Creating a blueprint

That time of year to raise a toast to the cream of the European OP industry has come around again. Last month, delegates from the community descended on the Grand Hotel Huis Ter Duin in Noordwijk, the Netherlands, for OPI‘s ninth annual European conference.
Despite the misty weather, nothing could dampen the spirits of all those in attendance as the Speed Networking sessions kicked off the three-day event. After a couple of hours of meeting and greeting, catching up with old friends and making new ones, guests were treated to an evening of fine wine and dining, all accompanied by a live three-piece jazz band.
Following a great start to this year’s event, the rest of the conference had a lot to live up to.
Former CEO of UK-based contract stationer office2office Ray Peck kicked off proceedings with his keynote address on what constitutes the blueprint for success in today’s industry. Not an easy task by anyone’s standard.
Peck touched on one of the aspects that would in fact continue to run as a thread through the rest of the conference agenda – the importance of people and leadership and our duty towards corporate social responsibility (CSR) in general and the environment in particular.
CSR, according to Peck, is becoming ever more important. "In the future it will no longer be sufficient to operate merely within the constraints of the law," he said, referring to the environment and other ethics-related issues.
He described the shared practices among some of the world’s most successful companies. These are partly governed by external influences such as globalisation, technology, the competition, security and the environment, and partly by internal influences such as a company’s competitive advantage, operational efficiency, and leadership issues.
"The number one priority for achieving the blueprint for success is leadership and having the right people. Having the right people around you and providing effective leadership will allow you to do virtually anything," he added.
Peck challenged conference delegates to take a test, assessing their companies’ performance based on the ‘seven Cs’, as described in Allan Leighton’s recent book on leadership: coordination, competence, communication, conflict management, commitment, creativity and capacity management.
A great company will score six out of seven while a good company will score four. However, most companies, if they looked honestly, would score only two to three out of these seven key criteria.
Peck’s ultimate piece of advice, however, was: "Stick to a vision and the goals that you truly believe in."
Mark Baccash, of franchise operation Office 1 Superstore International, and Chen Lin, a consultant to the Chinese OP industry, delivered a joint presentation on the ups and downs of entering the Chinese office products market.
According to the duo, all roads appear to be leading to China at the moment. But once there – and many companies are finding this out the painful way – it’s unlikely to be a road to short-term prosperity.
In a humorous and disarmingly honest address, Baccash told the audience of the many hazards of entering the Chinese market, several of which he had the great misfortune to encounter himself during his five-year-long struggle with Office 1 in the country.
"Everything leads to China – the house on the hill that will solve all our problems," he warned.
Baccash used the ‘Perfect Storm’ metaphor in his short assessment of the various channels in the market and their players.
And he cautioned: "Money, patience or time – what will you run out of first when you go to China-
All that said, both speakers confirmed that there is a clear demand for luxury goods, as companies and brands like Steelcase and Montblanc have shown, and if you can overcome the challenges, it’s a market well worth persevering with.
Lin said: "It takes five years to establish a brand in China. When counterfeits to your brand appear on the market you know that you have truly arrived!"
Lin’s advice for manufacturers wanting to enter the Chinese market is: "Find an appropriate partner, adopt a long-term outlook, and learn and adapt to China’s unique way of doing things."
Later in the day’s programme, Christian Langvad, director of purchasing at mail order and eCommerce operator OTTO Office, explained how his vision was based on sustainability, people and partnerships.
He told event-goers: "The blueprint for success can only be found at human companies. Every part of a development has its seeds in the human mind."
Langvad discussed consumer ethics and how they will influence the shopping behaviour of tomorrow’s customer. "Sustainable growth is about creating the illusion that we in the OP industry sell sexy products."
He added: "The value of humans in an organisation cannot be measured, but has a huge influence on the measurable performance."
Karl Cerny, Senior VP and general manager EMEA of Katun, provided an informative update on the print market and talked about the advantages of using aftermarket suppliers. But he warned: "If you select an aftermarket supplier, consistent quality is absolutely essential. There are no second chances."
Cerny was followed by Simon Hollington from Values Based Leadership, who illustrated the challenges of growing a company. He used his first-hand experience of helping UK-based construction company Rok grow from a share price of 75.14p in 2000 to a phenomenal 1,180p in 2007. There were plenty of obstacles along the way.
Hollington’s advice for good leadership was to be surrounded by a very good team and he stated the importance of having local leaders/managers with the same qualities as HQ/company leaders.
He described the challenge many leaders face using the baboon analogy: "The higher they climb into the tree, the more of their unsavoury parts they show."
Innovation expert Tim Jones, principal at Innovaro, analysed the top players outside the OP industry to illustrate the importance of product and service development.
And he described how the leading players across the world of commerce with a robust and clear innovation strategy demonstrate a clear increase in performance. The top firms Innovaro had measured all reported an increase of at least 50 percent in the following two years.
And he commented: "For us, Canon is the strongest innovator in the office equipment market, although the competition is getting closer and much better."
He also said the key to a successful innovation programme was to create a clear strategic focus, have an insight and understanding of the market, have the ability to collaborate and create simple yet effective processes, and have organisation that is very clear and distinct while having no ambiguity.
"These are the crucial factors that everyone needs or your companies will never move forward," he told the audience.
He said the rewards for innovation were clear. Using mobile phone manufacturer Nokia as an example, he described how outstanding product development had enabled Nokia to hold a 34 percent global market share with 32 percent profit margins from the "back streets of Bogota to Tokyo".
During one of the several break-out sessions, Vadim Khetsuriani, director of Russia and Central Eastern Europe research and training at Management Ventures, provided a clear evolution of non-food retailing in Eastern Europe.
Describing a market as large and complex as Central and Eastern Europe (CEE) in the space of 40 minutes is a tough task. But Khetsuriani highlighted the following pointers:
• Today, consumer electronics stores supply a vast number of home office requirements and services
• Back-to-school is the critical driver of office product categories in hypermarkets
• There is considerable scope for brands. Hypermarkets are ‘testing’ the market with brands such as Brother, for example.
Khetsuriani talso mentioned the so-called ‘retailment trip’, a new concept in the region whereby customers visit hypermarkets and shopping centres as a necessary but also a ‘leisure-type’ or social activity.
Recent shopper surveys indicate that the internet remains a small part of European purchasing habits.
During a separate break-out discussion on developing the blueprint for successful merger and acquisitions in the dealer community, Corporate Express (CE) chief Frans Koffrie warned of the importance of respecting cultural differences during any international takeovers.
Referring to a number of disappointing US-led takeovers, the CE head said: "There will always be a temptation for larger cultures and countries to impose their values and ideas on others.
"But it is important to recognise and be sensitive to the culture and values of others at all times. That is the secret of a successful takeover."
Professor John Counsell, professor at Strathclyde University and former head of European research at Brother, heralded the dawn of an ubiquitous age, "the anytime, any place, anywhere society".
He highlighted a world demanding more energy for its gadgets and mobile communication devices, yet increasingly conscious of the need to be eco-friendly and reduce carbon emissions.
The energy expert focused on three core areas of sustainability: the economy, the environment and society. He detailed the impact of the Energy Performance Buildings Directive (EPBD) on office productivity, such as ‘hot’ printer emissions causing an increase in air conditioning, leading to higher carbon emissions.
Counsell also highlighted the recent Gartner Survey findings that computers emit more carbon emissions (two percent) than airlines (1.6 percent) – 30 percent of which was whilst in standby mode.
In conclusion Counsell highlighted the biggest trend facing the OP industry going forward: how to increase office productivity in a personalised way, produce more compact technology and deliver a low-carbon marketplace.
One of the main announcements of the conference was provided by Dirk Collin, EVP and managing director of Office Depot Europe. He revealed that Depot’s vision includes globally pursuing a single-brand strategy.
The likely outcome of such a strategy would be the eventual disappearance of the Viking brand in Europe, just as happened in the US in 2005. However Collin emphasised that any such development would be part of a long-term strategy.
Collin talked about customer-centric marketing: "Channel-centric strategies are a thing of the past – it doesn’t fulfil all the customer’s needs.
"We moved from describing our customers to predicting their future shopping behaviour.
"Our customers have more control, are less patient and more demanding than ever before and they want a multi-channel shopping experience. But multi-channel buyers are more profitable customers."
He described how an important part of Depot’s aim was to reach ‘profitable’ customers through differentiation, such as office and services, rewards programmes and private label.
According to Collin, "a customer-centric approach results in increased loyalty". But he warned: "When the rate of change outside your company exceeds the rate of change inside your company, disaster ensues."
Engaging, passionate and, above all, positive – that was the overriding impression of the ‘Green Print for Success’ break-out session.
Break-out chairman Peter Frost left a packed room of delegates in no doubt about the importance of becoming greener. He talked in detail about carbon footprint and applauded genuine green leaders – Brother and Pilot in our industry, among others – while pointing the finger at other companies with some inconsistent CSR messages (BP and Wal-Mart, for example).
In a lively panel discussion, Brother’s Phil Jones pointed out how all the hard work involved in becoming a green company at a very early stage has paid off, resulting in commercial as well as brand-building success.
One of the challenges of the future, the panel unanimously agreed, is to make considerable inroads into environmental packaging – from making it more environmentally friendly to reducing it altogether – and improve eco-labelling.
Ending the eventful and fascinating programme was Rob Vale, CEO of Spicers Europe, who revealed his belief that the industry had moved forward enormously in recent times.
"Quality, service and price are now commodities, not differentiators," he said. "Like it or not, your brand is what your customer says it is, not what your marketing department tells you it is.
"I was really delighted with this year’s event" says Janet Bell, director, OPI. "The speakers were some of the best we have ever had. There is always a very special atmosphere at the eurOPe events and this year was no exception. In fact, I think the networking was the most relaxed and friendly that I have experienced in many years.
"Next year will be our tenth anniversary and we have a lot to do between now and then to make eurOPe 2008 the definitive event for the senior OP executive. The industry has changed considerably over the last ten years and this event needs to keep changing with it. Watch this space for the latest news as we plan our best ever conference."