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Commentary & Analysis

Change, Choice, and Leadership

Half of the printing companies that were in business in 1995 are gone. We are losing 1,000 to 1,500 more per year. And…since those firms are gone, i.e., they didn’t survive; it seems likely that they failed to change in some way that might have led to their survival.

By Wayne Lynn
Published: October 7, 2013

It is not necessary to change.  Survival is not mandatory.   W. Edwards Deming

Half of the printing companies that were in business in 1995 are gone.  We are losing 1,000 to 1,500 more per year.  And…since those firms are gone, i.e., they didn’t survive; it seems likely that they failed to change in some way that might have led to their survival.

When we are no longer able to change the situation, we are challenged to change ourselves.

                                                                                      Victor Frankl

Anecdotally, it is probably safe to assert that many of the non-survivors perished when they ran out of time waiting on things to return to normal.  Unable to change a world where the internet came into being and we have seen, not one, but two recessions since 2000; they were unwilling or unable to change themselves.

Leadership is about making choices in times of change.  Change can be externally induced on an organization by environmental forces like economics, technology, demographics, regulation, and competition.  Change can also be internally induced within an organization by its leadership’s desire to create better results or to get out in front of changes in environmental forces.

Thinking about what we have seen in the last couple of decades in our industry, the difference in the 27,000 firms we have lost since 1995 was likely leadership.  All of us probably know of an exception or two that can be written off as bad luck.  But, for the most part, those companies failed from lack of leadership.  Someone, the owner(s), didn’t step up and make a choice to make a difference.

There is almost universal agreement that the decline in the number of printing companies isn’t over.  At this point, we don’t know who will be around and who will not.  It is a safe bet that those who are around will be those owned and led by leaders who step up and accept that the old days are gone and will never return.  Acknowledging to themselvesandtheir companies that the environmental context in which they operate is beyond their control, they will step up and make decisions that give their firms the chance to survive and thrive again.

Our industry enjoyed unparalleled growth and success through the middle of the 1990’s and even into the early 2000’s.  Demographics and technology combined to produce the longest peacetime economic expansion in recorded history.  It was relatively easy to get into the printing business and you had to really screw up to not stay in business and live a solid, upper middle class lifestyle.  The major approach to strategy was to build a broad set of capabilities that enabled the printer to produce most customer orders.  (I jokingly refer to this as the “field of dreams” strategy.)  Most printing plants were designed for flexibility and range of product.  This requires a steady, consistent product mix to be highly profitable.  Because only a few in the general commercial space focused on target markets that helped smooth out the natural seasonality in print demand, this strategy seldom produced high levels of profitability.  Most owners felt good about their efforts if the tradeoff between good and bad months of the year yielded even a small bottom line at year end.

All of this began to change in the middle of the 1990’s with the internet and waves of digital technology coming after.  We didn’t fully appreciate it at first but we had begun competing with alternative media options that seemed to have compelling economics, at least on a cost per message basis.

As demand for print began to shrink, our economic models began to break down on us.  Staffing and equipment decisions we thought were necessary as “general commercial” printers now became a noose around our collective necks.  Company counts and, eventually, total industry sales began declining.  Except for about one out of every 4 firms, we became a no-profit industry. 

In the face of all this we are confronted by one key choice:  to change or stick with the status quo.  I don’t like the odds of going with the status quo.  How much longer will 75% of the remaining companies (the non-profitable ones) remain non-committal to true and deep-seated change in their value propositions and business models?

Why are they waiting?  I know of some of the reasons.  You probably know more.

  • A number (the percentage is shrinking) still hope things will get better.
  • Many still have debt tied to equipment on which demand is shrinking.  Their cost structure is forcing them out of business.  Therefore, their time and energy is spent trying to sell enough offset print to last until the debt is retired.
  • Then, there’s the “phantom equity” issue.  Many owners have defaulted on perhaps their most basic responsibility as CEO.  They have allowed sales people and the sales organization, in general, to control the relationship with customers.  As a result, they have drifted into a state of not knowing what is changing in their customers worlds.  While never having created additional legal owners or requiring the pay-in of personal capital, they have ceded control of too much of the company’s day to day operation and failed to provide needed strategic direction.  They have created “phantom equity” where the power of the sales person, particularly the high producers, rivals that of the CEO/owner. 
  • Many, the majority now, simply don’t know what to do next.  Their efforts to educate print buyers about digital printing have made little difference.  They don’t really understand variable data, cross-media, social media, mobile, wide-format, whatever.  They don’t understand, and don’t trust the IT types required to make this stuff work.  And, it’s no wonder print buyers don’t understand when we can’t explain it.  (If the print buyer did understand, what difference would it make?)  Ninety percent of our sales people don’t embrace digital print and other media.  They fear their companies won’t deliver so they, at best, try to sell new capabilities in a half-hearted way.  They are afraid of jeopardizing their income streams from offset commissions.
  • Lastly, at least on my list today is the fact of poor financial performance.  This has left many owners with little cash in the bank and meager free cash flow.  Changing will require investment in both people and technology.

When faced with the challenges listed above it’s easy to understand why owner/CEO’s are so reluctant to begin the change process.  The hurdles to be jumped are daunting.  There’s no road map, no formula to be copied from others.  You can buy the same technology, both hardware and software, that others who have made successful transitions into the multi-channel communications world have purchased.   But…that won’t make the difference because it’s not the difference.

This may sound like an indictment but it’s not meant to be.  I personally believe our industry in a restructured form will become robust, vibrant, and more profitable again.  Contrary to some, however, I don’t think the business model known as “general commercial printer” will survive in any meaningful way.  Having said that, those remaining firms that have the characteristics listed above will need to undergo significant change.  The ones that survive will spend 4-5 years undergoing a transition into a new business model.  They will have realized, as Victor Frankl said, they must change themselves because the debate about whether the industry and its environment have irreversibly changed is over.

Change in turbulent times requires three things:

1)     Courageous, purposeful leadership

2)     A strategy for what to become – What are we moving away from? What are we moving toward? How are we going to get from here to there?

3)     A sound, reliable process for creating and executing that strategy.

There’s no avoiding this and, perhaps, this is why the laggards to change have not moved forward yet.  It’s hard and most of us don’t know how to do it.  Does that ring a bell with anyone?

Wayne Lynn is an advocate of the adage that "you can't manage what you can't measure".  Combining his considerable strengths in leadership, economics, and strategy with broad experience in both public and private companies, he brings focus and discipline to the task of creating and sustaining success in today's chaotic environment.

Wayne has managed businesses ranging in size from $5 million to $500million in annual sales.  He has guided those organizations through a number of diverse market sectors including magazines, catalogs, inserts, direct mail, and general commercial printing.

A student as well as a practitioner of the fine art of business, Wayne's latest focus is on helping business leaders make their companies more viable economically, more relevant in the market place, more adaptive to constant change, and more durable in the long haul.  It's about people, what they know, and how well they execute on what they know.

Wayne can be reached at 704-516-7787 or at wlynn8697@gmail.com.



By Steven Schnoll on Oct 07, 2013

Excellent commentary. The only thing I would add is that a true business leader goes out and asks his customers what is changing in their business so he/she can develop strategies to assist them in the right manner.


By James Daly on Oct 07, 2013

Wayne, there's not much to debate in your analysis, it's spot on.

In my own experience owners do not analyze their options and opportunities sufficiently to commit to them when the going gets tough. They haven't developed the faith in their direction to continue because they did little more than proceed because it's what everyone says is a good idea. Alternatively they wait for that elusive customer that will justify the investment (or even provide the capital) and wait for the printer to learn the new craft.

What they fail to see is that their customer base is their greatest asset going forward, they need only leverage those relationships to get started.

The last issue is that printers don't understand what "talk to your customers" actually means. It doesn't mean to ask your customers "What additional services do you think we should provide?".

Ultimately, it's our job to create value that customers see and are willing to pay for.



By Greg Goldman on Oct 07, 2013

Wayne, hats off to you in your straight forward analysis of the industry and the challenges that Commericial Printing faces and may I add GLOBALLY. While there are pockets on the planet enjoying growth and prosperity in print, they too will face this change eventually. Thanks for the commentary it is reassuring for those of us implementing the change.


By Erik Nikkanen on Oct 07, 2013

Good article. I would say that the problem in this industry is not only that it is difficult to change to new ways of thinking but that for the last 100 years, the industry has been clueless about its own processes.

It has not understood its own processes at a fundamental level that could have provided the knowledge for printers to advance the processes internally. Instead they have relied on suppliers, which as you have correctly pointed out, does not result in any competitive advantage for the printer.

This has resulted in a culture that is not interested or able to innovate internally enough to be able to get ahead of a crowd of competitors in a shrinking market. Size of the printing company does not seem to matter that much. Both small and large printers tend to not develop knowledge internally that can be used for competitive advantage.

The fact that the graphic arts institutions and associations have also not developed the suitable knowledge has not helped. They too look to suppliers for guidance instead of leading by developing new knowledge. "Breakthrough" is hardly a word used in this industry to describe any technical advance or new knowledge.

The survival of printers will be governed by the simple rule of supply and demand. Survivors might be better managed or they just might have been lucky to not have made fatal investment mistakes.


By David Rosenthal on Oct 07, 2013

Excellent piece. Sums up the state of our Industry; leadership or lack of; and having sight without vision.


By Paul Felber on Oct 08, 2013

I think there's an additional piece that needs to be kept in mind. How many TRIED to change and failed? Not all change is positive. Easy enough to blame a lack of leadership or unwillingness to change, but in many cases it's taking your best shot and still not making it. After all, if it was easy, anyone could do it.


By Erik Nikkanen on Oct 08, 2013

Paul, you are right. Change can be very dangerous especially when one does not understand what actually needs to get done.

Basically, trying to make a change is a problem solving exercise. One should not assume that a problem is difficult just because a specific problem has not been solved earlier by others.

When dealing with problems, one will not know if the problem was difficult or easy until one actually finds a solution. It is a bit like a combination lock. If you don't have the combination the problem of opening it seems difficult. If you have the combination the problem is easy.

Valid science provides the "combination" or rules that govern a problem. When one knows the rules of a process, the problem of improving the process is not so hard.

And this is at the heart of the issue about innovation in this industry. The industry is technology oriented but is not science oriented and therefore has not developed the rules that can be used to develop predictable innovation. Without these rules, innovation becomes a trial and error exercise that often leads to failure. This is a cultural problem in this industry and that is why it makes trying to do innovation so risky.

The industry values experience over the development of valid theory. Experience, which is very helpful for dealing with the day to day operation of a process but is unfortunately useless when trying to do things that have not been done before.


By Tom O'Reilly on Oct 09, 2013


It's always good to see your fresh ideas and candor. Having had to shut 60% of my print operation in 2010-2011, I have had to live through the painful reality. One of the books that was very helpful to myself and the management team was "bounce"- the art of turning tough times into triumph, written by Keith McFarland. One of his examples that he uses is to "run toward the gunfire" for survival. Face the realities and don't back down. it became a rally cry for the team.
Today we are a profitable, growing company. Yet a smaller printing company with managed services and software leading the way. It was painful, but it can be done.

Thanks again for your insights as we continue to expand our understanding of where the market is headed and how to serve our customers as thought leaders and partners in the future.


By Wayne Lynn on Oct 09, 2013

Tom, I would have bet good money that you would be one of the ones to stare this decision down, make it, and then courageously follow up and make the needed changes in your business. Thanks for sharing that experience. It helps make the point.

Thanks to everyone else for also sharing your thoughts and experiences. Erik, you in particular, wrote some of the best commentary I've seen in a long while. Competitive advantage does come from deep, fundamental understanding of the process. Michael Porter got that right 30 years ago. You have inspired another article from me. Your comments about experience being valued over valid theory hits home in a big way. When you don't have deep understanding of the process supported by a valid theory of how the process works you are unable to answer the question: "What and how must I change to remain viable and relevant?"

Let me, however, make something clear. The process I am referring to is the overall process our industry (and all of us as individual companies) is a part of. We don't get that and we never have. Most of the fortunate firms that have weathered this storm well, made strategic changes, and continue to prosper have intuitively grasped this point.

Those who have bought all the hardware and software the leaders have bought but not prospered and diversified simply don't get this point. It's not about what you can buy. It's about what's in your head in terms of understanding the larger context of the industry and who and how it serves.


By Greg Imhoff on Oct 10, 2013

Thank you Wayne for framing a complex need and topic so accurately. Kudos too to each contributor in this the most stimulating thread read in some time. Leadership is also about framing Strategies with Tactics for all to see and this begins (also stated above), by listening closely to your clients...


By Dan Freedland on Oct 12, 2013

Does anyone remember the study released by PIA around 1990 entitled "Print 2000: Bridging to a Digital Future"? In it, then RR Donnelley Chairman John Walter suggested that 50% of one's revenues in the year 2000 would be derived from products and services not yet available (or invented). My employer at the time - a leading heatset printer in Southern California - scoffed at the notion. That unfortunate attitude led many CEO's to ignore market realities, while savvy risk-takers embraced change. In today's difficult environment, I've seen a few companies that have made tough choices and have successfully transformed their businesses. Others, unfortunately, have no concept of what change might look like, who might do it and which customers would even look to them for enhanced services. If change agents don't exist inside your company, seek them out and hire them. Don't sit on the sidelines - hoping your sales department QB throws a successful Hail Mary pass.


By Robert Godwin on Oct 14, 2013

>>They have allowed sales people and the sales organization, in general, to control the relationship with customers.<<

And their response to this dilemma to ask recruiters to hire away sales people with "book". So few of those hires ever bring much more than 15-20% of the business they had. Any sales person willing to jump does so for one or both of two reasons:
They have lost sales and are leveraging their past performance to get a new job; or, they are running from a business that is failing.

Sure, print isn't going away. Neither is watercolor or buggy whips. But like those artifacts of another era, print has become a bit arcane. Still useful, occasionally artistic, and not the powerhouse of communication it was even even 10 years ago.

If communication is print's power,time is its enemy. No sales person can overcome that fissure in value. Marketers struggle to find justification for print in their program budgets.

Print has a place, but it is no longer on the starting team. Sitting on the bench ready jump in when the opportunity arises, print can deliver. But after 500 years of printing, Twitter is the moveable type of this period, and who knows what will be there next.
Paper is static, software evolves and content is king.


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