A rose by another name . . .

I read in this morning's NY Times that Washington Mutual has disappeared. Actually the company called Washington Mutual has disappeared. It's been absorbed by JP Morgan Chase.

Regulators simultaneously brokered an emergency sale of virtually all of Washington Mutual, the nation’s largest savings and loan, to JPMorgan Chase for $1.9 billion, averting another potentially huge taxpayer bill for the rescue of a failing institution.

There might be some lessons here for printers and our industry. Washington Mutual did very well when the market for their product, home mortgages, was rapidly expanding. But when that market started to radically shrink, they were busy, busy, busy; first making lots of money, then trying to keep the ship from sinking. They didn't invest the time to look over the next hill. On the other hand, it seems that JPMorgan Chase did.

Bad ROT (return on time, coined by Dr Joe Webb) for WaMu. Good ROT for JPMorgan Chase.

Commercial banking is not going away. Most likely they will change the name on the door. But at it's core, they will lend money and charge people a fee for using that money. Hopefully they will make the process a little more efficient; innovate new product offerings that take account of the new conditions; settle for a smaller, but safer profit margin, for a while; and keep scanning the horizon to see what's next.

In our industry, it might look like this:
Commercial printing is not going away. Most likely the name for what we do will be different in different markets. But at it's core we will print stuff and get people to pay for it. Hopefully we will make the process more efficient; innovate new product offerings that take account of the new conditions; settle for a smaller, but safer profit margin, for a while; and keep scanning the horizon to see what's next.

Time is the enemy

I recently had a good conversation with a very rare creature, a printing sales person who has been working for the same company for over 20 years, is doing ok, and basically loves his job.

I say "basically" because he is forced to spend his time in nonproductive activities. For those who follow this blog, I think they will understand what I mean when I say, he has to spend lots of time on bullshit. See Princeton University Press.

This professional has to go to many internal meetings. The meetings can be seen as "important," But they have a very low ROT. (ROT is a term coined by Dr Joe Webb to capture the idea of Return on Time) as opposed to ROI. Since the most valuable resource is time, it's a very useful idea.

Here's how it can play out in the non printing world.

The financial industry reorganized itself last week. Merrill, Lehman, Bear Stearns gone. Morgan and Goldman becoming commercial banks. Neither investment banking nor the most talented investment bankers will disappear. Print is Dead? . . . or is it just that some printing firms will change or go out of business?

The most likely outcome is that investment banking and the people who know how to do it, will move to small "boutique" shops. Experts in niche markets. Firms with lower head counts and much more efficient product delivery infrastructures. A significant one-stop shop business model is broken.

It happened in one week.

The members of Congress, who are "very, very busy, important" people are usually vigorously engaged in partisan power struggles. Now they have made the time to put that to one side and focus on the problem at hand. It was amazing for me to watch C Span and see everyone in the hearing room, asking pretty intelligent questions, getting pretty intelligent answers, moderately little grandstanding or speeches. In short, there was a minimum of bullshit.

"The prospect of being hanged focuses the mind wonderfully" said Samuel Johnson. And nothing cuts through the bullshit like money disappearing. When an existential crisis hits, the most important metric becomes ROT, return on time. Congress has a week, maybe two. If they don't do it by then, whatever they decide to do will probably be irrelevant. Perfect decisions, made too late, are bad decisions.

What does it have to do with the printing business?
Many printing firms are in a crisis. Like anyone else, including congress people, for most the first response is denial. At the same time, or right after denial, comes anger and blame. Then comes the rushed response to deal with the crisis at hand. When the smoke clears, it's "back to business" as usual, which is often follows the same trajectory, only at the daily level. Lots of small crises to handle. Everyone again becomes busy bees.

Meanwhile, some firms got it right. Morgan started the application for becoming a commercial bank back in March. They planned for the worst, hoped for the best. When the storm made landfall, they were ready to act. I assume that Goldman did the same. They faced the nasty fact that their business model was falling apart. They prepared to move into a much less lucrative, but still a good business, commercial banking.

Morgan and Goldman obviously understood that spending time on alternative action options and looking very clearly at the invisible crisis had a very good ROT. The others did not.