Dealer Support June 2012 by Intelligent Media Solutions

June 2012 Issue 204

INSPIRING BUSINESS SOLUTIONS FOR DEALERS

DEALER SUPPORT JUNE 2012 | ISSUE 204

Beautifully smooth

MADE IN BRITAIN | LONDON OLYMPICS 2012 | GROWING GREEN

Accentuate every curve of every letter with the smooth writing BIC 速 ATLANTIS 速 ball-pen. Even the price is attractive!

MADE IN BRITAIN A look at manufacturing at home LONDON OLYMPICS 2012 Dealers go for gold

More for your money

GROWING GREEN An interview with the Commercial Group

FROM THE EDITOR

A summer of success? PEOPLE

DEALER INTERVIEW

Commercial Group

Commerical Group

Earlier this month Commercial Group launched its own brand of environmentally friendly remanufactured toners. How did this come about? It’s been an interesting journey for us in the sense that we started our own internal programme and really ramped it up like many companies in the middle of the last decade. Commercial had environmental programmes, and those kinds of things, in the background but they weren’t core business, so when we introduced our new programme in 2006 where we really ramped up what we were doing, we focused on our own internal stuff which is right and proper; you know, you start with what you do at home before you go out and try and change the world. So we first did our own internal changes through a carbon reduction programme and waste reduction programme. We achieved our carbon reduction target in 2010, on schedule, which was pleasing and we actually achieved our waste target back in 2008, I think it was. At the same time, we also realized the bigger hit to the environment was up and down the supply chain. We already had our suppliers assessment programme that had been running for some time, which we ramped up to try and encourage suppliers to engage in environmental matters, and we also launched our CSR day in 2007 to encourage and support customers to join us on the journey. But as time went along we realized that there was a gap that we experienced in the process, and there was an opportunity to bring some of the lessons that we had learned and the things that we had achieved more directly to the customer.

A green alternative The UK’s largest independently owned business services company recently launched its own brand of environmentally friendly remanufactured toners. Billy Taylor caught up with Commercial Group’s environmental strategist, Simon Graham, to talk about why environmental policies are

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so important

It seems like dealers have been particularly creative of late when it comes to thinking outside the traditional product box. Pens and paperclips? That’s so last year. The future is all about being different. Dealers are now offering everything from insurance to their own ink cartridges and close-the-loop recycling scheme to customers, and there’s no reason it should stop there. In this issue, we interview the award-winning WG Office Supplies (see page 26), a shining example of a growing dealer, and one that is well worth watching. From iPhone apps to insurance plans, the dealer group is creative in everything it offers its customers. But despite the radio adverts and whizzy gadgets, they haven’t forgotten good old-fashioned service. When the Dealer Support team visited MD Paul Deavin last month, he was quick to show us how quickly his customer reps answered the phone (after less than one ring). It all goes to show that to be a real industry winner (they have a shelf full of BOSS and IDS accolades, among others), you can’t leave service behind. The other interview in the People section comes in the shape of a conversation with Commercial Group’s environmental strategist, Simon Graham, who led the independent giant to success with launching a new line of remanufactured toners (p20). He talks about why it’s so important for every dealer to have an environmental policy, and by that he means one that runs throughout everything they do, and not just one that ticks all the obvious boxes. Over the past few issues, we’ve seen how important it is for dealers to consider alternative forms of income in the shape of 21 different products and services to offer clientele. The opportunities are endless if you let them be. With this in mind, we’re asking readers to get in touch and share their experiences of selling nontraditional business products. Got a story to tell? Found success somewhere? Share the wealth on editor@dealersupport.co.uk. Until next time, have a great start to summer.

You can now sell your own product, and recycle them once they’re empty. Are customers reacting positively to an environmental ‘closed-loop’ approach? It’s about product responsibility, because we are taking responsibility for the life-cycle of the product, so if you buy a toner from us, it’s not a transaction where we say: “OK, it’s your problem now.” We are saying: “We will actually take responsibility for that.” So we offer a facility to take them back, and we know there is zero land-fill, and it will be disposed of in the highest possible way. As much as possible is reused, and what can’t be reused is recycled; but more than that, there’s actually a process we’ve added to make it seamless. So instead of you having to contact one group of people who then do something and then

JUNE 2012 www.dealersupport.co.uk

www.dealersupport.co.uk JUNE 2012

“My own view is if you make the right thing to do the default thing to do, then everyone will just do the right thing.” MANAGING EDITOR Julia Dennison julia.dennison@intelligentmedia.co.uk

DESIGNER Sarah Chivers sarah.chivers@intelligentmedia.co.uk

EDITOR Billy Taylor billy.taylor@intelligentmedia.co.uk

DESIGNER/PRODUCTION Peter Hope-Parry peter.hope-parry@intelligentmedia.co.uk

REPORTER George Carey george.carey@intelligentmedia.co.uk

SUBSCRIPTIONS MANAGER Natalia Johnston natalia.johnston@intelligentmedia.co.uk

SENIOR ACCOUNT MANAGER – MEDIA SOLUTIONS Matthew Moore matthew.moore@intelligentmedia.co.uk

PUBLISHER Vicki Baloch vicki.baloch@intelligentmedia.co.uk

ACCOUNT MANAGER – MEDIA SOLUTIONS Krystle Davis krystle.davis@intelligentmedia.co.uk

Julia Dennison, managing editor

intelligent media solutions suite 223, business design centre 52 upper street, london N1 0QH tel: 020 7288 6833 fax: 020 7288 6834 email: info@intelligentmedia.co.uk web: www.dealersupport.co.uk web: www.uspmagazine.com

Annual subscriptions are ABC available at a cost of £68.00 for UK and overseas by surface mail, £90.00 for airmail. Subscription enquiries should be sent to the above address Dealer Support is the leading monthly publication for dealers in the business supplies industry. It provides information on the industry (both in the UK and overseas), information for and about the UK’s independent dealers, as well as information and advice on running a small business. The views expressed in this magazine are not necessarily the views of the publishers. Copyright of all the material published remains with Intelligent Media Solutions Limited. No part of this magazine may be reproduced, copied, stored in an electronic retrieval or transmitted, save with written permission or in accordance with provision of the copyright designs and patent act of 1988. Printed in the UK by Buxton Press www.buxtonpress.co.uk

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INSPIRING BUSINESS SOLUTIONS FOR DEALERS

CONTENTS 08

June 2012

INDUSTRY 06 NEWS AND VIEWS All the month’s news and views in the office products industry 08 MADE IN BRITAIN Are office supplies still manufactured at home? 12 TECHNICAL CONSULTING IS KEY Lock up recession fears with a consultative approach

14 COMPETING AGAINST E-TAILERS A look at what consumer research has to say 18 LONDON OLYMPICS 2012 Are there commercial opportunities for dealers?

PEOPLE 20 IT’S A GREEN ROAD TO SUCCESS Commercial Group discuss environmental policies 26 LOOKING AHEAD An interview with WG Office Supplies

MANAGEMENT 32 GROW YOUR BUSINESS This month: A4 MFDs 36 CHANGE IS IN THE AIR A review of changes to UK employment law 38 CREATING A STRATEGY WITH CUT-THROUGH Identify, pursue and profit

42 FINAL WORD Olympus’ Georgina Pavelin on prioritising life

Flip over for the June edition of USP magazine

INDUSTRY

NEWS

NEWS Speakers at BOSS AGM talk technology Alan Ball and Phil Jones focus on a changing market The mood was positive at the recent BOSS Federation Annual General Meeting (AGM), held in London’s historic Stationers’ Hall, as member’s approved a new chairmanship from Philip Beer to Alan Ball of Spicers, and renewed the BOSS association management contract with the British Printing Industries Federation (BPIF). Phil Jones closed the event with an inspiring key-note address entitled: Social Media for Leaders (in 15 minutes). The new head of UK business for Brother told the audience that he believes social media has effectively brought the customer audience far closer and more intimate than ever before. “I believe the new CEO of the future is not a CEO as we traditionally see it, but actually a COE by the meaning of: Chief Opportunity Engineer. That is, it’s our job to stay close to the market in order that we are so in tuned with what’s going on, we can change our company’s strategy on the turn of a coin if we have to.” Jones stressed that he believes the traditional relationship that used to exist between manufacturers and customers has ended: “because now, manufacturers listen directly to their customers and [they] can really understand what the real, latest word, on the street is.” “The proximity gap has narrowed significantly. Therefore, if you have not changed the way you listen to your customers, listen to your marketplace, and refined your messaging – you’re really, really missing a big trick,” he added. After accepting the two year BOSS Federation chairmanship, Alan Ball shared an optimistic perspective to technology advances: “The industry faces many challenges ahead, none more so than that of technology. It continues to consolidate and change, affecting everyone in the chain from manufacturers, wholesalers, resellers and retailers.” Adding: “However, as we meet in this historic hall, the Stationers’ Livery, it goes to show that an organisation like the Livery can go through change, many decades of change, and come out as a stronger organization on the back of it.”

“I believe the new CEO of the future is not a CEO as we traditionally see it, but actually a COE by the meaning of: Chief Opportunity Engineer.” Phil Jones, head of UK business for Brother

JUNE 2012 www.dealersupport.co.uk

Spicers invest in new forecasting system New system to manage changes in demand patterns Spicers has appointed Infor, a leading provider of business application software, to implement a new forecasting and replenishment system for the business. David Molyneux, director of inventory at Spicers, said: “This is excellent news for Spicers, our dealer partners and our supplier base. We continually strive to drive up our service levels and the new system will help enhance demand forecast accuracy and thereby boost service levels through improved availability and order fill rates.” The new system will help manage changes in demand patterns such as increased customer demand as a result of promotional activities and improve the alignment of demand to the orders from Spicers to its supplier partners. Molyneux says he anticipates the new system to be in place in the early autumn.

RED BOX WORKS TO END HOMELESSNESS Team members spend time on the streets of London Red Box has joined with the Big Issue to help raise funds for the Big Issue Foundation and raise awareness of homelessness in the UK. Having first helped the Big Issue to save money on its office supplies, a team of Red Box employees gave up their beds for a night on to sleep out in the Old Vic Tunnels in Waterloo. As well as giving them a chance to learn a bit more about life on the streets directly from those affected by it, the team has so far raised £625. Gordon Christiansen, MD, Red Box, said: “We’re proud to be supporting the Big Issue in their mission to provide a hand up, not a hand out and help individuals to take control of their lives.”

NEWS

Integra announce managed print solution Dealer group to offer competitively priced, easy to implement system for members

news in brief... LORD DIGBY JONES JOINS THE SPICERS BOARD The office supplies wholesaler, Spicers

Integra Office Solutions has announced the launch of its managed print solution (MPS) which gives members a competitively priced, easy to implement system to roll out to their key customers. After a comprehensive analysis of the MPS providers available in the market, Integra believes it has the perfect solution that ticks all of the boxes: a sensibly priced, ‘entry level’ print audit system which is easy to implement by both the dealer and the customer. Integra’s managed print solution also has a simple front end sales tool so members can present the details of a print audit to their customers in a very persuasive but simple way, and it is powerful enough to support a dealer if he wants to progress all the way to a full-blown MPS solution. The response from the members so far has been good with over 50 dealers taking the time out to attend a series of fairly intensive demonstrations of the system with many signing up straight away. Bob Davies, commercial director, Integra, said: “This has been something Integra has been working on for quite some time. It was important for us to look at all of the options available to make an informed decision which was right for our members and not just a knee jerk reaction to trends in the market. “The Integra managed print solution will help dealers lock in their customers by providing an added value service and help them grow EOS sales. If dealers haven’t yet explored MPS we would recommend that they come and speak to us. Not only can we help answer their questions about MPS in general but we can also show them how the Integra solution works and what it offers them and their customers.”

Xpress Solutions celebrates 20 years of success The company was founded in 1992 to offer a comprehensive and friendly service XPD has announced that long standing Officepoint member Xpress Solutions is celebrating its 20th anniversary. Phillip Tait, MD of Xpress Solutions, founded the company in 1992 with the intention of creating a business that would deliver a fully comprehensive and friendly service to customers at great prices. Xpress has always offered a consultative approach to its customers, and Tait says he set up Xpress with the intention that the company would always prioritise customers over sales targets. Xpress claims that a great deal of new business is generated through recommendation and referral from satisfied customers, but Tait also works with several networking organisations to promote his business. Gary Billington, business development manager at Officepoint, comments: “We are delighted to be celebrating Phill’s 20th year in business, and are glad that our solutions have helped him to grow so well. There are very few office supplies dealers in the London area who can boast 20 years in business, so Phill and the team at Xpress Solutions should be immensely proud of what they have achieved.” To celebrate his 20th year anniversary, Tait has created a ’20 products for 20 years’ package, which gives customers discounts on 20 bestselling office products, and is intended as a thank you for their continued support.

Limited, has announced the appointment of Lord Digby Jones as a non-executive director of the business.

NEMO TO LAUNCH NEW CORPORATE WEBSITE To coincide with its 25th anniversary, Nemo has refreshed the look of its corporate site. The website has been given a facelift, while continuing to provide vital information for dealer and supplier alike. The new corporate site is the place to find all the latest news and innovations from Nemo. This includes their latest marketing tools, details on their purchasing power, and an industry first project: Nemo TV.

XPD MEMBERS TO RECEIVE FREE MEMBERSHIP All XPD dealer groups can now enjoy BOSS Membership free of charge, as part of their group membership. Officepoint and SimplyOffice have both negotiated to enjoy Silver Membership free of charge, while OfficeStar members have the benefit of Gold Membership as part of their association with Spicers Synergy Group.

DIARY 14 Jun Commercial Group CSR Day Cheltenham Science Festival 22-23 Jun Nemo 2012 Annual Conference The De Vere Carden Park, Chester, UK 28-30 Jun Superstat Annual Conference 2012 Whittlebury Hall, Northamptonshire, UK

www.dealersupport.co.uk JUNE 2012

INDUSTRY

BRITISH MANUFACTURING

Homegrown The majority of products in the UK office supplies market are produced on foreign shores. George Carey asks why this is the case and what advantages British manufacturers can offer dealers

n the past 30 years, the UK manufacturing sector has shrunk by two thirds and in June 2010 figures from the Organisation for Economic Co-operation and Development, showed that it accounted for only 8.2% of our workforce and 12% of the national output. Unfortunately, the situation has been no different in the office supplies industry and the market is dominated by goods produced on foreign soil, particularly those made by French and American owned companies. Why is this the case, and does it look like this trend will ever be reversed?

JUNE 2012 www.dealersupport.co.uk

OFDA SOUNDS CALL2ACTION Office Friendly Dealer Association is generating fresh business for members with its telemarketing offshoot, Call2Action. The Sheffield-based dealer group has recruited two graduates from the city’s Hallam University to kick-start the new business service and hopes to double its staff this summer. Fifteen OFDA members have already engaged the Call2Action team to help them explore new business leads as well as revive lapsed ones. The service uses market intelligence software to clean up customer databases and create tailored lists of targets, while setting up appointments for clients and following up their promotional activities. The graduate pair have benefited from specialised industry and sales training since being snapped up by OFDA in February to work on the project, which managing director Steve Harrop believes is unique. “We spent a large part of last year listening to our members’ needs and top of the wish-list was new business generation,” Harrop said. “In a competitive and stagnant market we wanted a fully-managed service that would be practical and costeffective - able to be used on an ad hoc basis as well as part of a strategy. “It’s a unique move by a group on behalf of its members and part of a series of new investments over the coming year to help our members grow their businesses.” For more information on Call2Action contact Marilyn Caster at Office Frieindly on 0114 256 6238 or email marilyn.caster@officefriendly.co.uk

Call2Action team Nicola Taylor and Joe Bayley

INDUSTRY

BRITISH MANUFACTURING

While it’s true that manufacturing is no longer a big industry, the problem seems to be particularly acute in the office supplies industry and there could be many reasons for this. Andrew Stacey, product management director for the Vasanta Group, believes the reasons are twofold: “We believe that, firstly, trade brands in the US play a very different role to those in the UK and there is more manufacturer brand equity, and consumer loyalty in the US. This has allowed the American companies to become stronger, invest, and acquire. The second reason is simply the locality of French manufacturing, and this location lends itself to efficient supply chains. Also we should not ignore the fact that there are one or two supplier heads in Europe who know a thing or two about manufacturing!” However, Stacey believes that there are still advantages to using British manufacturers, who have their own USPs: “British companies can offer flexibility, speed to market and the ability to impart corrective action to problems. Overseas manufacturers just can’t react as quickly.” Alistair Kirkpatrick, sales director of Sinclairs, which is being run by the family’s fifth and sixth generations after 175 years of trading, is in agreement that local manufacturing can bring huge benefits to both resellers and end-users alike: “We produce 99% of our products in Yorkshire. Supplying locally allows us a certain level of flexibility with orders and processes.” He goes on to explain that this reduced amount of travel eases the strain on the environment and results in cost savings, which can be passed on: “This reduces our carbon footprint, as the amount of miles the product has to travel is significantly reduced when compared to those shipped from overseas.”

JUNE 2012 www.dealersupport.co.uk

“Unlike recent trends, we are still manufacturing in the UK”

Last year HK Wentwoth celebrated its 70th anniversary. The Leicestershire based company owns the AF International cleaning supplies product range, and has no plans to move its production capabilities further afield. Ron Jakeman, group MD, said: “This is a 70-year success story for British manufacturing. The H K Wentworth group of brands are all successful in their field and highly regarded by users in many industries.” While some will make an effort to buy British, purchasing decisions will unsurprisingly come down to hard economics and often our home-grown products struggle to compete, on purely a price-lead basis. Stacey says: “The decision comes down to cost. If the British manufacturer can produce, without adding any total cost disadvantage, then dealers will buy local. In addition, end users would also choose British and may sacrifice a very small premium to do so. The current economic climate does not lend itself to any premium that may be added to the cost of the product just for the sake of buying British.” However, as Kirkpatrick puts it: “You can buy cheap, but is it fit for purpose?” Another British manufacturer that believes in the power of locality and keeping close working relationships with customers is the Bedfordshire-based family-run company, GH Neville. David Neville, sales and marketing director, says: “Our products are available to purchase direct from us, from our UK manufacturing facility. The Emgee brand has been available via the wholesaler channel for many decades, but our aim is to ensure that all re-sellers have the ability to purchase these products (and more) direct from us. We believe that consumer choice is the lifeblood of the industry. Unlike recent trends, we are still manufacturing in the UK.” While an austere economic climate at the moment makes it seem unlikely that significant investment in British production is just around the corner, Stacey believes that there may be light at the end of the tunnel: “Over the last few years we have seen a migration from China, through to some of the smaller Asian Countries and then into Eastern Europe. We are now seeing some movement into more local markets. The requirement of a better standard of living and the cost of distribution is driving this migration. If local manufacturing can survive through this period, and it is a gradual migration, then in future years local manufacturing will become more attractive. Sadly, many of our British manufacturing has been lost.” While change may take some time, it’s reassuring to see that there is still hope for home grown production. In the meantime, there are still industry stalwarts making sure that all is not lost. Kirkpatrick concludes: “This is the sort of story that we like to think the government wants to hear. A lot of the manufacturing is gone in the UK, but we’re still here, providing work across the board.” DS

INDUSTRY

Q1 REPORT

Consulting for profit Double dip recession getting you down? There is hope, but independents must continue to take a consultative approach to driving innovative and technical product sales. GfK’s Greg Allen takes a look at how certain IT and office products fared in Q1 2012

o, the UK found itself in a difficult position yet again in the first quarter of 2012. With the news of a technical recession and double dip, the challenge for technology markets continues to grow. Moreover, with the information that well over a 1,000 outlets selling IT and office products have shut down in the last year (across both retail and B2B), there is still significant cause for concern. With retail and B2B both impacted by lower sales, there doesn’t seem to be much optimism around.

David v. Goliath

Value over volume The IT market may still be struggling on a volume side, but with value there are some good growths being observed. Within retail, of course, the webbook product segment is driving value strongly (up over a 100% on the previous 12 months). More interestingly is the value growth of a number of categories on the B2B side of the market, e.g. webbooks, storage, headsets, software and deskbound computers. So, there might yet be some optimism for the market. This January to March, the storage segment of the market has grown dramatically, now comprising 14% of value in the B2B IT Market. With the flooding in Thailand, it’s to be expected that prices have grown 220% this Q1 2012 against Q1 2011, (up to an average selling price of £196), but the level of demand is still strong enough to grow the category. The deskbound computer segment is also a point of interest, where values are up 21% over the same time period as above. This is being heavily driven by workstations (up 163% year-on-year) and by normal desktop replacements in B2B (up 81% year-on-year). Software continues to drive forward in the B2B sector, with sales towards utility software like security and operating systems.

JUNE 2012 www.dealersupport.co.uk

“The more technical products that require more consultation are being driven well by the independents ”

When we look towards the independents and multiples, we also see similar trends across the product categories, e.g. the growth in value of storage, software, webbooks, communication devices (like wireless routers) and the negative value trends for netbooks and notebooks is still observed. However, there are some areas which independents are performing better than the multiples like multi-function devices (MFDs), growing at three per cent Q1 2012 on Q1 2011 in the independent channel, compared to -21% in the multiples channel. It seems the more technical products that require more consultation are being driven well by independents. For the independent channel, it must therefore remain a key focus to drive technical, innovative products forward with good consultation. If it can continue to do this and diversify into more product fields, e.g. webbooks, then the impact of outside factors can be (albeit not entirely) diminished. DS

Greg Allen GfK account director, office greg.allen@gfk.com 0870 603 8121 www.gfkrt.com/uk www.twitter.co.uk/gfkrtuk

INDUSTRY

CONSUMER RESEARCH

Navigating the Amazon Billy Taylor investigates buying trends to decide whether people like to make purchases online or still appreciate the contract services that independent dealers offer

ompeting with an online retailer can sometimes feel like youâ&#x20AC;&#x2122;re paddling against wind and current up the Amazon (pun intended), but consumer research indicates itâ&#x20AC;&#x2122;s not a losing battle. You have probably heard by now that competition from nontraditional, online office supplies retailers, entering the market represents a formidable opponent to independent dealers. Itâ&#x20AC;&#x2122;s argued that over time these online-based, low-price newcomers have the potential to force down prices and erode necessary profit margins within the industry. The prospect is frightening to imagine, and raises the question: What do consumers think about online retailers?

JUNE 2012 www.dealersupport.co.uk

INDUSTRY

“The buy local movement isn’t new or specific to the office supplies industry, but its proponents say the theme echoes across all business sectors”

CONSUMER RESEARCH

United Stationers, the largest wholesale distributor of business products in North America, released a consumer research report in late 2011 that examines how employees think and behave within the context of purchasing office supplies. The findings not only provide valuable insights into the decision-making process of customers, but also highlight a strategy that every independent dealer should incorporate into their pitch: Buy local. The ‘buy local’ movement isn’t new or specific to the office supplies industry, but its proponents say the theme echoes across all business sectors. And United Stationers’ end-user research results appear to substantiate the claim. Of the 12,500 survey respondents, nearly two-thirds preferred to buy from local dealers for a variety of reasons, but specifically, because of the economic benefits it has to the local community. The findings indicate that consumers understand ‘buy local’ campaigns to mean keeping the money at home. “Other advantages that businesses cite for buying locally often times focus on relationship,” says Carol O’Hern, a consumer analyst for United Stationers. “Two key attributes of local businesses emerge: the first one is having a sales representative that the business knows. The result is open sharing, which leads to the second relationship attribute: when a business buys locally, they say that the reseller understands their business.” Additional factors within the end-user research include the opinion that ‘local’ means fast and convenient, as well as support for the community. O’Hern notes that independent dealers can leverage these trends by: getting to know their customers;

JUNE 2012 www.dealersupport.co.uk

emphasizing how “buy local” is a community effort; and tailoring the marketing approach based on the size of the business (large companies prefer fast delivery while small companies prefer a personal relationship). These guidelines embody the type of strategies independent dealers need to establish in order to set themselves above and beyond the capabilities of online retailers such as Amazon; but the necessary element, of course, is action. Without putting such data to work through marketing campaigns and customer service practices, it is meaningless. The findings are optimistic and offer an achievable business model for most, if not all, independent dealers. It also provides an opportune time to ask yourself a few questions. How frequently do you raise awareness of your products? Or more importantly, the services you offer to clients? Are you promoting yourself as a local resource, or even better, an asset to the community? Direct Purchasing Solutions (DPS) is just one example of a dealer that embodies the kind of approach necessary to compete with online retailers. The Norfolk-based company was formed in 2005, but its MD, Phil Moran, has been working in the purchase supply industry in the UK since 1991. One of the ways the company competes with online retailers is by providing an all-encompassing level of support to their clients. Through established affiliates and simple yet effective cost reduction solutions, the company is able to provide a personalized service that is unmatched by any online retailer. When asked about the challenges created by online retailers competing for a share of the pie, Moran explains: “You are right. In essence, we have to be different.” He aims to provide each of his clients with the kind of service that not only keeps them coming back, but that gives them the skills to better manage their supply chain efficiently. By doing this, not only does DPS produce savings for the customer it also gives them the time, and assurance, to concentrate on their core business. “We’re not going to get everything; we can’t be specialist on everything,” Moran says, explaining that if the customer accepts that and embraces a full-service approach, there is room for business, and margins, to grow in other areas. The company achieves this by focusing on four principles for each client: an absolute provision of service; an assessment of the individual business; supply chain management; and cost reduction measures. DPS is not exactly recreating the wheel here, but what they are doing is adjusting their approach to provide a personalised service that cannot be recreated through an online retailer. In effect, DPS is creating (extra) value to their clients by merely promoting their expertise. Moran sums his approach up best by saying: “The bottom line is we hope we can have more secure customers, with more retention, across different aspects of spending.” As the company’s website states, “in essence, DPS are an outsourced purchasing arm for your business, without the cost attached.” Who would say no to that? While online retailers, no doubt, represent a threat – research indicates that consumers remain interested in relationships with their suppliers. They want to buy local and be given a personal service. Therefore, by making these two approaches the cornerstone of any outreach efforts, you can rest assured there will be a bright future for independent dealers. But it’s up to you, the dealer, to get the message out. DS

FEATURE

www.dealersupport.co.uk JUNE 2012

INDUSTRY

OLYMPICS FOCUS

GOING F O R G O L D The country has been promised a spike in commerce when the Olympics come to town this July. George Carey looks at the opportunities the event could present for dealers

n addition to watching the world’s greatest athletes perform in one place, the Olympic Games have been presented as a great commercial opportunity and a much needed boost for our ailing economy. So will we see a record breaking rush on toner, or will this claim turn out to be as genuine as Ben Johnson? According to Tower Hamlets Council, the games are predicted to create an estimated 7,000 direct contracts, which together with suppliers, will generate around 75,000 supply chain opportunities. The council says it, along with the other host boroughs, has introduced some progressive procurement policies to enable UK and London-based businesses, particularly small and medium-sized enterprises, to compete for suitable contracts in a fair way. All Gamesrelated contract opportunities can be accessed via CompeteFor, a portal created by the London Development Agency that acts as a brokerage service between buyers and suppliers throughout the London 2012 supply chain.

JUNE 2012 www.dealersupport.co.uk

“The new Westfield shopping centre that’s been built as a result of the Olympics has given us a boost in business”

The system is free to use and includes business support services to help businesses access these potentially lucrative opportunities. OMM Group is a dealer that should be ideally placed to benefit from the Games, due to its location in Stratford, a mere stone’s throw away from the action. However, director Adam Thompson’s experience has been slightly different to the one advertised. “Our same-day website has picked up a bit of extra business because of big construction companies needing things at the last minute and we’ve had some enquiries about our office equipment hire services. However, on the whole it hasn’t made much of a difference. The contract stationers, who were already supplying all the big multinational companies involved, have held onto the contracts.” There have been indirect benefits for local companies though, which should last well beyond the Games themselves. Thompson says: “The new Westfield shopping centre that’s been built as a result of the Olympics has given us a boost in business. We supply several of the businesses in the shopping centre, so that’s a benefit that hopefully we’ll see in the long term.” Businesses will also benefit from a more highly-skilled workforce, following local boroughs’ investment in training for London 2012, which could provide an invaluable resource for local businesses looking to recruit quality staff. The amount of extra promotional material being printed by local and national businesses around the games should also provide extra business opportunities for dealers, with most SMEs looking to capitalise on the fever surrounding the Games. The amount of opportunities available may not be quite as great as we’ve been lead to believe, but there is certainly new business to be gained by those looking in the right places. DS

PEOPLE

DEALER INTERVIEW Commercial Group

A green alternative

JUNE 2012 www.dealersupport.co.uk

DEALER INTERVIEW Commerical Group

The UK’s largest independently owned business services company recently launched its own brand of environmentally friendly remanufactured toners. Billy Taylor caught up with Commercial Group’s environmental strategist, Simon Graham, to talk about why environmental policies are so important

Can you tell me about the product itself? There are lots and lots of types of toners out there. We are not introducing a brand new type of product. But when we were going out to market and I’m not saying that they’re bad, there are some people who provide some very good toners, but what we found is that there are ways to do things better. And we were very privileged to find a supplier that would work with us so that we could get a much better standard than we found was normal: a combination between high quality, low carbon, low waste, competitive pricing, and availability. We found that suppliers would tick one box, maybe two or three, but it was hard to find someone that ticked every one of the boxes consistently. And so, at that point, we decided we were prepared to put our own name to a product. You can now sell your own product, and recycle them once they’re empty. Are customers reacting positively to an environmental ‘closed-loop’ approach? It’s about product responsibility, because we are taking responsibility for the life-cycle of the product, so if you buy a toner from us, it’s not a transaction where we say: “OK, it’s your problem now.” We are saying: “We will actually take responsibility for that.” So we offer a facility to take them back, and we know there is zero land-fill, and it will be disposed of in the highest possible way. As much as possible is reused, and what can’t be reused is recycled; but more than that, there’s actually a process we’ve added to make it seamless. So instead of you having to contact one group of people who then do something and then

www.dealersupport.co.uk JUNE 2012

PEOPLE

DEALER INTERVIEW Commercial Group

another group of people that then do something else, it’s all through the same process. So a customer does everything in a simple and straightforward way – which means it’s more likely to happen. If you complicate matters then customers are less likely to take it up. But also, it means from our reporting process we can be really clear about what we achieve. And like you say, there is a loop that is closed, but more than that, from the customers’ perspective they don’t have to feel that at any point they’re left in the lurch. That’s great. I think customers generally want to help the environment and this offers them a pre-packaged answer. That’s the plan: to make it easy. My own view is if you make the right thing to do the default thing to do, then everyone will just do the right thing. Will this impact Commercial’s MPS approach? It is part of that journey, and it’s a really, really key part in which we can say that we can help people to become a responsible business. I suppose that is where Commercial has an advantage in that we have that expertise in managed print services, which we have now had for decades – but toners are key to that. After all, the toner itself is the thing that puts the stuff on the paper and I would suggest that taking responsibility for it is part of being a managed printer. If you are offering a managed print service, or manage part of it, and tell customers that it’s up to them to dispose of the waste then it’s not fully managed. We take responsibility for it and we’ll help them to deal with all the issues that come from printing. I think offering toner cartridges is critical to that because we

JUNE 2012 www.dealersupport.co.uk

can take responsibility up the supply chain up to the supplier and we can get a really good, clear understanding of where it comes from and how it gets disposed of. It just makes it more seamless. Is this Commercial’s first branded product? I believe it is. We certainly haven’t had any in my time. We’ve been cautious about using our brand to attach it to something because I think our customers trust us to deliver them something great, and if we didn’t deliver to our standards people would wonder what’s going on. So we’re very cautious about attaching our name to something that we don’t have absolute confidence with, but with these toners we have that confidence. If you receive a positive reaction from your customers, will you consider any other products in the future? Almost certainly. Although I should say, we have already had a positive reaction. The reaction has actually been incredibly positive. I think there is a desire out there amongst customers, certainly amongst our customers, to be more sustainable. They want help in doing that so it leads to a clear and positive response from them. If that positive response equates to them being happy to see other things, then we are certainly willing to explore other options. What else there would be that could provide the level of detail needed, we still need to look into. It wouldn’t make sense for us to offer a full range of products at the moment because the process we take to make sure they are at the calibre and standard, and with the credentials and the measureable benefits, that we would expect from something with our name on it

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PEOPLE

DEALER INTERVIEW Commercial Group

is a lengthy process. I can’t guarantee that at the end of the year there will be an entire 30,000 product offering with Commercial’s name on it.

I imagine it allows the staff to take ownership of the initiatives. Exactly. You’re absolutely right. Ownership is key.

Commercial Group has been a pioneer in corporate social responsibility (CSR) and green policies within the office supplies industry for years. Why is the environment so important to the business? I think Commercial got it early on. What I mean by “it” is the fact that sustainability is a key driver to so many benefits. Some people just see one bit and tag onto it and say: “Oh, yeah, we’ll do that”; or see one bit more and say: “Oh, we’ll do that”; or some people will say: “Oh, we’re throwing a lot of stuff away let’s introduce a recycling policy and then we’ll try on recycling everything.” Other people will notice that there are a lot of people driving into work that could cycle instead so they’ll introduce a cycling programme. I think that is great, but what Commercial did was it saw the big picture from the beginning. When the company launched the whole programme – when Simone Mann started the whole ball rolling – she said that we were going to do it in a big way. She was not interested in trying to pussyfoot around, to try it as an add-on or a kind of peripheral thing. She believed if we were going to try and do the environment, then we were going to do it properly. That meant we would get all the benefits, because actually there are massive business benefits from being sustainable.

What’s next for the Commercial Group? There are lots and lots of projects. The next big one is a CSR day on 14 June where we’re exploring with our customers and suppliers the idea that it is possible to balance people, profit, and planet. Can one balance being an economically sound, finically viable business, especially in economically difficult times, with being one that cares for people, staff and in the community, as well as the environment? Can that balance be struck or does one have to be lost or decreased? That’s what we’re doing next month. We’re looking at the question and then some good examples from our customers as to how they’ve addressed these issues.

What do you mean? Sustainability brings you lots and lots of staff benefits. We’ve had a very, very inspired staff with our Green Angels programme. Feedback has been incredibly positive. It has even boosted our recruitment, so it’s easier to find really, really good staff. For the vast majority of graduates now, one of the first questions they ask is regarding environmental policy. They want to know about carbon emissions. We’re finding it really easy to find good staff now. Additionally, we were in the Sunday Times Best Green Companies list as a company to watch. I think most of that comes from the fact that people are inspired by things, and sustainability is an example of that. Also, I think it means that you are more efficient as an operation. What is the Green Angel programme? The Green Angel programme is basically a list of things we think are key to being a sustainable company, and in there are things like carbon reduction and waste reduction and employee engagement, and supply chain engagement, etc. The Green Angel team is a group of about half a dozen or so team members that work together on one project over a short period of time. And they’ll deliver something within one of those commitments. But the key point to me is, as I said to you earlier, these are people who wouldn’t otherwise work together and they get something of great value from it. Most of the people that have been on our Green Angel team have gained leadership skills, team working skills, and project skills. These kind of things are really, really powerful towards staff development. In a company like Commercial we’re really keen on developing our own staff.

JUNE 2012 www.dealersupport.co.uk

Sounds like Commercial will find that balance. Absolutely. DS

My own view is if you make the right thing to do the default thing to do, then everyone will just do the right thing.

PEOPLE

DEALER INTERVIEW WG Office

WG Office Supplies has grown from a small, local dealer to an impressive operation serving the greater London area. Julia Dennison and Billy Taylor sit down with MD Paul Deavin to talk about his plans for the company and his perspective on the marketplace

LOOKING

ahead

JUNE 2012 www.dealersupport.co.uk

DEALER INTERVIEW WG Office

G Office Supplies, based in Dartford, Kent, has been a pioneer in the office supply industry for nearly two decades. Not only can it claim to be a founding member of Integra, they can now boast being the first dealer to launch a smart-phone app. Fuelled by an impressive turnover (with an even more impressive margin), WG Office Supplies is blazing a trail around London’s M25 motorway with a fleet of vans, radio advertisements, and a dedicated team all working towards a bright future. Here, MD Paul Deavin answers some questions about his business. WG was awarded the BOSS ‘Best UK Company’ for 2011, as well as being voted best company by Dealer Support in 2009 and 2010. You guys are good about entering awards. We never used to be. We just kept our heads down and got on with making money. But then we noticed there were companies out there winning that later went bust. We thought we were better than those people so we started to enter and over the past four or five years we’ve been mopping them up left, right and centre. I think it has to do with the fact that each employee has worked an average of 12 years at WG. Yeah, I was going to ask you about that because a lot of dealers struggle with keeping staff. What’s your secret? We blackmail them. [laughs] No, it’s because everybody knows what their job is and how important it is – particularly at this time because the pressure is on; it’s a tough world out there – but at the same time there’s a lot of flexibility within the business. Are you considering, or have there been, any acquisitions? No, but I’ll tell you what we’re looking to do. There must be companies out there that are really feeling the squeeze, that are really on the brink. I hope they will push their pride out of the way and come to talk to us. We’re a cash-rich business and we don’t rely on the banks. Twenty years ago we almost went under in the last recession, and we learned an awful lot from that. Thankfully, we managed to survive and have become a strong and healthy company. What are some of the things that you think you learned from the last recession? Get the money in! It’s really important. So we strengthened the credit-control.

How many people do you have working on the credit-control? Two.

YOUR ANNUAL TURNOVER: £6m GROSS MARGIN: 43%

Has it been difficult to be successful in a recession? Well, our telephone sales have grown by about 30% over the last year. Field sales have really been pinched margin-wise because that’s the nature of the beast. But in terms of new markets, we are the first dealer to do the iPhone app – which we have developed really well.

NUMBER OF VANS: 4 NUMBER OF STAFF: 38 WHOLESALER: Spicers WAREHOUSE: 10,000 sq ft

www.dealersupport.co.uk JUNE 2012

PEOPLE

DEALER INTERVIEW WG Office

Are you looking to expand business into any other areas? Yeah, we are. What we’re looking to do is find businesses that are teetering to come and talk to us. Also, throughout June we are looking to recruit new field staff. We’re going to be doing that via the radio. It will be going out to six million listeners from three radio stations. Any product areas that you’re looking into? Definitely office furniture, but we’re also branching out into insurance as well. Really? Tell me about that. Any insurance, from public liability right through to property insurance. Are people using it? Yeah, it’s working tremendously well. It seems like the perfect way to order office supplies. It is! I heard you hosted a customer day recently. Yeah, 80 or 90 people I think came out. You have to pick the right day of the week. Thursday tends to be the night when people are going to socialise with their business colleagues as opposed to their friends, who they see on a Friday or Saturday. Anyway, they came up and it was brilliant. We got furniture orders from it and made loads of new business. We also picked up so much business from the ‘close-the-loop’ process. We are really steamrolling into that at the moment. We’ve picked up about six new big businesses by doing just that. It doesn’t sound like a lot but it is if you never knew what it was before. How does close-the-loop work logistically? We’re working with a company called Shred-it. We can trace where the paper is going to go from start to finish. What we’ve found is that that industry is notoriously bad for service. They just can’t get their service right. So I think there’s a lot of business to be picked up that way.

JUNE 2012 www.dealersupport.co.uk

So you’re literally offering anything a business needs? A true one-stop-shop. Do you major with VOW or Spicers? Spicers. What about warehouses? We have a 10,000 sq ft warehouse where we house our managed print services. What are your gross margins? 43% A 43% margin is very healthy. Well, it evens out between field sales which is slightly less and telephone sales which is slightly higher. You were a founding member of Integra? Yeah, my business partner David Chalkley was even the chairman of Integra for two years. Has it changed a lot since you started? It has changed an awful lot. I mean, before Integra it was the National Dealers Association. [Integra] works really well as a wholesaler too. It’s great support really, full of marketing stuff, catalogues, and products. The Initiative range works really well for us. I think we

For further information please email: valerie@kmpuk.biz or contact us on 01475 730 099

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DEALER INTERVIEW WG Office

DEALER BOOKMARK

Name: Paul Musgrove Job title: MD Company: Nectere Location: UK-wide

were the number one supporter of the Initiative brand from the beginning. It’s very strong and we use it a lot.

SPECIALITY

There is only so much that you can cut in costs, and then you can’t cut any further. If you haven’t got new sales coming in and your margins are being chipped away, you’re not going to survive

So you must believe there is still room for dealer groups in the industry? My opinion, and what I would advise, is that any dealer out there that’s not part of a dealer group should speak to Integra, because they do not realize what they’re missing. It’s not just what Integra offers; it’s about the chance to mix with other dealers to get ideas. At an Integra conference, around the bar, you’re going to learn more about what’s going on in the industry and tips about how to run your business than anywhere you’re going to go. Generally we go to the Integra conference for the bar because you pick up so much from the other dealers, it’s invaluable. For those dealers out there that are struggling, if they don’t talk to us, they should join Integra. A lot of independent dealers feel they have to fight it alone, even when it’s impossible and they’re not doing very well. Do you think some dealers are too proud to admit they’re business isn’t going where it should? I don’t understand why they still retain their independence, unless they’re a massive company. Every dealer should really talk to Integra – that’s my independent opinion. What do you think makes Integra better than other dealer groups? The reason for that is that a lot of the dealers within Integra were there at the start. So you have the experience there of recessions, product knowledge, and the board, which is very strong at Integra.

This year is its 15 year anniversary. So you were there 15 years ago? We were. We were there. We started the NDA up to combat what was happening during the late ‘80s and early ‘90s. We started getting attacked by Viking; we had the major corporates like WH Smith hitting the marketplace, and it was good for everybody to put their buying power together to fight back. Where do you think the threat is now? I think that if you have a good dealer group behind you, I don’t see that there is a threat. I don’t think that the big corporate sellers are anything to worry about at all. We’re fighting them every day and we’re winning every day. I think if you’re proactive, recessions can be a good time. They don’t have to be a bad time. From what I’ve learned from people in Integra, and from the wholesalers, is that there are a lot of people that are battening down the hatches. They’re not being proactive with their marketing and they’re not going out to win new business. There is only so much that you can cut in costs, and then you can’t cut any further. If you haven’t got new sales coming in and your margins are being chipped away, you’re not going to survive. DS

Nectere is the only dealer services group in the industry. We actively assist in the day-to-day running of independent office supplies dealers who want the time and tools to win new business, improve margins and reduce cost.

A former board director and founding member of Integra, I set up one of the largest and most successful independent office suppliers in the Midlands. In 2009 I felt the industry was changing and dealers needed a new choice. I came up with the next logical step: Nectere.

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MANAGEMENT

GROW YOUR BUSINESS

As multifunction products become more prevalent in the office environment, A4 devices are carving themselves a niche in the market. George Carey looks at the products available and discovers what the consumers want

Mini multifunctional maestros

ultifunction devices have found their way into most offices in recent years and their popularity shows no signs of slowing down. Small A4 devices have been particularly popular with consumers and small businesses, but can they compete with bigger machines on the corporate stage, or are they simply better suited to independent business? It seems that these small devices are enjoying enormous popularity and are being helped by constant advances in the speed and ease with which they can be used. Jamie Mackenzie, head of product marketing for Samsung, says: “We’ve seen growth across both the colour and mono categories of our portfolio this year. One of the key focuses for us within the SOHO environment is the increase in our sales of wireless technology. We are seeing a continual trend in wireless convergence within the home and small offices, through increasing demand for our WiFi direct and mobile printing technologies.” Of course, while people will always crave convenience, as we settle into a double dip recession and watch the polar ice caps melt, the obvious advantages of more energy efficient machines will ensure healthy sales. Peter Silcock, category manager at Epson, comments: “The main technical advances that we’ve seen have been to cut the cost of the printing. We can cut the cost of printing by 50% compared to a colour laser printer. We’re also introducing double sided scanning and printing which is quite unusual for the lower end of the market. In addition, consumers now have the capability to scan and email remotely to different devices across the network.” He continues: “With an ink device, all the technology is in the print head, so you just replace the ink. It can deliver significantly lower costs and the energy consumption is

JUNE 2012 www.dealersupport.co.uk

reduced because you don’t have to fuse the ink to the paper, you just spray it on. You don’t have the expenditure of heating a fuser inside the machine, so it can take 80% off your energy bill. We estimate that our new devices will save up to 75% on emissions, throughout the lifetime of the product.” SOHO

Matthew Searle, director of Canon Partner Channel, recognises that although these devices should not be restricted purely to smaller businesses, they are perfectly suited, and on that basis will enjoy a strong market share, here in the UK: “According to the Department for Business Innovation and Skills, SMEs accounted for 99.9% of all UK enterprises last year, with a rising number of people starting their own business from home. These businesses have specific document management needs that are different to larger enterprises. SMEs and homeworkers need to colour print, scan, and copy everyday items cost-effectively, but in smaller batches. However, they can’t afford to sacrifice quality in order to function efficiently.” Searle extolls the virtues of these smaller units and the value they can add to businesses: “Particularly for home office users, space is at a premium. Compact individual A4 MFDs can save time, space and energy by printing professional-looking documents quickly and efficiently as well as copying and colour scanning, already associated with the larger MFDs but with a much smaller footprint.” He goes on to say, “A4 MFDs are also easy to install and maintain, reducing IT issues and making them a good fit for smaller businesses or home workers that don’t have ready access to an IT department

GROW YOUR BUSINESS

www.dealersupport.co.uk JUNE 2012

MANAGEMENT

GROW YOUR BUSINESS

for support. This means for dealers that they will save time and money with easier maintenance options.” Mackenzie is in agreement about the integral part these machines play in smaller businesses but feels they are also at home in the corporate environment: “There’s no doubt that Laser MFP’s offer a great benefit in the home office – print screen functionality, small footprint, stylish design and low running costs are all appealing to the home user. But as you move into the SMB and corporate space, you will find that these additional characteristics are still required by users. Whether it’s for an executive assistant’s personal printer, or the CEO’s personal office – style, footprint and ease of use are still top of the list of user’s demands.” Searle also asserts that A4 devices can make the step up and play an important role on the corporate stage: “It’s not just smaller businesses looking for increased functionality that benefit from these products. A4 MFDs can be integrated seamlessly into larger document management workflows, ensuring that smaller paper-intensive workgroups within large organisations, such as the finance department, also have convenient access to desktop A4 MFDs. Being able to tap into small and larger businesses provides a real revenue opportunity for resellers.”

A4 MFDs can save time, space and energy by printing professional-looking documents quickly and efficiently as well as copying and colour scanning CORPORATE

Just how far can these plucky little one-stop-shops climb up the corporate ladder, and do they present lucrative, long-term sales opportunities for the dealer channel? Phil Jones, deputy MD, Brother thinks that A4 products are here to stay, and can work alongside managed print services: “We’ve seen a massive push from the big MPS providers, trying to centralise everything in a business. They’re trying to rip out all the single stuff and put in big departmental devices and for a lot of companies that doesn’t always work.” Jones believes that corporate customers may have been too quick to assign the bulk of activity to large, departmental machines, which can cut down on convenience, and this has been demonstrated by feedback Brother has received: “Customers tell us that sometimes they’ll go over to the device wanting to print out something small, but it will be in the middle of printing a million copies of something else, causing inconvenience all round.” There is a clear opportunity to put a number of these devices across a network, so that the smaller jobs get done quickly and then the bigger departmental printing tasks can be performed on a more centralised device. Another reason that Jones believes A4 MFDs are at home in the corporate market is the drive towards digitisation, meaning that people are working more with scanners. There is a huge opportunity that exists in

JUNE 2012 www.dealersupport.co.uk

enterprise content management, where large businesses are using specific systems to organise and distribute information across the enterprise. Jones says: “In order to do that you need an input device, and what’s better than something that can act as a printer and scanner inbound to the network. Personally, I think that there are some real opportunities for resellers in this market.” He’s quick to point out that up-skilling will be required, but the rewards can be considerable: “You need to be able to have fairly technical conversations with IT administrators about how to manage these devices on the network. It’s not as complicated as it seems. With one mornings training, we can bring people up to speed. If you learn a bit more about the market, you can create new business yourself, because you can walk into your customers’ office and start talking about digitisation.” THE FUTURE’S BRIGHT

Mackenzie sees a prosperous future for these products: “A4 is still the format of choice for printing output, so desktop and standalone MFP’s offer a way of appeasing the format requirement of a busy office but without the capital cost of an A3 MFP. What also appeals to businesses is that much of the feature set that resides in the higher end departmental machines such as PIN security, open platform and scanning capability is now found within the A4 devices.” So, whether it’s enabling small start-ups to print off their first invoices, or helping corporate giants to digitise their data, it seems that these devices have plenty of sales potential, for those dealers asking the right questions. DS

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MANAGEMENT

Change is in the air Employment lawyer Allison Cook looks at recent changes in UK employment law

JUNE 2012 www.dealersupport.co.uk

he Coalition has concentrated on examining and reforming existing employment legislation as part of its efforts to encourage business growth and economic recovery. Numerous proposals and reforms have been suggested and the media and public have had mixed reactions. Business Secretary Vince Cable announced a number of proposals to reform employment law in November. The Government’s response to the Resolving Workplace Disputes consultation in relation to reforming the employment tribunal system highlighted a number of intended changes. One of the most newsworthy changes is the increase in the qualifying period for unfair dismissal from one to two years. The Department for Business, Innovation and Skills is yet to make a formal announcement but it is believed that the new two-year qualifying period will only apply to employees who commenced employment on or after 6 April. The one-year qualifying period will still apply to those employed before this date. The Conservative Government raised the qualifying period for unfair dismissal claims from one to two years in 1985 and the qualifying period was once as little as six months. There are differing opinions in relation to the likely success of the change in qualifying period. Many feel that the increased period will lead to employees pursuing claims such as whistleblowing and discrimination where the employee is not required to have accrued the necessary qualifying period of employment. Vince Cable announced that the increase would “give greater confidence to employers in recruiting new employees, without undermining workers’ sense of job security”. Some commentators doubt whether employers genuinely consider the danger of potential claims when hiring new staff. Others say that a year is sufficient time to assess whether the employee is performing to the required level and representing the business in the desired manner. One of the biggest bug bears of employers is that there are no costs involved in the issuing of Employment Tribunal claims and as such, no barrier to lodging claims irrespective of their merit or otherwise. The Government recognised this and published its consultation on tribunal fees in December. Two different fee-charging structures were proposed. The first option is the charging of an issue and a hearing fee. The amount would depend on the nature of the claim. The issue fee could range from £150 to £250. The hearing fee would range from £250 to £1,250. The second option would be payment of an issue fee only. This would range from £200 to £1,750. The proposed changes are significant, particularly as the initial issue fee is higher than many issue fees in the county court. For example, the issue fee for recovery of a debt of £3,000 to £5,000 is only £120 in the county court. Some contend that the level of proposed tribunal fees will discourage genuine claims in the tribunal. The consultation closed earlier this year, with a view to introduce the fees from 2013-14. A further change introduced in April is that a tribunal judge can now order a party to pay a deposit order of £1,000. The previous maximum possible order was £500.

If an employment judge considers that all or part of a claim has little reasonable prospect of success at a pre-hearing review, he or she may make a deposit order as a condition to continue with the claim. The aim of the increase was to deter claimants from continuing with frivolous, tenuous claims. Some argue that the increase was a barrier to the pursuit of justice. Costs orders are not the norm in tribunal hearings. They are used where the tribunal believes that a party or their representative has acted in a vexatious, disruptive or abusive manner in bringing or conducting the claim. As the government is keen to discourage vexatious claims, the maximum costs order a tribunal can award was increased in April from £10,000 to £20,000. This should dissuade some litigants from pursuing unfounded claims, in the same way as the increase in the amount of potential deposit orders. The government has made it clear that it would like to reduce bureaucracy for employers. In pursuing this aim, it plans to consult on the introduction of the concept of “protected conversations”, evidence of which would not be admissible at tribunal hearings. There has been strong opposition to this proposal, particularly as without prejudice conversations are already commonplace. The aim of protected conversations is to encourage frank discussions between employers and employees. Some fear that protected conversations will encourage bullying or harassment in private, although the government has stated that discrimination would not be protected. If protected conversations are introduced, employers may fear that an employee will later maintain that the reason for the conversation was because of a protected category such as age, sex or disability. Whether protected conversations survive consultation remains to be seen. Compromise agreements will also be examined in a further consultation to review whether they are unnecessarily complicated and whether they should be amended so that all existing and future claims are covered. Compromise agreements are widely used to avoid tribunal claims and to protect both the employer and the employee’s reputation so simplifying their use may be an attractive option for both parties. There is however some good news for claimants. Tribunal awards were increased on 1 February 2012. The maximum award for an unfair dismissal claim has been increased from £68,400 to £72,300 for dismissals that occur on or after 1 February 2012. The maximum limit on a week’s pay has also been increased from £400 to £430. Given the raft of proposed and implemented changes to employment law introduced by this government, they certainly can’t be accused of resting on their laurels in this area. DS

Given the raft of proposed and implemented changes to employment law introduced by this government, they certainly can’t be accused of sitting on their laurels in this area

www.dealersupport.co.uk JUNE 2012

MANAGEMENT

FEATURE

Creating a Strategy with Cut-Through How to identify, pursue and profit from a clear, compelling strategy

BUILDING A STRATEGY ARROW

Many business leaders are confused as to what a strategy actually is. For some senior executives, a strategy is synonymous with a plan; for others it is a high-level vision. In actual fact, it’s neither. A strategy describes how your company will succeed in the future. It must be specific and focused, enabling you and your management team to make better and quicker decisions. In short, it should give you cut-through. There are four elements to an effective strategy statement, which I call The Strategy Arrow: 1. Your #1 goal; 2. Where you will play; 3. How you will win; and 4. Your agenda for action. YOUR #1 GOAL

A strategy is only relevant when it has a clear goal that it is seeking to achieve. Your first step is therefore to establish a clear, unequivocal #1 goal. I don’t mean a short-list of five or six goals; I mean your single most important goal. For example, back in the mid-2000’s BSkyB’s executive team set itself a clear, unambiguous #1 goal of raising the number of subscribers from 6 million to 10 million by 2010. This goal alone made ongoing decisions much easier for management. If an initiative helped grow subscribers it was likely to be looked on favourably; if it didn’t, it was probably rejected. There are three questions you need to answer to establish your #1 goal: 1. The best metric to use. Although many executive teams choose a profit target, there are other options available, including a sales goal, customer numbers (as with Sky), market share, or productivity levels. The important thing is to link your goal to your business model. 2. Your level of ambition. Setting goals is an art as much as a science. The best goals are grounded in an understanding of what is achievable, but include sufficient stretch that new solutions, new growth and new behaviours are required to achieve them. 3. Timeframes. I have found that for most executive teams a period of around 3 years gives enough time to make big changes, but is also sufficiently brief for the team to realise that they must get going immediately and cannot procrastinate! What specific performance goal will best drive your business forward over the next 2-3 years?

JUNE 2012 www.dealersupport.co.uk

MANAGEMENT

FEATURE

WHERE YOU WILL PLAY

You can radically affect the success of your business by changing the playing field you wish to play on. Apple, for example, transformed its performance by re-defining its product markets from ‘personal computers’ to ‘personal electronic devices’. This shift in scope enabled the development of the iPod, the iPhone and, if we’re to believe the rumours, some form of iTV. There are four elements of business scope that you should consider: 1. Target customers; 2. Products and services; 3. Customer channels; and 4. Geographical reach. For each of these four elements determine the scope of your existing business, and then ask yourself what changes best help you achieve your #1 goal. HOW YOU WILL WIN

The choice of how you will win – also know as your competitive strategy - depends on three things: what your target customers value most; your specific competencies and capabilities; and how your competitors stack up. The good news is that, although there are infinite strategy variations, it is possible to identify just five generic strategies: 1. Product Leader. These companies deliver the latest and best products for their target customers. New product development is critical to their success, and customers are willing to pay more to get the product they’re after. Examples include Nike, Sony and BMW. 2. Cost Leader. These companies offer the lowest prices to their customers who are focused on keeping costs as lean as possible. Examples include Ryanair, Aldi and Primark. 3. Convenience Leader. These companies offer reliable, highly convenient and hassle-free products and services. Their highly efficient systems often mean that they are also low cost organisations. Examples include McDonalds, Toyota, Dell and Amazon. 4. Service Leader. These organisations gain and keep clients as a result of the expert advice and support they offer, both before and after purchase. Examples include John Lewis, Singapore Airlines and Lexus. 5. Solutions Leader. These businesses tailor their offer to individual customers, creating bespoke solutions. Close and deep relationships with their customers are critical to their success. Examples include McKinsey, IBM and many bespoke engineering firms. Critically, the world’s top organisations make clear choices about where and how they wish to differentiate themselves. They focus on one, or possibly two, of these dimensions, they don’t try to be all things to all people. So what type of leadership should your business be pursuing? Which are you pursuing currently, where are your strengths, and what type of leadership do your target customers value most? YOUR AGENDA FOR ACTION

The final element of The Strategy Arrow lists your top 3-6 objectives that you will focus on over the next few years to turn your strategy into reality. Put simply, it sets out what you need to do to get from where you are now to where you want to be. Tesco, for example, pursued four strategic objectives for a decade or more. There were: (1) A strong UK business; (2) As big in non-food as we are in food; (3) Retailing services; and (4) A serious international retailer. The specific initiatives underneath these four objectives changed from year to year, but the objectives were consistent, enabling management to remain focused and build real momentum. What are the handful of objectives that will best enable you to develop your new business scope, establish clear market leadership and deliver your #1 goal? SUMMARY

Developing The Strategy Arrow for your business can create clarity, focus and cut-through, and enable your business to deliver new levels of growth. In my experience, the process of building the strategy can also help strengthen the bonds within executive teams, improve alignment and commitment, and help your team persevere through difficult times. So, what are you waiting for? What is your company’s Strategy Arrow? DS Stuart Cross is a consultant, speaker and author who helps some of the country’s top companies, including Alliance Boots, Morrisons and GSK, to accelerate growth. His new book, The CEO’s Strategy Handbook, is out now, published by Global Professional Publishing.

JUNE 2012 www.dealersupport.co.uk

FINAL WORD

Prioritising life and work Georgina Pavelin, marketing product specialist, Olympus

Digital dictation has been a proven solution for years and as with so many technologies, dictation has advanced rapidly

e are continuously looking to save time and money in our every day lives, whether in business or pleasure, people are stretched and looking for tools to aid organisation and efficiency. Digital dictation has been a proven solution for years and as with so many technologies, dictation has advanced rapidly. From reels to tape and now digital offering security, reliability and even speech recognition. Speech Recognition has improved greatly since its introduction, many professionals utilise it on a daily basis as a time and cost effective tool to transcribe documents and letters. Often speech recognition is built into other devices such as mobile phones and in car hands free kits, even to control a range of technology such as televisions - speech recognition software has come a long way and it is proving ever popular in both business and personal environments. The benefits of speech recognition are well understood, for example, a company director can dictate their meeting notes into a recorder whilst on the go, send the audio files and speech recognition software will automatically transcribe them, ready to be edited and sent. The software can transcribe your audio files from the moment you send them so they will be typed up and waiting for you to review, saving you time for more important things. High quality recording is key for accurate results and whether our recorders come bundled with speech recognition software or are simply ready for you to connect â&#x20AC;&#x201C; each comes speech recognition ready. DICTATION REQUIREMENTS

Speech recognition software works by an individual training their voice to the software; the more time you spend training your voice, reading through passages of text provided in the set up wizard, the more accurate the results. Even once the initial training is complete, you can continue to train the software every time you upload a voice file and edit the transcribed document. The software will start to learn your behaviour, pronunciation and preferences. The accuracy of your transcription is dependent on various factors, for example the user should speak clearly and consistently, mumbling or speaking too fast will cause the software to find it difficult to differentiate between words. A good quality recorder is vital when using speech recognition software, whether you are dictating directly into your PC or on the go, a digital voice recorder will ensure high quality, clear audio is produced for better results. DS

JUNE 2012 www.dealersupport.co.uk

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hallenge Pioneer C mber 2012 te 17-28 Sep

ARE YOU UP FOR THE CHALLENGE? With the London 2012 Olympic and Paralympic Games coming up this summer, this year is undeniably a year of sporting achievement. If you’re feeling left out of the fun, here’s your chance to do something good for yourself and others. Dealer Support magazine is partnering with Antalis McNaughton and Pioneer Paper to take on the Pioneer Challenge 2012, to get the office supplies industry on their bikes in aid of Breakthrough Breast Cancer. Taking place from 17 to 28 September, the goal of Pioneer Challenge is to have 20 riders on each of the 10 stages of the relay. If every rider can raise around £100, with all the expected participants we will blow the £20,000 figure of last year.

The challenge Cycle one or more of the stages from Aberdeen to Brighton (each stage is around 85 miles)

The charity Breakthrough Breast Cancer, dedicated to saving lives by finding the causes of breast cancer, improving detection, diagnosis, treatment and services

The dates 17-28 September

How to enter Please go to www.dealersupport.co.uk to find out more about the challenge, dates, cycle routes, setting up a donation page, logistics and cycle support, then email matthew.moore@intelligentmedia.co.uk with your choice of date/s.