A global family

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Fellowes is one of the oldest family businesses in the OP industry. It all began in 1917 when the grandfather of current chairman/CEO James Fellowes started the business with a simple storage box for filing bank records. He called his business the Bankers Box Company.

 

The Bankers Box business – or R-Kive as it’s called in Europe – remains an integral part of the organisation and is just one of the many divisions that make up the Fellowes family of businesses.

 

What makes the company what it is today is its steadfast allegiance to the same basic principles that its founder formed nearly nine decades ago. These include the way customers are being served, being honest and fair with people, recognising that people are what make businesses successful, and bringing value to the market through innovation. In fact, Fellowes has formalised these core beliefs in its ‘Fellowes Forward’ document that serves as its guiding ‘North Star’.

 

As global marketing director of the shredders business, James’s son John Fellowes now represents the fourth generation of the family business. Between them, the Fellowes clan has driven the business through its deep involvement in the company while at the same time keeping in tune with constantly evolving market realities.

 

OPI: James, you’ve seen the industry consolidate massively during your 30-plus-year reign at Fellowes and the trend is ongoing. Your decisions, as well as those of your father and grandfather, have always been taken with the long-term interest of the company in mind. Will Fellowes buck the trend and remain independent?

 

James F: You’re right, the industry has been consolidating for nearly two decades. From time to time we have considered other options, but so far we have seen more advantages in remaining independent and focusing on several key product categories where we can be the leading or strong challenging global brand.

 

We see speed, simplicity and a long-term outlook as the principle advantages of our independence. And sometimes we have benefited from the scale and complexity of some of our competitors. We have had the financial wherewithal without going public or merging to pursue the opportunities that interested us.

 

OPI: These opportunities obviously included the creation of a comprehensive global presence. How is your international expansion coming along?

 

James F: We operate in 14 countries with Fellowes companies today. In turn, these Fellowes companies export to about 100 other countries. The international side of our business has performed very well over the past several years. Some markets are less developed in our categories, so there is greater upside potential.

 

We have worked to build a global platform in which we develop the business in one location and then leverage the capability around the world. The aim is to make Fellowes look the same and operate in the same way wherever we are. This means global products, global brands, global supply chain, global systems and processes.

 

OPI: What factors would you single out that make Fellowes so successful today? What are your key areas of focus?

 

James F: I would identify three principle developmental zones where we are investing our energy and financial resources: 1) Driving innovation; 2) building a consumer brand; and 3) building a competitive edge in manufacturing and the global supply chain. There are dozens of initiatives under these three core areas, but these are the key themes of our work today.

 

OPI: Starting with the first point, how does Fellowes bring innovation to the market today?

 

John F: Over the past several years we have taken a more formal approach to market research and invested much more significantly. In some cases the research has quantified our basic understanding of the business, while in other cases it has revealed new insights. In any case, any findings fundamentally shape our product development.

 

Recent research has heightened our appreciation of safety in business machines. Shredders, for example, were originally designed for commercial offices and office workers. Over the past several years, however, they have migrated increasingly to the home, which introduces new considerations for safety. Fellowes shredders have a patented safety switch that safeguards children and pets from accidents.

 

In the past year, we introduced our patent-pending SafeSense technology that takes safety to the next level. This new technology automatically shuts down the machine when fingers get too close. It will sense the presence of any warm-blooded creature including a pet.

 

This innovation in safety has been welcomed not only by the public, but also by the Home Safety Council. Shredder innovation also includes sheet capacity gauges to prevent paper jams, angled paper entry for under-desk shredding, and user-friendly pull-out waste bins.

 

Similarly, we are introducing an innovative range of laminating and binding products this year. Our new laminating machines feature our HeatGuard Technology. Most laminators get very hot and invite problems, especially with children. This new technology keeps the surfaces of the laminating machines cool to the touch.

 

The Cosmic Laminator, for example, which was launched last year, won the ‘Appliance Design – Excellence in Design’ award for its sleek, compact and portable design. This design is being carried across our new range.

 

We have worked to create a whole new generation of binding and laminating products and will be introducing them to the market over a nine-month period, beginning this autumn. It is a major investment for Fellowes and expresses our seriousness about the binding and laminating business. We believe the market is looking for innovation in this category.

 

OPI: Let’s turn to branding. How are you building your brand today?

 

James F: I would begin by commenting that we are building our brand not only for our benefit, but also for our resellers. The Fellowes brand establishes a premium value in the market that can command a good price. It is a name that can be trusted.

 

Also, much of our work in brand building is designed to expand the overall category. As a brand leader, we view it as our responsibility to grow the category as a whole, not just our share in it.

 

OPI: Can you give an example?

 

James F: Well, take identity theft. Half a dozen years ago there was very little understanding of it, yet it was the fastest growing crime in the US. Much of our early work in building Fellowes brand shredders had to do with creating public service news releases that exposed the spread of identity theft and linked Fellowes shredders to it as the solution. We continue to develop stories on this subject and thereby bring exposure to our brand.

 

In the past year, for instance, we stepped up our educational initiatives overseas. We collaborated with Scotland Yard and Crimestoppers in the UK to help consumers and businesses understand and prevent this crime. In July, we received a ‘Golden Award for Excellence’ from the International Public Relations Association in the UK for this work.

 

In Poland meanwhile, we worked with Wroclaw University on a dumpster diving initiative to show consumers how vulnerable they are to identity theft, and how important it is to properly destroy documents that contain personal data. Our aim is to find clever ways to attract public attention to identity theft and corporate espionage.

 

OPI: Judging by your initiatives, identity theft is a widespread phenomenon and not just a US issue?

 

John F: It is the fastest growing crime in the US and strikes ten million people every year. It’s also a significant crime in countries like Canada, the UK, Japan and Australia, but probably less understood today in other countries. Identity theft has brought about legislation in some countries that is designed to safeguard citizens from disclosure of private information. This legislation has also driven the shredder business. We expect the problem of identity theft to spread globally.

 

OPI: Brand building is always closely linked to marketing and Fellowes has gone for some big advertising campaigns. How is that all coming along?

 

John F: This year Fellowes introduced a new icon into its TV, radio and print advertising – an English bulldog that represents ‘powerful protection’ for the home. The message is that, just as a good watchdog protects the home from intruders, the Fellowes shredder protects the family from identity theft. The TV ad caught a lot of attention and received an endorsement from the Chicago Sun Times as one of the top produced ads in 2005.

 

We have now also brought the bulldog icon into our packaging and point of sale displays – it helps consumers connect to our brand.

 

OPI: Are these campaigns limited to the US market?

 

John F: No, they’re not. We also rolled out a TV campaign in the UK over the past year and one in Japan last spring. They have captured a lot of attention and helped to drive growth in the category. Basically, we are learning as we go with respect to our brand building activities and will be expanding our efforts in the year ahead.

 

OPI: Lastly, you mention manufacturing and the supply chain as one of your three priorities. Please tell me a bit more about this?

 

James F: Fellowes has always considered manufacturing to be a core competency zone for competitive advantage. Our best and most profitable categories are underpinned by competitive manufacturing capabilities. At one time, we manufactured our shredders in the United States and our binding and laminating products in France. These were excellent production lines created in the context of Total Quality Management (TQM).

 

A number of years ago, however, we shifted these operations to third party Chinese manufacturers to lower our costs and remain competitive. In order to ensure quality, we hired our own team of quality people in China to supervise manufacturing activity. In time, we added other people and were controlling most of the processes.

 

Now we are taking the next step and building our own Fellowes factory in China. It produces our shredders, binding and laminating machines and employs people in the context of TQM. We began producing toward the end of 2005 and are now accelerating our development.

 

Business machines require highly controlled manufacturing processes to ensure the production of an excellent machine at a very competitive cost.

 

OPI: All in all, Fellowes continues to be a thriving, competitive and successful company and one that’s well placed for the future. And John, you seem to be following right in the footsteps of your father, grandfather and great grandfather. Will there be a 5th generation of Fellowes leaders one day?

 

John F: My wife and I have two young boys and, who knows, maybe one day they will join the business and follow in the family tradition. That would be fine by me.