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DPI Client Interview
Gretag Professional Imaging

	Rak Kumar, CEO

            Judo experts have always known that size doesn't matter. In fact with the right strategy, small size can be used as an advantage as business competitors vie for supremacy. As this story illustrates, a smaller combatant may be able to use its agility and strategic focus as weapons so powerful that it can topple and defeat larger competitors.

            An undaunted commitment to this principle enabled a small, specialized manufacturer of printers to leverage its Driving Force and Areas of Excellence so effectively that it not only defeated two much larger competitors, but also ran them completely out of business. Says Rak Kumar, CEO of Gretag Professional Imaging, "The only way you can beat the bigger players is by clearly understanding the sandbox you're playing in and changing the game in order to dominate that sandbox. You need to understand the whole concept of Driving Force and the one or two capabilities you must excel at -- your Areas of Excellence -- because you have limited resources and you need to know where to use those resources to strengthen these Areas of Excellence. That's the only way to win."

            And win they have, as dedication to this simple credo has enabled Kumar's company to grow from $25 million in sales to $130 million in four years, with 30% annual growth predicted going forward. This, despite the fact that they were playing in a sandbox dominated by much larger companies -- divisions of Xerox and Lockheed -- that dwarfed them in size.

            Here's how it happened, as Kumar recounts this David and Goliath (actually David and Goliath and Goliath's bigger brother) tale.

            "Back in 1996 we were a small company, called Raster Graphics, growing at about 25% a year. We make what we call printers for wide-format imaging. That means we make printers for displays on the side of a bus or a Macy's window or a billboard," Kumar explains. "But when you have only about $25 million in revenue, you have limited resources, and we had very large companies as competitors. We were competing with Calcomp, a $400 million Lockheed division, and a division of Xerox that was at about $200 million at that time. Our big challenge was, as a small business with a good growth rate and good technology, what should we focus on? What should our strategy be over the next three to five years to continue to build the business at that rate and not get killed by giants such as the Xeroxes and the Lockheeds of the world?"

            To assist the management team in making these crucial decisions, they enlisted the help of DPI and its Strategic Thinking Process. The DPI approach appealed to them because of its participatory nature.

            "We looked at all the traditional BCG-type models, and we felt that there are two approaches to developing strategy. One approach is getting outside people to tell you what to do. At the root of the other approach, as Mike Robert always says, is the concept that the people who know your business best are the people on your own team and that they should create their own strategy. So, working with DPI was really an attempt on our part to get some help, and get the whole team to sit down together and come up with a game plan that made sense for our size of company and the environment we're living in," says Kumar.

            "We felt that the DPI Process was excellent in the sense that it was really a process that forced us to answer our own questions. And since we know the industry, the issues and the challenges, we felt this was the best way for us to define our strategy, one that we would own. When it's your peoples' own strategy, execution becomes that much easier because they developed it, they believe in it and they have ownership of it. And it's been the same strategy since '96. We have not changed it in the slightest, even when we went through a very bad hiccup in 1998 because of a technology failure. A technology provided to us by one of our partners failed in the field. We went through a disaster, but we never took our eyes off the ball. To this day, the whole management team still feels that what kept us going was this incredible focus on that single sentence that DPI helped us develop called the Business Concept -- Be the leader in wide-format imaging systems and only that. We continue to live by that every day."

            The process provided the forum that the company's management needed in order to get agreement on that concise Business Concept. In the course of the sessions it quickly became clear that the selection of a Driving Force and its related Areas of Excellence would be the platform from which their future would spring. As in most companies there were, at the beginning of the sessions, a variety of opinions among the key players as to the right Driving Force.

            Says Kumar, "Some people said we should be Customer Class-driven, a one-stop solutions provider. We should offer everything a customer needs -- the printer, the software, the ink, the paper. Others said, 'Let's just stay focused on one area we know well and be Technology-driven.' Still others said, 'Let's just build printers' -- a Product-driven strategy. We had always talked about these three components of the business without knowing that there is a way to look at them through a concept that DPI calls 'Driving Force.' Before we went through the process and began to sort out these things," says Kumar, "we had people who would say, 'Look we sell to this customer, why don't we develop some complementary products and sell them at the same time?' The difficulty with this concept is that when you're small, with only $25 million in business, your marketing people can only focus on so many things. They really only have the resources to focus on your own products. We began to realize, through the logic of the process, that when they go out and say to the customer, 'Let me show you some paper,' or 'Let me show you some laminators,' or 'Let me show you some PCs,' -- we really don't add any value from these additional activities. They don't make us any stronger in our sandbox. In fact they make us weaker because they dilute our limited resources. Also, we had to look at our technology, which is very good. Were we successful because we were a technology company? Or, were we successful because we understood the market the best?"

            In order to fully envision the implications of each choice, the process enabled the work teams to create pictures of where each Driving Force might take the company in the future.

            As Kumar Explains, "We played out all three scenarios, Product, Technology and User/Customer Class. It was very clear from the moment we began these discussions that a Customer Class Driving Force, for a $25 million company trying to fulfill all the needs of a commercial printer, was not a viable strategy. We came to the same conclusion regarding the Technology-driven strategy. We had a technology that had been successful only in a very small niche area, and we couldn't see how we could expand it into other applications. The discussion that really convinced us more than anything else was that over the previous six years, we had seen exceptional growth every time we launched a new wide-format printer product. Then we'd get to a certain stage, and after a period of about six months we'd have a dry spell. We would then introduce the next product and we'd go through another dramatic surge. Everybody kind of looked at each other and said, 'Boy, this is so simple isn't it?' We are so well known as a wide-format printer product company. We just need to focus on the Area of Excellence called Product Development. The whole team must make sure that the product doesn't slip. We must do everything possible to nurture, support, and help the R&D Team, make them part of the strategy process, and explain how critical they are for our business and our ability to compete with the Xeroxes and the Lockheeds.

            "We concluded that if we did those things we could be the best at Product Development. We could beat them because they move slowly, they're bigger companies, have other products to worry about and have different Driving Forces than ours. Plus, they don't have our focus. So it became clear to everyone that we should be Product-driven. We make a specific category of wide-format printers and that's it.

            "Our strategy was simple, yet it gave enormous focus, and we have never deviated from that. We defined our Driving Force to be Product -- 'wide-format printers.' We then defined our Areas of Excellence as Product Development and Sales & Service. That focus allowed us to introduce a series of new printers at a pace that the other guys could not keep up with. It was that simple concept that has set us on the path to supremacy in our sandbox."

            Like the judo expert, they proceeded to use their R&D expertise and agility to move faster than their larger competitors. They began to work their Critical Issues, nurturing the Product Development Area of Excellence, and developed a stream of innovative new products, supporting them with the most knowledgeable sales and marketing force in the sandbox.

            Gradually, this absolute dedication to refining and enhancing these Areas of Excellence amplified their "supremacy gap" and took its toll on their competitors. Incredibly, a couple of years later, both Xerox's and Lockheed's wide-format printer divisions were out of business in spite of healthy growth in demand for this particular class of printer.

            "I believe these competitors, because they were so much bigger first of all, couldn't focus on any one thing. Without as clear a concept as we created through the DPI Process, we overtook them in Product Development. And we never faced tough competition from that day forward because their products were always from the last generation of technology. In the end, they just gave up.

            "One of them, Calcomp, in our view, wasn't clear on whether they were a Product company or a Technology company. They got into developing some futuristic technology and spent a hundred million dollars on R&D, but never commercialized it. Instead of staying focused on developing printers, they developed something like an integrated circuit, a chip that goes into the printer. It was that lack of focus, in my mind anyway, that finally destroyed their business.

            "Xerox actually pulled out of the business completely," Kumar continues. "A $200 million division is gone. Calcomp Lockheed no longer exists either; it went bankrupt. So it is really very fulfilling to see that these huge corporations with all their incredible resources and market presence, but without a focused and well-articulated strategy, could fumble and just disappear," Kumar says.

            Meanwhile, Raster Graphics was purchased by Gretag, a Swiss imaging company. The wide-format group continues to operate autonomously and is on a rapid growth curve. But the world doesn't stand still and let a successful company like this own a profitable, growing segment unchallenged. Again, the DPI Process has provided the tools Gretag's people needed to review and revisit their sandbox, and identify potential new competitors they might encounter. This annual review has provided a basis for detecting emerging trends that might give rise to new products -- and new competitors -- and more opportunities to enhance its supremacy of the wide-format printer sandbox.