Part of the Next Generation: Chris Wells, CEO of LaVigne Inc.

by Gail Nickel-Kailing

This is the first in an occasional series of interviews with men and women who will lead the graphic arts industry of the future. They are young, energetic, tech-savvy, and smart.

June 30, 2003 -- Chris Wells, CEO of LaVigne Inc. - who is 33 - is one of the next generation. He heads up LaVigne, founded in 1898 and located in Worcester MA. LaVigne has about 100 employees in two divisions: traditional offset and digital printing.

WTT: You were promoted to CEO in 2000 at the tender age of 30. And you were the first CEO from "outside" in a business that had been owned and run by the same family for more than a century. Did you wake up the next day and ask yourself "How the heck did I get HERE?"

CW: It seemed sudden but it was really a smooth transition. I was a consultant working with LaVigne management to help plan a generational transition and to lay the groundwork to move the company to a new future. They were already looking to bring in management from outside the industry.

Toby LaVigne and I were discussing what kind of candidate he wanted to fill a sales and marketing management position, and he said he was "looking for someone like you."

I should explain that my wife and I were in the process of building a new house and I had been painting until the wee hours of the morning after work to get it finished as quickly as possible. I must have been intoxicated by the paint fumes, or lack of sleep, because I said "if like me - then why not me?" You'll realize the gravity of my answer when I say that, at the time, I knew nothing about the printing industry; I couldn't even tell you what offset printing meant.

After three months, I fell in love with the business. I love the deep customer relationships, the complex manufacturing processes, the uniqueness of every project, and the problem solving. The products coming off the press are physical manifestations of creative ideas. It has been exactly what I had hoped for.

It was really all part of a master plan, you know. At 19, I set a goal that I would be CEO of a company by the time I was 30. I just didn't know it would be this one!

WTT: In 1998, Toby LaVigne participated in a panel titled "Digital Printing - Making Money at Last(??)" at Seybold San Francisco. So have you made money at digital printing?

CW: Well, we did for a while, but then the margins began to shrink. It's coming back now.

When digital printing was the only option for short run or quick turn 4-color printing, we were able to charge a premium. In those days the turn time was 4 days for digital, down from a week or more for offset. Now the turn time for offset is 4 days. Pre-press improvements are making the entire process more efficient.

Since demand has been reduced for all kinds of printing, prices have dropped and margins have shrunk. Now 6-color shops are bringing the prices down for short runs and speeding up turn times. The premium no longer applies to short run, quick turn color.

Margins are still good on versioning and variable data printing and we're starting to make money on that kind of work. However, you still have to get the job.

The best opportunities for us today are in the print on demand market. We are able to solve major obsolescence and inventory problems for our clients and implement a very profitable, automated workflow. Because all of the orders are Internet-driven, the ease of use for our customers and the ease of automation for us create a great combination.

While variable data printing hasn't achieved its growth potential, it is clearly an effective way to increase response rates. The jury is still out on electronic communication as it relates to marketing.

WTT: In a December 2001 interview in the Worcester Business Journal, you described yourself as "a transitional and growth CEO." Would you consider yourself more of a "growth CEO" now?

CW: I think I'm even more of a transitional CEO than ever before. In fact, I expect to see that continue for at least the next five years. We are in the process of integrating all our systems, building on common standards, and evolving an entirely new culture - one that is, however, based on the positive culture the company has had for the last century.

The concept that the "job ticket rules" is changing. We are using an entirely new tracking mechanism for our web -to -press orders, and that is an internal culture change as well as an unbelievable technical change. Because about 35% of the LaVigne work force has been here more than 15 years, we're going through another major transition. The beauty of it is the amount of expertise we have here. I firmly believe that our team has more knowledge about conventional offset as well as digital printing than any firm we compete with. Plus they are completely dedicated to moving the company forward - I'd like to think it is something every LaVigne employee prides themselves on.

WTT: The terms "Digital Printing" and "Print on Demand" have come to mean so many things. So how do you define "Digital Printing?"

CW: That's a moving target! There are a number of industry definitions:

• Digital Basics 3.0 says: any reproduction technology that receives electronic files and uses dots for replication.
• GATF calls it "printing that uses electrostatic imaging to produce output."
• Pocket Pal - printing by plateless imaging systems that are imaged by digital data from prepress systems.

Our definition is "all printing processes that image plates or other image carrying media within the confines of a press." Even with offset printing the process is "digital" up to the press.

WTT: As companies use more online presentation of collateral, and designers work with the limited palette available online, does the need for high-quality color still exist? What about the concept of "good enough color?"

CW: "Pleasing color" is what is acceptable in different applications. However, high quality color production is still critical for certain kinds of printing. "Dead on color" is higher quality, higher value, and will be higher priced.

We look at it as a cyclical thing. The cost savings and the integration of customer information outweigh the value of "dead on color" in some applications. As digital color production gets closer to offset quality, the customer will be more demanding.

WTT: Last month you announced LaVigne's new Print-on-Demand (POD) system that integrates versioning, personalization, and on-demand printing and fulfillment with a web-based shopping cart. How are you differentiating your implementation and service from similar applications?

CW: From a conceptual standpoint, we're not doing anything unique, but we have tied it all together. We've put together an "all inclusive solution." Some solutions have a great front end but no shopping cart, others have a great cart/purchasing function, but limited variable capabilities on the front end. We have worked as hard on customer implementation as on production and our customers are telling us that is unique. We also have a deep understanding of print-on-demand as we've been in the digital printing arena for 10 years now. What we have done is taken a solution people have talked about for a long time - and delivered it with a simple implementation and use program and without the price premiums typically associated with printing in very small quantities or using personalization.

Unfortunately the industry is its own worst enemy - applications have always been designed to work with a specific manufacturer's equipment rather than to work with standardized data structures. Any in/any out is not there yet.

As printers, we need to speak to the corporate audience - the people that manage marketing, data and design. By integrating CRM with customized print, for instance, companies can begin to see some of the ROI they were hoping for.

It all starts with alphabet soup - PPML, JDF, PDF, PODI, ERP, etc., etc.! There are no companies that really understand how to integrate communications through the entire process. They all get the concept, but don't actually do it yet. Lots of people have point solutions that are not well connected.

We worked with HP and Printable to integrate our process through the shopping cart to our presses, folders and all the way to Fed Ex. And we still had to write applications to make it work within our existing workflow environment.

Print-on-Demand isn't just a digital press solution - it can be done on a conventional offset press too. What's important is that the order can come through the appropriate process.

WTT: It's pretty clear that "we've always done it that way" isn't in your vocabulary. What are your plans to drive LaVigne into new territory? What will LaVigne Inc. look like in five years?

CW: I wouldn't say that I believe in change for change's sake. Two of the people I most depend on have been with LaVigne for 35 years. They have critical industry knowledge and I respect the progression that has made the company successful. We have to combine the best of what has made the company successful with the best of new processes to capture market share.

The industry is under going rapid change and in 10 years it will be very different. Those who don't get it won't be here. We have a window of three to five years where "customer integration" or merging processes between the supplier and the customer become mainstream. We consider it "sticky" business because we are so tightly connected with our customers' businesses. We want to be able to "look right into the press" to show the job progress, right into the press queue.

We made the decision to follow the "customer intimate model" rather than try to be the low cost provider. Printers in the $5 - $100 million category need to decide on their model, make the commitment, and stick with it. Most of us are still trying.

Ultimately variable data printing and versioning will become commodities too. So we're watching the pace of change in wireless to see how people get the request for work here, how files are transferred. We want to see where the electronic communication links are going, how people communicate, and we're attempting to interpret behavior.

I don't think the entire world is going digital. About 80% of LaVigne sales are offset and we expect the mix to stay about the same, not flipping. On the conventional side, very large companies are successful based on the number of impressions produced per makeready. They're experts at lowest cost production. The big consolidators are smart and they know what they are doing - better, faster, cheaper.

However, LaVigne run lengths have dropped 30% in the last 10 years, and are expected to drop another 50% in the next five. In 1993 we were selling print-on-demand against cost-per-unit. We set our strategy and developed a workflow to bring the cost per unit down as far as possible so our buyers don't have to justify using it.

WTT: What advice would you pass on to young people coming into the graphic arts industry? What skills and experiences are particularly applicable? What course of study would you recommend?

CW: Young people are amazed that this is a high tech industry. The challenge is getting young people into progressive, cutting edge facilities to see folks in their 20s and 30s using very sophisticated technology. They must get into real environments.

At LaVigne we're both promoting the graphic arts industry and promoting involvement by the industry in technical school programs. We just don't see a lot of talent coming out of technical schools. It's not that the students aren't talented; there aren't enough of them with the right kind of skills who are interested in the graphic arts industry.

The graphics and printing programs in most tech schools are antiquated. It just doesn't work to have a student go through a program and come out knowing only how to run a single color press and a version of Quark that's 5 versions behind!

Equipment manufacturers and software companies must cooperate with the schools. More like Microsoft's approach or Apple's evangelists used to be - "seeding" the next generation.

For example, a new tech school is being built locally and they've worked to develop programs with equipment manufacturers to have the latest and greatest technology on campus. The manufacturers can use the campus print labs as test sites, as printing plants for special projects, or demo sites.

It's important too to keep examples of the old systems so students and understand what goes on behind the technology. For instance, running a four-color job through a single color press four times and matching the registration provides an invaluable understanding of the printing process.

All of LaVigne's digital production people come from the offset world and they understand the process behind the technology. It's not just "push the big green button" as some manufacturers would have you believe.

Young people need:

• A strong grasp of standards: XML, how JDF should work, PPML, PDF, etc.
• To know how the Internet and other networks transmit data and communication.
• To understand the difference between print and electronic communication - why print is important.
• To understand "ink on paper," rather than just images on a monitor.
• To comprehend database structures and how to use them.
• To understand how e-commerce works.

WTT: While it sounds like you've got your hands full, if someone waved a magic wand and said "Start over … here's a new life for you." What would it be?

CW: Darn, I knew I should have prepared a little better, this was the question I didn't have time to think about!

I'm so challenged, happy, satisfied … I wouldn't change a thing. I have a wonderful wife and family - three beautiful kids. Given the opportunity - I'd do it all over again!

The only thing that has ever tempted me is music. I've always loved music and play many instruments. I'd love to be in a small band that played in a few local clubs … but then, at 7:00 PM when I'm home playing with the kids on the floor, I think that I could have been in some smoky bar playing to strangers, and I know I've made the right choice.

WTT: Thanks, Chris. It's been great talking to you. All the best to you and your team at LaVigne.

For more info, visit www.lavigne.com.

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