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BIG INTERVIEW

Connecting the

business products world

Christa Furter iba/Office World June 2017

INSIDE THIS ISSUE Office Depot to focus on retail l Staples updates 20/20 strategic plan; ANZ deal closes l Private equity: good or bad for OP? l The future of the home office l NAOPA shortlist l ABC preview l Succession and how to plan for it l Viscom sector stays buoyant

CONTENTS 16 Big Interview Services, solutions and the one-stop shop are the way forward for Swiss reseller iba/Office World 24 Hot Topic Is private equity beneficial to the OP industry? OPI finds out... 28 Feature How is the dedicated home office faring in the age of remote working? 32 Spotlight Commercial Group’s environmental and social goals and achievements are manifold. But it’s an ongoing journey 34 How to... ...devise a successful succession plan and why it’s important to get started sooner rather than later 37 Category Update The viscom sector continues to be buoyed by new technological developments

Big Interview: Christa Furter, iba/Office World

Swiss reseller iba and multichannel operator Office World have been under Christa Furter’s watch for several years now. Both are reaping the awards of a strategy that focuses on services and solutions and an unfaltering emphasis on the one-stop shop

HOT TOPIC: PRIVATE EQUITY IN OP

44 Preview: ABC SP Richards’ Advantage Business Conference goes to Orlando, Florida, and the theme is to collaborate 46 Preview: NAOPA All you need to know about this year’s North American Office Products Awards, including the shortlist

REGULARS 5 Comment 6 News 52 5 minutes with... Steffie Verbeek 54 Final Word Tom Schinkel

June 2017

The typical deal often has a finite timestamp, ie the length of the fund. The usual shelf life is three to four years before the business is sold on or investors see their return on investment by taking the company through an IPO. The timescale is a double-edged sword. On the one hand, it can mean asset-stripping of the business to maximise the investment within the limited timeframe. Or it often means restructuring the business in question more rapidly than could have been achieved otherwise.

40 Category Update Opinions are divided on the state of the traditional OP category

COMMENT The OPI team EDITORIAL Editor Heike Dieckmann +44 (0)20 7841 2950 heike.dieckmann@opi.net Deputy Editor Michelle Sturman +44 (0)20 7841 2942 michelle.sturman@opi.net Reporter Joshua Allsopp +44 (0)20 7841 2952 joshua.allsopp@opi.net OPI Special Correspondent Andy Braithwaite +33 4 32 62 71 07 andy.braithwaite@opi.net Freelance Contributor David Holes david.holes@opi.net

SALES & MARKETING VP – Continental Europe, Middle East and Africa Ewan Dickson +44 (0)20 7841 2954 ewan.dickson@opi.net VP – North America and UK Chris Turness +44 (0)20 7841 2953 chris.turness@opi.net Director of Growth Services Jeremy Hughes +44 (0)7807 810617 jeremy.hughes@opi.net Digital Marketing Manager Aurora Enghis +44 (0)20 7841 2959 aurora.enghis@opi.net

EVENTS Events Manager Lisa Haywood +44 (0)20 7841 2941 events@opi.net

PRODUCTION & FINANCE Studio Joel Mitchell +44 (0)20 7841 2943 joel.mitchell@opi.net Operations & Production Eda Sismanoglu +44 (0)20 7841 2950 eda@opi.net Finance Kelly Hilleard +44 (0)20 7841 2956 kelly.hilleard@opi.net

PUBLISHERS CEO Steve Hilleard +44 (0)20 7841 2940 steve.hilleard@opi.net Director Janet Bell +44 (0)20 7841 2941 janet.bell@opi.net Executive Assistant Debbie Garrand +44 (7718) 660249 debbie.garrand@opi.net

The horizon widens

ast month we took an in-depth look at Australia and the various things happening there. And while there’s still plenty of unfinished business, of course, the Platinum Equity/Staples deal has now gone through. Platinum buying Staples’ ANZ operations is just the latest of many private equity deals that appear to be getting more prevalent in our industry. Private investment firms clearly like our sector. But why? Find out more in our Hot Topic on page 24. The focus this month for the OPI team is very much on Europe and the US. Europe because of the OPI European Forum that will take place in Berlin, Germany, from 12-14 June and where Europe’s leading business supplies executives – and several intrepid travellers from the US, Canada and Australia – will be convening for a few days of high-level talks and networking.

Private investment firms clearly like our sector. But why? At the same time, the OPI team is preparing for the eighth North American Office Products Awards (NOAPA), which will be hosted once again by US wholesaler SP Richards during its forthcoming Advantage Business Conference in Orlando, Florida (see page 44). I do like an awards ceremony. I particularly like an ‘office products’ awards ceremony, maybe because I have a vested interest in this industry doing well. So I read with great interest all the shortlisted products of this year’s NAOPA (see page 46). And I found it to be quite an eclectic mix which, in just five categories, comprised most of the trends we’re currently seeing in our industry. I have to admit, I’m deeply cynical about superlatives such as ‘world’s first’ and ‘best-ever’ – hard to quantify and quite possibly not always true. But perhaps that’s not the point. Innovation from manufacturers aside, what is important, in my opinion, is that this year’s shortlist – again – comprises products that historically have been completely outside the realm of the traditional OP dealer. It shows the broader outlook that resellers have today and the potential revenue streams that they are now beginning to tap into. As one of Europe’s most successful resellers points out, it’s all about the one-stop shop (check out our Big Interview with iba’s Christa Furter on page 16). Have a great month. HEIKE DIECKMANN, EDITOR

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June 2017

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NEWS

Analysis: Staples updates strategic plan New focus on ‘Pro’ categories after international sell-off nears completion Staples has added a new ‘strategic plank’ to its 20/20 strategic plan after virtually completing the sell-off of its international operations. The update comes as one of the four main components of the original plan – the focus on North America – has largely been completed following the closing of the reseller’s Australia and New Zealand (ANZ) operations sale to Platinum Equity at the end of April. This comes after the UK retail division was sold at the end of 2016 and the rest of the European business was offloaded in February of this year. Staples expects its remaining non-North American businesses in Asia and South America to be sold within the next 12 months.

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[Staples] ended the first quarter with 91,000 mid-market members, adding a record 34,000 new accounts in the quarter

The international exit has come at a price. Not only did Staples manage to get just $150 million or so for its ANZ unit – less than a fifth of what it paid for it in two separate transactions in 2008 and 2010 – but

the company recorded a loss in its first quarter accounts of more than $900 million related to its former International division. This follows a FY2016 loss of over $1 billion which included things such as impairment charges, losses on the sale of businesses and pension obligation write-offs. IT’S PRO TIME So 12 months after the company unveiled the 20/20 plan following the collapse of the Office Depot merger attempt, Staples CEO Shira Goodman said Staples was evolving the plan by focusing on what it is calling ‘Pro’ categories: facilities and breakroom supplies, furniture, technology solutions and promotional products. The Pro categories push will involve hiring sales and product specialists, widening the assortment – including scaling up on own-brand products and stocking more SKUs – and improving the digital customer purchasing experience. Goodman said that Staples would basically use the playbook it developed to grow facilities supplies into a $2 billion category for the company. While Staples is aiming to increase these Pro categories with “business customers of all sizes”, the initiative is going hand in hand with perhaps the most important component of the 20/20 plan: the focus on growing in the North American mid-market segment which comprises companies of 10-200 employees.

Staples has appointed its first ever Chief Information Security Officer (CISO) after discovering “material weaknesses” in its general IT controls as revealed in its recent annual 10-K regulatory filing. Brett Wahlin joins as CISO from HP, having started his career in the US Army counterintelligence. He will be responsible for global enterprise-wide information, product and data security.

The early signs are encouraging for Staples and will act as a heads-up for the independent dealer channel (IDC) whose customer sweet-spot has traditionally been the mid-market. MID-MARKET BOOST Mid-market sales at the Staples Business Advantage contract unit increased 10% year on year in the first quarter, with 7% coming from last October’s acquisition of Florida dealer Capital Office Products and the rest from organic growth. Much of this mid-market growth was in Pro categories where sales increased 12% year on year, including a 5% tailwind from the Capital acquisition. Another key metric for Staples is the number of mid-market membership customers it is attracting. It ended the first quarter with 91,000 mid-market members, adding a record 34,000 new accounts in the quarter and 70,000 in the past 12 months. There is also a strong message about developing better relationships with customers and bringing together products, services and expertise – that almost sounds like arguments the IDC has used for years to differentiate itself from the big-box players. Goodman has talked for some time about changing the mindset at Staples; if it is able to execute on developing an IDC-type approach to customer relationships backed up with the scale of its supply chain and $18 billion in purchasing power, then it will no doubt be a growing threat to local dealers.

DELIVERY AT THE HEART OF NEW TV CAMPAIGN Staples is trying to shake off its image as an office supplies retailer with a new brand marketing campaign. The reseller has scrapped its ‘Make More Happen’ slogan and replaced it with ‘It’s Pro Time’ as it focuses on the B2B delivery channel that is at the heart of its 20/20 strategic plan. The campaign will kick off with nationwide television commercials in which office managers are seen fixing photocopiers and mopping up spills.

Essendant misses out on Premier contract Six suppliers have won a US healthcare contract worth hundreds of millions of dollars with group purchasing organisation Premier. They include dealer network American Office Products Distributors (AOPD) and Ohio-based dealer FriendsOffice. Both renewed contracts with the healthcare-focused group whose members include around 3,750 hospitals and 130,000 other providers in the US. However, one notable name that was missing on the award was wholesaler Essendant. It had been tipped as an awardee as part of its new Access national accounts programme, but it transpired that Premier had asked Essendant to service contracts directly, something that would have compromised the wholesaler’s reseller-centric commitment.

NEWS

BOOST FOR SECURITY TEAM AFTER WEAKNESSES FOUND

IN BRIEF Colop opens Asia offices Austria-based stamp maker Colop has announced that it is setting up two new offices in Guangzhou (China) and Mumbai (India) to meet the increasing demand it is experiencing in Asia. The move follows expansion in its home region of Europe where it has a total of 11 offices after taking over former distributors in Poland and France last year. Iceberg names new President US-based office furniture and viscom manufacturer Iceberg Enterprises has appointed Douglas Nash as President. With 20 years in the OP industry under his belt, Nash started working at Iceberg as SVP of Sales and Marketing last year. He was selected by the board at the AGM in May. EPA honours ISSA sustainability dashboard Cleaning industry association ISSA has been recognised as a SmartWay Affiliate Challenge Honouree by the US Environmental Protection Agency. ISSA is the only cleaning industry association to be awarded the honour and was praised for its sustainability dashboard and distributor analytics tool, DEAL. Australian Forms buys fellow Office Choice businesses Australian Forms has acquired two City Stationery Office Choice businesses in Sydney. The locations will merge and relocate to the Australian Forms’ Phillip Street site. Details of the transaction were not disclosed. OfficeMate’s Thai makeover OfficeMate is investing more than BHT300 million ($8.6 million) in new storefronts and renovating existing locations in Thailand. It plans to become a ‘one-stop business solution’ in the region, aiming for a 20% increase in customer walk-ins.

June 2017

Do not disturb Computer scientists at the University of Zurich have invented a desk light that switches from green to red when users do not want to be disturbed. The device tracks keyboard and mouse movements to automatically display the activity status. It is intended to tackle interruptions in workflow and improve efficiency.

NEWS

OPI.NET POLL RESULTS Which of the following is the hottest issue in the OP industry right now? M&A/private equity

Exertis puts to bed market rumours

European technology distributor DCC Technology – which operates as Exertis – recovered from a poor FY2015/16 after acquisitions drove UK sales to record levels. Gerry O’Keeffe, the company’s Managing Director of the UK and Ireland, told OPI said it was another successful period for its office products category and a record year across its supplies business, as sales were up 10% on the previous year to £2.69 billion ($3.5 billion). He said the group had extended its UK warehouses, giving it further capacity and scope to grow its OP business, namely its new national distribution centre in Lancashire. Unlike other B2B sellers in the sector, he said there were no plans to expand into jan/san and facilities management, as he was happy with its current offering. Addressing market rumours, O’Keeffe ruled out combining with a large reseller like many others in the UK OP channel have done (including VOW and Banner, Spicers and OfficeTeam), adding: “We will never compete with our own customers.” He also put to bed speculation that the company had ever planned a takeover of EVO. He told OPI he was “very confident” for the future of the group, expecting growth across all segments. New infrastructure investments will allow it to overcome the expected challenging market and pricing pressures to achieve its planned growth curve right through to 2030. Shortly after the UK voted to leave the European Union in June of last year, Exertis promised its dealers that it would hold prices despite the weakened pound sterling. O’Keeffe said the move had been well received by the distributor’s customer base and was a factor behind the strong growth it reported for the year. He said price inflation will continue to be a challenge for its dealers as the year goes on.

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HP expands 3D printing partner channel

HP has launched a global reseller programme in a bid to expand the sales efforts of its 3D printing technology. Initially focused on North America and Europe, HP has added 30 certified partners to its channel, with a number of additional manufacturing service bureaus and product design firms using the technology. It has also named chemical and consumer goods group Henkel as one of its materials ecosystem partners. Earlier this year, HP opened up its Oregon, US-based 3D printing lab to prospective materials developers. Now, the company is opening more than a dozen 3D Printing Reference and Printing Centers across North America and Europe to enable companies to engage with its Jet Fusion 3D Printing solutions in production-level scenarios. The facilities will be opened in the UK, Spain, France, Germany and the Netherlands, and numerous US states including California, Oregon, Michigan, Kentucky and Georgia. HP claims its Multi Jet Fusion technology produces functional parts up to ten times faster than other solutions at half the cost. It has been lauded as a breakthrough in 3D printing since its launch last year, removing many of the barriers to the adoption of the process across multiple industries.

The 10% economy

Workplace technology

Amazon Business/e-commerce

77%

WHO’S WHO IN OP

Top 100 – NEW 2017 ENTRY Rick Toppin, President/CEO, SP Richards Rick Toppin took over from Wayne Beacham at the beginning of 2017 when his predecessor retired and he became President/CEO of wholesaler SP Richards (SPR). Before taking the top spot at the US wholesaler, Toppin has already had a long and extended career in the business products industry. He spent the first 19 years of his career with Moore Corporation (now part of RR Donnelly) on the printing and print management side. In 1999, Toppin joined Corporate Express (CE) as a Division President responsible for its business in the upper Midwest. In 2005, he was promoted to President of Corporate Express Canada and led the reseller’s rapid growth in that marketplace. He returned to the US in 2007 as a Region President for CE. Toppin joined SPR in 2008 as EVP of Sales & Marketing, being promoted to President and COO in 2010 and to his current position in January 2017. In addition to his role at the wholesaler, Toppin is a dedicated member of the City of Hope National Business Products Council and currently serves as Dinner Chair prior to being the 2018 Spirit of Life honouree.

Annoying office accessories A study by removals firm Kiwi Movers has shown that a quarter of staff find ‘quirky’ office furniture annoying. Listed among the most pointless office accessories are bales of hay, wall quotes, deckchairs and a throne in the reception area. Amazon steps up drone delivery Amazon announced that it would be tripling its R&D staff at its Cambridge drone research base. The UK-based development team will work on the internet giant’s drone parcel delivery system, Prime Air. Staples sells former Corporate Express building Staples has sold the former Corporate Express (CE) headquarters in Denver, Colorado, for $16.5 million. The iconic four-storey office complex and its adjacent 17.6 acres were sold to property group One Environmental Way. Staples acquired the building in 2008 when it bought rival reseller CE. Pentel strengthens UK team Writing instruments maker Pentel has bolstered its UK account management team. Michelle Somerville has been hired as B2B Channel Manager while Kyle Partridge takes on the newly created position of Key Account Manager. Xerox buys Ohio dealer Global Imaging Systems (GIS) – a Xerox subsidiary – has acquired Ohio-based print solutions dealer MT Business Technologies. The acquisition opens new market opportunities in the region, including in large metropolitan areas such as Cleveland and Columbus.

US dealer group Office Partners has signed a marketing agreement with a major buying group specialising in the jan/san, foodservice and other facilities supplies categories. Office Partners CEO Jim Hebert confirmed that a contract had been signed with The United Group (TUG) just ahead of TUG’s annual conference in Nashville, Tennesse. TUG is a member-owned purchasing organisation with more than 500 independent jan/san, foodservice, safety products and industrial packaging supplies dealers across the US. Office Partners’ dealers now have access to the direct-pricing arrangements of more than 200 TUG-preferred jan/san vendors, a development that Hebert called “a real change” from the current situation and something that will help Office Partners dealers be more competitive in the product category. The arrangement could be expanded to other categories beyond jan/san – foodservice, for example – while some of TUG’s members have expressed interest in working with Office Partners on the office products side, so it could develop into a two-way partnership.

BEST IN APP Expensify is an automated expense reporting app where users can scan and upload business receipts. It will code and report claims before auto-submitting them for approval. Money is delivered back into the employee’s bank account the next day. For more information on Expensify, please visit www. expensify.com.

Good start to 2017 for EPIC Business Essentials The EPIC Business Essentials national and regional account sales organisation announced record results for the first quarter of 2017. The joint venture between US dealer groups Independent Stationers (IS) and TriMega has seen growth in major categories versus the same period last year, with sales up more than 10% across its four reporting areas: commercial; state and local government and education; federal; and healthcare. Federal was the best-performing area, growing in excess of 30%. In addition, with the recent announcement by the US General Services Administration (GSA) that its Schedule 75 programme will not be reopened for the foreseeable future, the three GSA programmes being offered to EPIC Business Essentials-participating dealers will no doubt continue to be a source of interest and growth. Two of the contracts are via the GSA’s FSSI/ OS3 (Federal Strategic Sourcing Initiative Office Supplies 3) programme, with the other contract being a traditional Schedule 75 agreement held by the joint venture, which was recently renewed until the end of 2022.

June 2017

Static Control buys ink maker Print components manufacturer Static Control has acquired Ink Technologies. All ink formulations produced by Ink Technologies will now be manufactured at Static Control’s North Carolina headquarters.

Office Partners signs agreement with leading jan/san group

NEWS

IN BRIEF

The store key to Office Depot’s future New Office Depot CEO Gerry Smith expects the reseller’s 1,400-strong store network to be at the heart of the company’s growth strategy The future sustainability of retail in general, let alone in the office supplies segment specifically, has been called into question in recent times. However, Office Depot CEO Gerry Smith sees Depot’s stores and the ability to deliver an integrated purchasing experience as key differentiators to compete against the pure online players. This is a change to previous assumptions that Office Depot would continue to shut stores as its retail unit suffers from seemingly constant sales declines, and follow the path taken by Staples of a B2B delivery-focused business. But Smith believes that Depot’s stores will play a pivotal role in the company’s future and be a key part of its supply chain footprint as it ramps up initiatives such as buy online/pick up in store and ship from store. To illustrate his point, he revealed that the buy online/pick up in store programme grew by around 40% year on year in the first quarter. Even though Depot has been closing stores, Smith said a couple of times during its earnings conference call (on 9 May) that he disliked walking away from profitable revenue streams, and that the company was evaluating its retail closure strategy. At the same time, Depot continues to expand its smaller ‘store of the future’ (SOTF) model, with 30 SOTF now up and running, and a further 16 expected to be added in the second quarter. These extra stores will enable Depot to better evaluate the success of the SOTF format, although initial results are already showing what the company described as an “attractive” sales lift.

EXPANDING SERVICES Other initiatives include the expansion of the TUL private label brand beyond writing instruments and into categories such as notebooks and organisers; the introduction of an own brand of height-adjustable desks; and the roll-out of wide-format printing capabilities to the entire store network (it has been previously available on a regional basis).

Depot continues to expand its smaller ‘store of the future’ model This last point is one of a number of services that Depot will expand or introduce in the coming months, said Smith. He didn’t go into specifics, but he hinted at partnerships with third parties and offerings which appealed to different customer groups – consumer, small businesses and enterprise. That’s been done before, of course. Over the years, it seems we have reported on numerous retail-based initiatives such as in-store shredding and recycling, postal and shipping services, co-working spaces, device recharging stations, tech and mobile phone repair, etc. It will be interesting to see what Office Depot comes up with that is able to return the retail network to sustainable growth. A FIRST PERSPECTIVE ‘Growth’ was a word that Smith used often during the conference call, and you could sense his energy and enthusiasm about the task at hand at Office Depot. In fact, his optimism was refreshing and he has clearly been busy visiting stores, customers, vendors and other stakeholders during his first 60 days in charge. A strategy that we have covered before in OPI – either in print or at various events – is the ability to differentiate in the marketplace, especially against the likes of – you’ve guessed it – Amazon. And you can’t argue that having more than 1,400 stores dotted throughout the US doesn’t set Depot apart from the pure e-commerce players. Omnichannel is something that Staples mooted a few years ago, only to settle last year on its B2B delivery focus. Let’s see how much impetus the arrival of Smith gives to Office Depot’s omnichannel strategy in what are still very challenging Gerry Smith market conditions.

June 2017

MEMBER FOCUS Depot’s comparable retail sales in Q1 were -5%, largely as a result of fewer people visiting the stores, so increasing store traffic will be an important focus area. Smith outlined a few areas where Depot would be looking to increase visitor numbers. These include running more themed events at stores. In March, Depot held a ‘Slime Day’ at its stores which attracted 15,000 participants to the two-hour session and a further 50,000 viewers on Facebook Live.

While Smith admitted that events such as these would not make or break the company, he pointed to the greater use of social media and being able to react quickly to trends. He said that during the first quarter, Office Depot sold more glue (the Slime Day had been held in partnership with vendor Elmer’s) than it had during the entire year of 2016, so there is clearly potential to generate some excitement around retail.

NEWS

Analysis:

NEWS

BIRD FEED @Digirank When a lone lost sock becomes an puntastic opportunity! #officelife #bristol

AOPD wins public agency contract @HelenHsuPsyD #officelife There’s a huge #white rabbit offering a #bluepill or #redpill #FridayFeeling you can’t make this stuff up!

Dealer network American Office Products Distributors (AOPD) has been re-awarded a government purchasing cooperative contract. AOPD first won the national office supplies and services contract with National Cooperative Purchasing Alliance (NCPA) back in 2012. The NCPA works with 90,000 or so public agencies across the US to reduce the cost of goods and services through cooperative purchasing contracts.

Steve Harrop becomes new Advantia CEO

@nickjjoy Makes me laugh every time. A timely revisit of the Alien 3 stapler! #AlienCovenant

Australia anti-dumping measures lauded Follow us on Twitter @opinews

ISSA Canada now a reality

Worldwide cleaning industry association ISSA has joined forces with the Canadian Sanitation Supply Association (CSSA) to form ISSA Canada. After more than a year in the making, all ISSA Canada members now have access to the full member benefits, including expanded educational opportunities, market exposure, networking opportunities, business tools and data, and other industry information.

The Australian federal government is to impose tariffs on cheap foreign paper as part of an anti-dumping crackdown, echoing similar measures by authorities in the US and Europe. The duties will affect uncoated paper imported from China, Indonesia, Thailand and Brazil, which the government believes is priced below fair market value. The decision follows a finding by the Anti-Dumping Commission that Australia’s paper industry had experienced loss of sales, price suppression and declining profits due to foreign copy paper being imported at less than cost price. The region’s sole office paper manufacturer Australian Paper welcomed the move. Paper industry consultants EMGE said the move was justified and necessary for the survival of the country’s remaining paper mills.

UK OP veteran Steve Harrop has been appointed CEO of dealer group Advantia. Harrop returned to the industry earlier this year after a brief hiatus, taking up the role of COO at Accessory Bits. Back in June 2016, he stepped down as Managing Director of dealer group Office Friendly, where he had spent nearly two decades. For the full interview with Harrop, visit opi.net.

June 2017 13

BIG INTERVIEW

RUNNING

clockwork LIKE

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t’s been ten years since OPI’s Heike Dieckmann interviewed Peter Basci, then CEO of Swiss reseller iba. When Basci sold iba – created by his father Ilo in 1939 – to Swiss giant Migros in 2010 as part of his succession plan, then Marketing Director Christa Furter stepped up to the plate and became his successor. Under Furter’s leadership the company has gone from strength to strength, increasing in revenues from CHF55 million ($55 million) to over CHF90 million. In the original interview with Basci, the focus was predominantly on European reseller alliance EOSA where Basci was Chairman and which went through a particularly tumultuous period at that time. EOSA is certainly mentioned in the following pages, but the emphasis this time round is very much on Furter’s achievement at the reseller – it recently won one of the two Reseller of the Year trophies at the European Office Products Awards (EOPA) in Amsterdam – and her broader position in the vast Migros stable.

OPI: First up Christa, congratulations on winning the Reseller of the Year award at this year’s EOPA evening in March. You certainly seemed surprised as well as thrilled about the win. Christa Furter: I was! It’s a fantastic recognition for all the staff at iba for their hard work and provides great motivation to continue to do well. I also see it as a big ‘thank you’ to our customers and business partners – without them we wouldn’t have won. From my own personal point of view, winning this award reminds me of the values and core USPs of iba and of the responsibility I have to lead this company. Of course, it’s also a great marketing opportunity for us – customers want to deal with successful

companies, so it’s a fantastic communication and marketing tool for us. OPI: We first met when I came to Berne ten years ago to interview Peter Basci. But our readers might not be as familiar with you or indeed iba. Could you give a bit of background please? CF: Sure. Before I joined iba I worked in several French mail order businesses for 17 years, first for Damart (thermal undergarments) in purchasing, then cosmetics firm Yves Rocher in marketing and lastly fashion retailer La Redoute where I was in charge of the complete start-up of the company in Austria where I was born and lived at the time. I moved to Switzerland for personal reasons in 2004 and began working in a traditional Swiss mail order company for a short time. Through a colleague there I met Peter Basci from iba in 2005 and that’s how my iba and office supplies career started. Initially, I worked for the OP reseller as a consultant to help Peter grow the business. At the time, he was evaluating whether he should employ somebody

BIG INTERVIEW Christa Furter

full time in a consolidated purchasing, sales and marketing role at iba. He offered me that job in October 2005 and I became Marketing Manager in charge of the company’s commercial direction with all the touchpoints that this entails, such as marketing, sales, e-commerce and purchasing. OPI: Half a decade later you became CEO when Peter Basci sold iba to Migros and retired. CF: Exactly. Peter sold the company in June 2010 to Migros and with his recommendation and Migros’ confidence in me, I became CEO. Another five years on, in 2015, Stéphane Willa – who at the time was my boss and CEO of multichannel company Office World – left and I became Group CEO of both companies.

When we were sold, Migros asked us – and by that I also mean Office World – to come up with a strategy to substantially increase revenues. Iba stood at about CHF55 million at the time. The decision was to develop more service offerings. Specifically, in addition to providing a complete one-stop shop of office supplies and many of the adjacent segments that we always hear about, we now provide consultancy services on furniture projects, for example, as well as consultancy and logistics for corporate printed materials. We also

June 2017

OPI: Please tell me a bit about iba today. How has the company changed since Migros bought it? CF: The most notable change is that we’re increasingly becoming a service and solutions provider, as opposed to just being a transactional, products-oriented business.

We’re increasingly becoming a service and solutions provider, as opposed to just being a transactional, products-oriented business

OPI: Let’s cover some facts and figures of iba and Office World, such as sales and staff numbers. CF: In terms of revenues, it’s 50/50, approximately CHF90 million for each company. Staff-wise, we have about 200 people at iba and 250 at Office World. The retail network at Office World comprises 24 stores. OPI: I presume iba and Office World are competitors in some sense? CF: Yes, they are to some extent, especially for small customer accounts. But each company has its own standalone customer target groups: Office World focuses on the B2C and SOHO customer while iba predominantly targets medium and large companies. But we’re also complementing each other. Office World is a retail business and stocks ranges for the B2C customer that iba doesn’t – arts and crafts, for example, or school bags, technology accessories, and computer and printer hardware. Iba, meanwhile, is strongly focused on traditional office supplies and commodity products like paper, as well as consumables such as ink and toner.

new e-procurement solution for our bigger customers since March. The interest we’ve had so far has been very encouraging. OPI: Is the same true for Office World, ie a big push for content marketing and a focus on e-commerce? CF: It is. On the e-commerce front we’re doing well and are growing. We’ve also been increasing our social media activities at Office World since the beginning of the year. And I’m particularly proud of the work carried out and the results achieved in the area of product content and email marketing.

[The service business] is definitely a significant business generator and now accounts for about 25% of our revenues OPI: Let’s go back to the solution and services part of your offering at iba. What percentage of your overall revenues now come from the services as opposed to transactional part of the business? In other words, is the service business a value-add, nice to have, or a real revenue generator? CF: It’s definitely a significant business generator and now accounts for about 25% of our revenues. Importantly also, the service part of the business is growing faster than the transactional business. Perhaps the main benefit is that the combination of product and service allows us to attract customers in two ways. We have large customers, for example, that

June 2017

OPI: What’s your core strategy at iba now? CF: There are several strands to our strategy. Number one is to develop the solutions business that I referred to already, while at the same time maintaining a strong focus on small and medium customer accounts. Number two is to develop our e-commerce offering and expertise. We are in the process of creating our new web shop. We’ve also recently gone live with our social media strategy, having tested it for the past few months with Facebook and LinkedIn activities. In terms of product content, we are implementing a new product information management system whereby we aim to have really good technical as well as content product data. We’ve been working on this project for the past 18 months and we’re this year approaching the end – it’s a big milestone for us. In the context of our one-stop shopping approach and e-commerce strategy, we’ve also been offering a

BIG INTERVIEW Christa Furter

bought a dealer that specialises in managed print services called Tramondi Büro in 2012 and currently offer service contracts for the print fleets of mostly our medium and larger customer base. In terms of logistics, we have expanded our range of services to large customers with complete outsourcing processes whereby we can service them from a separate warehouse and with fully-digitised business processes, including individualised e-shops, for example. Some of the cooperatives within Migros are our core customers for these activities. The needs of this type of customer are quite different from the small to medium-sized companies where we deliver small parcels from our HQ warehouse in Bolligen. Overall, we have our strategic guidelines, of course, and we’re working closely together with the management teams in Migros in terms of harmonising and executing those guidelines. But in principle Migros supports very strong entrepreneurship in all its subsidiaries – it’s a cooperative – and we’re very much encouraged to keep our culture and be autonomous. So on the face of it, there’s no real difference to what you saw here at iba ten years ago.

Christa Furter BIG INTERVIEW use our corporate printing service. But they also know that we have the logistics in place to supply them with all their product needs. The combination of the two is great as it creates both loyalty among existing customers while also driving new customer acquisition.

Part of the iba team with the Reseller of the Year award, won at this year’s European Office Products Awards ceremony in Amsterdam in March

OPI: What is the core customer base at iba? CF: The majority of our customers are small to medium-sized companies which is very reflective of the Swiss market. Yes, there are the big corporate banks and other organisations, but the bulk of businesses fall in the small and medium-sized spectrum. OPI: I guess the demands of your customers vary considerably depending on their size? CF: There are certainly priorities and levels of importance. For the bigger customers, logistics are important, as are procurement processes. Simply put, the bigger the customer, the more of a system and process question it becomes.

The majority of our customers are small to medium-sized companies which is very reflective of the Swiss market

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Smaller customers really value the personal consultancy services we provide and the customisation options available – online and otherwise – as well as the one-stop shop aspect with a wide assortment. Fantastic customer service is very important for our clients. I have three members of staff, for example, whose sole purpose it is to source products for clientele that we don’t have in stock, or alternatively individualised products.

OPI: You just touched a bit on the make-up of the Swiss market. Can you elaborate on that? CF: Well, the number one player in Switzerland is Lyreco. Office World and iba combined are the number two in the market and then there’s Office Depot Viking and Staples through its cooperation with a medium

local player called Schoch Vögtli. Between us, we make up about 30-35% of the classic B2B market. The rest is mainly medium-sized, privately-held competitors and then the smaller papeterias. OPI: You said that the majority of your customers are small to medium-sized. I assume most of the big corporates are Lyreco customers? CF: Most of them are Lyreco or some are Office Depot and Staples customers. We have won a few of the big accounts and it’s an active focus point for us to attract more of these players and to position ourselves well with the bigger companies. Lyreco bought Büro Fürrer in 2005 and with that acquisition really specialised itself in big corporate accounts. We’ve only started building up our competence in this area over the past five years with all the procurement interfaces or tools that you have to be able to offer these accounts. We had a big customer event at iba in March, for example, where we presented our new procurement tool. So no, we’re not delivering to Swiss Post, for instance, but we’re becoming better at going for these types of tenders. Importantly, we now have everything in place to be able to immediately service these types of accounts from a process and logistics point of view. OPI: Elsewhere in this issue of OPI Tom Schinkel talks about Amazon as the perennial bogeyman of our industry. The e-commerce giant doesn’t have a direct presence in Switzerland, but I presume it matters that it’s in countries surrounding Switzerland. How much of a factor is that? CF: Well, it’s definitely a factor. Also, before I elaborate on that, Amazon in late April announced that it will launch Amazon Pantry in Switzerland soon. It’ll be purely a foodservice offering, but I will be monitoring it very closely. From a larger Migros perspective, the company owns the leading e-business food company in Switzerland which is called Le Shop, so Amazon potentially playing in that field is a very big deal for them, but they are well prepared. I’m also keeping an eye on what’s happening with Amazon Business in Germany. But going back to your question, yes I’m absolutely certain that some of our small customers purchase from Amazon in Germany,

BIG INTERVIEW Christa Furter

France or Italy, especially if they’re located near the border of Switzerland and may have a post box where items can be delivered to. OPI: Why do they do that? Is it price or convenience? If they deliver directly to Switzerland, delivery times are presumably longer. CF: They would be, yes. Sometimes it’s price and sometimes it’s convenience. The smaller the customer, the more likely it is they will order from Amazon. We see the same at Office World: we have quite a lot of private customers and when they’re ordering office supplies, they’re also looking for other products while they’re there. OPI: Why do you think Amazon has waited so long? CF: I can only guess that the size of the Swiss market hasn’t made it interesting enough from a strategic point of view. Also, investment in the country is expensive. And lastly, we’ve got some excellent e-commerce players here already – partly from within the Migros group – so it would be a tough proposition for Amazon from the outset. OPI: Before we finish up, let’s talk about EOSA. To start with, what is your role in the alliance now? CF: I’m one of four board members of EOSA. The alliance overall is headed by Philip Becker from Dutch member Hedera who, as you know, followed in Peter Basci’s footsteps as Chairman when Peter retired. On the board, we are in charge of proposing EOSA’s strategy to all 11 members. OPI: And what is that strategy? I know you had some member changes and added a Turkish member at the end of last year, but overall we don’t hear very much about EOSA… CF: We are putting a lot of emphasis on developing our members’ portfolio of products. That is reflected in our preferred supplier programme which now comprises over 20 vendors. And we also for the past three years have had our a-Series private label range which is performing well for members. The core remit of EOSA centres around purchasing, business development and best practice exchange. In the past few years we’ve improved the direct benefits significantly for our members due to our purchasing activities. Leaving BPGI in 2013 was an active step in our effort to do a better job with joint purchasing.

OPI: How do you see the future of EOSA? CF: I think it’s bright. We’re making great strides with our joint purchasing and our preferred supplier programme is very successful – more suppliers want to create international deals with us. For iba and Office World, EOSA is definitely a very good alliance to be part of. OPI: That brings us back to iba and Office World. Any final thoughts? CF: All I would add is that I have a great job, work with amazing people and that I believe we can be very successful.

June 2017

OPI: So you believe leaving BPGI was the right thing to do? CF: Most definitely. BPGI membership was right for EOSA for a certain period. But there was far too much direction – I’d go as far as to say far too many demands – by the vendors. Rather than helping us, it was restricting us in what we could do in the market and that’s despite the fact that EOSA was actually BPGI’s largest member. Every member of EOSA is different, in terms of product preference, in terms of e-commerce prowess, in terms of ‘typical’ customer. BPGI didn’t take any of that into consideration. Let me just say that it was a very complicated relationship and I’m glad we had the courage to step out of this network and develop our own purchasing identity!

MIGROS FACTS Migros, iba’s and Office World’s parent, is Switzerland’s biggest private employer with about 102,000 staff and total revenues of CHF27.7 billion ($27.7 billion). It is structured in the form of a cooperative and split into ten different regions. This means it’s effectively owned by a considerable percentage of the Swiss population (2 million out of a total of 8.4 million).

OPI: But from what I can see there hasn’t been much movement in terms of members since I talked to Peter ten years ago. There’s also still the very noticeable gap of membership in the UK since office2office was acquired in 2007 as well as in the French market when the membership of Fiducial didn’t work out at all. And no presence in the Nordic countries either since the departure of Paperipalvelu in 2013. CF: You are right in all of that. However, the alliance follows some membership rules, such as our members cannot be in strategic partnerships with competing globals. EOSA members now span 11 countries and have cumulative sales of €600 million ($662 million). We are more and more able to discuss and negotiate pan-European contracts with our suppliers. Another positive is that we are getting requests from companies to join the alliance, most recently – as you say – Akoffice in Turkey. With regards to the UK, we’ve had some interest from potential UK partners although there’s now more of a wait-and-see attitude because of Brexit. We’re also re-evaluating a possible new partner in France.

HOT TOPIC

In light of recent investment in business supplies companies by private equity firms, OPI investigates whether this represents a good or bad deal for the OP industry – by Michelle Sturman

here have always been investments, deals, mergers and acquisitions and money floating around the office products industry. While the 1990s and early-2000s were a frenzy of acquisitions and consolidation, the 2007 financial crisis ushered in a more subdued market. The past couple of years, however, have seen increased investment activity as industry transformation accelerates. The most notable recent deals have been the divestment of the international arms of Staples and Office Depot to private equity (PE) companies. Rumours have also been circulating around the sale of Staples’ US business, although at the time of going to print, the headlines had largely subsided again. Historically, PE involvement in the industry has revolved around OP manufacturers selling business divisions, with frequent smaller deals taking place.

But with so much current interest and Staples and Depot’s international operations now mostly under private equity ownership, the question is: what does this mean for the business supplies industry? Most industry experts that OPI spoke to were of the opinion that the level of interest and investment already shown by PE companies is a positive development. Soft-carrier non-Executive Director Peter Damman believes it is a “good thing”, adding that it shows trust in the industry that has not previously been seen as sexy or even profitable by private equity. “Why would you invest in a sector you believe is rapidly going downhill?” However, it’s no secret that certain parts of the sector are struggling, namely the traditional OP branch of the industry, which could be rich pickings for private equity firms moving forward. “Core office products continues to decline and we’ve seen the massive shift

HITTING THE HEADLINES

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Below is a quick reminder of some of the biggest and most interesting private equity and private investment deals to hit the office products landscape over the past few years.

TO MAY 2017 l Platinum Equity completed the acquisition of Staples’ business in Australia and New Zealand from Staples Inc. Cerberus Capital Management and Staples finalised the sale of a controlling interest in Staples’

European operations. Staples retains a 15% equity interest in the business, which has been separated into a privately-held company operating under the name Staples Solutions BV and consists of retail, contract, and online businesses in 17 countries l Office Depot sold off its South Korean business to private equity firm Excelsior Capital Asia. It has further reached an agreement to sell its Australia and New Zealand business OfficeMax to private equity

group Platinum. The reseller also completed the sale of its European business to the Aurelius Group for a “nominal consideration” l Greg Moore, CEO of Texas-based viscom and furniture manufacturer MooreCo completed the acquisition and recapitalisation of the company that was sold to a private equity firm in 2007 l Packaging solutions firm Sealed Air has agreed to sell its Diversey Care division and part of its Food Care arm to

global private investment firm Bain Capital 2016 Staples sold its UK retail operations to Hilco Capital for a “nominal” amount l The acquisition of print and document management giant Lexmark was led by Chinese aftermarket supplies and printing group Apex and private equity firm PAG in a $3.6 billion deal l The owner of the Autoglass car windscreen repair group took

HOT TOPIC Private Equity

in the Staples business, for example, into categories ‘beyond office supplies’,” says Eamon Kelly, Research Associate – Partner, Cleveland Research. PUTTING IT INTO PERSPECTIVE There is clearly still a lot of value in the OP industry overall and in individual businesses in particular, as no PE fund is going to win backing to provide capital for a company it doesn’t believe will produce a good return for investors. “Staples and Office Depot were the headline deals in the traditional OP markets, but there has been other activity in the addressable market. There has to be scale or potential to interest true PE investment,” says SPOT Group CEO Jeff Whiteway. And he’s someone who should know having worked under PE ownership for almost three decades. Whiteway believes that PE investment in the industry is a positive. Speaking from his own experience, private equity has enabled acquisitions in the past and will enable further consolidation in the future.

It’s not [PE companies’] goal to manage the business and they see bad management as a company’s biggest constraint However, the typical deal often has a finite timestamp, ie the length of the fund. The usual shelf life is three to four years before the business is sold on or investors see their return on investment by taking the company through an IPO. The timescale is a double-edged sword. On the one hand, it can mean asset-stripping of the business to maximise the investment within the limited timeframe. Or it often means restructuring the business in question more rapidly than could have been achieved otherwise. Either way, putting an improved company back onto the market can only be a good thing for the overall industry. “PE firms are not generally operators or interested in the finesse of creative, forward thinking. They are very focused on the performing assets and how they can supercharge those parts they can add to while peeling

a 41% stake in stationery vendor Moleskine, taking the company out of the hands of private equity l Investment firm Equistone Partners Europe took a majority stake in European managed print services provider Apogee

UK dealer group Integra which was subsequently bought back by the group’s members l French reseller JM Bruneau was acquired by Weinberg Capital Partners 2014 l UK office supply groups Vasanta and office2office (o2o) were merged following an offer for o2o by Vasanta’s private equity owner Endless l Better Capital acquired large dealer OfficeTeam and then confirmed that UK

wholesaler Spicers and OfficeTeam had entered into a transaction whereby control of Spicers was taken over by the fund which owns OfficeTeam l Escalade sold its Martin Yale print finishing business to an unnamed private equity firm. Its information security division was then acquired by Spanish investment firm PHI l Software solutions provider ECi was bought out by asset management company The Carlyle Group

June 2017

2015 l Beverages business Keurig Green Mountain was bought by investment firm JAB in a deal that valued Keurig at almost $14 billion l China-based

Suzhou Goldendgreen Technologies became the new investor in ink and toner franchise Cartridge World l Investment group Excelsior Capital Partners assumed a majority ownership interest in office furniture manufacturer Via Seating l PaperlinX agreed to a local management buyout for its Poland subsidary, backed by private equity firm Warsaw Equity Management l Investor Hemel Holdings acquired

off the ones that are underperforming or weighing them down,” explains ESG CEO Mark Newhall. Ramsdale and Company Managing Partner Doug Ramsdale agrees: “PE companies are active, engaged and demanding shareholders. It’s not their goal to manage the business and they see bad management as a company’s biggest constraint.” Whiteway adds: “Unnecessary cost and inefficiency in their invested business will be removed, but there is nothing like good old-fashioned sales growth to maximise values. Supporting a quality management team or replacing a failed one can only be good in achieving that.” Which was seemingly part of the problem with Staples and Office Depot. Many of those OPI spoke to all said the same thing: the resellers’ international divisions were left to flounder by headquarters and, by and large, didn’t have the right management in place. As one industry insider who asked not to be named commented: “I think Staples and Depot approached Europe as if it’s one country and therefore didn’t get the synergies they thought they would. They have basically been stunningly unsuccessful.” But, the insider went on to say, private equity would “provide the opportunity for reshaping the businesses to ones that are cash

Private Equity HOT TOPIC

generative and profitable which couldn’t be done within such enormous companies where most of the profits are made in the US.” As a business that had been under private equity in different guises for many years, Clover Holdings CEO Jim Cerkleski says there are clear pros and cons with such investment. When business is good, for example, management is left alone, but when it’s not, major changes happen, such as restructuring entire leadership teams. “They can just take people and whole divisions out which is obviously not only very disruptive to the company involved, but also to everyone else in the supply chain,” he adds. But private equity can also bring about a lot of positive change, some of it in unexpected ways. OPI spoke to Greg Moore of viscom and furniture manufacturer MooreCo about the recent management buyout. Moore says that the 2007 private equity investment provided the family with the exit it needed from the business, while at the same time enabling him as the new CEO to do things that had been previously unachievable as a family-run business. The company was under PE ownership for nine years – much longer than the usual fund – but this gave Moore the opportunity to learn a “tremendous amount”. He admits that it was challenging and stressful, particularly when the 2007 financial crisis hit: “These models are great as long as you can grow. Now looking back, I would still do it again because it was the best option for the prior owners, the company and its employees. But it isn’t for everyone. Unless everything is perfect, you walk away with some scars.”

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RETURN ON INVESTMENT Typically, an increase in PE investment is symptomatic of an industry in trouble, but on the flipside, the investment means that private equity companies think they can turn it around. Talking specifically about the UK OP wholesale sector, for example, one industry insider says that even though the PE firms bought the distressed assets to try and sort them out and make a profit, the market has changed faster than they expected. So what happens when private equity firms want out? Who is going to step up and buy them? There are three likely scenarios: an IPO is one option, but the preference is usually for a sale to two main types of buyers, either another PE firm or someone within the industry. All those interviewed for this article agreed that the current levels of PE investment are likely to be the catalyst for serious consolidation within the

PE POSITIVE

A report entitled Private Equity and Industry Performance reveals that industries where private equity funds have been involved in for five years grew more quickly in terms of productivity and employment. In addition, it was found that PE firms improve operations in the companies they invest in. The impact of private equity on industry performance is primarily due to the spill-over effects on other firms within the sector through competitive pressure and forcing competitors to improve their own businesses.

industry. “Taking cost out of the supply chain is essential for the industry and we should see this as a positive – proactive investors will help achieve that,” says Whiteway. “From my perspective, change is opportunity and always has been, but for those who like it the way it used to be, this will be a painful and nerve-wracking time. It’s going to be harder for smaller firms to survive long-term, there’s no doubt about it,” adds Moore. For independent dealers that may think PE is a good option to get out of the industry, ESG’s Newhall warns that it will undoubtedly be the larger, stronger dealers that get acquired first, then PE firms may work downwards. “If I were an independent, I probably wouldn’t hold out for that knock on the door just yet. I think they’d rather buy scale than build it. I would focus on strengthening the parts of my company that would be most attractive for investment, such as contract relationships, international penetration, etc. That’s what PE firms will be looking for,” he adds.

Unless everything is perfect, you walk away with some scars GOING PRIVATE Taking public companies private can also lend itself to ‘freeing’ a business to explore other avenues that might have previously been closed off. “When you’re private you have so many more options to manage the business and don’t have the public pressure of always being second-guessed,” says Cerkleski. In addition, he points out that as a public company there is so much noise around stock price and performance which runs through the public markets and media scaring consumers. It creates a vicious circle of fearmongering. “Going private allows a business to be a lot quieter which means if you do your job and service your customers properly, you’ll maintain them.” Another industry insider agrees, adding that as the industry is undergoing a large and fast seismic shift, restructuring the assets within the industry will be better in a private rather than a public forum. “Private equity in the business supplies industry is good. PE firms buy a strong business for a high price or a damaged business for a low price. Then they knock companies into shape which is something this old-fashioned and traditional industry definitely needs,” says soft-carrier’s Damman. He also points out that once those businesses under PE ownership become lean and mean, there will be more pressure on the market. “This is not a market that’s growing so market share will be taken from someone else. But I think it’s healthy pressure and this industry needs it,” he says. Cleveland Research’s Kelly warns, however, that private equity is unlikely to change the course of the industry over the long term. “Private equity firms being involved is not going to change shopping or usage behaviour by the consumer or by businesses, so it’s really only prolonging the inevitable.” For more exclusive content on this topic ,visit the June issue in the Magazine section on opi.net.

FEATURE

Recent reports suggest that the home office is dying, but is that really correct and what does the future actually hold for the dedicated home workspace? – by David Holes

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ump in a time machine and zip back 15 years and you’ll find the average person working from home with a desktop computer, printer and separate phone landline connected to a fax machine. He or she would typically be sat at a large workstation desk that could accommodate all this bulky equipment and be surrounded by several storage areas and filing cabinets. The office itself would most likely all be set up in a dedicated room or even a separate building away from normal home life. Fast-forward back to the present and, partly thanks to the prevalence of laptops and wi-fi, the home office might look quite different. Many who work remotely can now be found set up on the dining table or working from the sofa, with the TV on in the background. Others may alternatively be down their local Starbucks, keeping in touch with HQ while they sip a frappuccino. Nomadic workers today are more self-contained; a laptop may have all they need and, with paperwork diminishing, large filing and storage areas are no longer required. People are now asking themselves whether they still need a home office at all. Anecdotal evidence even suggests that some existing home offices are being repurposed into that modern equivalent of the Victorian study, the ‘man cave’. While the kids are playing video games on the living room TV, Dad’s in the ‘office’ watching football with a beer!

THE NUANCED TRUTH But is this all just apocryphal nonsense or are the days of the home office really numbered? OPI spoke to a number of home office suppliers to see if this scenario stacks up with their experiences and sales figures. Michelle Boolton, Director of Design and Workplace Strategy at Staples Business Advantage in the US, agrees that the dedicated home office space is in

decline: “This is primarily for two reasons,” she says. “Firstly, while technology has pulled us away from the office to work more from home, it’s also pushing us back out. Many home workers now need access to better technology such as telepresence and video conferencing, media labs and increased wi-fi speeds that they simply can’t access at home. As such, they’re heading out to co-working spaces such as our Staples Workbar.

While technology has pulled us away from the office to work more from home, it’s also pushing us back out “Secondly, it’s human nature to desire connection and shared purpose. And while many companies encourage their remote employees to use virtual team-building tools like Cisco Jabber or GoToMeeting, there is still nothing quite like the power of face-to-face human interaction. Consequently, corporations are requesting that some of their work-from-home employees spend more time collaborating in a shared workspace. It is there they’ll get that sense of community and the physical connection that fosters increased collaboration, camaraderie, engagement and motivation; all of which lead to an increase in thought capital for the business.” Doug Nash, President of US furniture manufacturer Iceberg Enterprises, doesn’t believe the home office is dead, but agrees that the demand for a more engaging and synergistic work environment

options are available. “This means that telecommuters often don’t take advantage of these programmes,” says Morton. “Instead, they choose to buy their own furniture that’s better quality and which complements the decor of their home. As such, we believe that quality ergonomic products such as workstations and seating represent a significant growth opportunity for home office furniture sales. Technology is another key area of major importance for a home office or mobile worker, and companies must develop rock-solid IT and security standards to protect the data of employees in their workforce who work remotely.”

Co-working spaces and more flexible work environments are on the rise because they offer a unique, energising and collaborative setting that home offices cannot Others still recognise a role for a separate home office environment and see distinct advantages in maintaining a split between work and home life. Bryon Morton, VP of Leasing for the NeoCon furniture show, explains: “While mobile technology has made it possible to work from just about anywhere, most would agree that having a dedicated place to work that’s like a real office – complete with printers, scanners and shredders – is important. It also gives remote workers the chance to ‘leave work’ at the end of the day, shutting the door of the office and returning to normal home life, which is vital for maintaining a true work/life balance. “But having a traditional office is also essential as it gives employees the opportunity to collaborate, learn from their peers and experience corporate culture first hand. The importance companies give to this is illustrated by the trend for establishing satellite offices in city centres that can also be used to attract and retain talent.”

June 2017

NO IMPACT ON SALES In Australia, Toby Watson, National Merchandise Manager at Officeworks, has not seen any negative impact on home office product sales. “We continue to see customers respond positively to the products that help fulfil their home office needs across all our core areas such as furniture, technology and general office supplies. So from our perspective the home office is still alive and well, and continuing to grow. “Having said this, we are also seeing a huge trend in people wanting to work from locations outside their home office – whether it’s in different rooms around their house, or externally at cafés, parks or in transit. Advances in technology are now making this possible, and our challenge is to continuously innovate to meet customer needs and empower them to work more flexibly.” Many corporations with a large mobile workforce will actually offer to provide staff with equipment to kit out their home offices. However, budgetary constraints often mean that only low-cost, low-quality

Workbar available in three Staples stores in Massachusetts, US

A GLIMPSE OF THE FUTURE Technology has created a ‘work from anywhere’ ethos, but it has also redefined the concept of ‘work’ and ‘employment’. There has been a sizeable shift away from the concept of working for one firm on a full-time basis and a movement towards the idea of the ‘gig economy’ – a labour market characterised by the prevalence of short-term contracts or freelance work, as opposed to permanent jobs. In the UK alone it’s estimated that five million people are already employed in this type of capacity and it’s a trend that is expected to continue. This is inevitably having an effect on the way both companies and their employees view their workspace needs. In a recent Tomorrow’s Workplace competition hosted by Staples Business Advantage, the runner-up, Jie Zhang – an architect from Cambridge, Massachusetts – presented her FoAM design range that sets out to celebrate this rapidly-growing trend towards a freelance economy. FoAM is a combination of easily-deployable inflatable ‘bubbles’ that create personal mobile offices, which can be set up essentially anywhere. The inflatables are collapsible, come equipped with digital technology and can be carried in a backpack to wherever they are required. Technology like this is truly pushing the idea of the mobile office far away from the traditional offering. The concept of a work ‘touchdown area’ is already established in many homes and seen by experts as the model many will choose to adopt going forward. This is not a defined or dedicated room, but an alcove

FEATURE Remote Working

is growing. “Co-working spaces and more flexible work environments are on the rise because they offer a unique, energising and collaborative setting that home offices cannot,” he says. “In terms of product sales we are finding that the tables we supply are actually being used more as next-generation desks because they are flexible, mobile and in some cases, height-adjustable. These tables are ending up both in home offices and the fast-growing co-working spaces as both environments change to suit today’s employee needs. So while we see co-working growing, home offices aren’t gone, they are just evolving too.”

Remote Working FEATURE or other area within the house that is equipped with the basics needed to work. Kitting it out is more about concentrating on ergonomics and suitable personalised accessories, rather than thinking about a full suite of office equipment – as such, items like fold-down or sit-to-stand desks, task lighting, monitor arms and compact desktop accessories are becoming more important. “This idea of the blended workspace is increasingly important,” says Boolton. “Results from our 2016 Workplace Index survey showed just this, with a desire for flexible furniture that can be used for multiple things by employees working from home on a more regular basis. “I see the home office continuing to trend to a home ‘desk-at-best’ arrangement. This desk will most likely double with other activities, such as also being a craft table or a blogging site. Most users simply don’t need to invest in the square footage of a purposely-designed room. With the trend towards urbanisation on the rise, especially among younger generations, space is increasingly at a premium and will play into this too.

Examples of the FoAM design range by architect Jie Zhang

“However, as with anything, these trends are certainly not the answer for all home workers. We have to approach the idea of the ‘home office of the future’ like any good designer and come up with specific solutions that can meet the needs of all types of

I see the home office continuing to trend to a home ‘desk-at-best’ arrangement individuals. That may be a touchdown area or even an inflatable mobile office, but equally it may just require a traditional home office solution with associated dedicated space, furniture and technology. We need to cater for everybody.” Read more about the furniture category and a review of this year’s NeoCon event in Chicago in the July/ August issue of OPI.

REMOTE WORKING REBOOTS CONCENTRATION A change of scene lifts flagging productivity, according to research by flexible workplace provider Regus. Remote working improves productivity levels by offering a much-needed change of scenery said its recent survey of over 20,000 business people. Over half of global employees (53%) suffering from symptoms of cabin fever find relief by varying their work environment.

In addition to improving productivity, remote working also helps 56% of people to concentrate, with a break from the usual business environment renewing focus and enabling mobile workers to get through their ‘to do’ list without interruptions. Perhaps unsurprisingly, employees who work this way spend less time commuting and have more time to

while 11% would allow them to work this way the whole time. Richard Morris, UK CEO at Regus, comments: “Traditionally, business managers have been seen as being hesitant about allowing staff to work remotely. So the fact they’re offering employees mobile working may come as a surprise. However, further motivation for directors is that remote working provides

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Flexible working practices allow companies to have a presence in different locations, whether to meet potential customers or source suppliers, with little extra expense

unwind with family at the end of the day. 58% also say working away from the office helps them stay closer to clients. Given those findings it’s encouraging to see that many managers are aware of these positive effects. Next year around a third plan to allow their teams one or two remote-working days per week,

companies with a wider reach. As a business grows, proximity to clients and prospects is indispensable, but can also be costly. Flexible working practices allow companies to have a presence in different locations, whether to meet potential customers or source suppliers, with little extra expense.”

SPOTLIGHT

BEING

GOOD isn’t always easy

Simone Hindmarch-Bye acknowledges that raising the bar on social responsibility can be challenging

t would be very easy to just write about Commercial Group’s environmental and social achievements. Like the carbon emissions we’ve eradicated through investing in a green delivery fleet or the disadvantaged people whose lives have been changed through our social enterprise. I could also tell you about the many challenges we’ve faced. The time the living wall died or when our recycling bins were contaminated and a whole batch was unrecyclable. The reality is that the most responsible path is not necessarily the easiest. But I believe that it is ultimately the best path, and one which can add immense value to a business. MAKE YOUR OWN PATH If you were following the #RBWeek online conversation during Responsible Business Week in April, you might have felt inspired by the many examples of good business practice out there. On the other hand, you might have felt it’s all a million miles away from anything your business could ever hope to achieve.

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Responsible business is a journey, not a destination. And like all journeys, it needs to start with a single step

It’s always good to look at what others are doing. But what’s realistic and appropriate for one business won’t necessarily be right for another. Responsible business is a journey, not a destination. And like all journeys, it needs to start with a single step and the direction taken will be determined by the culture, values and attitude of your business and the people in it. When my brother Arthur and I set up Commercial Group 25 years ago, our shared values shaped many of the decisions we made. As we’ve grown, our moral compass has stayed the same, but we’ve had to

deploy it differently. The processes, challenges and decisions facing a £60 million ($78 million) company are far more complex than those of a start-up. A major challenge for us was finding ways to nurture and maintain our core ethos as the business grew. We’ve learnt that a two-tier approach where ideas are harvested from the whole business, then actioned within a strategic framework can ensure responsibility is inherently progressive. And it is just as relevant to businesses starting out as those looking to take it to the next level. INVOLVE EVERYONE It’s important to create a culture that both instils and elicits a responsible outlook from employees. Most people want to feel that they are doing good, so find ways to embrace the values and attitudes of individuals across the business. For activity to become self-sustaining, decisions shouldn’t all be made at a board level and filtered down. Instead, let initiatives come from the ground up. They are far more likely to be in tune with the daily operations of the team. This will result in greater resonance, and when obstacles are encountered, people will be more motivated to overcome them. Empowering individuals to become champions of environmental or social change can be very effective. Our Green Angels programme has generated some amazing ideas that have energised the business as well as engaging and inspiring our clients and other third parties. One example is the living wall (which, incidentally, is now thriving again). PROVIDE A FRAMEWORK A major barrier to responsible business operations can be the misconception that they will involve disproportionate costs or reduce competitive edge. It’s true that some outlay could be required or that procurement decisions may need to step away from being purely cost-driven. But if business directors create a robust framework for social and

COMING SOON...

Australia

Some of our best initiatives are those that have evolved and developed from a simple idea over time

SPOTLIGHT

environmental initiatives, they should ultimately deliver a healthy return on investment. Responsible business activity needs to be aligned with corporate goals and have its own clearly-defined targets and deliverables. There must be a compelling rationale behind the decisions made to ensure the overall process is sustainable and has longevity. Goals need to be ambitious, but achievable. Some of our best initiatives are those that have evolved and developed from a simple idea over time. The solar-panelled, purpose-built bike shed and park and stride ideas were improvements upon earlier efforts. And our zero-waste achievement was the result of six years of hard work. It’s exciting, because you never know where an idea might take you. At other times, you need to follow your gut instinct and recognise when to seek new challenges or alter the course. When we set up our social enterprise initiative, Commercial Foundations, it involved a significant transition from solely focusing on environmental responsibility to actively generating tangible social value.

...OPI’s annual Green Thinking supplement which will be published this autumn. Featuring: - Vendor and reseller interviews - Legislative news - Supply chain best practice - CSR initiatives - Sustainable product category updates

As well as measuring the direct impact of initiatives, wider factors can be used as a benchmark of success. People who work in businesses with strong environmental and social credentials are typically more emotionally engaged with their organisation. These businesses tend to attract new recruits with similar values as well. This can deliver multiple benefits, as people who care about the place they work are more likely to have a positive attitude which infiltrates everything they do. Measure factors such as staff churn, the calibre of new recruits, customer loyalty and customer satisfaction and see if these improve over time. Also consider how your activity might be used to achieve differentiation from competitors. RESPONSIBILITY BREEDS SUCCESS Profitability and purpose should be two sides of the same coin. There’s nothing new about this idea. More than 100 years ago brands such as Cadbury’s and Johnson & Johnson were focusing on the well-being of their employees and wider communities. In today’s connected world we can act globally and locally. Every single action creates a ripple effect that has the potential to contribute to the greater good. So, go on, raise the bar on responsibility in your business. You’ll probably make mistakes, and it won’t always be easy. But once you’ve taken the first step, you can empower the people around you to make a positive difference to the world.

CONTACT

May 2017

Simone Hindmarch-Bye is co-founder of UK business services specialist Commercial Group. With sustainability at the heart of its business, the company has two full-time environmental specialists and was the first in the UK OP sector to introduce biofuel deliveries.

GREEN THINKING 2017

For all editorial enquiries contact: heike.dieckmann@opi.net For all advertising enquiries contact: 33 ewan.dickson@opi.net or chris.turness@opi.net

HOW TO...

The IMPORTANCE

of SUCCESSION

In the first part of our How to… guide to successful succession, Charlie Cleary explains why having a plan is important, followed by his top tips for creating one

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ave you started thinking about retirement yet – days playing golf or reading a bestseller by the pool? If you’re anything like 75% of small business owners, you don’t have a plan that is going to get you to the first tee or chapter one, let alone allow you to have comfortable years of retirement. Whether retiring later this year or 15 years from now, you need to build a succession plan. But why should I, you may ask. There are many reasons. Planning will financially benefit you as a small business owner as well as other family members; it will benefit employees with continued employment; customers with a continued source of supply and suppliers with a healthy and viable client. Most importantly, you’ve spent 40 or so years building a business, a lifestyle and a legacy. You deserve that ‘payday’ that decades of sweat-equity have earned.

WHAT IS SUCCESSION PLANNING? Succession is people sharing knowledge and following one after the other. A plan is a detailed proposal for achieving something. As a small business owner it may have dawned on you that, like taxes and death, succession is inevitable. You will be more successful in retirement or indeed your next career if you plan for the inevitable in your timeframe, select your successor or outside buyer and engage with a third party for professional guidance.

The reasons that so many business owners don’t plan for their succession is because they think it is too complex and/or takes too much time. Succession planning is not cookie-cutter but it’s also not complicated. And even though plans may change over time, the planning effort to-date is never wasted and always contributes to the result. In any succession, there is simple planning and then there is emergency planning. No one likes talking about the latter, but it’s very important to the

Don’t end up like other business owners without a plan who are forced to sell their business for less than what they could have received continued success of your business. Emergency planning is required in the event of unforeseen circumstances – a sudden illness or death of the owner of a small business, for example. Your emergency plan does not need to be extensive or complicated. It can be a one-page plan kept in the centre desk drawer. Identify who is running the company in your absence, what has to happen in the first 24 hours, first week and first month, bank contacts to get pay cheques organised, and sign-on and passwords to mission-critical programmes and email. You should also provide contact information for a key advisor that family members can reach out to for planning next steps in the event of a prolonged absence. Ideally, you’ve discussed with this outside advisor what you’d like to see happen with the business in the event that you can’t return to run it.

Start thinking about what you want to do when you retire About a year before retirement, take a two-week holiday and test-drive retirement before you actually do it. Retirement can be more difficult than you think, so it’s worth trying it out. Your son or daughter won’t want you back in the business after the official succession date and you can’t go back if you sell the business to an outsider. Identify your successor You might identify more than one person until just a few years before the transition. It could be a family member or a key manager in the organisation. Protect your wealth by making sure that your successor is qualified to successfully run the business in the future. He or she doesn’t need to run the business today, but needs to be capable of doing so when you hand it over in the time ahead. The best way to confirm that your repalcement has the leadership skills for success is to professionally assess his/her core skills through an outside organisation. Making sure you have a qualified successor is essential to protecting your wealth. Train your successor Develop your successor’s management and leadership skills through outside programmes and over time. Start the brain download process as soon as practical by including him/her in management meetings that you are running or attending. Continuing this transfer of knowledge over time will prepare him/her to run the business.

Finance succession This is the biggest hurdle for most small businesses. How can a family member or key manager come up with the money to buy the business and let you cash out? If you have ten years to plan, you can develop a compensation plan for your successor to build savings to buy the company. If you don’t have the luxury of time, you may need to provide owner financing to make the transition a reality. Regardless of your timeframe, reaching out for professional guidance on financing approaches and where money is available to a new business owner should be part of your plan. Tax planning Thinking about the tax man is a must with any transition in order to minimise the tax impact to you as the seller, and to provide adequate cash flow for the buyer to run the business. If the plan is succession to a key manager (in the US), it may be a stock purchase and being a C corporation will limit taxes to capital gains. But if your succession plan is to sell the company on the outside, it likely would be an asset purchase where S corporation or limited liability company (LLC) status would eliminate the ‘double taxation’ of a C corporation. And succession of the business to a family member might be best handled by ‘gifting’ the business and applying the ‘lifetime gift tax exemption’ to eliminate or significantly reduce the payment of taxes. Outside help from your certified public accountant (CPA) and tax planning will keep more money in your pocket.

HOW TO... Succession Planning

PUT IT ON PAPER Time will be your friend if you plan for succession well in advance of retirement. Building a plan 10-15 years ahead of exiting the business is ideal. If retirement is closer than ten years, the time is now to get started. Like Rome, you can’t build the plan in a day. Start today, but schedule time weekly over the next month to add to, edit and revise the plan. And it’s ok too if the plan changes over time, except for the transition date. Decide on the date that you plan to retire and turn over the company to your successor and stick to it. That’s what planning is all about. Here are my top components of a successful succession plan for you and your business:

Review your plan Annually review your succession plan for adjustments and to make sure that you’re on track for that retirement or transition date. That’s it! It’s not that complicated and you certainly can make the time now to get started by jotting down a few ideas on paper. Don’t end up like other business owners without a plan who are forced to sell their business for less than what they could have received if they had had a strategy. Charlie Cleary is the owner of Cleary Consulting, assisting office products dealers with succession planning, buying and selling businesses and strategic planning. With over 30 years of industry experience, he understands the challenges facing independents today and helps them build strategic plans for growth through acquisition or successful exit strategies.

June 2017 35

CATEGORY UPDATE

There’s continuing good news from the visual communications sector as vendors report strong growth and exciting technological developments – by David Holes

t’s been another excellent year for the visual communications (viscom) category. Some of the sector’s largest players are sounding particularly confident, with sales figures soaring to new heights. Reports suggest this is driven, in part, by a rapidly-developing product range that’s seen as dovetailing with the changing ways in which we are now working. “We continue to see annual double-digit growth and it’s set to maintain that pace throughout 2017,” says Beth Wright, Chief Commercial Officer at Bi-silque. “This is largely due to channel growth globally in the industrial, hospitality and education sectors, as well as new business acquisitions with pan-national and independent OP resellers in markets like Germany and the US. This strategy saw our US business increase by 48% through Q1 2017.”

The decade of the whiteboard continues, with collaboration, communication and learning happening everywhere

CHANGING TIMES As technology and social interaction have changed, so too has workspace design. Businesses have now had long-term experience of the pros and cons of open workspaces and the agile workforce, causing them to take a long, hard look at the way forward. The open office concept was originally conceived as a way to increase collaboration, transparency and equality in the office. But a recent survey of 90,000 employees by design firm Gensler concluded that, when an open office sacrifices focus for teamwork, both suffer. People who are constantly distracted from their core work grow frustrated and are therefore less likely to collaborate with their co-workers. An international Ipsos survey commissioned by furniture manufacturer Steelcase also found that 84% of staff reported their work environment did not allow them to concentrate or work without interruption. They saw this lack of privacy as one of the most important office issues that needed tackling. Balancing this desire for a flexible office space with the needs of individual employees has seen increased attention being given to the acoustic impact of hard, sound-reflective surfaces and the effect this can have in open-plan areas. For the viscom

June 2017

Fellow viscom vendor GMi Companies is equally positive. Says VP of Sales and Marketing Jim Harter: “2017 was another banner year for us. The decade of the whiteboard continues, with collaboration,

communication and learning happening everywhere. We are also finding that people want to be closer to the source of their products, so ‘Made in the USA’ is an important aspect when choosing who to work with and purchase from.”

Viscom CATEGORY UPDATE

category, this has meant the use of more bulletin board surfaces and acoustic-dampening panels to reduce noise levels within the office and mitigate the disruption this can cause. “Providing products which are mobile and have noise-cancelling properties that can deal with the challenges of the open office is one of the key office trends today,” says Wright. Some workplaces have already introduced silent areas where people can go when they want to concentrate and avoid interruptions, and this is a trend that’s expected to continue in the years to come. CONNECTION TO OTHERS Social interaction at work is important for maintaining positive morale and sustaining productivity. Without meaningful connections to other people organisations can seem anonymous. And because of the increasing mobility of the workforce and many staff members often located remotely, alternative work strategies must be crafted so that employees don’t lose their sense of belonging. Viscom products can be used to help achieve this, with video and telephone-conferencing systems specifically designed around the needs of both in-house and distributed employees. These are aimed at creating an equal sense of community for both those off-site as well as those physically present.

MATERIAL FOCUS From a design perspective viscom products are undergoing something of a sea change, driven in part by fashion trends but also by the type of environment in which they are designed to operate. Within the traditional office space quality, functionality and products with high aesthetic properties are particularly in demand. “With an increasing requirement for items that fit within the overall office decor we see an opportunity for a hybrid viscom range that integrates well with other workspace furnishings,” says Wright. “We are therefore employing novel construction methods and

Bi-silque viscom products in a healthcare setting...

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Providing products which are mobile and have noise-cancelling properties [...] is one of the key office trends today

Alongside this, on-site employees also need areas where they can work collaboratively and firms are increasingly providing dedicated immersive team spaces which give staff a place where they can share and display ideas, thoughts and ongoing work. Providing both the analogue and digital viscom tools necessary for this collaboration and information sharing is obviously vital (see ‘The visual wall’, page 39). “This key trend centred on collaborative spaces means we’re seeing an increasing interest in a broader assortment of personal decor boards, and a rise in demand for higher performance, mid-sized, dry-erase boards and presentation easels,” says Wright. Scott Bowers, Director of Product at GMi Companies, picks up on this trend: “As life continues to grow more complicated and technology advances, we’re actually finding more people value the simplicity of dry-erase boards. They are easy to use, effective, and a great way to promote collaboration. They’re still seen as a safe way for people to get their thoughts out and promote an inclusivity of ideas while verbalising and visualising different viewpoints.” Other viscom products that help promote collaboration and sharing are also expected to do well in 2017. For example, monitor arms that let people turn and show their screen to others nearby are growing more popular and tables with built-in touchscreens, which enable them to collaborate on projects in real time are also being embraced within more workplaces.

incorporating new surface substrates into product applications such as easels, wallboards and desks.” Bowers adds: “We’re reinventing traditional whiteboards and looking to create products with an architectural design element. We’re also exploring how to make glass boards dynamic so they are configurable. This will give people the flexibility to set out their space as they see fit without being tied down to a permanent layout. The days of having a single-purpose product are gone.” In industrial environments things are quite different. There is still a need for flexible writing surfaces, but vendors are seeing a greater focus on products that can combine effective communication with productivity tracking and goal setting. This is

...and in the industrial environment

TRACKING THE TECHNOLOGY Developments in telecoms such as the rise of Skype for Business are also having an effect on the viscom sector according to Alex Mackay, Technology Product Manager at UK wholesaler VOW. “It’s a vital communications package that completely eliminates

The goal of UC is to provide the solutions that integrate both synchronous and asynchronous communication so end users have easy access to all possible tools from whatever computing device they are using. However, technologically speaking, it’s advances in virtual reality (VR) that are taking viscom products to the next level. As an educational tool it offers unparalleled opportunities. School children, for example, can already use it to immerse themselves in a plethora of learning experiences and trainee surgeons are now using it to practice their profession on ‘virtual’ patients before attempting real operations. In the traditional workplace, VR will allow people to step into a virtual view that shows what a finished project will look like. For example, a visualisation of

It’s trends in [virtual, augmented and mixed reality] that are worth keeping a close eye on geographical constraints and is now seen as an essential money and time-saving tool. It also makes completing training courses and exams a lot easier. I recently completed a webinar course from the office. It would have involved a 300-mile round trip before.” And watch out for the latest marketing buzzword, Unified Communications – or UC – that promises to have an impact on the viscom sector. Put simply, UC refers to the integration of different types of communication tools that help people exchange ideas and do their jobs more effectively. Some tools, like IP telephony and instant messaging, facilitate synchronous communication in real time. Others, like email or Twitter, employ asynchronous communication where messages are picked up at a later time at a person’s convenience.

a set of floorplans could provide an idea of how a finished space will appear – something that is often difficult for the inexperienced eye to imagine. Augmented reality (AR), on the other hand, delivers the ability to show how a product or design will look in an existing space by placing a virtual product over the real world view using, for example, the camera on a smartphone or tablet. “It’s trends in VR, AR and mixed reality (MR) that are worth keeping a close eye on in my opinion,” says Mackay. “With the technology behind these products advancing rapidly and ever more cutting-edge devices being released on a regular basis, it won’t be long until the market sees the emergence of something truly astounding in the viscom sector.” (see Glossary, right)

GLOSSARY Virtual Reality (VR): To experience VR users wear something on their head – usually a set of goggles or a helmet – that creates a fully-immersive, but entirely artificial world that is separate from the ‘actual’ reality around them.

CATEGORY UPDATE Viscom

creating demand for enclosed-display structures and document-display products. Meanwhile, in areas such as healthcare where the emphasis is on wellness and improving recovery times, the trends are centred on products that incorporate antimicrobial infection control, and custom boards that can deliver effective communications to both patients and healthcare support teams.

Augmented Reality (AR): AR also requires the use of a sensor-packed wearable device, such as Google Glass, but takes the ‘real world’ view and adds digital information and/or data on top of it. Mixed Reality (MR): Sometimes also referred to as hybrid reality, MR is the merging of real and virtual worlds to produce a visual experience where physical and digital objects co-exist and interact in real time. For example, a surgeon could overlay virtual ultrasound images on a patient while performing an operation.

THE VISUAL WALL environment is changing at a rapid rate and we aim to provide catalysts in meetings and planning sessions that aid professionals in their workplace needs. “The office trend towards functional surfaces has had a positive impact on our success, particularly with architects, contractors and interior designers, but also with major corporate companies like Google and Facebook.”

Smart Projector Wallcovering by Smarter Surfaces

June 2017

Functional wallcoverings is an emerging, but fast-growing sub-category within the viscom sector. It takes the concept of traditional flipcharts, whiteboards and projector screens and turns them into collaborative walls that you can write on or project onto, effectively making use of an existing vertical surface and reducing clutter within the workspace. Smarter Surfaces is the company that developed the original Smart Wall Paint in 2009 – a one-coat whiteboard paint that turns any smooth surface into a write-on/wipe-off, dry-erase whiteboard area. Since then, the company has also introduced a blackboard paint and a range of magnetic paints and plaster that can additionally transform walls into magnetic areas. Its latest addition is the Smart Projector Wallcovering, a low-sheen, dry-erase product that turns a wall into a projection surface. Company Director Denise Doran explains the idea behind the company’s range: “Walls are usually dead. They come alive with products that reduce clutter and transform spaces into areas where employees can effectively communicate together. The workplace

CATEGORY UPDATE

GREY

Traditional office supplies are often referred to as ‘core’ OP, but is that still the correct terminology when the category has been in decline for so long? – by David Holes

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he topic of the traditional OP category draws diverse opinions. Some view the sector to be in terminal decline, while others will tell you it’s in a robust state of health. Is it possible to reconcile these polar opposites? It turns out that the truth isn’t black and white, but more nuanced by many shades of grey. A recent survey by Epson UK lends weight to the conclusion that the traditional OP market is far from dead. The data shows that even among the millennial generation of 18-24 year-olds, 73% say they still like using ‘analogue’ products such as pens and paper for thinking creatively. Additionally, 82% of British start-ups continue to use traditional office products on a daily basis, with only 1% of these saying they had gone completely digital. Simon McLoughlin, Traditional Category Director at UK wholesaler VOW, points to a sector that reflects this encouraging picture. “The traditional office products category is in good shape and the pace of change is quickening,” he says. “We are seeing simplification and consolidation in some declining sub-categories, but this is coupled with an increasing commitment to supporting and pushing innovation through.” Travel across the Atlantic to São Paulo in Brazil and you get a similarly upbeat report from Jaime Nascimento, Export Manager at traditional OP manufacturer Acrimet: “We are very well positioned in the US, UK, Europe and in all Latin American countries. Dealer participation in traditional OP sales

has grown and e-commerce sales are expanding significantly too. We’re focusing on the growing importance of winning customers at the point of purchase and adopting a blended strategy that appeals to all sales channels. We’re particularly intent on improving our in-store service and the overall customer experience.”

This market is still declining – down a further 5.4% again over the past year However, speak to Mélanie Martins, Digital Marketing Manager at CEP Office Solutions in France, and you get an entirely different impression. She portrays the sector as being locked in a continuing downward spiral: “As in previous years this market is still declining – down a further 5.4% again over the past year. We expect a similar decline in 2017, but thankfully the decrease is slow which gives us time to prepare for the transition.” A QUESTION OF TRUST A core message emerges from those companies that remain upbeat about this category. They all resolve to leverage their brand values and concentrate on themes which reinforce the narrative of being

environmentallyfriendly, high-quality products remains very strong. The larger economies in Europe as well as the US present the best opportunities for growth as these markets prefer top quality and have a real fondness for British designs.” It’s interesting that CEP’s attitude again differs quite considerably here, as it believes brands are not majorly important in the desktop accessories sector. “The most important element is offering the best value for money and, as a consequence, private label is a serious alternative,” says Martins. This general ongoing trend towards private label is reflected in many countries throughout Europe. 2016 sales data from retail research company Nielsen shows that the market share for retailer

CATEGORY UPDATE Traditional OP

suppliers of quality products that consumers value and can rely on. In Japan, manufacturer CARL is fixing its attention on producing highly-valued, innovative products that can cross over from the existing B2B office supplies market and also appeal to consumers looking for items for personal use. As the company’s Brand Manager Ada Ma explains: “Our mission is to emphasise the fact that our output represents high-quality, superior technology, reliability and products you can trust. In this sector you have to captivate and inspire people and provide them with the items that help them work, learn and live comfortably.” The result is a new line of hole punches – called Mr Punch – that features an alumite alloy plating and a double-lever mechanism which reduces the effort required to punch holes. The product has just been awarded a Red Dot design award for 2017. The company has also launched a number of storage and dividing products as it looks to move out of the office and into the home organisation category. The focus on trust and loyalty is equally central to Acrimet’s ethos. “Our brand is well known for delivering high-quality products, backed up by a strong customer service reputation and an excellent

Acrimet’s range of desktop products (above and below)

We’ve deliberately stepped back from the private label market where product quality has been driven ever lower sales team,” says Nascimento. “Acrimet is now 45 years old and customers have grown up with our brand and continue to have a lot of faith in the quality of our products. This, coupled with the company’s consistent investment in product innovation and improvement, gives us a distinct advantage over the competition that is constantly forced to play catch-up.”

CONSUMER ENGAGEMENT Marketing traditional OP products to a younger, more tech-savvy and digitally-aware audience is uppermost on the minds of some people OPI spoke to. Rapesco believes that it’s leading the way with its direct consumer engagement programmes via Facebook,

June 2017

PACKING A PUNCH Playing to its strengths is also the strategy of Rapesco in the UK. While recognising that demand for traditional OP has been falling, Group Trading Director Ken Trenberth is sanguine about the sector as a whole and remains positive about the company’s prospects. “Rapesco is bucking the trend,” he says. “We’re continually improving and adding to our range and demand remains buoyant. We’ve launched over 150 new stapling and punching products over the past 12 months and nearly all our products come with a 15-year, no-quibble guarantee which is clearly marked on the packaging and advertising – this helps customers identify that Rapesco is a brand that can be relied on. “We’ve deliberately stepped back from the private label market where product quality has been driven ever lower in an effort to chase a reduced price point. Consumers are now becoming wise to this and are looking for quality, design-driven, sustainable products and that’s what we give them.” He adds: “Our new Soft White ECO range is a first to market and is proving to be a huge success both in the UK and across the world where demand for

brands increased in 13 of the 20 countries it tracks. In France, volume share has climbed over 35%, in Germany it’s now over 40%, whereas it’s reached a record-breaking 46% in the UK. Countries in Eastern Europe, Scandinavia and the Mediterranean region also all posted market share gains. But while traditional OP sales are declining overall, Martins refers to several other growth opportunities that manufacturers can tap into and CEP has done exactly that. She says: ”We have enlarged our range to encompass hygiene, reception and breakroom products, for example. We also see opportunities in new technologies, such as Qi wireless charging and LED lamps.”

Traditional OP CATEGORY UPDATE

things. And while the term ‘stationery’ has seen something of a renaissance in the public’s mind, the industry perhaps hasn’t embraced that positivity. Personally, I think the whole channel needs a greater level of support, with activities that give better backing to brands and trade-up programmes.” Overall, it seems this is a sector that’s a long way from breathing its last and that, despite difficulties, still has much to offer. The final word goes to Trenberth who sums it up succinctly: “We can’t hide from the fact that this market is tough, but this strengthens our resolve even further to keep on with innovating and designing new products and finding new customers and markets to sell them to.”

Twitter and Instagram. It also has its own YouTube channel that’s currently hosting over 230 videos. “This has all been hugely successful at targeting consumers of all types,” says Trenberth. “The younger generation consumer is particularly keen to participate in our digital media competitions, with many sharing our messaging around the world. Product data, content, imagery and video are all available for any market and reseller, with multiple language translations ready and waiting for partners to use.” CEP is taking a different approach to getting its product message across in this digitally-connected age. “What we have started to do is to answer comments posted on the Amazon website,” says Martins. “This gives consumers a professional and positive image of our company that we hope they’ll remember when they next come to make a purchase.” CATEGORY IMAGE There’s a sense that the traditional OP category has been ‘talked down’ over recent years and is suffering from a certain negativity and an incorrect perception that it’s dull and boring. But you only have to look at events like The Stationery Show (see below) or indeed some trendy and fashionable retail outlets such as Smiggle or Moleskine to realise that there are two sides to the coin. “It’s really important how we label and brand this category,” explains VOW’s McLoughlin. “The terms we use such as ‘traditional’ or ‘core’, and even ‘office products’ are pretty uninspiring ways to describe

Rapesco’s Soft White ECO stapler

THUMBS UP FOR THE STATIONERY SHOW

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This year’s London Stationery Show, held from 25-26 April, saw a record turnout of industry representatives flock to the Business Design Centre. A number of overseas brands came to display their wares too, giving the event an international vibe. And despite Brexit looming ever larger, it clearly hadn’t deterred some companies travelling from as far afield as Turkey, Singapore and India. Judging by the feedback that OPI received, the future of

the sector seems an optimistic and exciting one. And there was plenty of opportunity to get involved with checking out an array of gadgets and hi-tech products, including 3D printing pens and quirky new takes on traditional stationery. Of course, the UK launch of Amazon Business in early April was the talk of the town for most exhibitors, but few seemed fazed, heartened by the sheer number of visitors and the interest from trade buyers.

The second and final day of the event was capped off by the Stationery Awards which this year received over 400 entries. Part of the overall awards, the prestigious Judges’ Choice Award went to two companies, independent publisher Abrams & Chronicle for “successfully raising the profile of its stationery offer”, and illustrator Laura Stoddart for “offering something fresh and new to the market”. For the first time, the Stationery Show is heading to

Manchester this autumn. After several successful years in London, event owner Ocean Media Exhibitions is launching a new stationery trade event to serve the North of England. It’s billed as a specialist writing and paper products show that will focus on design-led, fashionable items. It will take place over two days on 31 October and 1 November at Old Trafford in the heart of the city and is timed to coincide with buyers selecting ranges for the New Year.

EVENT

ABC PREVIEW

COLLABORATE –

to be successful

verything in the business supplies industry today centres around change. Whether you talk about evolution, revolution or indeed complete transformation, only those independent dealers that keep their eye firmly on the prize – the customer – will ultimately succeed, against Amazon, Staples, Office Depot and all the other large players that have deeper pockets and more resources. But no matter how good the individuals in those dealerships are, they can’t do it alone. The answer is to COLLABORATE. This is precisely the theme of this year’s Advantage Business Conference (ABC), organised by US wholesaler SP Richards (SPR) and held from 12-16 July at the Orlando Marriott World Center in Florida. It’s a topic that two members of the SPR team – new President/CEO Rick Toppin and EVP of Operations Jim O’Brien – and Paul Donahue, President/CEO of the wholesaler’s parent company Genuine Parts Company, are acutely aware of. They will be taking to the stage the morning after the night before (the welcome party!) to give their view on collaboration within the channel as a whole.

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GET INVOLVED Listening, learning and networking are three of the cornerstones of every ABC and this year is no different. Whether delegates want to find out about how to create a better value proposition in their sales approach, take their prospecting to a new and better level, devise an exit strategy, or up their understanding of and expertise in digital marketing and e-content, the two-day seminar schedule provides ample opportunity to get involved.

A considerable amount of content – and this is back by popular demand from last year – is also dedicated to two specific product tracks: the Furniture track and the Facilities, Breakroom and Safety (FBS) track. These tracks are run by SPR teams who, in presentations and panel discussions, offer much-needed information and advice on how to maximise the opportunities in these categories. Says O’Brien: “There’s one trend that is clearly evolving – the growth and share gain that is available to the independent dealer community in the FBS categories. We recognise that many dealers are not yet in a position to hire that specialist who can jump-start their efforts. However, every dealer can have someone at the ABC who takes a leadership position, gets immersed in our OnPoint Training and takes that message back to the rest of the team.”

BROWSE THE EXPO Before the seminar schedule kicks off on 14 July, ABC attendees can browse the aisles of the Business Solutions Expo the day before to find out what’s new and innovative in the business supplies sector and what their customers might be looking for. Judging by the entries received and the shortlisted products for this year’s North American Office Products Awards (NAOPA), the scope for dealers is certainly getting ever broader. (Find out more about this year’s NAOPA shortlist and how to get involved on page 46). Every ABC always offers plenty of relaxation and sightseeing opportunities

ABC OVERVIEW 12 JULY • Networking Reception 13 JULY • General Session • NAOPA – Vendor Awards • Business Solutions Expo 14 JULY • Keynote Speaker • Seminar Sessions 15 JULY • Seminar Sessions • Gala Dinner/ Entertainment • NAOPA – Dealer Awards

EVENT

NAOPA

NAOPA PREVIEW

countdown NAOPA SHORTLIST BEST PRODUCT – CORE BUSINESS PRODUCT • 3M – Post-it Dry Erase Sheets • ACCO Brands – Quartet Glass Dry-Erase Desktop Computer Pad • ACCO Brands – Quartet Glass Dry-Erase Desktop Easel • MMF Industries – Wheelchair Accessible Payment Terminal Mount • Westcott – Hot Glue Pen BEST PRODUCT – TECHNOLOGY • Brother International Corporation – Brother QL-820NWB Label Printer • HSM of America – HSM SECURIO P36i Shredder • Plantronics – Voyager Focus UC Stereo Bluetooth Headset • Victor Technology – DC450 Electric Dual Monitor Sit-Stand Desk Converter • Victor Technology – Sharp EL-1901 Paperless Printing Calculator BEST PRODUCT – FACILITIES, BREAKROOM AND SAFETY • Cascades PRO – Cascades PRO Signature Antibacterial Towels • Fellowes Brands – AeraMax Professional AM II Air Purifier • HSM of America – HSM ProfiPack 425 Multi-Layer Cardboard Converter/ Perforator • Satco Products – LED HID-Replacement Lamp • Weiman – Goo Gone Coffee Maker Cleaner

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BEST PRODUCT – FURNITURE • Fellowes Brands – Lotus Sit-Stand Workstation • Ghent (A GMi Company) – Aria Low-Profile Glassboards • Lorell – Black Glass Conference Table • Safco Products – Adapt Configurable Space Dividers • Safco Products – Kick Balance Board

PRODUCT INNOVATION OF THE YEAR • Fellowes – Lotus Sit-Stand Workstation • GOJO Industries – PURELL Surface Spray • Kensington – VeriMark Fingerprint Key • MMF Industries – Wheelchair Accessible Payment Terminal Mount • Safco Products – Focal Pivot Seat

ver the past eight years, the North American Office Products Awards (NAOPA) have become a not-to-be-missed feature in the US business supplies sector’s calendar. This year’s NAOPA will again be hosted during SP Richards’ (SPR) annual Advantage Business Conference (ABC) which takes place at the fabulous Orlando Marriott World Center in Florida from 12-16 July (for a Preview of the ABC, see page 44). Each year, a wide range of products in several categories are highlighted for their innovativeness as well as for their potential or existing success in generating revenue streams for the US independent reseller channel.

It’s [...] important to recognise all the new talent coming into our sector – they will be the movers and shakers of the future And the 2017 awards finalists are no different. Whittled down from a record number of entries and nominations, the NAOPA judging panel this year selected a shortlist (see left) that perfectly reflects the fast-changing nature of the business supplies sector. It’s also highly indicative of some of the trends in our industry, such as workplace well-being, security issues and the demand for convenient, design-oriented and customised products. As in previous years, the NAOPA are spilt into two parts – the vendor and the dealer awards. The

OUTSTANDING PERSONALITIES While the products highlighted in the vendor awards are the bread and butter of our industry, it’s people who sell that bread and butter. This is where the dealer awards come in. They single out and recognise the outstanding personalities in our sector, the ones that ‘make things happen’. In additional to the Professional of the Year and the coveted Industry Achievement awards, this year sees the return of the Young Executive of the Year award – first introduced in 2016 – testifying to the growing importance of involving and nurturing the younger generation in the sector in order to guarantee its continued relevance and success. As OPI Director and NAOPA organiser Janet Bell says: “We have had some outstanding dealer award winners in the past, people who have made phenomenal contributions to their companies and the industry at large. But it’s also important to recognise all the new talent coming into our sector – they will be the movers and shakers of the future.” All award winners will be announced during the ABC, the vendor awards on Expo day (13 July) and the dealer awards during the always eagerly-anticipated last night gala dinner (15 July).

Which is your FAVOURITE? Make your voice heard and help select the winner of this year’s People’s Choice award

EVENT NAOPA 2017

product-related vendor awards will be selected from five categories in the aforementioned shortlist. US readers of OPI and delegates of SPR’s ABC event in Orlando will also have the chance to vote for their own favourite product in the People’s Choice, a very popular award that was first introduced in 2012 and has seen some interesting winners over the years.

Pick your favourite and text the unique code (on pages 48-51) to 650 600 9016 For more details on all shortlisted products and voting information, please visit www.opi.net/naopa2017

June 2017 47

NAOPA 2017 EVENT

3M – POST-IT DRY ERASE SHEETS These pre-cut, dry-erase sheets are a versatile solution that can be used on a variety of different types of vertical and horizontal surfaces, including desktops, tables and doors. They are particularly suitable for the education sector where collaboration and versatility are so important.

CODE:

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147506

147504

BROTHER INTERNATIONAL CORPORATION – BROTHER QL-820NWB LABEL PRINTER An ultra-flexible office category label printer that lets users print colours over the entire label. It offers multiple connectivity options such as Bluetooth wireless technology, Ethernet and wireless interfaces.

ACCO BRANDS – QUARTET GLASS DRY-ERASE DESKTOP COMPUTER PAD A glass surface, dry-erase computer pad that is ideal for capturing quick ideas and keeping track of daily tasks. The notepad design sits neatly on a desktop for CODE: 147505 easy access.

CODE:

ACCO BRANDS – QUARTET GLASS DRY-ERASE DESKTOP EASEL A glass surface, dry-erase easel in a convenient design that fits neatly on a desktop. The easel can stand upright for easy reading, but can also be collapsed to comfortably write notes and reminders.

CODE:

147554

CODE:

147553

CASCADES PRO – CASCADES PRO SIGNATURE ANTIBACTERIAL TOWELS A simple and effective way to reduce bacterial contamination and transmission. When drying hands with these antibacterial paper towels, water releases the active ingredient benzalkonium chloride onto the user’s hands, eliminating almost 100% of residual bacteria.

FELLOWES BRANDS – AERAMAX PROFESSIONAL AM II AIR PURIFIER This is an air purifier for comparatively small shared spaces such as washrooms/restrooms, exam rooms and offices. It features a four-stage filtration system for handling common indoor air quality problems.

CODE:

147556

Text the unique code to 650 600 9016

GHENT (A GMI COMPANY) – ARIA LOW-PROFILE GLASSBOARDS These glassboards achieve the look of floating glass and an unobstructed writing surface as a result of no visible hanging hardware. They are available in eight standard colours as well as non-magnetic and magnetic glass. CODE:

147557

CODE:

147558

GOJO INDUSTRIES – PURELL SURFACE SPRAY Formulated specifically for food-contact areas, this surface spray kills a vast number of germs, including norovirus and E.coli, in 30 seconds, with no harsh fumes and no need for gloves, safety equipment or subsequent handwashing.

HSM OF AMERICA – HSM PROFIPACK 425 MULTI-LAYER CARDBOARD CONVERTER/ PERFORATOR This is a powerful device that perforates and bolsters up several layers of used cardboard into packaging material. It is particularly useful in all shipping and CODE: warehousing 147559 environments.

HSM OF AMERICA – HSM SECURIO P36I SHREDDER This shredder has an innovative IntelligentDrive motor and operating concept and incorporates a touchscreen display. This shredder is ideal for a work group of up to 15 people.

EVENT NAOPA 2017

FELLOWES BRANDS – LOTUS SIT-STAND WORKSTATION A sit-stand workstation that uses patent-pending Smooth Lift Technology which keeps workstations stable and makes changing positions effortless. Includes 22 different height CODE: settings. 147555

CODE:

147560

June 2017 49

NAOPA 2017 EVENT

KENSINGTON – VERIMARK FINGERPRINT KEY Engineered to provide simple, biometric authentication, the VeriMark Fingerprint Key protects against unauthorised access CODE: 147561 on compromised devices while offering best-in-class cyber security for today’s cloud-based world.

LORELL – BLACK GLASS CONFERENCE TABLE The durable, one-inch thick tempered black glass writable surface on this table is ideal for collaboration and interactive meetings, and combines functionality with timeless good looks.

CODE:

SAFCO PRODUCTS – ADAPT CONFIGURABLE SPACE DIVIDERS This collection of space dividers allow users to create endless possibilities in any space. Lightweight and easily movable, these panels are a cost-efficient CODE: alternative to permanent 147565 walls or panel systems.

CODE:

147562

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MMF INDUSTRIES – WHEELCHAIR ACCESSIBLE PAYMENT TERMINAL MOUNT This wheelchair-accessible mount for payment terminals has a patent-pending, adaptable arm that extends from a stationary position above a standard checkout counter height to a height below the counter to allow easy payment options for wheelchair users.

147564

PLANTRONICS – VOYAGER FOCUS UC STEREO BLUETOOTH HEADSET Particularly suitable for noisy work environments, keep the focus on your (phone) conversation with this noise-cancelling UC stereo Bluetooth headset.

CODE:

147563

SAFCO PRODUCTS – KICK BALANCE BOARD This balance board is designed to encourage low-intensity movements to help keep users more active throughout their workday. The board pairs well with any standing or sit-to-stand table and desk.

CODE:

147566

Text the unique code to 650 600 9016

CODE:

147567 SAFCO PRODUCTS – FOCAL PIVOT SEAT This ‘seat’ offers users a stand assist while they are using a standing or sit-to-stand desk. They can lean or perch, and the Tri-flex seat and rounded base are created to support the body where it needs it the most while simultaneously allowing maximum movement.

SATCO PRODUCTS – LED HID-REPLACEMENT LAMP These LED lamps have a patent-pending design that allows for the light to be directed specifically where it is needed. They replace incandescent, compact-fluorescent as well as high-intensity discharge bulbs. Energy-efficient and available in several Kelvin temperatures.

WEIMAN – GOO GONE COFFEE MAKER CLEANER An odourless, biodegradable coffee maker cleaner that safely removes machine-clogging mineral and lime deposit build-up and the bitter coffee oils often left behind in machines. Perfect for cleaning espresso machines, automatic drip and single-serve coffee makers. CODE: 147571

CODE:

VICTOR TECHNOLOGY – DC450 ELECTRIC DUAL MONITOR SIT-STAND DESK CONVERTER The DC450 transforms any sit-down desk into a sitting or stand-up desk. The electric motor design allows easy custom-height adjustment with the push of a button.

CODE:

147569

WESTCOTT – HOT GLUE PEN This new hot glue pen features nozzle changes from blue to red indicating when the pen is hot and ready for use. It also has a top-mounted finger trigger for controlled glue dispensing and a non-stick tip for easy clean-up.

EVENT NAOPA 2017

CODE:

147568

147570

VICTOR TECHNOLOGY – SHARP EL-1901 PAPERLESS PRINTING CALCULATOR A paperless printing calculator that is perfect for those who need the power of a printing calculator with the functionality of a desktop calculator. It features a 12-digit display with a 5-line scrolling LCD tilt display and is whisper-quiet. CODE:

147572

June 2017 51

5 MINUTES WITH...

Steffie Verbeek CAREER Q&A

What’s your life philosophy? In the end, everything will work out for the best. What’s your most prized possession? I’d prefer not to refer to them as ‘possessions’, but my two children are the most important ‘things’ in the world to me. Your favourite gadget? My phone. It’s used as a diary, navigation tool, digital photo frame, connection to the world and much more. It’s even capable of making phone calls! Early bird or night owl? Definitely an early bird. Describe yourself in one sentence. An open and spontaneous person who loves to laugh every day. What’s your guilty pleasure? Shopping… online or offline. Optimist or pessimist? Optimist: there are no problems, just challenges. And for every challenge there is a solution. Your favourite place to visit in the Netherlands and why? That really depends on the goal of the trip. For shopping I love to visit ‘s-Hertogenbosch (southern Netherlands), but for a day of leisure, the Efteling theme park in Kaatsheuvel is perfect. And for a short holiday I like Texel, also called the ‘Ibiza’ of the Netherlands.

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What secret skill do you possess? Manipulation. I don’t know if you can really call it a skill, but it is useful sometimes.

What do you do in your spare time? Shopping goes without saying, but also having a lot of fun with my children, friends and family, as well as cooking and doing different kinds of voluntary work. What word do you use the most? A Dutch word – dus. It translates into ‘therefore’. What would you be a patron saint of? Something to do with voluntary work. I am the chairman of an organisation that organises activity weeks for children. I also do other voluntary work. What are you particularly good at? I think I’m good at explaining information in a way that people can understand. That’s the goal of marketing. What makes you happy? Being with friends and family. Favourite author? US novelist David Baldacci.

Describe your current job. SOFEA Marketing and Communication Specialist. In this role I am responsible for all the marketing activities around the SOFEA rating system for sustainable office products. Because of the ‘go live’ date at the end of 2017, there is a lot of work to do in the reseller, manufacturer and customer communities to create awareness around SOFEA. If you could change one thing about the industry, what would it be? I would like to see more sustainable office products and make customers aware of their environmental impact.

If you weren’t doing your present job, what would you like to be doing? I really love organising events. While this is part of my current job already, I would also like to plan things such as big fairs or festivals. Your best piece of advice to someone who has just joined the OP industry? Take your time to explore this complex market. The best moment in your career? There’s no particular moment. Instead, there are a lot of different ones, most involving the people I was working with at the time which made them special.

FINAL WORD

De-risk

YOUR BUSINESS

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ith Staples and Office Depot shedding large chunks of their global operations, last year was a tipping point for an industry that is changing fast. Business valuations have dropped down to less than 20% of revenues and market conditions are far from ideal right now. Numerous reasons can be given for this condition. First of all is everyone’s favourite bogeyman – Amazon. Another oft-repeated reason is that the digital age has reduced the demand for OP in those offices that have embraced digital technologies in all aspects of their work processes. All of this would make a strong case if it weren’t for the fact that some companies in this industry appear to be thriving like never before. Taking a closer look at the entire population of mid-market companies, a pattern emerges that divides these firms into two groups. One group is comprised of the ‘sales-centric’ firms where everything is driven by sales, sales and more sales. On the other side of the spectrum are the ‘business model-centric’ companies, meaning firms that define more narrowly what kind of sales they want and which then engineer and implement business processes that achieve their goals. The difference in performance is stark. Most of the companies that can be labelled as sales-centric tend to generate an EBITDA that hovers around the 3% range at best, often less. By contrast, the business-model centric ones achieve EBITDA in excess of 7-8%, with some reaching double digits. What is it these business-model centric companies are doing that makes them so uniquely successful even in a mature industry? Is it sales? Is it margin? Or is it something else? After all, they’re all competing in the same market, selling the same products.

MINIMISING RISK It turns out that everything these companies do – all the major and minor innovations they introduce – can be classified under one common denominator and that is ‘minimising risk’. Consistently minimising risk is an entrepreneurial instinct that is not easily recognisable unless you dig deeply into the company’s decision-making process. But why is it so important? When it comes to determining a company’s corporate value, increasingly sophisticated buyers don’t just look at growing the top line or EBITDA, they look at ‘risk’ as the central tenet of value that drives their ‘buy’ decision. Risk, after all, translates into a certain weighted cost of capital. It is this weighted cost of capital that sets the parameters for the purchase price. De-risking the business is more sensitive to corporate

value creation than either increasing sales or improving profits. Attempts to significantly increase sales, or expand margins, without first reducing risk will likely increase risk and decrease value! FIRST LINE OF DEFENCE In the M&A world, a risk reduction programme as the first line of defence followed by subsequent strategies to increase sales and expand margins will leverage value due to a lower discount rate applied. The difference from a selling owner’s perspective can be as much as 20-50% in terms of net proceeds from the sale. So regardless of whether your goal is to sell your company or you want to hold on for future

Thomas Schinkel, M&A Adviser, Thomas Schinkel & Associates

Sophisticated buyers don’t just look at growing the top line or EBITDA, they look at ‘risk’ as the central tenet of value that drives their ‘buy’ decision generations, in today’s OP industry, de-risking your business should be your number one priority. To achieve this, it helps to migrate from the said sales-centric organisation to one that reflects more of a business-model centric culture. How do you accomplish this? It is not rocket science, but it does require a structured diagnostic process of all the relevant variables and an objective assessment of the business. Many sales-centric firms are reluctant to engage professional help to achieve this because they feel the cost is too high and it would take too long. However, a comprehensive risk assessment can be made with remarkable speed and accuracy at a budget of under $25,000 for most firms. This should be an investment worth considering. In my experience Special Issue this approach provides the foundation that allows TECHNOLOGY you to retool SOLUTIONS your business model in a systematic way and to reach the corporate value that you and your shareholders seek. Thomas Schinkel is an internationally-recognised adviser who works with medium and large businesses on strategic issues that include corporate value improvement, exit planning and growth through acquisition.

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