Supremes Get It Right

On Monday, in a unanimous decision, the Supreme Court ruled that a specialized appeals court had followed incorrect legal standards – for almost 30 years.  The end game of this decision is that patent holders can no longer shop for a “friendly” venue to file patent infringements.  It was this type of shopping that helped non-practicing entities (patent trolls) victimize the printing industry several years ago.

Although this may be a bit late for our industry, it’s a beneficial move since legislation has been stymied for the past four years because of partisanship and special interests.  Supremes — you rock!

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Missouri Fire Storm

Several weeks ago the University of Central Missouri (UCM) made it known it was closing its Graphic Technologies program.  Needless to say this has created consternation for the instructors who have worked hard to make the program viable in our constantly changing industry.  It has also shocked alums who were recently made aware of this announcement.  Here’s a sample response from one of the program’s graduates, “This is unbelievable. What are they basing their decision to cancel the program on? Why would our program be deemed useless? With the successful digital industry we are experiencing today, I would have thought that technology would be a very popular area of study and one that would pull potential students. I will absolutely show my support any way I can.”

Yet, the reality is that over the past 10 years, dozens of four-year programs with a focus on “print” have closed around the United States.  The reason, in my opinion, is the lack of industry support.  The UCM program had support of suppliers (Fuji was one of those), but it lacked an “overwhelming” support of print providers who were committed to hiring students and becoming involved with the program.  It’s that type of interest and support which is important to college administrators, who sad to say are more focused on “bodies” in programs rather than how successful the graduates may be in their chosen industry, and I’ve met many UCM grads – who are bright and extremely passionate about our industry.

Although the door has not quite closed, if you would like to support the efforts being led by Dr. Mark Rankin (rankin@ucmo.edu) to keep this Missouri program operating – give him a shout and support his efforts to make the university’s management aware that the industry does care; otherwise another program will find its way to the ash can.

Really?

This morning (Tuesday, July 12, 2016) Bloomberg reported that Xerox is in talks to acquire R.R. Donnelley.  Really??? Xerox has always had a hate/love relationship with many in the commercial and quick print industry.  Some  print providers saw Xerox as a direct competitor in managing “in-house” document centers which would move business out of the commercial space, and others did not like the fact that Xerox was selling equipment to both the commercial/print-for-pay firms while also selling to corporate end-users.  Many print providers saw, and continue to see, Xerox as a valued supplier.  Yet, this announcement may indicate that Xerox has decided to cross the Rubicon and position itself as a print provider rather than a manufacturer of equipment.  I’m perplexed by this announcement and will be curious to see how this all plays out.

White Space

There’s a new phrase I ran across in an online article from Andy Plata’s Output Links – White Space Management.  Not one to get carried away with wonky management du jour philosophies, I started to ignore it and go back to aimlessly deleting emails.  Then, I thought, “What the heck is White Space Management?”

Per the article, “In business management terms ‘white space’ is a process management concept. It was described by Rummler and Brache in the 90’s as the area between the boxes in an organizational chart where no one is in charge, and yet is the place where an organization has the greatest potential for improvement.  In essence, manage the white space effectively and you can improve an organization’s overall performance!”

Okay.  It’s an interesting concept but given the size of most companies (small) in our industry, I don’t see it as a crucial management topic.  Then I continued to read the article, which was written by Crawford Technologies and directed readers to their blog – Reducing Document Production Costs is So Last Decade.  That got a bit more interesting.

Although the article is directed at corporate communication/inplant operations managers, and it’s a bit of an infomercial, there’s a lot of fodder there for folks in the commercial world.  It reflects the continual challenges large companies have with internal communications as well as messaging to their clients via transactional printing.

It brought to mind what a consulting friend of mine (non-print) stated in a recent conversation.  In a commoditized business (yes, that’s us), differentiation is crucial, and the role of consultative selling is vastly important, which means we need to know more about a client’s business than they do.  And more the reason to read this article, and peel back the onion.  There are potential nuggets of opportunities for a print provider if they expand the way they look at the world of print/paper.

Good News. Bad News

As an astute reader of “Cup,” you’ve probably already determined that this article will discuss issues originating in Fantasyland on the Potomac – and you are correct.  Our legislators and regulators are hard at work creating more “stuff” which affects our industry.  So, let’s get the bad news out of the way – and it comes from the Environmental Protection Agency (EPA).
For the past several years, various bodies have been litigating or threatening to litigate against the EPA because they feel that the threshold for low-level ozone is not low enough.  Many wanted to lower the threshold below 60 parts per billion because if lowering it to 70 was safe – 60 would be better.  Regardless that there were no hard facts to back up the supposition.  Now for the good news – the threshold is going to be 70.  Now the bad news – it’s 70.
What does it mean for our industry? The Dallas/Fort Worth area is already struggling to meet the previous threshold (75 ppb) and there are possibilities that San Antonio, Austin, Oklahoma City, Tulsa, and Kansas City will be affected, but it’s too early to tell.  Each state has to create models and then create regulations (based on theory) that will reduce the VOCs to the established level.  This can take up to two years.  More than likely, the result will be more monitoring, lower VOC solvents, and other measures which will have an indirect affect to many.  Oh, and vehicular traffic, which is not regulated by the Clean Air Act and one of the major generators of low-level ozone, will not be affected by these new requirements.
Now for some more good news – the Senate on October 1passed, by voice vote, the Protecting Affordable Coverage for Employees Act (PACE) (HR 1624).  What does that mean in English?   Currently under the ACA, the definition of the state-based small group markets is scheduled to change in 2016 from 50 to include employers with up to 100 employees. The PACE Act would keep the one to 50 definition in place, but states would have the option of expanding the definition of small employer to cover employers with up to 100 employees.  Employer’s over 50 still have to offer health insurance, but can participate in the small group exchanges (Small Business Health Options – SHOP).  Well, if that was the good news, we need to address the “other” news.
Per information shared by Printing Industries of America’s Jim Kyger, “According to a recent report, if the small group definition moves to 100, premiums could increase by approximately 18 percent for a majority of the mid-sized employers. As a result, many employers may choose to self-insure instead of remain in the small group market because those employers will no longer be subject to the various requirements of the small group market. This could further increase the premiums for those left in the newly expanded risk pool.”
Although I never believed the Affordable Health Care Act would be affordable, I’m concerned that much of the law that was not transparent (thank you Ms. Pelosi) is rapidly changing the behavior of employers, medical professionals, individuals, and the insurance carriers.  The result?  Unaffordable health care, and many of the millions that the law was supposed to help still don’t have insurance coverage.
So, let’s close on some ________ (fill in the blank) news.  We elect a new President and Congress in approximately 13 months.

Expanding Markets

I was catching up on my readings and read “Printed Electronics – Salvation or Snake Oil” by Bruce Kahn published in PIA’s “The Magazine” earlier this year.  I really liked Mr. Kahn’s brutal honesty on this topic.  As he stated, “I have been involved in printed electronics for over 10 years. In every one of those years, pundits, prognosticators, and soothsayers predicted great things for the future, particularly the near future, most frequently ‘next year’.”

Although he did a nice job of making the reader consider that which glitters is not always gold, I felt he could have gone further and reminded the audience that too often we think of technology as the product rather than as a tool to create a successful business.

In the case of printed electronics AND 3D printing, these technologies are not really printing – they are enhanced forms of manufacturing.  Consequently, the target audience for that product is not normally people who buy print – and that’s where many of these soothsayers and futurists go astray in challenging our industry to expand into these markets.  Yes, some print providers may have the know-how to make the technology work, but what is required are customers who buy – in serious amounts – what they are capable of producing. It also requires a sales force capable of selling in that market space.  This is a MAJOR challenge. One just needs to see the uphill battle the industry (as a whole) has experienced in having established sales reps sell digital printed products.

Does that mean printers should just fold up their tents and go away?  NO.  It means we need to focus on the fact that our industry is an integral part of the channels used in marketing products and providing information.  That’s where our focus should be – not necessarily manufacturing technologies which happen to have “printing” in their title.

I’m Too Busy

In our hectic business life, too often we overlook an opportunity because “we’re too busy.”  Is it that we’re too busy — or we have not prioritized correctly?

As a business CEO, or senior decision maker, we cannot afford to become bogged down with “stuff” that’s repetitious in nature, or which can be readily delegated – no matter how good we are with it, or how much we like it.  As a C-level exec or company owner, we need to be searching and exploring, or to put it in Trekkie terms, “to boldly go where no one has gone before.”

The world around us is changing so rapidly that if we don’t take the time to explore the shifting dynamics of communications, we could find ourselves marooned on a desert island.  So, take the time to read that online article you’ve been ignoring; listen to that webinar; spend time with the supplier who wants to talk about new technology; attend one of our Association Quick Take programs, or even take a trip to Chicago this fall and explore McCormick Hall (GraphExpo).  I’ll close with one of my favorite quotes.

In times of change, learners inherit the earth; while the learned are beautifully equipped to deal with a world that no longer exists.

A Hidden Liability

During my career with PIA I have seen businesses destroyed (or nearly so) because of the firm’s lack of understanding about tax laws. It could have been untimely deposits of payroll taxes; not classifying themselves properly regarding franchise tax laws (Texas); or mis-applying sales tax.

Why this comes to mind is that I recently attended a sales tax seminar regarding nexus which featured Chanel Davis, who is an expert in this unique part of sales tax regulations. The seminar was attended by CPAs, and I found it interesting that for several of these professionals the nuances of nexus were either a.) mis-understood or b.) they had no knowledge of the topic. If you are a print provider in the 21st century — you NEED to know about nexus. More importantly if you rely on a CPA for tax information — make sure they understand sales tax laws that apply to our industry.

For example, if you are a Texas, Kansas, or Missouri printing company doing business in Oklahoma and use your delivery vehicle to deliver product to Oklahoma, you are have nexus in that state. That now requires that you collect sales tax on those items being delivered to Oklahoma and submit taxes to the Oklahoma Tax Commission. Oh, by the way. If you have sales reps calling into Oklahoma — you have nexus.

What’s really getting interesting is “click-thru” nexus. Some states (Kansas, Missouri) are beginning to take the position that a remote seller has nexus in regards to online sales. For example, you have a web portal with a print broker in New York. New Yorkers order from the site. You fulfill the print orders and the broker gets a commission. Because you used a third-party in New York, nexus has been created and now your company is required to collect New York sales tax. There about 24 states who are adopting similar rules, although there are a lot of legal challenges being discussed and no clear answers. To quote Elmer Fudd — “Be afwaid. Be wewwy afwaid.”

We Hate Business Cards!

Over my career in our great industry, which now spans four decades, one of the products most often treated by disdain by every printer was business cards.  Your prices were always too high and the cards never came out the way the customer envisioned.  Lord forbid if you screwed them up — because if you couldn’t be trusted with a “simple” business card, how could you be trusted with our company’s collateral?

Yet, VistaPrint and other print providers (Printplace.com, Staples, Office Depot, FedEx) have used this and many other “non-sexy” printed products to create a whole new sector of print providers.  Cimpress (VistaPrints parent company) is taking this success to another whole level.  As a recent online article in Printing Impressions stated, they are focused on serving “the marketing needs of the small, micro businesses and consumers who want to boast collateral that reaches the professional level of Corporate America.”

Check out this article to see what Cimpress (VistaPrints parent) is up to. Interesting reading.

To Regulate or Not to Regulate

OK, I’ll admit at first I wasn’t too excited about this topic of Net Neutrality.  I liked things the way they were.  Limited regulations and free enterprise. Good things I thought, but then I started to do a bit of reading and talking to my son.   James grew up (professionally) during the dot com days of Silicon Valley and makes his living in that world. He is a proponent for net neutrality and was upset with the folks in Congress who “didn’t get it.”

I also started paying attention to my rising telecomm costs at my office and at home.  I also noted that there were more and more mergers in the world of telecommunications and less and less competitors.  Hmmm.

Although I’m not one for regulations, I think I concur with the FCC on this issue.  Utilities (or services which are utilized by the vast majority of our country — and dominated by a handful of companies) need to be regulated.  Otherwise, it’s my observation, that the smaller companies and folks who don’t have the deep pockets get forced out of the markets.  Talk to the young entrepreneurs in Silicon Valley, and you’ll see that they support net neutrality – because they want availability to the opportunities that a regulated system could provide.  The companies who are beginning to dominate the channels want to dictate the terms of access – and they speak about open markets and efficiencies.  But is this best for us?  Is this best for creating new markets and allowing the world of communications to grow?  Is this good for small business?

Congress is going to become involved in this and it behooves everyone in our industry – who utilize these pipelines of information every day – to contact their legislator and speak up.  I for one think that net neutrality is good for business.