In late 2019, on "The End OF The Day With Ray!" I asked a question of the audience. The question was. "Who is your Carl Icahn"?
I asked the question as many in the industry were critical of Xerox's majority shareholder Carl Icahn and John Visentin Its CEO as they pursued massive cost adjustments; adjustments needed to realign Xerox to the realities of the changing marketplace.
During Xerox's consolidation, we heard more complaining than cheering. After all, the complacent won't cheer for cost-cutting. The pain of not addressing cost overruns or refusing to fix unprofitability quickly is far greater than the temporary pain of the actions required for continued relevance.
So, here we are, it's 2020. A pandemic has impacted the industry in ways that will cause even further declines in the industry's core products use and, more importantly, its value. Over the last two reported quarters, the results are not pretty for most of the industry's manufactures. No one expected any of the manufacturer's to knock it out of the park, and of course, none of them did. However, it seems as most are not taking the necessary steps as Xerox did in 2019 and continue today.
So, the question comes up again. Who's your Carl Icahn? It seems as the industry is in denial of its realities. The write-ups regarding the manufactures' financials are written as if things are only temporarily disrupted and soon normalcy will return. Of course, even that statement is disturbing because, before the pandemic, none of the manufacturers were hitting home runs, and the normalcy was a declining industry. When profits fall below zero serious action is needed.
Even the diversifications towards IT services are struggling
Over the last decade, the dealers and a couple of manufacturers with direct operations Seem to have understood the need to pivot into IT services. However, for the most part, they all saw IT services as an add-on instead of a diversification.
In other words, they did not set out on a quest to reinvent their infrastructure to deliver IT services. They instead tried to deliver; IT services through the infrastructure of a print services company. This, I believe, is the reason for negative profit outcomes.
I think this miscalculation was based on not having a clearly defined deliverable and, more importantly, a clearly defined customer to engage for that deliverable.
The document imaging channel's IT services will remain mere attempts unless those pursuing IT actually address its failures in not redefining its business model. The industry does not have another decade to attempt something they should now be doing profitably.
The easy part is buying a business with a different model or chasing squirrels to win a diversification contest.
The challenges are aligning the old model with the new and delivering to the market profitably. Those good intentions of one day we will be profitable. Only make sense if one day is clearly defined on the calendar. Losing money and not clearly defining the deliverable for a decade, is not a realistic approach to successful diversification.
Everyone in the industry knows there must be PROFIT. Unfortunately, there seem to be many still denying the steps and painful decisions needed for profitability. In reading the financials, there's talk of cost-cutting. However, there's not much discussion on reinvention or detailed strategies as to how.
All reconstruction comes from what was deconstructed. The ability to deconstruct is not conducive to any form of appeasement. Instead, deconstruction is about clearing all that obstructs the path towards relevancy, and all that obstructs that path will include people, processes, and products.
Reinventing is not about getting buy-in from the status quo. It's about working tirelessly with those who understand the painful realities of constant relevance.
Those insecure about their place in the future will cheer for complacency hoping to pacify weak leaders. Eliminating all that is complacent takes strength and boldness. In many cases, leaders chasing buy-in is a procrastinating leader's excuse - enabling them to postpone tough decisions.
All those who understand relevance is a constant process. Expect change and are eager to get behind those who lead it. Or they take the led themselves. I think some leaders misjudge the determination their teams have to remain relevant. It's not that teams need buy-in; it's leaders need to lead.
The industry has the ability to reinvent themselves, but the industry must purge itself of all that is status quo. Purging status quo will be the toughest thing the industry's leaders will do and though that toughness new leaders will emerge. Those who go into 2021 as if 2020 never happened will find themselves in peril.
"Status Quo is the killer of all that will be invented."
CEO/Founder TEASRA,The Innovation Channel and Host of The End of The Day With Ray! https://www.endofthedaywithray.com/
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