A new digital press; the anatomy of a new acquisition…

So you are in the market for a new digital press? Well then you are in luck as you have many choices to look at. With offerings from every major player in the market the job of making an intelligent choice is quite daunting. No one machine can be perfect for every situation and no one manufacturer can be everything to everyone.
Before walking down the digital printing isle to chose something off the shelf, you will want to review carefully at your current customer base and the jobs that they are providing to you, the skill sets of your people and the current equipment capabilities and capacity and your business as they are today. A bit of dream building and having a clear vision of what you want to accomplish both in the near term and the future can be a job by itself.

Take into account that a digital press acquisition in not an inexpensive one and is a decision that you will have to live with for a while. Whether you purchase or lease and what options you chose will have a lot to do with the current state of your business and your short and long term vision is for your company. A solid business and marketing plan are essential when undertaking such an expense.

Environmental considerations, Electrical needs, Space requirements, Speed, Reliability, Output Quality, Throughput, Substrate Handling, Duty cycle, Image Processing in both Accuracy/Power & Speed, Initial Acquisition Price, Cost to operate, Serviceability, Operator Control, Uptime, Training & Ongoing Support, Color Management and the ability to put this new asset in line with a workflow system or MIS system are all considerations that you must take into account when shopping. Companies that cannot answer your questions and provide you with a reasonable level of confidence cannot be considered seriously.

Let’s face it digital printing has come of age and is a serious rival to offset lithography. Run lengths for digital are getting longer while the average run lengths of offset lithography are getting shorter. At the GATF/PIA training I received in PA last month we were told the national average has dropped to 5000 sheets per run. At the same time the digital printing technology has evolved to the point that the delta between digital and offset has risen significantly from on average 1500 sheets to the 2500 sheet neighborhood. Even with the industries greatest achievements and innovations set up times are still 30 to 45 minutes on an average 4 to 6 color press. Highly skilled labor, Chemicals, Plates, Make Ready are still serious pricing components to any offset job. The systems required to drive these new offset presses are expensive and have many cost factors associated with them as well.

Now that the economic pressure has put companies on alert CMO’s are being pressured to do more with less both in marketing budgets and in labor. Companies are reaching out to find new ways to increase ROI of their marketing campaigns and are seeking to increase revenues without increasing the money spent to bring in those revenues. Marketing and Communication departments have redefined what “good looks like” and have looked to the science of timing and relevance to increase response to their offers.

With this science the advent of cross media advertising and elaborate relevant campaigns have become the norm. Print service providers have also had to redefine themselves and have been stretched from selling a commodity in their chosen craft to becoming a practitioner of a manufacturing science and participating in a solution based sale. Reaching out to expand their horizons the common print service provider has had to look for new revenue streams and retool their staff in their transition to marketing service providers.

Now many printers are selling a product based service instead of just a cost center product. With 1 to 1 marketing and the ever increasing sophistication of conditional variable data printing the choice of a digital press has become a very important one indeed for the printer that intends to be around in 2020. With many companies looking at variable data printing the ability to print long digital runs has changed the way to make a digital press choice.

So where do we start in the dissecting of a digital press acquisition? Well let’s start with the workflow surrounding a digital press. Many companies have already invested or will invest in a make-ready/workflow tool. Whether you use something simple like a suite of applications, or something more advanced like a server based solution there are many options available; one must look at what solutions are supported by the equipment and what training and ongoing support is also available.

If your sales rep and his/her team do not have a strong resume and experienced background you cannot take them seriously in their recommendations for your business. As important as the attributes of your press are so is the connection to that company both from a training and support side and from a recommendations side. You cannot spend enough time to know everything therefore you have to have a relationship that is strong enough to be able to count on their recommendations at a certain level. Sure you have to be a student of the business but the reality is you have way too much on your plate to learn about everything involved.

Pick a company that locally has a strong presence both in production print and in the ancillary services and has the relevant knowledge to help you become successful. Make-ready tools, Workflow systems, Business Development, Hardware setup and support, Business system integration, Initial training and long term support along with the typical financial services and flexible billing options are all key elements to take into account. Listen for people with vision but that are not unrealistic or that sound like “perfection in a bottle.” People that don’t talk about the risks associated with a solution are not being realistic. You should always be presented with options and a well thought out upgrade path so you are not caught off guard.

Make sure to know what level equipment you need and that the company you are looking at has a sufficient upgrade path for you and your business. Make sure to take the time to understand all of the cost elements and product limitations and upgradability. Digital presses can cost from $50,000 to millions of dollars. Ensure that your system is modular and has a way to add feature sets as your business adds new revenue streams and takes on new offerings. The last thing you want to do is short change yourself by buying the cheapest machine on the market without taking into consideration what you may be doing in 3, 5 and even 10 years.

Companies that don’t show interest in your business processes and rush to offer a “solution” without taking the time to observe and ask questions are not going to be good business partners now or in the future. Reluctance to slow the process down to seriously talk to you and your key operators and production managers are not going to offer anything but a nightmare down the road. Without a true understanding of your current capabilities, capacity and business offerings any proposal given to you would be futile.

Look for companies that not only have a good product but have local talent that understands both your needs and business model. Listen to the questions being asked and the level at which they communicate with you and their responsiveness to your requests. Be willing to give a serious contender the time to be able to fully grasp both your current situation and your future vision. Companies that are not interested in your future will under or over sell you and compromise you and your company.

Many a printer has gone out of business by over extending themselves. There are almost as many companies that have gone out of business by not taking new technologies seriously and not having the firepower to compete in the marketplace effectively. The effective use of technology is a delicate balance and sometimes it takes someone from the outside to help. Look to sound organizations that can help like the GATF/PIA who have a broad understanding and membership that crosses all sections of the industry. Whether you are a specialty printer or a general commercial printer they can offer invaluable advice as they see things from a 50,000 foot view.

After you have narrowed the field to a manageable list of potential suitors it is time to look closely at the hardware and software solutions that are being presented to you. In the next segment we will look at the hardware considerations of a digital press and what options are available.

Pirate Mike

Canon in the driver seat; what’s next? Delisting Oce?

Well the news is out Canon now holds 87.51% of the total issued share capital of Océ.

tradingmarkets.com posted the release:
In part, "The total number of shares held by or tendered to the Offeror (including Océ's financing preference shares) as of the Post-Acceptance Closing Date represents approximately 87.51% of the total issued share capital of Océ (including Océ's treasury shares)"
You can find the press release on Océ's website here: "CANON HOLDS 84.65% OF OCÉ ORDINARY SHARES"

In Canon's original press release on January 28^th, 2010 "Recommended cash offer by Canon for all the issued and outstanding ordinary shares of Océ N.V. to create global leader in printing industry"

Canon spoke about the details of the offer.

Under the heading: Liquidity and delisting it goes to say "Subject to the Offer being declared unconditional (gestand wordt gedaan) and in the event that the Offeror has acquired 95% of the Shares, the listing of the Shares on Euronext Amsterdam will be terminated as soon as possible. This may further adversely affect the liquidity and market value of any listed Shares not tendered."

I am not a stock broker but it appears that if Canon acquires 95% they can delist the stock and anyone left holding stock is out of luck? If they are at 87.51% now that would seem prudent to dump the stock so that your investment is not completely lost, except that the Post Acceptance period is over and I do not know how that may affect tendered shares now. It would seem that Canon has every intention to go through with the purchase and that the groups that wanted more for their stock didn't get their wishes.

In a Reuter's report they stated: that "Canon made their offer unconditional after a Dutch court on Wednesday denied a lawsuit by Hermes Asset Management and the Universities Superannuation Scheme (USS) who opposed Oce management's handling of the offer and argued Canon's offer undervalued its target. Orbis Portfolio Management, which owns about 10 percent of Oce shares, had also opposed the deal."

It appears that we have now seen history strike four times in a row! Once with Konica Minolta's acquisition of Danka, Twice with Xerox's acquisition of Global Imaging Systems, Three times with Ricoh's acquisition of IKON and now for a Fourth time with Canon's acquisition of Océ.

Now the stage is set; 4 Global Mega-Manufacturers are on the starting line prepared to make an Olympic 100 yard dash! With the proving grounds in the areas of Managed Print Services and Production Print it is anyone's race. This is a very scary time for anyone in this industry as the list of refugees grows! Be watching for upsets in the Fabulous 4; there are still competitors lurking in the shadows that could at any time appear as a newly positioned contender for the crown!

Happy Sale'ing…


Pirate Mike

Xerox – Next to reign in their rogue warrior?

Out of respect of the below comment I have removed this blog as it was written.

What I would say is from an industry perspective does Xerox intend to always have a wholly owned entity selling multiple brands?

That is the reason why I moved to IKON was I loved the idea of having a complete set of tools and not being locked in to one manufacturer. This "best of breed" concept gives a saleperson a lot of flexibillity. If this is the case then Global will be the only show in town with the ability to pull from the expansive "soup to nuts" portfolio of Xerox with the help of an inexpensive fleet line like Sharp or to meet some special interests or needs with the sometimes very unique offerings of Konica Minolta.

It will be the only time in recent history where a manufacturer was ok with running like this. Canon would rather cut their arm off then let one of their businesses sell another manufactures product. In fact I have spoken to people at Canon that have been planning for months on what they are going to do with their new tool "Oce/Imagistics"

Look how they delt with IKON, they didnt take any time at all to cut IKON off and they were just a distributor. Ricoh was the same way but used a little better judgment in their timing and transition. We are seeing different leadership styles coming from each of the manufactures it will be interesting to see how it all plays out over time. From what I had heard the acquisition of Global was the only one where they increased their market share during and shortly after the acquisition. If true this shows strong leadership and good planning on both sides. The question still remains how long will this relationship continue and how will that play out for the folks at Global.

For now they run on their own P & L and to the beat of their own drummer. Only time will tell if this is a permanent arrangement or not.

Pirate Mike

11 days till… David meets Goliath; a fight that may define the end of IKON OFFICE SOLUTIONS

In 11 days I will get tons of calls and emails from around the country on what new changes are being made inside of the Ricoh / IKON group. I have been listening to both sides of the house and have been hearing similar stories.


Unfortunately for those employees that still work there they do not sound good.


There have been rumors of huge layoffs and mass firings in store. It appears that these decisions are being looked at on an area by area basis. IKON has not been keeping up with the "Welch Way" of differentiation so there is bound to be more firings than layoffs. 

From what I'm being told there have already been some location closings/mergings in certain areas where it made sense. Some branch locations have scaled back or quit seeking new people all together. These have been kept very quiet as the worst has yet to come.

So what do we know so far of the story as it is unraveling? We know that there have been many "engagement issues" in which Ricoh sided with "Cain" We also know that the April 1st deadline (fiscal year) is coming upon us soon and Ricoh will not wait to "kill" IKON like they did with Lanier.

This is not a 5 year process!

The process is to merge the top level execs (already done and it appears that many of them came from IKON) and then to merge the back end processes (done) then to merge the sales forces and remove the chaff. (Starting to happen!)

What will we see?

Meetings with sales managers and local leadership on a market by market basis (Already Done) I am sure that they will dress it up as a "let's meet our neighbors" visit. I am sure that it will be very cordial. But what it really will be is a public display much like a title fight between heavyweight contenders! They will weigh in face each other and pose for a picture before the real Day of Atonement. I am sure they will make their merge decisions on an area by area basis.

There is a lot that is unknown, Ricoh has a lot of "purchased entities" in their back pocket and a lot of "intellectual property" that it has yet to release. One thing we know for sure is that they (Ricoh) has yet to make a unified group out of their acquired companies and has yet to create a soup to nuts product portfolio out of them. So anything can happen; so everything that we talk about here is just speculation.

In the end their can only be 1 Ricoh and 1 Ricoh Business Solutions and IKON which now is more of a RiKON than what people remember as IKON will soon be no more! Eventually Cain will kill Abel as he did more than 2000 years ago and the story will relive itself again.

I was miss-quoted the other day so I am making a re-post so that there is no misunderstanding.


If you look at my blog post which was posted at 9:05pm 01-13-2010 it clearly indicates that I am "on the market looking for a job." That blog can be found here: Pirate for hire! 


I am no longer in any way associated with IKON/Ricoh group.

If you are a shop owner or production manager and are seriously interested in the limitations that I ran into while placing this equipment I would be glad to answer your questions.

There are many successful C900 installations and soon to be C720 installations as well. But there are some limitations that need to be understood or your experience with this gear like all gear could become a nightmare.

There are many variables to consider when getting a production copier or digital press and I think I will dedicate an article specifically to that end.

This industry is where I make my living so I will keep some of my personal feelings to myself.


Pirate Mike

Mega Manufacturers – Canon and Oce; one more day, one step closer…

The office equipment industry has gone through several iterations of how they wanted to go about distributing their wares. From a simple direct from the manufacturer through an owned distribution and sales force to a myriad of convoluted multi-level channels and VAR's through a complicated series of licensing agreements.

Many times looking for partners that were not interested in selling their goods as a primary source of income as they didn't want to give deep enough discounts to actually compete in the market place against their direct organization or to create a newly formed competition in their industry. These "Value Added" partners were given the right to purchase product at a slight discount (like 15-20%) and were left to basically "throw in" the goods to create more impactful solutions with their core product. Many times the reseller doesn't even service or support the goods much like many of the resellers of bindery and finishing equipment.

 Although these arrangements sound great for both parties it eventually waters down the market with disenfranchised dealers of products they work twice as hard to find business for which in the end pay less than have as much. Since they are not on the same buying schedule as "Fully Authorized Sales and Service" dealers they do not get the same discounts and incentives to market the merchandise and in many cases the same level of support (if any). These arrangements do nothing but ultimately take the VAR's focus off of their core product.

The office equipment industry has tried this many times a notable agreement of this nature was the "On Demand" dealer program that Konica Minolta launched. The "On Demand" program was launched to dealers of other products say a Fully Authorized Canon Dealership to fill a hole in the product line that Canon didn't have which at the time was the "light production color" arena. The dealer would not have high capital investments to get started which appealed to dealers that didn't want to be a full line dealer but needed a quick shot in the arm in one area. These dealers jumped on the 'light requirements' only to find out that they would not have the proficiency to sell and service the product and truly be able to compete against the "real dealers" and the direct outlet and win. These "On Demand" dealers were buying relabeled Konica Minolta equipment and selling directly against Konica Minolta Direct and Dealers that were far better suited to market the product. This arrangement was quickly cancelled by Konica Minolta once they realized that this was not the way they wanted their product sold and serviced.

 In the end it only served to water down the market places with inexpensive deals sold as the newly formed "On Demand" dealers had inventory that they needed to turn and were not savvy enough to sell with margin so the local Direct and Dealer Channel ended up getting hit in the head with inappropriately priced deals by a desperate channel. This was during the great expansion when each manufacturer had many channels and multi level agreements and heavily weighed these channels against their direct operations.

 Now we have the pendulum swinging the other way where Ricoh went back to huge dealer channels and bought them back to be able to shore up the level of service and support that their customers were getting. The Lanier purchase was an example of this "channel repurchasing." Canon which lived by the dealership channel has taken some serious blows to the head and pocket book and is now "joining the club" in respect to being more responsible for their own success. The level of support they have dedicated to their own group has doubled or tripled compared to the level of support that they give their best and largest dealers. Minolta didn't have much of a dealer channel but Konica did so the merge of Konica-Minolta added hundreds of new "competitors" to markets that only had one source of "micro toner." This created new issues for reps that walked up to signing tables and had to answer why the 3 bids came back for the same product and all the prices were different!

 Now manufacturers want to control their own destiny and are bringing full line solutions to the table themselves cutting out as many VAR's and alternate channels as possible so that they can have a tight grip on the bottom line and ultimate control of the customer's destiny. These relationships are hard to manage when there are so many partners involved that no one wants to take ownership of an incompatibility. No one wants to go back to the drawing board and rewrite firmware.

Canon took its first step by making their offer for Oce. This was first announced January 28^th 2010 with a public press release.

"28 January 2010— With reference to the joint press releases of Canon Inc. (trading symbol CAJ) ("Canon") and Océ N.V. (trading symbol OCE) ("Océ") of 16 November 2009 and 14 December 2009, Canon Finance Netherlands B.V., a wholly owned subsidiary of Canon (the "Offeror") and Océ hereby jointly announce that the Offeror is making a fully self-funded, public cash offer for all the issued and outstanding ordinary shares with a nominal value of EUR 0.50 each in the capital of Océ (the "Shares") at an offer price of EUR 8.60 in cash per Share (the "Offer").

• Canon made this offer unconditional with its press release March 4^th and set a time limit for the "post-acceptance period" which ends March 19^th.

 Canon has been making plans on what to do with this "new acquisition" rumor has it they will stay in their normal form and immediately cut off all sales of other manufacturers products which adversely affects Konica Minolta being an OEM for sister company Imagistics for some time now. Konica Minolta has already terminated their relationship with Oce for the Black and White "big iron" and has moved forward with their own platforms. Rumor also has it that Konica Minolta has been working on an IBM relationship for roll fed devices. It will be interesting to see how Canon divide up their new purchase and how much "Oce" do they keep for themselves and how much do they let sit as acquired "intellectual property."

• Either way they will be on their way to becoming the next Mega-Manufacturer.

Happy Sail'ing

Scary Times – Ricoh the one world leader succumbs to bad economy and is vulnerable like everyone else…

Now this is just hearsay, but I was just told that Ricoh is making employees take a week furlough without pay and has started lying off employees. This is a very similar situation that I am seeing across the boat I mean board with companies in our industry. From Konica Minolta's huge layoffs right after Xerox and Kodak cut roughly 20% of their global workforce. I'm sure it is not a shock to see HP step back and act cautious in new hires and expansion. Now with Canon in complete desperation to see them partner up with HP is almost funny. These types of partnerships are not uncommon in our industry, good bedfellows they make as they both struggle to assert their once top tier status. With Oce bleeding profusely to now even Ricoh showing their humanity we see salary's decreasing, employee benefits being cut or disappearing all together to sheer headcount reductions in almost every company.

IKON has even make changes and cutbacks in our company 401K matching program. The one thing I will say is that we are still expanding headcount and retooling our demo facilities and go to market strategy. We have not given up that we can be successful in such trying economic times. "Be Bullish In Production" our RVP says religiously. IKON is very bullish in times when even the greats are cowering. In fact we seem to have put on the war paint and run into the streets to meet our enemy head on. We continue the fight regardless of the naysayers.

I am getting nervous to see our "big brother" have such 'noise' coming from their employees. I knew many that went from Konica Minolta and others to over to RBS when they were the best looking for longevity; now what were long term stable employees they too are making the great pilgrimage to look for "gainful employment."

With everyone having such a knee jerk reaction it makes me wonder what is coming next. From everything I am seeing it appears that IKON is coming out on top and in a strong position to negotiate with the Ricoh first born. It would not surprise me to find that IKON becomes the "chosen one" and the pony picked to win this next horse race. I look forward to hearing the stories from my readers as I'm sure that many will find even uttering such a thing blasphemous.

If you have a Ricoh layoff story or more "inside information" I would love to hear. As for Pirate Mike I think we will see the true colors of Ricoh's intentions by April 1^st 2010! Maybe I'm wrong but hide and watch as Ricoh retools their organization to come out fighting strong in the next fiscal.

Also be looking for the new Ricoh Pro C901 ( or whatever they will call it ) This new machine of destruction will be a great advancement of the C900 of today with no fuser oil, basing its strengths on a newly formulated polymerized toner? that will bring digital quality to new heights. If I had to guess with the speed at which they are developing products I would guess mid spring or early summer. With all of the great advancements of the Aegis product you can be sure that Ricoh is looking to show the world that "Ricoh knows production." Or at least the new horse they ride IKON>

What Ricoh knows is how to buy the best technology and engineers and then follow that up with a great distribution model which they did too buy. The IKON acquisition will show that their multibillion dollar purchase was not in vain but truly put them on the map in a way that they never could have done before the acquisition.

Ricoh is slowly learning the power of the weapon that she bought. But being able to wield this new weapon of destruction is yet another story. IKON is not an easy horse to ride, and this ride is surely to get very edgy in the short term as things build and the economy continues to falter. This is an "E" Ticket for sure!

As we get into 2010 I'm sure there are more cuts, layoffs, and changes to come. All we can ask is in the end that we are paid to the champions of the day. I for one cannot complain too bad as I have had record months and a record year! I am sitting somewhere around 120% of my budget with almost 400% of my yearly units. The Ricoh Pro 550EX, 700EX and the infamous C900 have taken me to the Promised Land!

Even in bad times the pirate of Lewisville Lake is showing that it can be done with no food or water and just on new business acquisition alone!

Happy Hunting,

RiKON, IKON’s struggle for the right to exist…

Ok, October 1^st 2008 has come and gone. And so have the IKON fiscal year, and our Pantone 185 Red. Now we are the step child to the one world leader in business technologies and equipment manufacturing. Xerox's Anne Mulcahy mentions IKON/Ricoh as the new threat to Xerox's supremacy in one of her last talks to the corporate shareholders. So now that we are donning a new Red in our logo (Pantone 186) and have a new phase tagline on our business cards "IKON a Ricoh Company" what does the future hold for us?

I can still remember the year prior to the acquisition and the marching orders that we had. Looking back I can see the signs that should have signaled the takeover. Looking forward I am seeking the signs that will indicate my future. Now after a complete quarter in the new Ricoh fiscal year the signs that I see are not as descriptive as I would like them to be. The mantra of protect the base and explore the new world are really just warmed up battle cries from previous generation. What I do see is a lot of shuffling, maneuvering, positioning, and jockeying for the privileged positions in the new one world leader's house. As the days of IKON come to a end, so will the legacy of the world's largest independent distributer of end to end business technologies.

I see leadership poised to make quick and many times knee jerk reactions to the ever flowing economic hard times ahead. One thing that I have noticed about IKON is that they are not scared to make a quick decision. They will uproot you in a second. One day covering one account and another day another, in some senses this ability to move quickly has brought them to a position of greatness. But in another sense it is why no one seems to have any ownership of their own success. They are only successful in the task of the day not in the overall success of their position. Maybe I have a very narrow view coming from just one IKON marketplace. Now almost 2 years into this adventure I am one of the sales survivors. I am now a tenured veteran walking the hallowed halls quietly for fear that I might awaken the sleeping giant.

Now a Ricoh company we see that our chest beating over the Canon product was just another marketing ploy that we used on our clients and eventually came to believe. It is funny to spread a lie what is even funnier is when you actually believe it. What we have learned is that people really bought from us and not a product name? So what Ricoh really purchased was a network of people and relationships strategically located in 400 unique locations around the world. I was on an international conference call with the IKON of the UK and found that they too are just like us and are engaged in the fight for world dominance just like we are. They ask the same questions and provide the same solutions to their clients as we do.

Amazing how we all are fighting the same battles, with a lesser or greater degree of success. We are now learning to sell a new product (or at least new to us) this new world of Ricoh innovations. What I am finding just like I did selling Konica Minolta or Canon is that Ricoh has products that when placed in the right environment with the right enablers they do wonderfully (even in the print for pay market.) There I said it Ricoh products can be used in production environments, did you disbelieve? Did you really think that Xerox and the others we all have come to know and love were the only ones privileged enough to make good production equipment?

Watch the evolution of the engineering as the new 7 series comes out. Hide and watch as the group formerly known as IKON comes to market unified under the RiKON banner. Many rats have scurried and left what they thought was a sinking ship only to have their A*s' handed to them by what they said would be an inferior product. What I say is it must be embarrassing to those reps that fled to Canon to only be beaten like a red headed step child by the product that they swore could never grace the floor space in tandem with other greats like Xerox and Canon; only to find out that their new MIF is slowing going away to these new raiders of the lost copy machine.

So is it the product? Is it the people? Is it the process? Well I will let you figure that out. What I am interested in is what to expect in the next generation of RiKON. They are taking over our internal processes, Shipping etc. So how will this all shake out? What is to become of the IKON of old? How will the sales territories be realigned and divided up amongst the corporate raiders? Will IKON's leadership be incorporated into the Ricoh world or will they just cut the head off of the monster to let it die a quick death?

Watching the slaughter going on at Konica Minolta now that they have cannibalized the Danka people puts me in a bit of distress. They (Konica Minolta) have shown their Minolta roots. Minolta was a strong down the street company. They did not need fancy analysts and strategy sessions. What they needed was feet on the street and quick turn business. They were not interested in anything that couldn't be closed inside of 30 days. Really 21 if you expected it to get delivered in the same month. Konica's deep thinkers have all but been sacrificed and it looks as if they will do the same to Danka's people. If you do not have Minolta blue running through your veins your chance of survival in that pit of vipers is not very good, so be forewarned.

Now so how does that relate to IKON and Ricoh will PMS185 or PMS186 prevail? Will the darker red over take the pirates of IKON? One thing is for sure there are a lot of similarities in the Konica – Minolta merge and the IKON – Ricoh acquisition. Both engagements have a strong hunter and farmer component; although financially different Konica – Minolta was a merger, do not forget that IKON – Ricoh is an acquisition. We are an owned piece of property. So will the same be true here that IKON pirates will slaughter the pleasant farmers of Ricoh or will they show their teeth and push back the boarding marauders?

What I have witnessed is that everyone is scared for their job. No question that every employee has thought once or twice what they will do if their job becomes disposable. As we all are very well aware we all can be replaced in a second and without much thought. One thing I will say is that many have come to grips that this is the new program and they are executing. As we push forward we see how well this new equipment is holding up and that people really don't care whether or not they have a ball an X or red words written on their equipment. What they care about is when they call will anyone answer? And if someone answers will they be able to fix the problems that come us as they most certainly will (it is just a machine).

Before we were searching for the ultimate top line, now again we are concerned again with the bottom line, and soon we all will be walking the line as Ricoh puts the firing squad out to lean down into the fighting machine they will have to be to survive this economic holocaust. So are people still buying; of course they are, in upturns and downturns this business continues to provide alternative solutions to cost savings and automation with ultimately provides for real top line and bottom line revenues as productivity goes up and we learn to do more with less.

As for me I am glad to have a job that provides for me and allows me to continue the battle. Tomorrow again I will pick up the battle axe and let out a cry this time the name is different the red is darker but the result is the same; Victory! Stop at nothing less.

Just a bit of inspiration from the RiKON ship of warriors; from the man known all around the world as Pirate Mike…

Happy Hunting…

(Xerox, Konica Minolta, Danka, Ricoh, IKON, Oce, Imagistics, Lanier, Global) How good companies alienate great people – A story of bloodletting and corporate ignorance.

I have wondered how companies let such great talent walk out the door and end up at the competition to do nothing short of shut them down in a particular marketplace. I have watched so many people change hands over the last 4-5 years that it is truly amazing how fast the strength of a company can change. I have noticed that companies lose employees in 5 distinct ways.

1.Through lack of leadership.
2.Through lack of promotional opportunities, and poor positioning of their resources.
3.Through changing of the compensation plan or not insuring that the employees get paid as they should.
4.Through the changing of an established employees territory or constant switching of roles.
5.Through the lack of respect, recognition or pure disregard for the employees goals and dreams/desires.

I have survived now 2 distinctly different combining's, the merger between Konica and Minolta and the acquisition of IKON by Ricoh. Both were very different but had many of the same elements in them. I have witnessed several other acquisitions and mergers from the acquisitions of the Ricoh family companies like Lanier to the acquisition of Global by Xerox and Danka by Konica Minolta and Imagistics by Oce. One thing that they all have in common there was always a mass exodus of many great people during these troubling times. And in which affects the company's strength and positions the company for greater failures.

During Konica and Minolta's merger I witnessed many events that I wish would have ended up differently. One thing that Minolta and the later Konica Minolta were very good about is making sure that their employees got paid what was due to them and identifying what the employees dreams were and addressing their work to accomplish that dream/desire. Managers took special care to see that the sale reps got paid and that their livelihood was preserved at all costs. Although it seemed as if the sales people were spared the initial cuts, pay plans took dramatic cuts. Leadership was there to manage focus and readdress employee concerns. Konica and Minolta had their failures with processes and support structures. The companies were brought together without a good supply chain methodology. There were very few things that actually happened that made business any easier. In fact many of the processes that were solid become more flimsy as the companies came together. Research and new product lines were coming out quickly giving their people some great products to sell but there was no internal support structure to get them to where they wanted to be. The frustration had always been tolerated as salesmen knew that they were "paid the big bucks" to deal with it themselves. Now that the financial incentive had left the big hitters left also for a more fertile hunting ground.

There was very little emphasis that anyone was very important. In fact the exact opposite was quite true, we like you but we can replace you tomorrow with someone that wasn't here when we paid them properly was definitely the attitude. Promotional opportunities were available but limited to the local leadership's ability to keep you pinned down to what they needed you to do (sell if that was what you were good at). The branch I was at had probably 8-10 of the companies top 20 reps nationally and they all were gone within eighteen months of the formal merge. Territories didn't change for the Minolta employees but that isn't true of most of the Konica employees that ended up in menial jobs and eventually quit to find somewhere else to graze. Minolta had a strong culture of respect and that was only broken by raping the compensation plan to the point that one could see the writing on the wall (you are not getting paid the way you used to so just get over it). It was obvious that Konica Minolta didn't want a huge changeover but really did want to slowly change out all of their employees to new ones that would only remember Konica Minolta and not one or the other. The legacy employees were not good for morale and only brought strife and improper expectations. The original expectation was that if you don't make a six figure income we will fire you. The new expectation was be lucky to have a job and hope you make 65-80k.

IKON and Ricoh's situation was quite different. Ricoh tried to preserve the unique identity of IKONITES. They were very keen on putting value on their individuality and importance. Great steps were taken to try to keep key employees put until the changeover was complete. Leadership was lacking though as IKON had become weak and instable. How can the largest independent distributor of office products in the world get taken over? Who would let this happen? Hedge fund operators that were looking to plunder gold at any cost, that effectively were nothing but corporate pirates. These raiders and marauders slowly and methodically purchased stock and held it for ransom till they were able to manipulate the books till IKON looked like an attractive buy. Leadership had lost the desire to fight and had become fat, slow and lost the entrepreneurial spirit. IKON's growth pattern was like a dwarfed child with no way to grow into the fulfillment of the promise that it had once offered. As a result she became a victim of greatness. Her size and distribution model soon became the desire of others that didn't want to create their own but saw IKON as a cheap alternative since she had become so weak and unprofitable.

IKON was built on the conquering spirit and had become a fierce competitor to do battle with. Over time their success had created greed and sloth. (See the 7 deadly sins of a copier salesmen to fully understand this dynamic) IKON became vain and without potency. Something like 21 companies bid for IKON; Canon, HP, Samsung are some of the ones that I heard of. (If you know where I can find documentation on whom bid for IKON and how that went down please let me know) Now after the acquisition there is much restructuring being done to become the new Ricoh; the new one world leader.

One would have thought that promotional opportunities would have been wide spread as many of IKON's people did leave to places far off. But as the people left the leadership found it more attractive to place "new" talent in place that did not know of the IKON way. The compensation plan was very slowly adapted to a new way of thinking. This new "manufacturers" view of box placement and aftermarket preservation took a while to settle in and is still being implemented now as we speak. Territories have not changed that much as they really have tried to preserve IKON's identity and run it as a "wholly owned" subsidiary for the mean time. People were viewed as an asset and respect was placed on maintaining the integrity of the local branch and employees. But IKON really expects you to take care of yourself, they do not see the value in "getting you paid." If you cannot figure it out for yourself you are surely out of luck. They still believe in the "only the strong survive," and do expect that everyone that comes aboard has a sharp sword and is ready to use it. (Even if it means cutting a few throats in the initial onboarding) I almost find it funny sometimes as I have almost become accustomed to it.

Other employers love to hire IKON employees as they bring the "blood lust" to their people. We revitalize their troops in a way that we will never fully understand, but it is why we get so many phone calls. If you survive you are a "keeper." Leadership at IKON is much more methodical than Konica Minolta but the leadership at Konica Minolta was much more visionary. I can still remember seeing the President of Konica Minolta come to the local branch and taking time to meet and inspire the local people. IKON is the exact opposite they do not have time to be bothered. I have seen people I didn't know walk to the corner office and leave within an hour to only find out that it was the National VP of Sales or some other high powered title to watch them gather their things and leave as quickly as they came. They would rather do a "focus" group then actually meet the people and refocus the troops. This is the mistake that Konica Minolta did in the acquisition of Danka; they did not reach down and pull everyone up this time as they did in the merger.

But I have decided that "acquisitions" are much different that "mergers." In a merger everyone is more hey we are a team that is now stronger to take on bigger foes, in an acquisition you are more the conquered one and must be subservient. People look down but they do not reach down to pull you up. They look at their new purchase in a fish bowl and see how neat their new pet is. In a merger you look over at your new comrade in arms and hope he is carrying a big stick and extra ammunition as you go to slay goliath. Konica Minolta was a 'small' company that had 'big' dreams. Their dream was to become a tier 1 player in the game of office equipment and imaging/document services. Ricoh's dream is to be the 'one world leader.'

So in this I have seen many different approaches and cadences. I have seen good management and poor management, good leadership and poor leadership. I cannot tell you exactly what good leadership is but I know it when I see it. I can 'feel' it. It is the love – hate relationship that you have with overcoming your fears and taking new ground. It is the fear of taking the hill then rejoicing as the hill falls to your power. Good leaders empower their people to conquer and do not hold them back but send them out as berserkers. For those of you that do not understand the reference and its importance; "Berserkers (or Berserks) were Norse warriors who wore coats of wolf or bear skin and were commonly understood to have fought in an uncontrollable rage or trance of fury, hence the modern word berserk."

We now more than ever must come to grips with our fears, overcome our call reluctance and go forth with frenzy. We must take our market share by force and win friends and influence people with the sharp edge of the sword and the tactical advantage of a calculator and well worked spreadsheet. Some days I love the challenge and other days I wish I was dead. Today I was up for the challenge. I will probably reword this blog many times over so you can read it every day and it will change as the season and circumstances change. One thing that you will find out about Pirate Mike is that I am not stubborn in my knowledge. I fully bend and flow as my understanding changes. I hope to evolve my understanding of my circumstances and the events around me and hope to be a survivor and a thriver in this harsh economy and time in our industry.

So WHAT DO YOU THINK?

Pirate Mike

Here is to good hunting… May you kill everything that falls into your sights…