints and gain better representation. The losses come from less representation of special interests, the difficulty of blending cultures and the potential increases in overhead. Just as in corporate mergers, success will be determined by leadership who acknowledge and develop plans to deal these challenges. I believe that consolidation in associations is unavoidable just as the printing industry is consolidating, it is the inevitable outcome of a mature market. The balancing factor is that in a reasonably free market, if associations become too consolidated to the detriment of their respective memberships, we will see new organizations spring forth to represent those interests.
Gordon Stanley, Path Forward
Join us tomorrow to see what association leaders have to say….