The Blueprint

Years to Build – Lost in a Day

As AEC commercial reprographics firms take on more responsibility for controlling project critical construction content, the perception of reprographers is improving.  My cousin who worked for an engineering firm questioned why I would want to buy a company that sold to “blueprinters”.  Three years later he commented “I get it now.  We are turning over more and more responsibility to our blueprinter”.  This was also confirmed in my meeting with Gensler.

Stakeholders in the construction industry are feeling more and more comfortable with their reprographics firm being the custodian of their project critical content.  But what happens when they can’t get to that content or it gets destroyed?  A minor blip is manageable, but frequent minor blips or a serious data loss could loose that customer forever.

Salesforce.com is one of the fastest growing customer relationship management technology providers.  Their business model is a hosted model.  They do not sell software, and all of your data is stored on their server.  PLP uses Salesforce.com.  It is a very powerful application, but there was some hesitation on our part having somebody else with our mission critical data.  We use it for opportunity management, customer service, and inventory.  Recently Salesforce.com has had some blackeyes.  There have been hours at a time where we can not get to important data.  When that happens the natural reaction is to start looking at what you are paying and what the alternatives are.  If we were to be down for a day or more we would start looking as fast as we possible for another solution, as would many other companies much larger for us.  The risk posed by downtime is huge for Salesforce.com.

I have seen reprographers with amazing disaster recovery plans and solutions.  They could have a fire in their server room and be up and running very quickly at an offsite location.  I have also seen reprographers with vast amounts of project critical data with very little disaster recovery plans.  Even if the data is backed up that is not enough.  You need to focus on customer up-time.  Going several days without their data could be disastrous for them.  Imagine if you had to go a couple days with no printers.

As your customers become more reliant on you to store their content, the opportunities increase, but the risk also increases.  You could loose the trust you gained overnight.  With every challenge is an opportunity.  You can sell different levels of disaster recovery service.  Your level of service can be variable, and your price can vary.  The higher the requirements the higher the price.  You just better be certain that you can perform at those levels!!

BIM Will Create More Demand for "Content Brokers"

I had a meeting yesterday with two principals from Gensler.  Gensler is a renowed architectural firm that has been voted Contract Magazine's Most Admired Firm by their peers for two consecutive years.  The primary topic of the meeting was Building Information Modeling (BIM) and how it would affect the construction industry and specifically the AEC commercial reprographics industry.  Gensler has adopted AutoDesk’s Revit application [interactive overview] and is using it more and more each day.  I learned a lot about the use of BIM and how it will affect the industry.  More to come in later posts...

One of the most interesting things that came from the meeting was they said they didn’t know who was going to be the custodian of the models.  I said “Since you created the model wouldn’t you want to maintain it”.  The response was “We are at the beginning of the process, but there are many more organizations that contribute to the content.  We are an important part, but a small part of the content.  We believe that the management of this content is too IT intensive”.  After a long discussion on this technology and the advances being made in the AEC reprographics industry the conclusion was blueprinters could be a natural “broker” of this content.  They saw pro’s and con’s to this concept but also said "we are already using our reprographers to store the plans and specifications and control the revisions."

There will be an educational session at the upcoming IRGA show on Building Information Management.  I am the moderator for this session.  This technology will change the way business is done.  The panel will include representatives from AutoDesk and technology executives from architectural firms who have implemented BIM.  They will discuss how the technology will change the construction industry, but more specifically how it will affect the AEC commercial reprographics industry.  I'd highly recommend you send somebody from your organization to this session.  This technology WILL affect your business.

Wanted: Young Professionals Seeking Opportunity

About 14 years ago, only a few years after the fall of the Berlin Wall, I was in Prague, Czechoslovakia.  For anyone who is traveling to Europe I’d highly recommend Prague.  It is truly a stunning city.  I was walking down the winding cobble stone streets one evening when I heard a crowd shouting in the distance.  I followed the noise and came into a plaza (“Old Town Square”) where I saw a group of seven or eight people standing on a monument with bright lights shining on them.  One of the people would say something in Czech and cheers would come from one half of the crowd and hisses would come from another half.  Whatever they were saying was very polarizing.  One half emphatically agreed with what they were saying and the other half emphatically disagreed with what they were saying.  When I would ask somebody what they were saying, nobody spoke English.  I saw a young woman who was just as curious and as me.  I asked her if she understood and she said “No I don’t speak Czech, I’m German”.  She found an older man who spoke German and she started to converse.  She then turned to me and said “They are communists.  They are trying to bring back the communist party.”

I thought to myself “why would they want to bring back communism.”  They worked so hard to get free from communism.  As I looked around the crowd, I noticed that the half of the crowd that was cheering were older and the half that was upset was younger.  The day before I had been talking to an older Czech that told me “you American’s promised us prosperity and we fought to bring the wall down and now we have less”.  My response was “We didn’t promise you prosperity we gave you opportunity.”  It didn’t make sense to them and at that moment I realized why:  The older generation wants security and stability and the younger generation wants opportunity.  The fall of the wall brought opportunity for younger people, but there was no social security for older people.

Why am I telling this story?  I believe the AEC reprographics industry has a problem that relates back to the branding problem.  Due to the doom and gloom that has been professed by some and the branding of the reprographics profession as less than strategic, the industry is not seen as exciting by younger people who could enter the industry.  I have nothing against older reprographers, I just believe that there needs to be a balance of wisdom and stability provided by the older generation and the passion, optimism, and risk taking that is endemic in a younger generation.

I have hope.  I do know of a handful of younger people (and some older people who believe they are young) who have a hard time sleeping at night because they are so excited about the future possibilities.  I believe if we can re-brand the industry and highlight the more strategic and opportunistic aspects of the industry we can attract more people who see the opportunities and want to seize them.  The irony with the seizure of opportunity comes more prosperity, with prosperity comes more stability.  We should all be on a recruiting mission to convince younger people entering the market that this is an exciting industry full of potential.

Bring Back the Supplies Business

It is fascinating that so many companies have “Supply” in their business name, but really don’t sell supplies anymore. When I ask why? I usually get the answer - it used to be a large portion of our business, but architects eventually started buying more supplies from catalogs and then the Internet. It was too difficult to compete with this commodity pricing. It just wasn’t profitable. Most reprographers exited that part of their business.

But some did keep it going. I was surprised recently when an owner told me that it is now very profitable for them. When I think about that company, their office really is a "destination". The front office is always busy. Selling some AEC related supplies fits in well with destination theme. This company not only sold traditional architectural supplies, but also supplies for contractors and surveyors.
The people who are shopping for these goods are usually not price sensitive. They are impulse buying or convenience buying. Why would I buy a coffee maker at Starbucks, or why would I pay 40% more for milk at the Seven Eleven two blocks away? It is impulse purchases and convenience purchases.

Think of your locations as destinations and think about what type of goods might fit into the convenience or impulse category. The pricing of these goods will be much less of an issue, and you could find it to be quite profitable. If the goods are chosen and presented carefully it could help in the branding of your location as a “destination”. If you want to validate this concept, just go to Starbucks, or even Kinko’s. Though many people see Kinko’s as a competitor, look at the items that are sold at Kinko’s. They target a specific type of consumer, but are they targeted your typical construction customer?

Caution Paradigm Shift Ahead

I hate to use the phrase "paradigm shift" because I think it is over used. As the speed of change accelerates these shifts happen more often. As someone once said “the only thing constant is change”. A paradigm shift that is occurring in our industry is the move to a distribute then print model. More architects and contractors will be printing on demand rather than receiving a distribution of the documents they need. I’d highly recommend you read the blog post titled "Print Then Distribute versus Distribute Then Print” by Scott Sheppard from AutoDesk.

The most interesting take away is it makes clear that AutoDesk, the largest provider of AEC CAD software, is promoting a workflow that will minimize production printing.  I recognize Scott includes a workflow that still includes production printing. I believe for the most part Scott is being politically correct, but he is also realistic about how much time it will take for people to change.  Not every company nor every distribution will go the distribute then print route, but is a trend that is gaining momentum.

If most of your profits are generated by high volume production printing this is a trend you must understand deeply.  You must adapt to this new workflow. AutoDesk is not promoting this because they don’t like Reprographers. They are promoting it because they believe it is what their customers want and they also believe this is a more efficient and cost effective workflow for construction projects. If you believe the only way you can make money is production printing you should see this as “doom and gloom”. If you believe you can adapt to the new way of doing business then this trend will expose more opportunities.  Where do the opportunities exist? Online plan rooms, FM placements, file conversion services, and many many more?

Where do we find the many more you may ask? At your customers' location. The answers to these questions are not within the four walls of your office, they are at your customer’s site. I truly believe that the opportunities are very large, but you need to make the paradigm shift your own head first.  You then spend time with your customers finding out what products and services they need from you in this new “distribute then print model”.  Every new innovation creates new problems and pain points that require new products and services.

To paraphrase Albert Einstein - you can't solve the problems of tomorrow using the same methodology that created the condition in the first place. A new and decidedly different approach is required 

New paradigms create new problems.  New problems require new solutions.  Are you ready for the challenge?  Are you ready to change?

Even Really Smart People Underestimate Technology

I read an interesting article in May 2006’s issue of Fast Company an article called “The Change Function” by Pip Colburn. The premise of the article is new technology doesn’t necessarily get customers to change. He says it is a function of a customer or consumer’s:

1. Level of current crisis, and
2. Perceived pain of adopting the technology.

It appears he has a book by the same name.

What really caught my eye is an exhibit titled “Dumb Things that Very Smart People Said”

 
Here are the quotes.

“640,000 bytes of memory ought to be enough for anybody.”
Bill Gates, Microsoft Co-Founder, said in 1981

“I think there is a world market for maybe five computers”
 Thomas Watson, IBM Chairman, said in 1943 

“It would appear that we have reached the limits of what is possible to achieve with computer technology, although one should be careful with such statements, as they tend to sound pretty silly in five years”
John Von Neumann, a pioneer of the digital computer and member of the Manhattan Project, said in 1949

 “There is no reason for individuals to have a computer in their home.”
Ken Olsen, Co-founder of Digital Equipment Corporation, said in 1977

“The Internet will catastrophically collapse in 1996”
Robert Metcalfe, Co-founder 3Com and con-inventor of Ethernet, said in 1995

So all of you that said plan rooms were a fad a couple years ago. Don’t feel bad…

To be Blue or Not to be Blue

Do a search on Google for “blueprint”. You get 61.3 million hits. Do a search on “Blueprinter” and you get 28,200 hits.  Do a search on “reprographer” and get “10,600” hits. What does this mean? A couple things. The industry has an identity crisis and a branding problem. That was in now way a scientific study, but I believe an effective litmus test.

Not long after I came to PLP. I was at the CRA show in St. Louis. I was in the elevator with several CRA members. We were all wearing our CRA name tags and someone on the elevator looked at one of the badges and said “CRA. What kind of convention is that?” Someone spoke up proudly and said “we are reprographers”. The man leaned forward as if he had misunderstood the response. The person responded a little louder and little slower “WE ARE REPROGRAPHERS”. The man realized that he had heard correctly the first time AND looked very confused. Mike Duff from, Cushing & Color, broke moment of confusion by stating “Sir – we are blueprinters”. He smiled and nodded his head.  He understood.

The industry refers to itself as reprographers, but customers don’t really know what it means and most people are embarrassed to even say the word because they have received a similar reaction as the elevator at CRA. Most customers have shortened printer to “printer”.

There are two things that are important in branding: (1) being easily recognized, and (2) creating a perception in your stakeholders mind of what that brand stands for. Walmart and Target are both well known brands. Both are very recognizable.  When one hears Walmart the perception that come to mind is big and cheap. When one hears Target they think of good value and good selections. Both create different perceptions.

The challenge for reprographers is:

1. Nobody knows what a reprographer is.
2. Blueprint is a VERY strategic word. It conveys emotions of a strategic plan or a solution.
3. Blueprinter is a tactical word. It conveys an organization that may be at the bottom of the food chain in the construction supply chain.

We all know that is no true, or if it is kind of true – we don’t want it to be true. Reprographers are investing heavily in technology and training their employees new skills. Reprographers are handling the logistics or project critical documentation. If a reprographer doesn’t to his job right a construction project can come to a halt. With some of the new document management technology that is being embraced the opportunity exists to be even more strategic.

How can reprographers break the tactical perception that “blueprinters” or “printers” creates and be perceived by the construction industry as a more strategic stakeholder? It can be done, but it takes a lot of work and commitment. It can’t be done by one reprographer. And most importantly it requires leadership.

Luckily the IRgA has embarked on a branding project. As a member of the board I have been lucky to be involved in this project. I believe that a lot of good work went into this by SmithBucklin, the board members, and other participants. The results will be shown at the upcoming IRgA show. It is by no means a forgone conclusion, but a summary of findings from customers and reprographers. It is a good start and it will require the work of everyone in the industry to take it to the next step.

Is Your Shop a Destination?

In 2003 I had a unique opportunity to participate in a week long charter program between Young Entrepreneurs Organization and Stanford University.  It was similar to an executive education program, but targeted at entrepreneurs.  We participated in intense sessions with professors that taught technology luminaries such as Steve Ballmer (Microsoft CEO), Jerry Yang (Yahoo! Cofounder), and Sergey Brin (Google cofounder).  One professor told me over dinner that Steve Ballmer came to him with a difficult dilemma.  “Do I finish my education at Stamford, or go join this start up company with this guy Bill Gates?”.  He didn’t finish his education, and it seems to have been the right decision.  It was a fascinating experience for both the entrepreneurs and the professors.  The entrepreneurs had an opportunity to take a step back from their day to day businesses and analyze some of the most successful companies and how they became successful, or in some cases how they failed.  It was a good experience for the professors because they had a different audience than they were accustomed to.  Even though these are some of the most respected professors in the world, none of the entrepreneurs took what they said as the gospel.  The student entrepreneurs constantly challenged everything they said.  Some of the professors professed that they were used to students that took notes and listened.  They weren’t accustomed to that much debate.  In this intense week-lone program, I learned many interesting things that I believe apply to the AEC commercial reprographics market.  I will be writing about several “lessons learned” in this blog.

One of the most interesting case studies we reviewed was Starbucks.  The case study was specifically focused on Starbucks globalization strategy, but we learned about every aspect of the company.  It was fascinating to take a deeper look at the company and its strategy.  I was most interested the fact that Starbucks’ strategy does not center on coffee.  It centers on creating a “destination”.  Coffee is a means to that end.  Their internal strategy focuses on making Starbucks the “Third Place”.  It is not your home, and not your office, but that other place you visit and spend time at.  Coffee is their primary method of luring you there.  They actually don’t make that much money on their specialty drinks.  How could that be?  A friend of mine who refers to Starbucks as “Fourbucks” – can’t believe this analysis.  My wife’s grandfather several weeks before his death told me.  “I’ve come to understand a lot of things in my life, but I will never understand why somebody would pay four dollars for a cup of coffee”.  When everyone coming in your store typically orders one cup of coffee and there are 19,000 variations of specialty coffees and you need two to three people to serve this coffee your profits get eaten quickly.  Where does Starbucks make their profit?  In everything else!  They accessorize.  The after coffee breath mints, the sandwiches, the T-Mobile internet connection, the little bears my 3 year old daughter talks me into buying, the special edition music the sell – the list goes on.  That is all very profitable for them.  By making it a destination, people build habits around their visits.  When I am in town, I stop by the same Starbucks religiously.  It is part of my daily routine.  Even though the profits may be slim on the coffee, they get me there every day.  When I need to pick up some ground coffee or pastries for a meeting, I buy them at that store.  When I want to get away from the house or the office to get some work done or just read the paper on a Sunday.  I go to Starbucks.  You can debate the profitability of the coffee, but the main point here is that Starbucks strategy is around creating a destination where people want to go.  They then use that destination to identify other profitable revenue streams. Many of the reprographers that I visit have many people sitting in their lobby.  Some have added vending machines.  Many people sell architecture or drafting supplies.  Most people offer complimentary coffee. 

If you were take a step back and look at your business is there a way to emphasize your shop as a destination.  Can you make it more pleasant of a place for your customers to visit?  Can you get more people to visit?  Are there other ways you can sell them things to increase you profits?  Can you do things with your destination to increase their loyalty?  Can you make stopping by your office a habit in their workday?  Do you have enough destinations to meet demands of your customers or potential customers?  Is your competitors office a more desirable destination than yours?

A Blueprinter or a Technology Provider?

Everyone at some point struggles with the question “What do you do?” Some of us have worked on our “elevator pitch”. I try to make it simpler than an elevator pitch. Often in social environments (at least in DC) they are just trying to determine how you can help them. When people ask me I tell them “I provide software for distributing documents in the construction industry”. Most people are okay with that, but some will dig further. At some point I tell them I sell software to blueprinters. People will often ask “Why would you sell technology to a blueprinter?” My retort is “Have you seen their server room? – Many traditional ‘blueprinters’ have server rooms larger and more sophisticated than IT companies.

When it Absolutely, Positively, Has to Be Done…

One of the key's to FedEx's success was its ability to guarantee overnight delivery.   FedEx was not the only overnight service at the time, there were quite a few competitors.  But FedEx's slogan was "When it absolutely, positively has to be there overnight" and they delivered on that promise or the delivery was free.  They guaranteed it!  The way FedEx could deliver on that promise is they had piercing insight into every process in their business.  They learned, measured, tweaked and then re-learned these processes.  Execution became part of their corporate DNA.  This gave them the ability to execute with confidence and to stand behind their brand promise.

Do you think that FedEx scares customers away when a customer checks next business morning?  Do they erode their margins when they ship 2nd day?  I don’t think so. It adds to their profits in a more significant way than before they offered the services.  It also makes it hard for their competition to keep up.  FedEx didn't always offer next business morning.  They constantly perfected their model until they reached the point where they could offer the service and stand behind it. It really doesn't cost that much more for them to deliver a next business morning package, but to be able to consistently deliver it takes painstaking preparation and diligent follow through.

Could you increase your margins if you could charge more for faster turnaround and less for slower turnarounds?  Does your customer base spend money or less money for faster or slower turn arounds?  Absolutely.  They trust FedEx to deliver.  Why can't you do the same?

When you have confidence in your ability to perform you can negotiate from a position of strength. This confidence comes from developing a piercing insight to your operations, and understanding what it takes to perform.   You then make a promise to perform and follow through on that promise.  Sounds simple...it isn't!