Discussion

By Michael J on May 11, 2009

All good points, but... the primary predictor of success or failure is not what you do, but who you are. Pigs can't fly, even if they have the perfect strategy, focus and desire.

Organizational DNA tends to be OPM/PSP/production focused or VAR/customer focused. The most reliable road to success is to not try to fight the organizational DNA but to nurture it.

If you want to get into a different business partner or buy a company that has the complimentary DNA. Printer + mailer + marketing firm is much more likely than printer becoming a mailer becoming a design firm.

There's plenty of opportunity for everyone. But as Marlo Thomas used to say, "You have to be the best of what you can be." It matters less what that is, as long as it is the best of whatever it is in any given market.

By Chuck on May 11, 2009

You correctly state part of the problem with this idea. In addition, the MSP "mantra" incorrectly assumes that all printers do is print marketing materials, and that their only possible alternative to calling on "print buyers" is to attempt to move up the food chain to "marketers" or the CMO. There are a lot of other "business owners" in companies who are terrific prospects for print products, who are not in marketing.

By Lou Berceli on May 12, 2009

I agree with Michael J that to partner, merge or purchase another group with compatible DNA can be a key to success. I have experienced and know of several small, medium and large companies that have done this with an approximate 50 50 success rate at best.

I do see a need in our industry to improve the match making / partnering process that seeks out compatible DNAs / Cultures. I also see a need for the compatible parties to accept the fact that they each have their own SWOT, Strengths, Weaknesses, Opportunities and Threats.

The one major weakness that most DO NOT recognize or address prior to starting a merge process of DNAs is the fact that MOST organizations leaders are very WEAK in match making / merger and financial negotiations.

I suggest using a 3rd party business merger consultant to help with this common weakness.
Setting strategies with steps to achieve specific financial goals will help deliver a WIN WIN WIN.

Goals that allow WINs for the 2 parent DNA organizations to motivate transition with a plan to then unplug their old DNAs to the final WIN for the new merged DNA org.

By David Dodd on May 12, 2009

Michael J,

I agree that a merger or an acquisition can be an effective way to get into a new business. And this approach can be the best way for some printing companies to expand into broader marketing services. As Lou Berceli pointed out, however, mergers and/or acquisitions are not risk-free, nor do they always produce the desired result.

I do disagree strongly with your argument that what a business can or cannot do is controlled by some kind of unchanging and unchangeable "organizational DNA." Companies and managers MUST adapt to changing market and economic realities in order to remain successful. If the change is significant enough, those companies that don't adapt don't survive. I'm not saying that changing the character of a business is easy or without risks, but it is far from impossible. If you don't believe that, read the interview of Mark Parent that I mentioned in my original post.

By Michael J on May 12, 2009

David,

Just to be clear, I did not mean to say that the only alternatives are to merger or acquire. The most plausible alternative is to network or partner. The point is to keep everyone focused on what they naturally do best.

No doubt, organizational DNA can change. The recent experience of Anderson Litho under Cenveo management showed that pretty clearly. What I'm trying to point to is that companies are dependent on the DNA - that is the demonstrated personal qualities - of the leadership.

Thanks for the point to the interview.

What I got out of it was the Mark started as quick printer 17 years ago. Then moved to being an offset printer. Then gathered a finicky clientele. Then focused on getting to a PDF workflow to make his print production efficient. Then seeing that was a difficult market moved to solution selling.

So my takeaway is that he has demonstrated persistence, a record of responsiveness to market conditions and the ability to maintain a clear focus. I might say he has the DNA of being a VAR.

When asked what he would do differently he's quoted as saying

"If I could do it over again, I would start another company under a different name, work that part of the business, and let someone else run and be responsible for delivering on the print side to feed the new business."

That points exactly to what I'm trying to say. Let people with Print production DNA print. Let people with VAR DNA do the solution selling. But let each grow in their own protected environment and make sure the communication between them is mutually respectful and open.

That's what I mean by DNA.

By John on May 13, 2009

Great discussion and a great topic. When new prospects ask me about CP&I- I tell them one thing- We're the easiest company to do business with. We print, we mail, we fulfill on a daily basis for clients who rely on and value our expertise.

Sounds simplistic- but I've yet to meet a prospect I want to work with who has rejected us because we're too simple. In my opinion, companies that use phrases like MSP instead on printing, mailing and fulfilling, are typically already one step to the graveyard. Of course there are exceptions, but overall I find changes in focus to be driven by frustration and the inability to see at any distance. I guess the biggest issue I have is an industry press made up of people who generally have NEVER made a payroll- telling me I should change my company or die.

By Michael J on May 13, 2009

John,
Thank you for the sentence "We’re the easiest company to do business with."

I think that if printers spent less time worrying about what to call themselves and alot more time to make it easy to do business with them, they would all be a lot more successful.

My own little soapbox has been the single most important thing anyone could do today is to measure how long it takes to answer the phone.

Until you've got that done to the first ring, everything else is a complete waste of time.

By Gary Ampulski on May 13, 2009

These posts seem to be characteristic of what our industry is going through right now. Given the current economy and add a healthy dose of new technology and what you have is a formula for an industry under rapid transformation. There is only one direction ...forward.

Everyone is interested in what to do to "make it". Those with good, long term relationships will find a way to survive because they recognize they are not just printers or marketers but service providers who help their clients successfully communicate with their customers. They embrace change and have the infrastructure to support it. For them, these are "the good ol' days".

What sells at industry conferences and with consultants is what's new. People are looking for options because things are not working the way they used to. However, I agree with one post that suggests that all the experts in the world aren't worth much if they haven't had to meet a pay-roll or commanded a ship through troubled waters. Success is still only 10% inspiration and 90% perspiration. Your customers will tell you about value (inspiration). You just need to find a way to deliver (the perspiration). Strong companies do not suffer a lack of vision or a crisis of leadership.

There are plenty of opportunities in this industry and I believe even a mediocre plan executed flawlessly is still far better than a highly tuned strategy poorly implemented.

This really isn't rocket science and the real elegance is in simplicity.

By Harvey on May 13, 2009

I hear a lot about changing identities from print provider to marketing services provider. Wow, you mean now that you're calling yourself an MSP, you can provide strategies that can actually generate new business? Does this open up a world of malpractice. Imagine claiming to be a marketing provider and not touching on all of the necessary competitive research, market analysis,base line testing, pitch development and everything else a true marketing firm gives. It's like swinging a client into postcards because that's all you make. I bet their will be a lot of lawsuits due to misrepresentation.

By Alan Roberts on May 13, 2009

This is a wonderful subject and the threads are an interesting read indeed. I certainly would not want to go to my general practitioner if he claimed to be a heart surgeon because he knows how to read my pulse. Our Clients buy our products and services as they meet a specific need in their marketing mix. They rely on us as print professionals to maximize their spending dollar and expect that we will apply our professional advice to help them best produce products to their need and budget. That is our value add. I do agree however that there is a role to play in helping a Client in the product life cycle that goes outside of most individuals comfort zone. As a Client uses the products we produce to meet a specfic business goal, I strongly believe that we can play an important role in helping them measure the success of the product. This may include providing tools to help them measure the success of a direct campaign, PURL's etc that are part of the print process. But to think that we know their business better than them with respect to providing marketing advice is akin to stating we are Heart Surgeons. If we can continue as an industry and individuals to advise how print can be used more effectively as part of their marketing mix will only drive more orders.

By Wayne Peterson on May 13, 2009

References to organizational DNA sound a little ethereal, and muddy something I think is essential. Any effective strategy will link two things: marketplace opportunity (need) with organizational capability to meet it. Useful terms too often become buzzwords and fall out of favor. In this case the term "core competence" (which went through that unfortunate cycle) has real value. A marketplace opportunity isn't sufficient. Just finding one, even a really large one, is useless unless the organization has the necessary set of competencies to fulfill that opportunity.

So the exercise must involve looking from the outside in as well as from the inside out. For me, understanding what the organization is capable of doing or learning to do is as important as understanding the opportunity in the marketplace to create customer value. Good strategic marketing rests on assessing both very well, not merely finding an unmet marketplace need.

While compatible cultures can be important in a successful acquisition, more often the culture with more power (the acquirer) simply engulfs the weaker one. I've yet to see a real “merger” ... someone is always acquiring someone else. And the acquiring company's organizational culture will win out over time. More important is an acquisition where complimentary and essential capabilities are gained. That is when the acquisition yields a 1+1=2.5. Acquiring more of the same typically yields something more like 1+1=1.7.

Moving from being an undifferentiated commercial printer to being an undifferentiated MSP is not a recipe for much forward progress. It might be a recipe to restore the status quo in some cases, but not much more. Momentum always requires a sustainable competitive advantage – something that sets you apart from your competitors in fashion that creates more value for your customers than your competitors are creating. And that always rests on effective differentiation. It cannot rely on following others in a lemming-like fashion, no matter how seductive the apparent opportunity. Einstein had it right: “For every problem there is a solution that is simple, obvious and wrong.”

By Michael J on May 13, 2009

Wayne,

I think you are spot on when you say "Any effective strategy will link two things: marketplace opportunity (need) with organizational capability to meet it."

But . . .the problem is to have a good model, to which one can attach process metrics, that defines an ongoing process, not a core competency at a moment in time.

I like to use organizational and leadership DNA because it captures the idea that there is something unique in every company. Most usually it is about the decision-making process over time and the focus of the top people.

The form of an organization at a moment in time is just a snapshot of complex, ever changing relationships between groups of people.

One way I like to think about that complexity is as an evolutionary development, driven by Darwinian principles of random mutations and competitive selection. The business environment is always changing. But the response of the organization to those changes is critically dependent on the organizational DNA.

In my experience there is too much that can be done. As has been said, The essence of strategy is knowing what not to do.

I've seen too many good, smart people in many organizations who are too busy being busy to have time to think and focus on what's next.

The irony is that the key characteristic of successful companies - either the mom and pop shop or the global - are focus and persistence.

By Wayne Peterson on May 13, 2009

Michael,

We're not far apart, if at all. A core competency is always a human element. And it is much more than merely a current capability. Since those competencies lie in the human capital (another buzzterm) of an organization, they are adaptive in just the way you describe.

The danger lying in "being too busy being busy to have time to think and focus on what's next" is myopia. That's exactly what I was getting at when I said that looking from the outside in as just as important as from the inside out. Worst case scenario, and what I think you're pointing to as well, is looking from the inside in -- not seeing outside the four walls of the plant and today's urgencies.

I love that Warren Buffett's answer when asked the characteristics of the companies he acquires boiled down to one key element: "a durable competitive advantage." And whether we call it DNA or core competence, focus and persistence are required to conceive of, create and maintain any durable competitive advantage.

All the best,

By Michael J on May 14, 2009

Wayne,
Thanks for the response. I agree that we agree.

By John Foley, Jr. on May 14, 2009

Hi Folks,

The MSP mantra has been bounced around for a few years now – I have been a drum beater! I think fundamentally the Print Service Provider (Marketing Execution Category) must do something to diversify their business in order to sustain never mind grow. So yes my opinion is "To be" a Marketing Service Provider.
The issues that I consistently see points back to a strategic plan and then reshape/direction of the organization. I often ask the folks (President, IT person and Pressman) that are buying technology at the tradeshow why they buy these solutions and they say they want to add value to their offering and drive a higher profit margin on selling/delivering marketing services. I ask them what is the plan? Where is YOUR marketing plan and sales plan (2 different things by the way) and they say we don’t have anyone in marketing. In business we often overlook the simple things. I know I am over stepping little here but the wrong people are lined up to buy technology and that in itself impedes MSP growth.

In business we need a business plan; the plan provides the roadmap and focus which will give the company the best shot at achieving its goals. Yes the plan changes and that is okay but you should start with one. And a major component of the business plan is - The Marketing Plan. That is the thing that tells you how you are going to bring the new company and services to market. A good start for any organization prior to moving down the MSP path is to look at their marketing plan, if you don’t have one develop one. Why? Selling a marketing solution which an MSP must do, consultatively is different than the way PSP's have been selling their print services. Analogy = I am not a Biotech company if I were to get in that business I would have to have the resources that could market and sell those services. So one of the moves I would make is to find a marketing person that understands the marketing process for selling those services. I woudl also use that person to help me position our comapny in the market. It would be different than selling technology as I do today. The print service provider needs to do the same to be more successful.

Finally do your own marketing before going to sell these services. The following saying aply - Eat your own dog food! If you want to talk the talk - walk the walk! Practice what you preach. I am amazed that the MSP wanna bees first make every attempt at selling these services without the right resources and they have a million excuses why it is failing. Never mind they barely f at all do any marketing themselves. Just do it yourself first. “You are your first customer!”

Thanks David for the post. Yes I believe the MSP is the way to go. Just start with the business basics and you will win the day!

My 2 Cents
- John

There is more where this came from ;)

Follow me on http://www.twitter.com/johnfoleyjr

By John on May 14, 2009

I wonder how a printer becoming an MSP deals with becoming a competitor with their own customers? Sounds a bit like what happened before when printers began doing creative as a way to offer more services and open up new business revenue streams. Creatives simply took their business to printers who did not compete with them. Eventually most printers abandoned their creative depts.

- J

By Michael J on May 14, 2009

John,
WIth all due respect . .
Before you can market you have to have a production process that is flawless and as elegant as possible. You also have to have a constantly improving ease of purchase. Then and only then does marketing make sense, in my humble opinion.

The reality is that work comes in the door mostly through word of mouth. Word of mouth depends on flawless product and ease of use. Money and focus spent on marketing, before you've achieved the great product and present customer facing systems, is not money well spent.

So first be a great printer. Then worry about other things.

By Anne Stewart on May 15, 2009

The great thing about marketing communications is that it doesn't have to be one massive package or nothing. A printer doesn't need to, and probably shouldn't, jump from straight print and mail to MSP overnight. The process should happening organically, adding to your staff and services offerings as resources and demand allow. Every branch on my company's printing tree grows out of some need from our customer-base, and growth into providing a variety of communications service happens naturally.

By Alan Roberts on May 15, 2009

For twenty years I was the Vice President Marketing of a 70 million dollar printing company with a marketing staff that included creative,product management, market analysts, telemarketing and brand management. We effectively managed the marketing 4P's (Product,Price,Place and Promotion)and the company today continues to be a market leader. While that organization had exceptional marketing talent, our core competency was producing products for our 10,000+ active clients. We had an exceptionally high customer satisfaction rating because our staff knew how to "serve clients" . Our marketing staff focused on our marketing which included educating our Clients on how to effectively used print products to acheive their business objectives. We would have never claimed to be an MSP, we were a great profitable, well recogniized, well managed printing company

By Michael J on May 15, 2009

Alan,
Sounds great. Get the printing part right and you don't have to worry about what you call it.

We had an exceptionally high customer satisfaction rating because our staff knew how to “serve clients” .. . . We would have never claimed to be an MSP, we were a great profitable, well recogniized, well managed printing company.

I'm not saying that doing MSP is wrong. I'm just saying that calling it MSP is more confusing than clarifying.

By Jason C. on May 18, 2009

Most print service providers don't want to transform into MSP's, and for good reason, they're printers, not marketing firms.

I think the biggest problem is that before you can help your clients to better market their businesses, you need to first be able and capable of marketing your own successfully.

But I understand the urgency to find new profit centers, too. I just don't believe it should be at the expense of core business?

In my opinion, "potential" profit centers that require a substantial upfront capital investment, an expensive learning curve and that have long sales cycles are probably not the right direction for any company struggling right now, especially a PSP.

By Erik Nikkanen on May 18, 2009

I have tended to think that the idea that printers should become something else was a bit dumb. Sounds good but not easy to do.

My whole printing science effort was based on ways for how printers could have more competitive and low cost technology based on this new science.

It is obvious now but survival is always the underlining goal of any effort to have a sustainable competitive advantage. But the fact is that in good times or bad economic times, printers will not step far outside their comfort zone to obtain that competitive advantage even if the cost and risk is low.

This pattern of behavior is seen in both large and small printers. One might think that this severe economic environment will result in the smartest and best printers being the survivors. This may not be the case if everyone has taken the same no risk approach.

What might be left is the group of people that were good enough to survive but had no other place to go. The more entrepreneurial types might have already left. This type of contraction can not be good for an industry.

By Michael J on May 18, 2009

Erik,
to your point about the "smartest and best"...

Darwin said “It is not the strongest of the species that survives, nor the most intelligent that survives. It is the one that is the most adaptable to change.”