Just because a company has bad times DOESn'T MEAN THIS is an industry trend!

The above title is the name of an app—in short, IFTTT. It’s a really smart app that allows you to automate your workflow. In this article, I will use the title to speculate about what the consequences of bad leadership can lead to—and in our industry, there are, unfortunately, many examples. This is the first in a series of articles!

A couple of days I wrote the following on LinkedIn: Guidance to industry leaders: Your troubles or successes in your company are different from general industry trends. If your company isn't doing well, you can be quite sure it's because you, as manager, haven't listened to your customers, the market, and customer-facing staff. Your job is to lead your company to success by offering customers the products they need to be successful. You are not selling leadership - you are selling products and services that enable your customers. So-called leaders in our industry who can't deliver positive financial results should focus on the leadership needed to become profitable - that's why we need leaders!

The inspiration for this article came because CEO Dr. Ludwin Monz from Heidelberger Druckmaschinen, on stage at the official Pre Drupa event, spoke about the difficult times in our industry (free from memory). It directly contrasts the HP management's positive comments from the HP Pre Drupa event in Indianapolis just a week before. Both can't be true unless the “market” only refers to each company's market. My concern is whether Dr. Monz mistakes market trends with Heidelberg’s performance. With thousands of people on short leave and decreasing order in-takes, being the CEO of Heidelberg can’t be the most exciting job these days - and of course, Dr. Monz can’t be held entirely liable for Heidelberg’s situation, which seems to be a constant over the past ten years - decreasing revenue, fewer employees, and not being an industrial leader anymore. You can say the market has changed, but you can also say that the competition gets tougher. Again, the contrast to Dr. Monz's negative view on the market, Koenig & Bauer announced increasing sales - maybe they are simply better listening to the market?

Listening to HP’s management was a story about new products, growth, new market opportunities, and even bringing entirely new technologies to market—and, therefore, a very positive outlook.

The two examples illustrate greatly that you can’t define the market based on how your business is doing - and of course, both Heidelberger Druckmaschinen and HP study reports, statistics, etc., to lead their companies - but why is it that Heidelberg in the past many years hasn’t been able to innovate products aligned with customer demand? Why haven’t they announced a strategy that eventually will give customers and shareholders belief in a future Heidelberg? Looking at the nearest competitor to Heidelberg, Koenig & Bauer. They are developing their own Inkjet technology, Rotojet, and partnering with Durst, HP, and others.

The conclusion must be bad management or, at best, a management that can’t convert input to output fast enough. Regardless, this is, by all means, the management's job.

The consequences of bad management are always lower returns on investments for shareholders, low job security for employees (and difficulties attracting the best talent), and finally, product development that isn’t aligned with market demand!

HP Indigo and PageWide are today bigger than Heidelberger Druckmaschinen, Canon is bigger, and both companies lead the industry with examples. Canon in Europe has large events for book publishers (I wish we could attend at some time, as it seems so interesting), HP creates applications to inspire brand owners to utilize HP’s technology, and so forth. That is, in my mind, leadership, and they don’t even talk about leadership; they just do it.

Managing a company isn’t, of course, the easiest thing in the world, and a company where things have turned the company upside down is Xerox. When Carl Icahn invested in Xerox, replaced the management and the board, canceled the planned merger with Fujifilm, tried a hostile takeover of HP, and probably many more things, the result is today a Xerox that has no future in the industrial part of the printing industry. I believe Xerox’s days are counted - and yes, I have changed my mind.

This is ALSO a great example of how misjudgment and mismanagement eventually lead to enormous consequences, which can also happen to a company like Heidelberg.

Heidelberg has NOT downsized the company over the years; they have yet to announce a strategy for the future (except starting to produce products for customers outside print). They have a weak economy, and the former CFO Wassenberg has already sold all the assets they could turn into operating cash.

So, back to my headline: IF Heidelberger Druckmaschinen doesn’t get up to speed in sales, strategy, production, and R&D and develop products in demand by the market, THEN there will be no need for the company in the future. And as sad as this sounds, I can’t see any other conclusions, or what do you think?

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Henrik Christiansen

President & CEO

Heidelberg's situation make me remember the Fujifilm-Kodak situation many years ago. The future transformation from film to digital was inevitable, but even though Kodak introduced digital cameras, they did not manage the transformation. This was an obvious example of lack of leadership. Fujifilm managed the same transformartion in good shape and is an even bigger and greater company today. It is a question about listening to the customers. Heidelberg has a impressive distribution channel, which should be perfectly geared for listening to the customers and perceive and transmit the information up through the system. But perhaps the distribution channel is so fixed on its own existing knowledge that the customers' informations are not processed and acted upon in the correct way. With a conversative management and a conservative distribution channel, it is difficult to turn a big ship, especially if the future direction is up in the air. Offset will continue to be the leading printing technology for a long period, even though digital and flexo printing take market shares, but it is not the printing the technologies but print production structure which is changing fast. This requires a new way of marketing products and solutions.

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