by Patricia Ames, The Imaging Channel
Konica Minolta Business Solutions USA has been on quite a tear, acquiring a slew of technology companies as well as dealerships and launching their new Workplace Hub in Berlin last spring. That whirlwind continues and Rick Taylor, CEO and president, takes some time to talk to us about the power of conviction and the challenges of digital transformation. Join me in the SpeakEasy.
What are you the most excited about right now?
We’re in an environment that has created much opportunity. There are two types of dealers and two types of OEMs — and to me they’re very distinct. Some are retaining the old model and saying, “I’m just going to be more productive. I’m going to have more sales productivity and better service. I’m going to ride this storm out somehow.” Perhaps that’s what they’re thinking.
The second type are the companies who are seeing this digital transformation and pursuing it. The opportunities are broader than we’ve had in some time, and the key is they augment the core business. So, we’re not going into a different area — logistics, for example — we’re doing things that keep the core business alive and will in fact expand it.
These new opportunities are in areas where the customers actually want to talk to you. The workplace of the future is top of mind for every executive we’ve spoken to. They’re thinking about how to go to market, how to make their people want productivity and how to respond to the digitization of the workforce. That’s what I’m excited about.
So you’re excited about opportunity in the market?
Yes, and it’s a totally new opportunity. This isn’t like a new accessory or a new piece of equipment. We have great new markets in print, so I’m very excited about industrial print and production print. We have a huge opportunity there. But I’m also excited about the core business. It’s changing, and the core office business is going to be a whole new landscape with our traditional print a central part of it. But the companies that are not looking at the new opportunities and making investments there are going to have a hard time.
What do you like most about your job?
What I like most about this job is that I can say something and then actually do it.
The benefits of investing in the future don’t just come in the form of additional revenue, it’s also about what people think of us as a company. We sell all kinds of products that are part of our core business because people want to buy from companies that are thinking about the future.
Our units are up 10 percent this first six months of our fiscal year, from a good first half last year. So we saw double digits once again. We haven’t had double-digit unit growth consistently for a while, over six-month periods. It’s working.
Where are you investing the most in your company right now?
We’re looking at a wide array of areas. We’re serious about the Workplace of the Future (which we have trademarked), enabling people to work in a style where they can be more collaborative, productive and efficient. This new digital workplace hits everything from recruiting to real estate.
Anything that adds to that workplace of the future is going to be significant for us. Take Voice over Internet Protocol (VoIP); five years ago we wouldn’t have looked at that. If it didn’t relate to mobility, we wouldn’t have made an acquisition in the telephony area. But today, because it really enhances the ability to have a mobile workforce and to have your number follow you, it became an excellent addition to our portfolio of offerings.
There are other areas that I believe we must enhance that will further round out this picture. We’re going to support anything that will help you be more productive and save your company money and attack the opportunities in the market.
Specialization in vertical markets that print a lot is another major area of focus. Compliance is big – especially in financials and healthcare. It’s not just about acquisitions, it’s also about whom you partner with and what alliances you form.
For our Workplace Hub, we’re aligned with BrainTribe, Canonical, Cisco, Hewlett Packard Enterprise, Microsoft, ScienceLogic, ServiceNow and Sophos – some of the biggest names in the industry. Why are they excited about partnering with us? This vision that we have is good for our industry and others. We’re breaking out of our little cocoon in which we’ve operated for years, and that means we’re going to have some interesting competitors and partners.
Does all this investment into new areas affect the way your products are sold?
Yes. Customers want to deal with us in almost the exact opposite way than what the traditional model has been. In the past, the investment was made up front in gaining customers in our core business. Mailers, advertising, cold calls, demonstrations, and taking prospects to baseball games, etc. We’d get the customer on a five-year lease and then we wouldn’t see them again until six months before the lease was up. Then the cycle would begin all over again.
The customer wants the opposite. The customer wants us to invest in them while they’re actively doing business with us. They want a partnership. So this gap is the difference between the expectation level and what we do, and we need to fill that gap. If we can enhance their experience with us by adding other value to what they’ve already bought, then they will love us. That’s what they want.
That requires discipline and hard work.
Transformation takes patience. I have a lot of empathy for the challenges dealers face. For the dealer to give a sales rep six months to a year to learn a new technology — that is a huge ask. The sales cycles on a lot of products like production print have expanded beyond what they are used to. Having the patience to continue investing in a highly paid salesperson while they learn a new line of business is really challenging. It requires a high level of confidence that what you’re doing is right. It’s hard to have that kind of confidence in an uncertain market.
I’ve been challenged at our company many times. Once, very early into our investment into IT services, a senior Japanese executive told me I was the only one in Konica Minolta who thought it was a good idea. I was never in doubt. You have to have some long-term patience, and in a company with 8,000 employees we have a little more margin for error than a dealer would have. So far in my career, I’ve been responsible for about 75 acquisitions and not one investment has incurred an impairment charge, which means in layman’s terms that all investments have achieved their original return on investment. That’s tough to do, especially when you’re buying companies that are in different industries. Those are inherently riskier. Being totally committed makes all the difference.
You mentioned that your entire company is in the middle of transformation. What do you find challenging in that process?
Everybody wants progress, no one wants change. What does that mean? We’re constantly challenging the dynamics of our business, and we try to explain what we are doing and why and take care of everybody. So the potential for making people uncomfortable, and therefore maybe unhappy, is really there.
We mitigate the discomfort by doing what we say we are going to do and focusing on communicating well. We hold many live meetings. We try to reach everyone at the same time by creatively using technology to get a consistent message out. We don’t want to leave a single employee out. I assure you, the good ideas do not come from the executive floor of the Ramsey, New Jersey, headquarters. The best ideas come from people closest to the customer. That’s not me. We have people who interact with customers every hour of every day. That’s where the good ideas come from. You have to listen and then you have to act on that information.
There was a lot of time spent talking about digital transformation at your national dealer event recently in Carlsbad. What do you say to the dealers that have not made the leap yet?
I’m not an alarmist and it’s irritated me for years when OEMs and consultants would say to dealers, “If you don’t do this, you’re going to go out of business.” I wouldn’t say that to anybody. The ability dealers have to adapt quickly and change their businesses and turn things around is phenomenal. No one has more respect for that than I do.
So, if something that we’re doing is starting to appear like I’m warning you, it shouldn’t. And the direct answer to your question is that it’s not too late, especially if you’re a Konica Minolta dealer, because I’m responsible for helping every dealer in the room take advantage of these new opportunities successfully.
Onstage at that meeting, our dealers were encouraged to just do something, just pick something, even if they were overwhelmed by all the options out there. If I have to sell it for them, and service it for them, and give them the margin on that to get us in the business, I’ll do that until the very last one says, “I’m not interested.” The only way you’re not coming on this ride with us is if you say, “I’m not buying a ticket.”
It’s my job to convince the dealers to join us. And when they do, I’m going to make sure that there’s a vehicle for them, that they’re ready to get on and that they can do it. It could be a large production print opportunity where we might end up making the technical sale. We’re adding more people on the dealer side in technology sales roles. We need more people and we’re committed.
If you want to invest in an OEM, invest in ones that are spending their own real money on technology and not just saying, “Here’s what you should do. We’ve partnered with so and so … .” We’re investing our money in this, and we’re executing and it’s working and we’re there for you. As the train is leaving the station, there will be a Konica Minolta hand reaching out for the last one who wants to jump on.
Now, do the realities make it too late sometimes? Perhaps. But technology moves fast and so to get in a new business and be successful, it can happen very quickly if you have the right partner. You just have to take that very first step.
If your customers were to choose three phrases to describe Konica Minolta, what would you hope they would say?
If they said we were very innovative, that would be a wonderful compliment. If people recognize that we have a great culture, that would be very important. And I hope they would say that we’re here to give back to the communities that we serve.
I believe you have to have a great culture and a great heart, give back and be really innovative. To me, being innovative is to be bright, enthusiastic and have a lot of passion for what you are doing. I think that shows.
I know you listen to a lot of music. If you had to pick only one artist to listen to, who would it be?
I’m kind of a rhythm and blues guy — my favorite is old, classic R&B. Maybe Sam Cooke? Actually, if I had to pick one person it would be Van Morrison. I wake up every morning to “Days Like This.” Listen to the words … “When everything falls into place like the flick of a switch, there’ll be days like this.”
Not a bad song to start your day!
This article originally appeared in the December 2017 issue of The Imaging Channel