Cup-a-Joe

“The printing industry is feeling the impact of change as much, or perhaps even more, than some other industries.  Our change is being driven by the digitalization of information.  This is not only dramatically changing the way we produce our products, but the demand for them, and in many instances their very form.

Historically successful companies in every industry – and our industry is no exception – are losing their way because they have failed to anticipate he impact of these forces on their business, and therefore have not made timely adjustments.  Even in this harsh environment there are companies which are growing and seized opportunities that others didn’t see. They too, however, are faced with the challenge of maintaining their success.”

Pretty interesting observations aren’t they?  What’s more interesting is when they were written — 1995.  So, when one thinks that things have just recently become topsy-turvy, we have to remember that our industry has been facing change for decades, and here’s the important message.  For us to win in a changing environment, we must think strategically.  And that my friends, was the message in Wallace Stettinius’ book, “Winning in a Changing Environment, Learning to Think Strategically.”  The quotation above is from Wally’s preface written over 16 years ago.

I never got to know Wally that well, but in my observation, he was one of our industry’s true management visionaries.  In the 80’s and 90’s, I was able to attend seminars he presented, and had the opportunity to sit and discuss ideas he presented.  He also published many of those thoughts.  “Running in the Black,” dealt with financial management in our industry.  It’s now out of print, but probably was the best book ever written about that subject for printers.

I’ve been re-reading “Winning” and I feel that it still holds numerous nuggets which apply today.  I know that many in our industry are working to re-shape their companies for the future.  Yet, we can no longer afford to build the bomber as we’re flying it.  There has to be some serious planning before we start making major changes in our business model or rethink the types of capital investments we make. Thus, I strongly recommend that you consider purchasing “Winning.  There are copies available on Amazon.com

An article in this morning’s WSJ lamented the fact that e-book pubs are being priced nearly the same, if not more, than the printed versions.  One of the major reasons is that major publishers have decided to set the pricing levels, which does not allow the retailers to discount.  The end result is creating more profits for the publishers.  Not a bad strategy when new technologies are being introduced, but should create opportunities for new entrants or small niche publishers down the road — and may help the book printers!

I just came back from spending a day in Kansas City, my home away from home the past few years.  The main purpose was to thank Jim Oldebeken for his many years of service to the industry.  Jim started with the Oklahoma PIA in the mid 80’s and went to Kansas City in the early ‘90s.  When PIA Heartland merged with PIA Texas/Oklahoma, Jim was a key part in making the transition work smoothly.  It’s been 10 years since that consolidation, and Jim is transitioning to another association — in another industry.  A small dinner was held at Grand Steet Café near the Plaza and many of Jim’s industry friends reminisced about past events, trips, and the “good ‘ol days.”  Although Jim will be missed, his replacement Loretta Nichols has jumped into the gap and will provide an outstanding resource for the print community in Western Missouri and Kansas.

OK, I’ve gotta talk a little baseball.  Can I say that I hate the Angels?  First, growing up in Southern California, I was a Dodger fan; thus, ensuring that the “other” team didn’t have a place in my baseball world.  The Angels have added to their team one of the best, if not the best, player in the league.  Although I wasn’t bothered by the Rangers losing C.J. (can’t win in the clutch) Wilson, he’s a good enough hurler to really make the Angels a better team.  Yuck.

Don’t think that there’s long term play for our industry?  Why is it that we’re seeing some serious players making acquisitions?  They see value.  One of the most recent was the Ginny’s/TouchPoint acquisition and we understand that a Fort Worth firm has been acquired.  And there’s more to come as the industry continues the inevitable consolidation and reshaping.

The industry is losing another long-time Association leader.  Jim Tepper, PINE (PIA’s New England affiliate) has announced his retirement after 35 years with the Association.  He will be replaced by former PINE board member, Tad Parker.  Jim has been a very good friend and mentor to me over the years, and I’ll miss our regular conversations – but the transition doesn’t occur until spring of next year.  I don’t think Jim’s going to disappear, and that’s good for the New England industry.  Tad is going to have his hands full as he transitions from the world of print to the Association world, but he’s going to do just fine!

Marketing is changing and it’s affecting our industry.  One of the 2012 goals for PIA MidAmerica is to add a marketing specialist to the staff.  The person’s role will be to help the membership better understand the media integration and more effectively sell the value of being a print provider. More to come!

It’s that time of the year and wishing everyone a very Merry Christmas, Happy New Year, Happy Hanukkah, and a great holiday season!  Feliz Navidad.

So, what can we learn from the AMR bankruptcy?

First, bankruptcy is not a solution for firms in our industry.  In my 40 years in the industry, I have only seen one company ever come out of bankruptcy and survive.  Rather than spending a lot of time exploring the reasons why bankruptcy has not worked, let’s take a look at Southwest Airlines (hmm, another North Texas transportation company) and what they’ve done right.

American Airlines was about providing a broad range of services to everywhere, which required a diverse amount of equipment.  They also pursued the glamorous (and expensive to support) overseas markets.  In contrast Southwest flew only one plane (still does – Boeing 737) and focused on short hop flights which were under-served.

American was a legacy airline with legacy labor costs.  Extremely strong unions and management took an adversarial approach.  One of the biggest snafus was a recent one in which employees were asked to take serious cuts in wages and benefits.  When things got healthy management was rewarded with very large bonuses — and employees got nothing.  Southwest is known for its iconoclastic approach to labor management.  Flight attendants tell jokes, sing and dance (yes, they do!) and several times I’ve seen flight captains who were dead-heading home help out the flight attendants by passing out peanuts.  You won’t see that type of esprit de corps in any other airline.

Although Southwest gets flack for their boarding process, their gate turn is inordinately faster than the legacy airlines and that translates into less people and less aircraft.  Throw in their “no bag fee” approach, and it all translates into bottom line dollars.

So, which do you want to be? A Southwest Airlines or an American Airlines?

As a long-time resident of Dallas/Fort Worth, I remember when American Airlines announced they were relocating from New York to Dallas.  It was exciting times and that relocation was a key part of the economic boom of the past 30 years for North Texas.  Thus, the news this week of their bankruptcy was a bit of a downer, although it wasn’t a surprise.

When your company is in a struggling industry with high capital costs and price competition is rampant and you’re dealing with extremely high labor and material (fuel) costs and you are highly regulated, it’s never a pretty picture (ask anyone in the printing industry).  Given that many of AMR’s major competitors (US Air; United; Delta) had already gone through bankruptcy reorganization, it was just a matter of time until AMR faced the inevitable.

Although we’re dealing with issues on a totally different scale, I see lessons that our industry can learn from this debacle, but I’m saving that for next week.  Stay tuned.