Markets change, companies close, transitions happen. This is the natural progression of business, but if mailshops weren’t plagued by ineffective leadership, we likely wouldn’t see so many go bankrupt.
I was heartbroken and frustrated to learn that World Marketing – one of our most trusted and long-standing mailshop partners – filed for Chapter 11 bankruptcy protection. A statement released by CEO Tyrone Jeffcoat cited the filing as “the first step in what will likely be the end of the company.”
I couldn’t believe it. This happens way too often. In March, less than a year after signing a multimillion dollar deal with CareSource, Standard Register – a Dayton, OH based print and marketing company – filed a similar Chapter 11 petition, accompanied by a statement from CEO Joe Morgan saying “our ability to invest in growth has been hampered by our debt structure and legacy liabilities.”
Debt structure? How does a company that inked a multimillion dollar deal go bankrupt less than a year later?
To understand print production, mailshop services and document management, is to understand that the margin of profit is usually somewhere between 1 – 3%.
Yes, as an industry, printers and mailshops are constantly slashing prices, taking on jobs that are too small (or worse yet, too large) for their machines to turn a profit in-house, and overbooking in an attempt to guard against late or canceled clients.
But those, my friends, are just the challenges of this industry, the unfortunate constants of printing. The variable here is leadership.
On one hand you have an industry-leading mailshop, a former Berkshire Hathaway company, going bankrupt, bringing the DM programs of hundreds of clients (including the critical state agencies) to a screeching halt. On the other hand, you have printers who have been successfully in business since the late 1800s.
The difference is leadership. I’ve been around the printing, print buying and mailshop industry for long enough (more than 40 years) to understand not only the challenges faced by my competitors and partners alike, but also the keys to success.
This industry cannot survive merely on a transactional basis, with leaders who are one dimensional, tactical decision makers.
The print industry is a giant wheel of cash in and cash out, where nobody knows who is really coming out on top until the whole thing shuts down. Mailshops can’t afford to wait for that moment; no business can. There has to be an evolution of relevancy that starts with investing in technology, automation, innovation and professional development.
George and Greg share their thoughts on Professional Development and Succession Planning later in this issue. See Legacy of Leadership
PS|PS Digital has succeeded because we as leaders understand these principles and put research and development plans in place to ensure tragedies like this don’t critically wound our business; but when a master like World Marketing collapses, it is impossible not to feel the ripple effect.
This is not the business to get into if you aren’t print minded, meaning if you aren’t thinking about how to grow and diversify to stay relevant, then you, your employees and the industry as a whole are all being set up for failure.
I remember an eye-opening conversation with Ursula Burns, CEO of Xerox, who told me about how she reinvented the company after realizing they had allowed success to make them one dimensional. Today, Xerox is working in toll collections, medical imaging and micro-circuits.
Having a strategic vision also means making hard decisions, and on the print-buying side of the business, this means costs. Printers and mailshops have to break old habits, like letting legacy clients slide on paying invoices, or slashing prices.
Printing and print buying is a for-profit enterprise. If you offer an excellent product, partners are just going to have to pay for it, and trust me, we will. There is no substitute for quality product, and low-balling prices forces suppliers and everyone down the chain to do the same. The whole industry is affected, and lives and dies on transactions rather than innovative growth.
I’m angry that this tragedy has played out once again. World Marketing was a captain in the industry, with quality and timely product, a loyal and responsive staff and an unmatched understanding of nonprofit direct mail. They will be greatly missed, and hard to replace.
As we work through the transition process here at PS, I worry about who will be next. I’m tired of condolences, so I challenge our industry to think bigger and to open our eyes to existing and future possibilities .