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RR Donnelley -- Giant Transformation

May 2003
By Erik Cagle


When your company is the largest printing communications conglomerate in the United States (second biggest in North America after Quebecor World)—in a manufacturing industry that is fourth largest in this country—suffice to say all eyes are on you.

It makes no difference if the onus of an entire industry is wanted or warranted. Your company becomes a reflection of all that is wrong with the industry. The most layoffs, most plant closings, the biggest dip in year-to-year sales—if you want to know what's wrong with an industry, look for the giant with a huge target on its back.

That giant is RR Donnelley.

The Great American Printer from Chicago has some of the biggest scars, most publicized problems and, in the end, becomes symbolic of the state of the industry. And this is an industry that has been in severe pain for two years now, and the campaign prior was more than a bit uncomfortable.

But there is a silver lining. In 2002, RR Donnelley opened a plant in Shanghai, China; a premedia digital solution center in Pontiac, IL; and premedia facilities in Portland, OR; Warsaw, Poland; and Shenzhen and Shanghai, China. Additionally, a logistics distribution "supercenter" will open in York, PA, by the end of the second quarter 2003. Despite the sales dropoff and the decline in stock price, RRD greatly outdistances its U.S. competition in sales and boasts a balance sheet that owes few apologies.

The RR Donnelley management team, pictured from the left, includes Steven Zuccarini, Michael Allen, Susan Henricks, Haves McNeal, Edward Lane, Daniel Knotts, Robert Pyzdrowski, Mary Lee Schneider and William Davis.
The venerable, 138-year-old institution, bulging at 45 facilities and 30,000 employees, shelled out $250 million in capital expenditures during 2002, with an equal amount tentatively scheduled for 2003. But the giant is undergoing a transformation. Bill Davis, chairman, president and CEO, envisions a market-driven company with a new set of tools that enable customers to realize maximum potential. A major cultural shift has played a large role for the company.

Customers First

"We've made a shift from a place where we were looking out for ourselves to one where we are conscious of our values and accountable for moving the company forward," Davis says. "RR Donnelley has a new culture that embraces innovation, respect for others and shared leadership as it puts customers first. Over the past two years, we've advanced our transformation efforts and maintained a strong financial position, despite a severe downturn in the economy. By aligning our structure and culture with our strategies, we are better positioned to service our customers and provide them with solutions that help them save more, sell more and build their brands.
 

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