The Situation: A $25 million sheetfed printer had successfully integrated value-added services into its product mix – with digital printing and fulfillment services playing an important role in their growth. Even though value-added content was very high, sales had been flat for a few years. The plant was turning out decent work and was handling complex jobs with relatively few screw-ups, but the company’s profits were lagging, at only 8% EBITDA .

Our Approach: It was clear that everyone in management was working hard. The company had good operational and financial reporting, and good production data, but managers weren’t holding people responsible for results. Everyone was doing the best they could, but there were no standards for performance – or at least no accountability for performance. Even their most successful salespeople were relatively unfocused in their selling efforts.

We helped management to instill a sense of accountability in the plant, helped to install a systematic program to improve productivity, improved responsiveness by reducing turnaround times in pre-press, revamped the sales compensation system to focus on value-added and profitability, and worked to install a set of key indicators for management to use in judging their progress. During the process, we carried on a continuing series of biweekly phone calls with the CEO, making sure that priorities were clear, and results were on track, with prompt remedial action taken whenever the required progress wasn’t being made.

The Results: Within a few months, EBITDA had risen from 8% to 11%. By year-end, it was running at a 12% rate, and now even moderately good months are generating 15% EBITDA.

Productivity has grown – with more than 20% improvement in the pressroom alone – so the company has lots more capacity and can meet customer demands for faster turnarounds without panicking. Sales have begun growing, with both profitability and value-added content continuing to rise. As salespeople focus on bringing in the right kind of business and the right kinds of clients, they are earning more per dollar of sales. Everyone is happy.

The company will probably earn 15% EBITDA this year, and we’re now working to see whether 20% might be a possible target. They certainly have the product mix and value-added content to make that possible.