Cup-a-Joe

I will admit I do have a bit of a bias since I was regular buyer of Harry & David’s products for about 20 years, and that  is my disclaimer.

Now to the heart of the matter.  Leverage.  Debt.  Borrowing.  Call it what you will, but over the past 20 years it was what “everyone did.”  I still remember to this day my finance professor in grad school expounding on why companies needed to use leverage to maximize profits.  But what we’ve seen over the past few years in many industries – including ours — has been criminal.

Back to Harry & David.  Wonderful company.  Wonderful product – but more importantly they were the region’s (Medford, OR) largest seasonal employer.  And had been for many years.  Now that H&D is bankrupt, who knows what will happen.  And the reason is basically one we’ve seen for years.  Company becomes successful.  Original owners want out – so they sell the business.  If the new owners don’t care for the business other than for the cash flow – it is more than likely doomed.  In this case a purchaser of the business (Yamanouchi Pharmaceutical) sold it to a New York buyout firm (Wasserstein & Co.) who highly leveraged the deal in 2005 with a bond sale while rewarding itself and its investors with $82.6 million.  OK, everything is fair in love, war and business – but what did these guys do to make the company stronger.  Did they provide additional products for their customers?  Improve the business proposition? Take care of their employees?  Not one darn thing.  What the company had was more debt, more risk (I remember that from grad school as well), and when the economy collapsed, soon there after so did H&D.  Now the individuals of Medford are paying the price and those of us who looked forward to their gift baskets or pears, may no longer have that opportunity.  Oh, and the guys on Wall Street are laughing all the way to the bank.

If you are one of those folks who think the Post Office needs to start re-inventing itself, pay close attention.  The most recent foray is a move to integrate mobile media advertising (think mobile bar codes, e.g. QR Codes) and direct mail.   Along with the recent “Every Door Direct Mail” option, we’re starting to see a USPS thinking out of the box – in terms of product and marketing.  It still needs to deal with its infrastructure of too many employees and an attitude that says we’ll just move the deck chairs around until we find the right combination.

On a lighter note (not really), check out this WSJ cartoon which reflects a pervasive attitude of society.  It was published in the online WSJ on Monday, April 18th.

These past few weeks have been awful quiet in regards to the print industry.  We continue to watch the economic fist-fight between President Obama and the Republicans and wait to see the results.  The Libyan mess has been relegated to the back pages – but the instability this has created in the Middle East is being reflected in oil prices.  Not a good thing for the economy, or our industry.

I’ve been reading a variety of blogs and articles on print and its “changes,” and continue to see a diversity of opinions.  One group will say – “the industry is not going away,” while another is saying “the sky is falling.”  Hmmm.  Maybe we can all agree that the next few years are going to be “different.”

The SFI/FSC fight of who’s holier-than-thou is filling up the blog pages and there still continues to be cynicism on producers and consumers on the whole issue.  Yet, one thing we should not overlook is that companies which have solid sustainability practices (this means a lot more than “being green”) have found ways to reduce their costs of operation by minimizing waste, in materials and production – and that’s a good thing.

I see that USPS has put IMb on the back burner — again.  Still too much confusion – and Postmaster Donahoe has bigger fish to fry.

Oh, baseball fans, note that the Texas Rangers are 8-1.  Not a bad way to start the season!

Did you miss getting a chance to hear Dr. Joe Webb last week in Kansas City or Dallas/Fort Worth?  It was an extremely informative meeting with over 80 attending in total at both locations, and to quote Dr. Joe, “Many folks say I’m much more depressing in person than online.”  That’s the knock on “Dr. Doom” as he is known by many — but Webb’s prognostications have been on target when it comes to the general commercial printing industry.

Joe’s key message at these meetings was there is no more “business as usual.”  We live in an industry which is changing – but in a very different way than in the past. From the days of letterpress up to about the year 2000, the changes were fast and furious (hot metal to cold type to desktop; letterpress to offset litho to digital) – but they were internal changes.  As an industry, we were changing the process used to produce print. With the advent of the Internet and the rapid expansion of advertising/marketing channels, our industry has been affected by outside sources — and will continue to be so challenged over the next 20 years.  The result will be that our industry will share a much smaller slice of the advertising pie.

The analogy Dr. Joe used was a pizza which was sliced in half – that was the old model.  Advertisers would either use “media” (radio/tv) or print to distribute their message prior to 2000.  The new model looks like a “Twister” board with probably 30 different choices an advertiser could make, e.g. Broadcast TV, cable TV, internet TV, social media, direct mail, print, radio, viral marketing, etc., etc.  Yet, advertising budgets have not grown, and advertising/marketing decision makers will make decisions which mean less of a slice for print.

But all is not lost per Joe – and that’s why his book (the premise of the presentation) is titled “Disrupting the Future.” He shares ideas of how companies in our industry must find ways to not do business as usual in order to “disrupt” the future realities.

Although the presentation was sobering – the message was clear.  Change the way we think about ourselves – think as entrepreneurs and find ways to help our customers achieve their end goals – regardless of how their message will be delivered.  Per Webb, our industry is uniquely positioned and skilled to be a key player in this new world of media.

This past March Motheral Printing hosted an Association breakfast meeting on the generation “gap.” It was one of the best programs I’ve seen on this topic – and I’ve been to a few.

It was led by David Danforth with Eastfield Community College and Dr. Rick Lumadue with Texas A&M – Commerce.  These college professors, who are both Gen X-ers (born between 1964 and 1980), were very entertaining and candid with their observations.  These were not guys who are consultants or doctorial candidates writing research papers.  Every day they are seeing the new generation (Millennials) in the classroom, and they are also interfacing with the Boomers (administrators).

The key to this program was the observation that the upcoming Millennials (born between 1980 and 2000) are motivated very differently than the Boomers or Gen X-ers.  They communicate differently—via blogs IMs and text messaging rather than phone or face-to-face preferred by the older generation, who are frequently their supervisors.  They are heavily influenced by their parents and peers and are very team oriented.  Where Gen X-ers were highly independent and self-motivated, the Millennials need structure and very focused leadership. Millennials are multi-taskers and are not use to having lines of authority – they ask “why.”

Given that our industry’s workforce composition is beginning to change, managers and supervisors need to understand the dynamics of the groups they manage and how their own biases can affect their leadership. The more we can learn about ourselves and our workforce, the better leaders we become.  If you would like a copy of the PowerPoint presentation used by Danforth and Lumadue, please contact me.