Man is Meant to Act and Not be Acted Upon

An article written for the newsletter and later promotional material of Printer’s Plus (a printing-industry standard MIS).

After using Printer’s Plus for 25 years in our 40-year family shop, I spent the last two years significantly increasing the value of my company prior to selling it.  Yes, we doubled the sales value of our company during the recession.  How did I do that?  Three things: the evolution to wide format, touchpoint managerial accounting, and hiring systematically.

First, the past three years has created a boom in the wide format industry on a scale that hasn’t been seen since the adoption of the copier in the late 70s.  If you haven’t gotten into wide format printing, do it now.  I bought a machine and supplies for under $10K in 2008 and revenued $50K on it in its first 12 months.  While $50K is only 2-3% of a year’s revenue for most people reading this, it does wonders for morale during the recession, ran a very high profit margin (300%+), and countless customers came in off the street to stare at all the neat posters, banners, and giclées we were hanging as samples.  Wide format made our shop cool again.

Managerial Accounting consists of all the numbers in your shop that don’t have to do with taxes.  If you’re like most print shop owners, you started/bought your company because you’re either an artist or you ran a press.  Either way you have no interest in accounting, and probably just don’t do it.  You don’t even run reports on Printer’s Plus, instead pretending to people that you just “know” your market and “have a feel” for what works.  Two years ago my shop was like that, so I can say authoritatively it’s a lie voiced by people in a self-imposed survival mode.  The truth is, there is no way to come close to maximizing the value of your company without being best friends with every line of the Printer’s Plus reports and Microsoft Excel.

Write this down: Management is the work of translating human capital into financial capital. And vice versa.  Your job is to teach art to your accountants and accounting to your artists.  I don’t know how that is possible without a spreadsheet, because visual people need to see big colorful graphs.  If you’re not comfortable looking at numbers, you need a spreadsheet program to allow you to visualize what’s going on in your company.  If you can’t do this, find someone who can.  Without knowing what’s really selling, you don’t know what your customers really want, and you’ll keep spending 80 hours “surviving,” making less than your employees, and blaming “the economy.”  Even if you’re the best and really successful, I promise you’re not within 20% of where you should be without big colorful graphs.  Many of these numbers are buttons in Printer’s Plus, so start pushing buttons ‘til you’re passionate about one of them.  And take advantage of one niche you have that your accountant doesn’t: 11×17 color copies at cost.

Once you know where the buttons are, just pick a number and start following it.  As Einstein said, it’s about learning to count what counts.  From there, as Drucker said, what gets measured gets done.  Once your operational machine is responsive, you can pick a specialty or not, but it will be your choice.  You can then use your talents and interests to carve a niche, instead of always desperately playing “me too” with the franchise place down the road.  Do whatever the customer asks once he walks in the door, but your marketing can aim wherever you point it.

Three good places to start looking for metrics:

1. I already said “just start pushing buttons.”  Just start printing reports on Printer’s Plus and learn what each number means.  Something you see will stick in your head, and what gets noticed, even if you don’t say it aloud, will get done.
2. Second, know your touchpoints.  An important paradigm in picking metrics is to learn which variables matter and which don’t.  We spend a lot of time fine-tuning when we haven’t rough-tuned yet.  This is a sensitive topic, so I’ll phrase it in the third-person.  Touchpoint advocates argue that for the hundreds of things going on at once in your shop, only a half-dozen of them interface with the customer, and therefore only a half dozen of them impact sales.  They’re not saying having a clean pressroom isn’t important—it is, but no one within the sound of my voice has ever made a dollar from having a clean pressroom, while every one of you has lost at least a dollar from not having a clean enough front room.  The vital Touchpoint process will allow you to more properly allocate your time and money on variables that “matter.”
3. A third and I would say important place to start is the book “Print Shop for Sale,” by Larry Hunt and John C. Stewart.  Whether you’re selling your business or not, it’s hard to increase the value of your business without making more money, and vice versa.  This book on statistically significant ways to valuate your print shop will give you a strong springboard for developing your management metrics.  Like a homeowner adding a pool thinking it will increase the value of his home, or the Chinese restaurant that adds “and American Food” to their sign thinking it will double their traffic, you may unintentionally be doing “obvious” things that actually lower your bottom line.  As an example, I quickly found out that my profitability was outside the bell curve—that companies exactly like mine but with lower profits actually sold for slightly more money!

The third thing I did to significantly increase the value of my company before I sold it was to institute personality typing into our hiring process.  Part of my paradigm was that I wanted to systematize everything so it didn’t need me anymore, and this included hiring.  This turned out to be a very simple switch to flip: I simply found my favorite employees from the past, had them take a free online Jungian/MBTI personality test (the one at Humanmetrics is what I used), and then drafted out a virtual recipe book of my ideal employees.  I put a link to that test on my next job listing (without telling them what score I was looking for), and voila!  I knew that everyone who had ever thrived on my front counter was an ENFJ and I could judge all incoming applicants through that lens.  Yes, I had all sorts of other subjective things I was looking for, but this objective lens made the process much simpler and worked like a charm!  The MBTI has been taken by so many people that you can go to the library and check out academically-sound books on “what happens when an ENFP marries an ISTJ.”  It’s so legit it’s admissible in court.  Famous ENFJs are Ronald Reagan, Barack Obama, Oprah Winfrey, Michael Jordan, and Johnny Depp—like my favorite copy employees, these people are all people who emotionally recharge by being surrounded by a mob of demanding customers, who value doing things perfectly, and who are naturally pretty good at absolutely everything without needing training.  Rinse and repeat this process and you have recipes for all your staff.  (For example, it is now easy to see that you want introversive perfectionists who are skill-centric running your bindery.)

The inside of a helicopter is a shotgun-blast of switches that scare most people away from ever wanting to fly one.  But with a little paradigm shift, a pilot learns that while his job is to monitor all the switches, knowing which half-dozen to master is what it takes to excel.  Above I listed my three favorites, and how they flew me where I wanted to go.  Please find yours, and tell me how it went.

Related articles

• Touchpoints Bring a Customer Experience to Life (designmind.frogdesign.com)
• Mindshare Marketing Touchpoints (biztipsblog.com)
• Touchpoints Bring the Customer Experience to Life (blogs.hbr.org)
• Pareto’s law and touchpoints? (customerthink.com)
• Your Personality at Work (personalbrandingblog.com)

Tags: Barack Obama, ENFJ, ENFP, Johnny Depp, Microsoft Excel, Oprah Winfrey, Ronald Reagan, Touchpoint