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Interview

Kodak Graphic Communications Group: One Year into the Integration (A Conversation with Jeff Jacobson)

During the On Demand show,

By Cary Sherburne
Published: May 24, 2006

During the On Demand show, WhatTheyThink had the opportunity to catch up with Jeff Jacobson, President, Graphic Solutions & Services, Chief Operating Officer, Graphic Communications Group, Kodak, to gain his perspective on the business and the industry a year after he took on his current role in the Graphic Communications Group at Kodak. Here’s what he had to say.

WTT: Jeff, great speaking to you, as always. You have been in your current role for one year now. What would you categorize as your key accomplishments?

JJ: It starts with the integration—that’s the thing we are most proud of. I consider myself to be a realistic optimist, and I didn’t' think we would be where we are today, just one year into this. There is still so much to do, but first and foremost, we had to bring together our culture and our systems. The systems part takes the longest—integrating the back end systems for six different companies. But I certainly didn't think that at this point, we would be as integrated as we are culturally, one team with one vision.

WTT: To what do you attribute that success?

JJ: When Kodak laid out over $2 billion to build the Graphic Communications business, there were certain economic models that absolutely had to work, Many integration models fail because once the acquisitions are done, they throw out the financial models upon which those acquisitions were based. We haven't deviated from the models and justifications we established for the acquisitions. And we are far ahead of our cost and revenue synergy goals. Every show we go to revalidates the opportunities we have. At Print05, for example, we exceeded our goal by a factor of three; at IPEX, we had double the revenue we were aiming for. And we expect similar results at On Demand.

WTT: What are your objectives over the next 12 months?

JJ: What we accomplished the fastest over the last 12 months was getting our field force—sales, service and marketing—integrated to ensure that our customers’ needs were satisfied even through the transition, on a global basis. The systems integration will continue for a couple more years, and we are working hard to make sure that that is transparent to our customers. These are more administrative types of functions. We have also set up our compensation systems to reward people for selling in depth, selling all product lines equally, and we will continue to focus on that. We have had good success so far with our “one face to the customer” approach. An example of that is the fact that we have a 90% attach rate—that is, when we sell a plate setter or plates, 90% of the time they are matched up, the customer is buying the complete system from us.

WTT: Do you have other acquisitions in the works?

JJ: We want to digest what we have here. But the answer is never “no.” We are still only one year into this, and we spent $2 billion to acquire six companies. We want to demonstrate and ensure that we achieve our financial goals before we take on more.

WTT: How about your new CMO, Jeff Hayzlett?

JJ: Jeff reports to Jim Langley, and the CMO role is now a little more focused inside the business, more integrated with our strategic product groups and regions. It is now a more operational role. One of the key elements of that is the way we will be handling segment marketing. We have seven key segments, including commercial print, newspapers, creatives, etc. Before, we had part-time segment roles, and we found it was difficult to do what we needed to do with part-time resources. So Jeff and his team will focus on understanding the needs of those segments, working with the strategic product groups and introducing packaged solutions into the regions. He also will have responsibility for business development and partner relationships.

WTT: So here we are at On Demand, which is really a digital show, and you have a great presence here. You obviously see the future in digital. What about offset—is it going away anytime soon, in your opinion?

JJ: The thing that is most exciting to me is the footprint that we have today. As much as this is a digital show, offset is still 40% of all printing. Just as we were able to migrate customers from analog to CTP, we have the biggest base to migrate from offset to digital. Many of our customers find that adding digital actually increases their offset volume. It is really a hybrid world and the two technologies work well together. But offset will be around a long time. There are billions of dollars of cylinders out there.

WTT: What is Kodak doing to build more of these hybrid opportunities?

JJ: For one thing, we are not just out there selling hardware. We are bringing a full solution to customers, beyond the digital or offset press they may be acquiring. And we are very active relative to standards. For any industry, standards are important. They make the industry more productive and efficient. As an industry, we have not been as efficient as we maybe could have been. For Kodak, it has never been about one-stop shopping. We understand it is a multivendor environment. We have built a lot ourselves in terms of the total solution, but a lot has also been made available through acquisition and through partners. The key to that is workflow, and workflow isn't just a cable you plug in. There is much more to it than that. We have a leadership position in offset, a leadership position in workflow. And in digital, which represents the greatest growth opportunity, we have a continuum. And that is by design. Our objective is to help customers integrate from host to post.

WTT: Jeff, thanks for talking with us today. Is there anything else you would like to add before we close?

JJ: You get so few opportunities to do what we are doing at Kodak. When Antonio gave us the vision for the Graphic Communications Group, he said that Kodak needed another leg in the stool, one that could be a clear market leader. We can't be arrogant about what we have accomplished or rest on our laurels. Rather, we have to work hard at taking it to a new level. The industry has been good to me; I love it very much. And I would love to see the entire industry elevate itself and be a place where young people want to come to work. That’s the future for us.

Cary Sherburne is a well-known author, journalist and marketing consultant whose practice is focused on marketing communications strategies for the printing and publishing industries.

Cary Sherburne is available for speaking engagements and consulting projects. To get more information contact us.

Please offer your feedback to Cary. She can be reached at cary@whattheythink.com.

 

 

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