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Management 3.0 and the Printing / Document Industry: final chapter

1st part here, 2nd part there.

Printing and Document industry

The printing industry is no different from any other Industry. It comes from a methodical background which has been very much refined over time. The business model has proved extremely sound over the years. Predictability is the absolute mantra in the industry, with future revenues being extremely well planned, and forecast is king (sales, manufacturing and finance go hand in hand). Selling printers or a copier contract is typically from the 1.0 world. A salesman goes out to meet the client he has been allocated, and sells the piece of equipment (leasing contract) under strict guidance of the terms and conditions. I have a strong memory of a manager saying to me a few years ago in a discussion on market evolution: “Salesmen should do as they are told”.

The first wave of MPS contracts, which were a variation of Product sales put in another format did not change this much. The situation changed later when the Clients became more knowledgeable, more aware, and the complexity of their demands grew rapidly.  In order to meet these new and complex demands, sales team expertise, knowledge and human qualities had to take an unprecedented upwards lift. As a consequence, it became increasingly difficult to impose the “control & command” attitude on these highly paid, individuals who were facing high-level clients with success. The team was probably more expert than the boss, and the speed imposed by clients and competition alike, required shorter cycles, in which it was not certain that traditional management could contribute. Modern management should be more putting ‘oil in the bearings’ enabling things to happen, rather than commanding how to do it.

Large companies have struggled with this, but they have social and cultural mechanisms in place to stabilize human relations, and avoid too many difficulties in mitigating such issues.

One of the issues for the industry was that many dealer principals (there are notable exceptions) who had had the energy and drive over 25 years to create a successful company, struggled with these new management situations. They were THE boss and could not envisage seriously the kind of intellectual and financial challenge imposed on them by this new situation. SMEs do not have the mitigation culture found in larger companies.

When the industry, as a whole, complains about the lack of adoption of complex service driven engagements by the channel, I believe this is one of the core reasons. The management of most of the channel companies (average size 20 to 80 employees) was not able to cope with this new situation of human management.

Our industry resisted the change for a long time. The business model was solidly entrenched with great efficiency. Nobody dared change it. But in 2016 multiple factors have somewhat weakened the resistance, and with the high-speed evolution and increased complexity of our business model, referred to in another article in our blog, Management 3.0 will become of age, potentially skipping the 2.0 phase.

 

The new business model around Document services (MCS) will require typical “let go“ attitudes found in Management 3.0

The sales team will be responsible for the Pricing and Service levels granted to the client during the contract negotiations as well as for the associated satisfaction achievements. It will be accountable on the Profit and Loss account (a real one incl. provisions on certain risks) of the client.

One of the benefits of Service engagements is that, if executed properly, they renew with ease as compared to new customers. The Sales team will be rewarded on customer fidelity.

All compensation schemes need to align with this, which is probably not far from a 180° turn from where they are today. The trend is still towards too much suspicion between functions and not enough cooperation.

Similarly OEMs and Channel will need to redefine their relationships. Because none of the OEMs can provide all the responses competent dealers need to deliver to such complex and global requirements, some level of cooperation with apparent or real competition will have to be accepted.

Software will need to be interoperable to some extent. Today this is hardly the case. Only independent Software vendors’ products are truly interoperable, but their structure and pricing are very different from those of the OEMs.

 

Chargeable Professional services also need to see improved cooperation and this subject is in a broad sense not ripe enough in organisations today. There are chargeable competences at both levels but the formula for them to work together in a fluid fashion still needs to be found. We can only wish this improves in a methodical manner.

 

This is just a high level laundry list of the changes management 3.0 implies on our Industry. This is quite an agenda, not far from a cultural revolution. Some concepts may not apply but there are elements that have been seen in other industries. Therefore they influence our customers buying patterns and raise their expectations, so in the end they do influence how we, as a whole, move forward.

The implications are profound, and represent a huge challenge for management throughout our industry. Successful implementation of the changes discussed will require a fundamental re-think not only of processes and assigned responsibilities, but also of accountability at all levels of organisations – and with that serious consideration of the calibre of management and staff required to operate successfully in this new environment.

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This article was written on 11 Feb 2016, and is filled under Point of View.

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