We Need to Change the Way We Manage

Roger Ynostroza, Editor in Chief -- graphic arts online, 3/1/2001

Now, in a very short period of time, some of us-perhaps many of us-are realizing how overextended we've become and how forgiving the seemingly unstoppable general economy has been up to now in propping up weak businesses, weak ideas, weak business plans, and weak execution strategies.

A new and chilling wind is blowing over the business landscape; in fact, it's not just blowing, but it's actually reshaping the landscape and thus changing how enterprises small and large inhabit that landscape.

Attentive managers are changing

What do I mean? It's obvious that, as expressed in a range of formal and informal conversations that have taken place inside the graphic arts industry as well as elsewhere, attentive managers are changing the way they think and the way they operate their businesses today.

This has been a sudden change, for sure; only a few months ago, it was pretty much business as usual, or more accurately, business as everyone got comfortable conducting it in the go-go '90s, when relentless growth bolstered by general momentum and optimism masked any serious deficiencies.

But now is now.

Today, top managers are realizing that growth at any cost-a simple strategy that worked beautifully in recent years when everything was on the rise, including profit margins-is no longer a guarantee of success. Now, suddenly, the mantra "growth at any cost" has become "profit at any size" as everyone rushes to perfect their ability to examine every detail of a job or project.

Shift is clear and obvious

In the printing industry, the shift in business management is just as clear and obvious, and it has come about just as suddenly as in general business. But while the shift in thinking among printing managers may already have begun-"volume at any price" is being traded in for "margin at any volume"-this is coming about at a very awkward time.

The reason is, there's a serious lag in thinking about volume versus margin against the operating structure that's been in place for some time. Revenue targets, established using customary practices, have already been set for the year and most have been set pretty high, which should not be surprising coming out of experiences during the '90s.

So we start with a built-in anxiety about coming up short on the gross numbers, an anxiety that triggers a natural and familiar response: we've got to get our volume up, so make sure we turn those cylinders. And don't worry about the margins; they'll take care of themselves-they always have.

The hitch and the challenge

But here's the hitch: if the volume isn't there, and we can't be sure anymore that the margins will take care of themselves, do we still know how to run successful enterprises?

This is truly shaping up to be the year of challenge for business; the managers who are still around in December will undoubtedly be far different from the people they were in these early months of the new century.