Eyes wide open with Vision 2015 – Print21 magazine article

Nick Kugenthiran, the new managing director of Fuji Xerox Australia, takes leadership very seriously and has his own take on the “vision thing”. He talks with Patrick Howard about his ambition to empower people to come up with their own visionary plan for the company.

Where are we going to be in 2015? When people talk or write about us in six years time, what will they be saying about us? What type of organisation do we want to be and what do we need to do to get there?

These are the questions typically reserved for leaders of large corporations to wrestle with in their midnight hours. They go with the territory of the top job, the executive suite and, in Fuji Xerox Australia, they pre-occupy Nick Kugenthiran much as you would expect. Following the resignation of Andy Lambert, former managing director, the company veteran has risen to take on the mantle of leadership of the industry’s largest digital supplier.

In this fast changing world, it is imperative for a new leader to imprint his own vision of the future on the organisation. Kugenthiran has moved swiftly to change the tempo and tenor of Fuji Xerox Australia. On some level the fact that he is a long-term member of the company, the general manager of the Integrated Sales and Marketing Division for the past four years, makes it easier. He is known to everyone and is reputed to know a large percentage of the almost 1,700 employees throughout Australia.

On another level, this level of familiarity makes it more difficult for an individual to transform their relationship with the organisation on assumption of the top job. It requires a strong break with the past and the inauguration of a new style, heralding a new age. This is especially true in the high technology world where Fuji Xerox plays. The paradigms of operational efficiency move quickly here as the continuing transformation of technology shifts the very meaning of the organisation’s role. It becomes vital that companies acquire a self-developing dynamic that can sustain them through the inevitable changes of upper management.

Long an enthusiastic advocate of inclusive management theories, Kugenthiran dealt with the leadership challenge by, in the first instance, convening a team of top executives to develop a joint vision of the future.

“As a leader it is important to make your people powerful and give them ownership of the future,” he explains. “What I asked them to do was imagine what type of company Fuji Xerox will be in 2015. I was part of the team, naturally. We went away and broke into three teams, each of which had to come up with a vision for 2015.”

The innovative method of clarifying the possible futures was to create the front page of a business newspaper six years from now, with its own headline focusing on Fuji Xerox. Banners centred on such themes as Fuji Xerox Australia voted by its customers as the valued partner of choice etc.

“We had fun with it but it was also incredibly serious. I didn’t want to simply tell them where I wanted the company to be in six years time. They had to feel ownership of the vision we decided on,” adds Kugenthiran.

He then assembled 70 of the company’s executives from around the country in Sydney to develop the vision and come up with a blueprint to take the company from here to there.

“Vision is only part of it. We needed to work out how we are going to bring it into being. These are the individuals who know what they can do, it is up to them to come up with the ways of making it happen.”

If this all seems a radical departure from established management practice and theory it is in keeping with Kugenthiran’s belief that the world has fundamentally changed with the information explosion. To reflect this change, Fuji Xerox has changed its corporate identity at a time when the role and even the identity of a document is undergoing continuous transformation.

To illuminate how the information age has changed the world in which the company operates, he quotes telling statistics, such as the creation of 281 exabytes of information in 2007, an amount which is expected to increase by 640 per cent by 2011. This is five times the information in all the books ever written. To drive home his point that we are living through tremendous changes he declares that last year there were:

* 15.2 trillion printed pages, expected to increase by 30 per cent over the next decade
* 100.9 million direct marketing pages produced and posted in the US daily
* 25,000 newspapers and periodicals in the US alone
* 300,000 new books published and, importantly
* the 100th million website was created.

Fuji Xerox Australia’s role in all this must be one of continuing adaptation and transformation. No one individual can chart the course nor drive the evolution that must take place in order for the company to be in a leadership position in 2015. As far as Nick Kugenthiran is concerned, it is a project that involves the input and commitment of every individual in the company. Perhaps a true visionary is one who clearly sees how important it is to open everyone’s eyes.

More than one economic stimulus
When the global economy fell off the cliff in late 2008 the influences reached Australia in the first months of 2009. Before the Federal Government instituted its rescue package in April, Nick Kugenthiran had moved quickly to launch the company’s own stimulus package in March.

The global financial crisis hit Fuji Xerox like everyone else earlier this year and, like everyone else, its severity took the company by surprise.
“Nobody picked it. We had the best year ever in 2008 and drupa was very positive for us. But things began to change near the end of the year,” says Kugenthiran. “The bottom was reached in January and February.”

Revenue dropped, printers stopped buying and along with the Federal Government, Fuji Xerox Australia recognised that urgent and radical action was required.

“We instigated our own stimulus package at the beginning of March. We saw the market was tight on credit, and that we had to provide some incentive to our customers in order to give them confidence to buy. We provided a financial holiday in terms of preferred interest rates for new acquisitions for the term of the lease. We had already built up considerable momentum when the Government announced its own stimulus package in April,” says Kugenthiran.

The result is that Fuji Xerox Australia has escaped the worst effects of the downturn. While revenue is down 12 to 14 per cent, in real terms it has only dropped back to 2007 levels.

“The level of operation has retreated to the seven year average,” points out Kugenthiran.

During these seven years, the average total digital print volume has risen by around 10 per cent from 11 to 13 billion prints per year. For Fuji Xerox Australia, revenue and equipment has also risen by the same amount. All this took place while the total print market shrank by 15 per cent.

It is indicative of Kugenthiran’s philosophy that he can pick out the positives in a dark landscape. While the company cut all discretionary spending, it maintained investment in such areas as marketing, people development initiatives and R&D.

“The GFC has given us the opportunity to grow capability, to look around the curve and reflect on the business. It provides a time to look at our discipline, efficiencies and capability, a chance to examine processes and reengineer the business,” he says.

Not that it was all plain sailing. Margins suffered, mainly because of the Australian dollar revaluation.

“At the worst it cost us an extra 60 per cent that we could not pass on and had to take the impact,” adds Kugenthiran.

There may be more tough times ahead for us all, but Fuji Xerox Australia appears to be well-prepared to ride out the storm.