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By Cary Sherburne, Senior WTT Editor
January 26, 2007 -- After 118 years in business, Fetter Printing Company announced in December that it had completely overhauled its management structure as well as its vision for the future, walking away from some of its traditional lines of business in order to focus on others in which it can be a market leader. This bold and unusual move prompted WhatTheyThink to contact President and Chief Operating Officer Terry Gill to get the story behind the story.
WTT: Terry, thanks for talking with us today. Fetter has made a pretty bold move. Maybe you could start by telling us how you came to the conclusion that you needed to make a change like this?
TG: We came to the realization that with finite resources, we couldn’t create a powerful enough value proposition that we could really dominate a category. We were serving several different areas and doing a good job, but increasingly, we were getting requests from customers to develop more complex solutions. We came to the conclusion that we had to simplify our business and focus all of our resources on a limited set of vertical markets. Our labels business made sense because it was a defined market. We had an advantage there because we were the number two supplier to the paint and coatings segment. Our production platform was not too dissimilar from the competition. But while our competition was providing decorative labels to the paint industry, they also served other industries, and we felt our focus on paint and coatings could deliver a significant competitive advantage. This industry traditionally has a heavy reliance on inventory and acceptance of high costs of obsolescence. We believed that if we could devote 100% of our resources to the label business, we could help them reduce their dependence on inventory as well as reduce cycle times. We didn’t see that opportunity in direct marketing and commercial print, and that was what drove us down that path—the huge savings we believed we could help this segment achieve.
WTT: The other segment you chose was health care fulfillment. This seems somewhat unrelated to paint and coatings.
TG: Actually they are related in the sense that they are both data intensive and highly regulated. We came from a direct marketing background and we understand data. Print quality is expected—there is no premium that the market will pay for quality. We wanted to look at how we can help these two segments manage their information and assets better.
WTT: You talk about overhauling your management structure. What was involved in that?
TG: We brought in a new CFO, John Roos; Cheri Glass moved into the Chief Administrative Officer position and I moved into the president’s role. It was a combination of some new people and some that had been here for a long period of time. We also took the opportunity to reassign other roles in the organization as well.
WTT: Have you done anything different with your sales force?
TG: These relationships are sold at an enterprise level. The strength of our proposition is built around how well we can service the label needs of our paint and coatings customers and prospects. This goes beyond printing labels and includes their marketing needs, supply chain and procurement needs and financial needs. In the past, we relied on a sales person to carry that message out and use a more traditional approach with persistence. When needed, they could bring in a specialist. We use a totally different approach now, more of a team approach. For example, recently my Director of IT and a salesperson made the first call together on a new opportunity. We also are much more likely to be in front of a customer or prospect with our client service manager and the sales person. Sometimes we might even start with IT and eventually bring the sales guy in. It is a little different approach than asking the sales force to go out there and talk about the equipment in our pressroom.
WTT: What level in the organization are these calls usually at?
TG: These are at the senior management level. They might be in marketing or operations, or in some cases it might be IT. We want to know what their biggest aggravation or pain point is and start there. It is somewhat predictable that a lot of these companies struggle with their own management information systems. They are terribly reliant on their internal IT organization to get information to them and that oftentimes is not a priority for the internal IT group. We can come in with an IT swat team and take on a specific project, even on a speculative basis. They might be having difficulty getting a specific report generated from a particular body of information. We look at how we might be able to help them with that, and that is how the discussion begins. It is not about our equipment mix or our price per unit of print. We tell them we would like to help make a significant difference in their process before we talk about things as mundane as pricing.
WTT: It sounds like you have a lot of IT resources internally.
TG: We continue to add IT resources, and we will continue to invest heavily on the people side, and maybe disproportionately when you look at the size of our company. We have about 125 employees, and over 10% are in IT, which is a lot for our size. I hope that percentage will continue to grow. Right now, we have open positions for programmers and data analysts.
WTT: You mentioned that both paint and healthcare are highly data intensive and regulated. Can you expand on that?
TG: We have 25,000 SKUs under our control for three major paint companies. If the EPA mandates a change to a particular chemical, you have to figure out where that chemical is in each formulation for every SKU of every family, and you have to change all of the labels. You also have to understand how many labels have the old information and where else it appears, including data sheets, brochures, etc. If we could build a better asset management tool using our expertise with databases, wouldn’t that help solve the problem? That’s been the breakthrough for us. And it ultimately leads to having us print all of those materials.
WTT: Of the things you “walked away from,” what percent of your revenue last year would that have comprised?
TG: Probably about 40%.
WTT: If you gave up 40% of your business, how much of that have you been able to recoup with this new strategy?
TG: We haven’t recouped it in terms of top line sales, but we have made significant progress in recouping the value-added portion. Because our margins are so much better today, we don’t necessarily miss the top line revenue. We are doing much better with a smaller number at the top. Bigger isn’t always better, and we learned that lesson as well.
WTT: Can you talk a bit about some of the customized automation tools you have put in place to support this new customer focus?
TG: Both the paint and coating segment and the healthcare segment have a need to distribute content and to manage it. Increasingly, these customers are asking for better access to information when they need it, and they want to use their PCs to get at that information. We have used our IT team to develop very specific solutions based on customer requirements. Maybe they want to see inventory real time, or look at an obsolescence report or usage. We go into each customer with a clean slate. Because we are not using canned software, but developing all of this internally, we can offer truly customized solutions and that has been a big benefit for us. Customers are desperate to have someone build a solution and do it quickly and collaboratively, working alongside their IT group, not trying to bypass them.
WTT: After having gone through this process, what are some of the “lessons learned” you would share with your colleagues in the industry as they look at their businesses?
TG: You can’t force feed your customers standard solutions. You have to listen to what the marketplace is asking for and then be very honest with yourself as to your ability to address a specific need. If you can’t find a way to address certain needs, you need to keep looking. There is certainly no magic formula, but building a team of talented data professionals and technology folks is paramount regardless of what niche you choose to pursue.
WTT: Would you recommend using outside consultants as people go through this process?
TG: I would encourage anyone to get a fresh perspective on their business. If an outside consultant is the best way to get it, then use an outside consultant. We thought of ourselves as a printing company because many of us had grown up in the industry professionally. You can’t help but be a little bit biased as to why you do the things you do because they have always been done that way. We had such a long life in the commercial print business, so it was hard to make that decision to change our operating model completely. The consultant we worked with helped us through that.
TG: I also want to emphasize that developing and aligning our business model with our core customer service culture is incredibly important. IT people need to build great tools. The sales force needs to understand the customer requirements. But at the end of the day, you have to have the human contact who can understand what a customer is looking for and respond with timely information. We are building a customer service culture/platform that we believe is equally as robust as our data platform. Our culture is the foundation for our new business model and is the operational driver. It helps us align and simplify our strategic thinking, our business systems/ processes, and helps to ensure that our employees are strongly connected to Fetter, their jobs and each other. We believe our culture will provide a competitive advantage with every person knowing and thinking like our customers. Each person will be trained to know how to meet our customers’ needs as they are defined today. But equally important, the training will teach them how they personally can create solutions and provide value to customers that will meet our customers’ future needs.
Prior to launching her consulting practice, Ms. Cary Sherburne was the Vice President of Marketing Communications and Outsourcing Solutions at IKON Office Solutions. In that capacity, she developed and implemented a branding campaign to build brand awareness for IKON in the marketplace as well as enhance employee pride in the organization, and was responsible for all internal and external communications, including trade shows and events, corporate newsletters, and industry and press relations. In the outsourcing role, she set strategic objectives and priorities for IKON's product and services portfolio in its Outsourcing businesses, including development of programs and sales support materials for that environment.
Sherburne was a Director at CAP Ventures, an internationally known firm specializing in market research and strategic consulting for the digital document and print on demand industry, before joining IKON, where she launched and managed the company's Document Outsourcing Consulting Service.
Her tenure in the printing and publishing industry has also included sales and marketing positions at Xerox Corporation, Indigo America and Bitstream. She is a frequent speaker at industry events and a recognized author.
Cary can be reached via email at firstname.lastname@example.org, online at www.sherburneassociates.com and by telephone at 603-430-5463.
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