What Would Peter Drucker Recommend Today?
Often credited as the man who created business management, Peter Drucker’s timeless advice can still help steer any operation through challenging market conditions. While he is no longer with us, his insights and recommendations are still relevant and can be applied in making business decisions in today’s unprecedented COVID-19 business environment. While Drucker shared many business beliefs and principles in his lifetime, here are five to consider and ways to apply them in planning for what lies ahead.
- “The greatest danger in times of turbulence is not the turbulence; it is to act with yesterday's logic.”
Defining the right strategies for moving a company through the current crisis is top of mind for every print business owner or executive. While the answers aren’t necessarily clear, market research can offer clarity on what your peers are experiencing, doing, and planning.
Moving forward, reliable industry business indicators will be essential for monitoring what’s happening to make the best decisions. NAPCO Research and the PRINTING United Alliance recently launched the COVID-19 Print Business Indicators Research, an ongoing survey of print providers across all segments ─ commercial printers, graphic and sign producers, apparel decorators, functional printers, and package printers/converters. This research includes an index of current business indicators to capture when the downturn has hit bottom and an index of leading business indicators to capture when the upturn has arrived. Responses from open-ended survey questions offer context to what the numbers mean and explore critical issues such as how printers are protecting their companies from the crisis and their future plans. Click here to download the first full report including all printing industry segments surveyed.
This research will continue after the current crisis ends to provide the industry with ongoing business metrics. A large portion of this research is captured by a panel of industry participants. Companies that join the survey panel receive exclusive in-depth analysis reports (not made available publicly) of research findings. Click here for more information on participating in the panel.
- “The purpose of any business is to create and keep a customer.”
This Drucker principle is evergreen. Every printing company owner and executive knows that to grow their business they need to keep existing customers happy and add on new ones—no matter the competitive business environment. The challenge is identifying what customers want and developing the right strategies to meet those needs.
A recurring question included in many NAPCO Research surveys of print buyers is why they selected their current providers. The responses to this line of questioning almost always point to customers wanting providers that address their unique needs with innovative solutions. For example, in our recently released study “Adding Value to Digital Print,” brand owners and marketers surveyed tended to pick print providers that offer them unique ideas to enhance the print they purchase and proactively educate them on new technologies and special effects.
In addition, our ongoing surveys of print service providers reveal that those reporting high sales growth meet customer demands for more complex communication products, shorter turnaround times, seamless service delivery, and using new technology to produce more engaging customer communications.
A key ingredient in any company’s success in customer creation is pursing the right prospects and meeting their needs. Market research is a viable tool to assess market, competitive, and customers trends to build strategies that succeed at recruiting and retaining customers. NAPCO Research offers a robust catalog of original research that is accessible (and free to download) from the “research tab” on all or our publications’ websites.
- “Business has only two functions — marketing and innovation. Marketing and innovation produce results; all the rest are costs.”
During challenging business conditions, companies are tempted to put investments in marketing and innovation on hold. Of course, focusing on costs is always essential, especially today, but companies that cease marketing and innovation efforts do so at their peril. The current crisis will eventually end, and businesses need to be positioned for when the recovery occurs.
Print providers that do continually focus on marketing and innovation reap benefits. According to a recent NAPCO Research analysis highlighting the actions taken by print providers experiencing double-digit sales growth, these firms continually invest in new applications and services, new technologies, marketing strategies, and business partnerships. Their organizations focus heavily on marketing and technology investment to raise above the competition, underscoring the importance of balancing marketing and innovation.
An important caveat here is aligning your marketing efforts and investment plans with the current market situation. While you want to position for the future, you can’t be tone deaf to what is happening today. For example, when communicating with customers you should strike the right tone. When creating customer communications answer the following question: How does this message help my customer right now?
- “What’s measured improves.”
Measuring any activity forces managers to pay attention to it, understand it, and develop ways to improve it. Benchmarking against the competition to understand how your company stacks up in terms of financial ratios, measures of efficiency, customer satisfaction, and product quality all support making solid business decisions. Industry benchmarking is an important tool for print providers in identifying inefficiencies and areas of strength. For print providers looking to compare their results to industry leaders, the PRINTING United Alliance’s Performance Ratios includes more than 150 performance indicators. ( Visit performanceratios.com to learn more.)
- “Whenever you see a successful business, someone once made a courageous decision.”
There are many examples of printing companies demonstrating courageous leadership in today’s business environment. Companies are looking beyond focusing only on protecting cash flow to position for the future recovery. Industry firms are pivoting to growth industries, expanding e-commerce capabilities, and increasing customer communications. Resisting the urge to focus only on short-term solutions requires courage.
Our research indicates that successful printing companies demonstrate a pattern of making courageous decisions to innovate, expand, and respond to changing market conditions. There are numerous examples of printing companies that have expanded into adjacent markets, invested in game-changing technologies, or added new customer services. One example is Color Ink, Sussex, Wis. What makes this company stand out is its ongoing focus on innovation and digital transformation to meet customer needs. Here is link to case study describing the actions the company took to evolve its operation and expand its services.
Moving Forward: Act Courageously
Drucker’s extensive body of work offers many lessons to help guide organizations through any situation. No matter what current business conditions are, making fact-based decisions and investments that focus on customer creation, marketing, and innovation are acts of courage that result in survival and success.
Lisa Cross is the principal analyst of NAPCO Research (a unit of NAPCO Media) where she conducts market research and analysis on emerging trends and changing dynamics in the commercial, in-plant and packaging industries, and the market forces that are driving those changes. With decades of experience covering the graphic arts and marketing industries, Cross has authored thousands of articles on a variety of topics, including technology trends, business strategy, sales, marketing and legislation.