It promises to be a watershed year for the local Heidelberg business with major changes in personnel and operations, including a new skipper at the helm. A company man for nearly 25 years, Richard Timson took over as Heidelberg Australia & New Zealand’s managing director late in 2012. Here he talks to Print21 about taking the top job and his vision for the future.
It’s been a rocky few years for the print and graphic media industry. During this time many print companies have gone to the wall and suppliers have not only had to cut costs in order to survive in a diminishing market, but also to absorb losses from customers’ defaults.
Of course none of this is news to Heidelberg’s new managing director, Richard Timson, who was the company’s general manager for the northern region before accepting the top job. He’s worked at the coalface for years and has seen what’s transpired first hand. With this experience up his sleeve, a passion for print and a commitment to work with his people as a team, Timson may well be the breath of fresh air Heidelberg needs to adapt to the new paradigm.
- "Heidelberg must adjust its payment terms over the next six months," Richard Timson, new managing director at Heidelberg ANZ.
Timson is a realist. When asked about the good old days, he comments, “They were at least five years ago, if not longer. And the really good old days when printers made great money were two decades ago. Things have changed. There’s no point in talking about what’s been before, as it isn’t coming back. We need to focus on tomorrow and the adjustments we are making to the business are similar to what our customers have had to make in their own businesses. Lean, smart and effective, that’s what we are aiming to be.”
To the idea that a trim Heidelberg is a weaker proposition, Timson replies assertively, “That’s rubbish. Heidelberg has reduced its staff, we’ve cut the fat and made some strategic changes. It wouldn’t make any sense to try and operate the company at the staff levels of old when our customer base has shrunk with industry attrition. You have to know what it costs you to do business and to act accordingly.”
He adds that there is still a lot of good news in the industry. “We’ve seen enough stories about the decimation of the industry and about Heidelberg’s decline in the trade media. The reality is that Heidelberg turns over €2.6 billion worldwide and we are still by far the largest and most viable sheetfed supplier. When you look at our markets, each of the first world countries may have suffered from consolidation but Asia, South America, China and India still have a desire to consume printing equipment, so as a global company there are a lot of opportunities.”
Team Heidelberg
In his new role, Timson believes in a personal approach to business. “Heidelberg is a big company, and a leading, global brand, but I want Heidelberg ANZ to be run like a big family business. What I mean by that is, I want the staff to feel included by participating and contributing. The staff need to be very attuned to what we need to achieve and I need to be aware of how they feel in terms of the business and their own job satisfaction.”
For Timson, this means getting down to grassroots level. “I had lunch in the canteen the other day and the staff were amazed that the MD had done that,” he laughs. “But I want to hear what they think and what’s going on in their world so I have an understanding of where there might be issues. I don’t want to be a remote manager sitting upstairs in my office oblivious to what’s going on.”
Heidelberg has had to reduce its staff, a fact about which Timson says, “No one likes to let people go, but at the end of the day we need to operate as a professional concern and be fiscally responsible. We’ve lost valuable assets, not critical assets, which means there is no change to the sales, service and support functions.”
Reducing the headcount has been financially successful for the business and given Timson some breathing space. He spent the last months of 2012 in a “whirlwind of meetings” but also found time to consult with staff, look at the systems in place, and to reshape certain processes.
“We’ve been busy restructuring the way we operate to meet the changes in our customer base, but the things Heidelberg is respected for globally, such as the service and support of our customers, has not diminished. We still have the most comprehensive support network in ANZ. That’s been a priority for me, to make sure that our customers are not impacted by the changes that have been made, and I am confident that this is the case. Certainly that’s the feedback I am getting.
“What I love about our company is that we have so many people who are supporting our customers across the business from consumables, and service, to the call centre, spare parts, logistics and sales. They are the customer-facing people and if you lined them up I think you’ll find there isn’t another company in our industry that can boast it has such a good team.”
More than an equipment supplier
Beyond the day-to-day business, Timson is supportive of Heidelberg’s commitment to be an active member of the industry. “What we have contributed to the industry in ANZ tends to get lost in the wash of bad news stories. Heidelberg doesn’t just supply equipment. We are one of the most avid supporters of our industry. We sponsor awards nights, apprentices, training, and initiatives like Women in Print. Being part of this industry is important to Heidelberg, not just the company but to the staff, and we’ve shown our commitment over a very long time.”
Asked if closing the showroom at Heidelberg’s Notting Hill head office will have an impact on the company’s ability to show its equipment, Timson smiles wryly. “It just isn’t viable to keep equipment in an idle space in the current market environment and, quite frankly, having a showroom is overstated. It’s a nice to have, not a must have. With top end customers, we have always flown them to Germany or to other customer sites where they can see the equipment in a working environment. And for the A3 market we’ve always conducted local demonstrations - we’ve not always had A3 gear in the showroom and that hasn’t stopped us selling a broad range of equipment into that market over many years.
“I’d say the majority of our customers have never visited the showroom so its closure makes good business sense.”
The space is now being converted to a warehouse facility.
Another topic Timson wants to address is PacPrint. “Everyone knows Heidelberg is not going to PacPrint, and the reasons are simple. It costs hundreds of thousands of dollars for us to attend a show like this. Just the equipment installations alone are a significant cost and in a market where we are being asked to cut costs, we cannot justify the expense. I think trade shows around the world are changing. Drupa will continue as it is the premier event for the industry, but gone are the days when companies can go to every show on the calendar.”
Tightening fiscal policy
One change Timson is going to implement in 2013 is a tightening of Heidelberg’s debtor practices.
“Like the paper suppliers have done, Heidelberg must adjust its payment terms over the next six months to bring them back to a more realistic level.
“It’s going to have to be 60 days or less, because our exposure levels are so high these days and the cost of funds for money sitting outside is horrendous,” he states. “Everyone needs to look at their debtors and reel them in if we are going to have a strong industry.”
He isn’t worried that customers will push back against changes to terms. “Everyone understands the issues around cash flow. They know exactly how much it costs them to produce a job. And how hard it is to collect from their customers. We all face the same issues.”
In recent years, Timson has observed a shift towards a more strategic management approach from printing companies which he says is essential to the industry’s ability to reinvent itself.
“The industry must move away from being price driven and start value adding. Price leaders let the price down and everyone else follows. This is also happening with some suppliers. This practice weakens the opportunity for everyone. Just as suppliers have added value to their offering with services such as training and business development, printers need to think about how they can bring value to their customers beyond the obvious. Print is viewed as a commodity and as long as this perception holds, it will be subject to the vagaries that plague the manufacturing sector.”
While he is very much of the school where you take responsibility for yourself, Timson says the industry has been let down by a lack of commitment from government. “I don’t know what the government thinks of the printing industry but it can’t be very much given the lack of support we are shown.”
He acknowledges that this is true of the wider manufacturing sector under which print falls but says that not enough is being done to promote an industry that still employs a considerable number of Australians. The Australian Bureau of Statistics reports that, as at November 2012, the number of people employed by the printing industry was around 50,700. And when the numbers employed in paper and paper products (14,500) and publishing (41,800) are added, the number swells to over 100,000.
Looking to the future, Timson says he believes the market has been through the worst and is now levelling out. He anticipates perhaps another 10 per cent attrition before the market is at a realistic size for the amount of print being purchased.
In conclusion he says, “I want my team to be happy and feel good about everything they do. I want them to come to work and enjoy themselves. That’s my catchcry for 2013.”