From Dot Bomb Implosion to the Printing Industry: My Personal and Professional Journey
Lockwood, Diane L., Frayne, Colette A., Callahan, Robert E., Journal of Managerial Issues
Since its founding in 1974, Printing Control Graphics (PCG), a recent acquisition of Houston-based Consolidated Graphics (NYSE: CGX), has been known as a high-end, boutique, commercial printer, producing annual reports, presentation folders, catalogs, brochures, and direct mail. Before 2000, PCG was a successful medium-sized printing company with nearly $13 million in annual revenues. However, after the dot.com bubble burst in 2000-01, the slide in earnings began with back-to-back years of successive losses. But that was before Richard Lancaster joined the ranks of this rapidly sinking ship in June 2003 as Vice President of Business Development.
When Mr. Lancaster joined the company, revenues had fallen to $7.5 million and the company had an operating loss of more than -10%. At that time PCG was owned by a failed consolidator called Kelmscott Corporation, which in turn was owned by J. P. Morgan Chase and GE Capital, and managed through the JPM workout banking group. The goal on joining the company for Lancaster was to affect a turnaround and transition as quickly as possible and to help the Kelmscott group's effort to earn its way out from bank ownership.
Lancaster, at the age of 43, has lead PCG on a steady march back to profitability. Revenues in 2004 jumped to $10 million from $7.5 million in 2003 when he came onboard. However, the company's bottom line still showed some red, with losses of $716,000 in 2003 and $100,000 in 2004. Then in April 2005, after the closing of the merger with CGX, Lancaster was promoted to President of the company, and ever since the company has been profitable each month. July 2005 operating income came in at 18.5%, while the industry standard is around 5%. While the turnaround and transition is not complete, Lancaster feels the company is well on its way to becoming an industry leader in terms of operating income. The organization-wide restructuring resulted in a:
* 20% reduction in the workforce.
* 19% replacement in the remaining workforce.
* Crossed-training 60% of the staff.
* Increased sales revenues due to new customers.
* 10% increase in cross-selling additional value-added services to existing customers.
* Investment in new, state-of-the-art digital printing technology.
* Reduction in operating costs through various process efficiency improvements.
Lancaster noted in a presentation to executives at his new parent holding company that he set out six core ideas in leading PCG's transition, but pointed out that these principles were not all that different from using persistent, consistent, good management principles anywhere:
* Sales Focus--"nothing happens until somebody sells something!"
* Program Selling--sell value-added programs, not tactical printing jobs.
* Cost Consciousness--embed this in everyone for everything we do and make results clearly visible.
* Quality-Centric--customers know us as a high-end boutique printer, thus we must deliver a quality product to differentiate ourselves in the marketplace.
* People Focus--respect employee's longevity and knowledge. If people truly feel valued, this is infectious in their interactions with customers and with each other. Have fun (e.g., BBQ's for the staff and horse races for customers).
* Insist upon integrity in all that we do--always take the high ground on any issue where "circumstantial ethics" can creep into decision making.
What is particularly amazing about Lancaster is that he had no prior experience whatsoever in the printing industry I a traditionally "good-oldboys" industry.
Born in England into a British military family, Lancaster spent his youth traveling the world with his parents and attending Britain's equivalent of The Citadel military boarding school, followed by a small liberal arts college in Nottingham, England. …