This One's for Ladies Only --DeWese
This column is for women only! It is strictly private and confidential. Women should enter their user names, passwords and proceed to read my column. Men should just flip the page and read the equipment ads.
About 18 years ago I wrote a column that predicted women would have a bigger role in printing management and printing sales.
What actually happened was that women who couldn't get a decent job in printing got jobs as print buyers. (And, by golly, female print buyers have noticed that the printing industry is male dominated and, as a result, they are irritated.)
We have female CEOs in less than 5 percent of all printing companies. About 30 percent of all salespeople are women. The most notable CEO is Stephanie Streeter, CEO at Banta Corp., a New York Stock Exchange company with revenues of nearly $1.5 billion. For the first nine months of 2002, Banta's earnings were up 28 percent in an extremely weak economy. Way to go Ms. Streeter!
This perverse inequality in the printing industry strikes me as odd since more than 50 percent of the population is female. In my own family, 75 percent of my children are female and 80 percent of my grandchildren are female.
Only 12 of the Printing Impressions 400 companies have female CEOs. That's only 3 percent of the top 400 printing companies in America.
I did all this research because the National Association for Printing Leadership (NAPL) asked me to conduct a special seminar for the spouses at its annual Top Management Conference, which is scheduled February 19-23 in Scottsdale, AZ, at the fancy J.W. Marriott Desert Ridge Resort & Spa.
Each year NAPL has a program for spouses at the conference. Lots of times the program includes wine tasting, cooking classes, shopping trips and museum tours. I guess they don't want spouses and significant others to sit in their rooms and watch the soaps and Oprah.
I already know that my seminar participants will be 100 percent female. My topic: "All you ever wanted to know about the printing industry, but were afraid to ask."
Here's what I'm going to tell the participants.
I will begin by telling the women that the printing industry is the fourth largest manufacturing industry in America, but is about 89th in terms of profitability. I will then point out that more than 95 percent of the industry leaders are men so it would appear that the boys have dropped the ball.
I will go on to note that the industry has many inherently negative characteristics. Which makes one wonder why men chose to enter this business in the first place?
The industry is also highly fragmented, which means there are many small firms competing with one another—in fact, about 40,000 nationwide. There are so many companies that no one has found a way to count them exactly.
You might ask, "Why is that so bad? There are tens of thousands of privately owned gas stations." The gas stations are all "branded" by the oil companies and tracked on computers. Oil companies, for example, know to the ounce how much gasoline they sold. No one knows, to the penny, how much printing was actually sold in 2002.
So, because printing is a fragmented industry, there is very poor statistical information about the performance of the industry.
Fragmented industries also have low barriers to entry. This means that any printing salesman or pressman who gets fed up with his employer—able to scrape up a few bucks and get financing for a press—can start a printing company. Small companies in fragmented industries are also usually at the mercy of their customers and their suppliers.
This has happened in several of the printing industry segments, the most notable being the largest segment: general commercial printing. Pizza shops are a fragmented industry, but customers can't go in and negotiate the price of a large pepperoni or get the proprietor to throw in free anchovies.
Once they have entered the industry, the mostly male printing company leaders have proven to be equipment junkies. You've all seen men indulge their cravings for machines in their lives—boats that sit in the backyard, fast cars, power tools, tractors, etc.
The rationale seems to be, "We can't get enough customers, but we can damn sure can get more equipment. Maybe, if we build it with more equipment, they will come." This kind of thinking is what leads men to bet and lose big bucks on pro football.
As a result, depending on which expert you believe, the printing industry has too much capacity by factors ranging from 20 percent to 40 percent. Capacity is another word for "supply" or, in the case of the printing industry, another word for prepress, press and bindery equipment.
Now everyone knows that our economy works on supply and demand. If the FoodMart is not selling butter, it goes on sale. If SuperColorLithoGraphics has idle presses, printing goes on sale until it lands some work, even if those jobs lose money. It took those jobs away from its competitor down the street, MagicLithoColor (MLC), so MLC cuts prices until it can land a few unprofitable jobs. Now everybody is losing money.
The customers stand by and say, "This is easy. Let's demand good quality, fast service, the lowest price and somebody will still print our jobs."
As a result, the customers rule most of the larger printing segments. (Oh, there are a few highly specialized segments where the printers rule, but I'm almost certain those specialties were ideas that originated from women.)
The printing industry has another unfavorable characteristic: the job shop manufacturing system. This simply means we are not manufacturing 200,000 Ford Explorers in a plant (continuous flow manufacturing) or 200,000 gallons of chocolate chip cookie dough ice cream (batch flow manufacturing). The equipment in automotive and ice cream facilities gets set up and runs forever. Printing equipment has to be set up (made ready), then washed up after every job—plus every job is different.
This manufacturing system makes printing "people dependent." It takes a lot of workers at every step of the printing process to complete the job. A batch of beer at the Miller Lite plant, however, only involves a handful of people since most of the equipment is automated. The people dependency in printing means that human error is always present and much can go wrong with a printing job.
This leads to human conflict, and we all know that men would much rather read the paper than deal with conflict. Women, on the other hand, have better people skills and are fantastic at resolving conflict and nurturing other human beings.
There is a lot more that I will be telling my seminar participants that I don't have room for here. If you would like a copy of my PowerPoint presentation slides, then write to me in care of Printing Impressions and I will send them along.
The purpose of this column, however, is to call for a female revolution in the printing industry. I think the women will have some better ideas. I want all you female readers (remember: there are no men present for this column) to begin wearing black arm bands. This will remind the male leadership in your companies to promote women into management positions. If this doesn't work, then I'm going to ask all the female buyers to boycott companies where women have no role in management.
Now, all you saleswomen get out there and sell something! Your male competitors are sitting in their offices wishing they had a new eight-color press, grieving that the NFL season is over and impatiently waiting for the NCAA March Madness to begin.
About the Author
Harris DeWese is the author of Now Get Out There and Sell Something!, published by Nonpareil Books. He is a principal at Compass Capital Partners and is an author of the annual "Compass Report," the definitive source of information regarding printing industry M&A activity. DeWese specializes in investment banking, mergers and acquisitions, sales, marketing, planning and management services to printing companies.