As much as she would love to wave a magic wand and make it disappear, Laura Blackmer knows the supply chain struggle confronting the industry isn’t going anywhere in the foreseeable future. That said, the recently promoted president of dealer sales for Konica Minolta Business Solutions U.S.A. (Konica Minolta)—and really, the manufacturer’s executive branch as a whole—has laid bare the company’s soul in communicating updates, projections and market variables to dealers and resellers in the hopes of mitigating the consequences of delayed product.
Konica Minolta
Business Solutions U.S.A.
Still, the OEM isn’t just expending energy putting fingers in the supply chain dike. In April, Konica Minolta hosted a Dealer Summit at its headquarters in Ramsey, New Jersey, a hybrid event that brought in more than 1,000 people on location and remotely. With the theme “Full Throttle,” the venerable manufacturer used the occasion to unleash Rev’d Up, a new dealer performance program that incents diversification and shows a path toward production and industrial print, digital transformation (DX), managed IT and the cloud. Plus, its client engagement center (CEC)—a spotlight-stealing, business-sealing showcase hub—helps encapsulate all the manufacturer has to offer.
Blackmer took some time from her tour of Konica Minolta’s leading dealer partners to offer her views on the supply chain, Konica Minolta’s quest to supercharge its resellers, and her comprehensive background with industry manufacturers and how it’s prepared her for some of the most unexpected obstacles in recent history. Tough though times may be, Blackmer believes both the manufacturer and its partners will emerge stronger, and more diversified, in their quests for growth.
Provide some insight into Konica Minolta’s financial performance during 2021. What were some of the variables that played into how the company performed?
Blackmer: As with a lot of the world, and certainly in our space, the financials were tough, which was primarily due to the incredible volume of backorders—more than I’ve ever seen in this business. It’s pretty much the same with our European affiliate. Backorders don’t produce profit; they just sit until you can fill them. The growth in our managed IT business, including procurement, was almost double. This aligns with diversifying business and looking for opportunities to grow, which is what we were preaching about during 2020 and 2021. We saw a strong performance in the managed IT space on both the direct and dealer side. Essentially, anything that didn’t touch the copier did very well. If we factor in the potential revenue we would have received had we been able to fill those backorders, we would’ve surpassed our 2019 performance. That, in itself, tells me demand is still extremely high.
We saw a real uptick in the first quarter of this calendar year, which was our Q4, in terms of people asking for contract pricing. So the order rate is strong. As a corporation, we’ve done a tremendous job in trimming down expenses. Our return on sales was as high as it’s been in the four and a half years I’ve been with the company. It was a best-of-times, worst-of-times tale; while we struggled with backorders, what we did produce yielded a strong performance in some key areas. As the product becomes more available, I’m excited for the potential because the engine we built is really tight and really able to churn out good profit.
It seems that supply chain is the new four-letter word.
Blackmer: We also had the added obstacle of having a toner situation. Looking back on it, I’m amazed it didn’t cripple us. But we managed through it and actually came out of it pretty much in the last 45 days.
What were some of the highlights for Konica Minolta during the past year?
Blackmer: Demand is still strong in dealer diversification conversations, particularly in the area of digital transformation—solutions, managed voice, managed IT services and procurement. We had more dealers sell something in that category than ever before, which led to that doubled growth. It’s not just all about the numbers, but also the fact that dealers are getting it and are able to figure out how to fit this into their business models. It brought a lot of dealers some enhanced revenue that they needed as well. We spent a lot of time last year really thinking strategically about the business. We built the Rev’d Up program, which we launched during our event in April. I’m really proud of our team and the outcome. It’s one of these programs that’s going to continue to grow and get richer from a content perspective. There’s a lot of work being done on the learning and development side to really make it a program that dealers are going to find tremendously valuable.
We managed to get through the last year relatively unharmed. Our relationship with the dealers is actually stronger than ever. Part of it’s because we stepped up; we didn’t hide in our offices and wait for the supply chain problem to blow over. All of us—Sam (Errigo), myself, Kay (Fernandez), Dino (Pagliarello)—were out on the road meeting with dealers and talking to their customers. In a sense, it was like an apology tour, but it went beyond that. We wanted them to know we’re still here, we know it’s a problem and we’re going to do everything in our power to make them well. In a relationship, when you go through some tough times together, the connections that you make are even stronger. As we eventually come out of this, our relationship with our dealers will be stronger than ever.
You assumed the role of president, dealer sales in April. How does it vary from your previous position, and can you provide insight into some of the initiatives you have planned?
Blackmer: I think it really reinforces that this role isn’t just about sales. These days, I spend a lot of time in product development. I’m working with our All Covered team and our product team on what we should bring to the dealers. Supply chain has become a huge part of my job, along with a lot of decision-making. Do we keep the product in Pomona and ship it from there? Do we move it to local warehouses? What do we lose if we do that, and what do we gain if we do that? My job is richer from that perspective. I’m talking more end to end about what we’re doing with dealers than just carrying a quota and selling that quota to the dealers. I actually like it more because it gives me more empowerment to make sometimes-hard decisions or even creative decisions about how we can do this better. In some respects, it was an evolution of what I was already doing. In the process, it took a lot of things off Sam’s plate, and he has a lot to deal with already. The timing was good because I’ve been in this role for over four years and it’s allowed me to really understand the business, Konica Minolta, and the unique things we bring to the table.
Obviously, you have a wealth of experience, dating back to your tenures with HP and Sharp. Given the vast changes in market conditions, how has your background prepared you for these challenges?
Blackmer: During my 20 years at HP, we had several products that went into what we would call severe availability. I would go through my spreadsheets and decide how many products CDW, PC Connection and Ingram Micro were getting because we were much more of a distribution model. I was already very aware of how to manage the fairness aspect; you can’t just give it all to one company. Otherwise, you’re going to make some people unhappy. It gave me a lot of experience in leadership and managing through tough times. When I was at HP, we went through 9/11, which was an incredibly difficult time to be in any kind of business, particularly in New York. And while at Sharp during the 2012-2014 period, the company’s survival was kind of an open question.
Going through some really turbulent times—not just from a P&L/balance sheet standpoint, but dealing with your people and the company’s partners, distributors and solutions providers—has been beneficial. You have to be careful about how you bring those challenges to your outside partners and how to lead your people through difficult times. It’s all about communication. We had a lot of cool virtual meetings with our leadership group and our dealer advisory council, and we also did regional events. I keep in touch with a mentor from my HP days, and we talk about the need to be predictable and transparent. That way, when things go wrong, you don’t change who you are or your approach. It’s important to be transparent about your message and not spin it. I was really lucky to have a strong management model to follow. Sam is a perfect example of transparency and being completely authentic. It’s about leadership and not losing sight of who you were when times were good. You need to be the same person at all times.
Back in the spring, Konica Minolta brought its resellers together for the hybrid Dealer Summit. What were you personally hoping to accomplish, and what’s been the feedback you’ve received?
Blackmer: I believe we’ve found a model that will work for the future. We can’t expect 1,000 people to fly somewhere every single time. But we want to make sure we can reach as broad an audience as possible, which produced this idea of a hybrid model. We brought in a satellite system truck to make sure we had zero bandwidth issues. We wanted to connect as many people remotely so they could experience the event seamlessly without any hiccups. We were really careful about transitions and making sure some presentations were recorded and some live so attendees got a good continuity experience. With hybrid events, sometimes you’re just sitting around for 20 minutes, waiting for something to happen. This one went smoothly, so my expectation is that we’re going to change the way we approach these meetings and set a new standard for how they’re held.
The hybrid approach allows you to reach as many people as possible, and we had more than 1,000 people watching online. It exceeded my expectations. We had the opportunity to share what’s probably one of the biggest areas of growth in the print market—production and industrial print. We were able to showcase the CEC, and we want dealers to really see the value in that opportunity. We can do remote sessions, bring customers in, host events. We wanted to share not just the venue, but also all the technology and what’s happening in that market from an opportunity standpoint. We also launched a new program, Rev’d Up, and we reconnected with a lot of people that we don’t necessarily see in our tours of the world. It was exhausting to fit three and a half days’ worth of content into a day and a half event, but we’re pleased with the results.
The Rev’d Up program was one of the big announcements, and it’s certainly a major undertaking for Konica Minolta. How do you see it taking shape?
Blackmer: Following the launch of Rev’d Up, we’ll be working to make sure that it’s a great program. We’ll be rolling out a lot of learning and development programs and providing the dealers with some great tools, particularly since the program is built to reward not just the standard office and production spaces. Production print for some dealers is a new category, and the same goes for DX. So we’re really developing tools to help them decide what kind of people they need, what kind of selling skills they require and what kind of industry knowledge they need to have. That will be a big focus over the next 12 months. I was talking to a dealer in Pittsburgh recently who said he really feels it’s the first innovative program he’s seen from a manufacturer, which we love to hear. This program was built based on an incredible survey we did last year. A lot of dealers really love the idea of getting into the managed IT space, but have no idea where to even begin. This program helps them step by step, covering compensation, hiring, retention and training. This is a long-term project because technology is going to continue to change, and we’ll need to be really innovative in how we deliver it.
As you alluded to earlier, Sam Errigo stressed during the conference the importance of keeping open lines of communication. Can you provide some perspective on your personal journey in reconciling this challenge?
Blackmer: We started holding monthly calls, the “availability forum,” and these are probably the toughest calls I’ve ever done. In some ways, they’re the most gratifying, and the feedback has been fantastic. We’re unbelievably honest, given the level of detail we provide. There are so many elements to this supply chain issue, including geopolitical pieces and topics you wouldn’t normally consider, such as the potential longshoremen’s strike (in California). We’re having a lot more discussions about broader topics than we might have had two years ago. It all goes back to this concept of being completely transparent about what’s going on and the effect many elements are having on us. I’m making sure our dealers have the most information possible so they can make the best decisions for their purposes.
One aspect that emerged from the Summit was the Step Together program. Can you talk about the value in building a community for female dealership leaders?
Blackmer: Anyone who’s been in this industry for a while understands the demographics are fairly skewed. But it’s changing. I came into this industry nine years ago, and having been in technology for a while, I wasn’t surprised at the demographics. Being a woman in the role that I’m in was fairly unique. I can’t tell you how many emails and calls I received from people who said it was good to see a female in a leadership role. And that provided a sense that there’s going to be a change. In my industry travels, I was seeing more and more women enter leaderships roles, whether they were second or third generation from the original founder, or they had advanced through a sales, marketing or technology role.
When I came here, I was impressed with what Kay Fernandez and her team had built around Step Forward, the Konica Minolta program designed to shine a light on some of the issues that come from the demographics heavily leaning one way. It gives everyone, not just women, the opportunity to hear speakers discuss issues ranging from time management to how to present yourself in a leadership position, and what things people should do to increase their knowledge of technology.
The genesis for Step Together came almost by accident. We were invited to an LPGA event two years ago, and as I walked the course and watched these amazing golfers, I thought we needed to be more involved with women’s sports, because we’re such a great sports engagement company. At an LPGA event last year, we asked our dealer advisory council to have each company bring a current or rising female leader. We did a number of parallel events in conjunction—workshops, a golf clinic, networking. People loved it; everyone was saying, “We need to do this more often.” So Kay and I sat down to figure out how we could share what we’d done to a broader audience.
We wanted to create a community for females that, at that point, didn’t really exist. We’re going to do live events and virtual events, but most importantly, it’s about having a community that can work with one another. Now, if someone such as Stephanie Keating of AIS has a question, she can go to Chelsey Bode at Pearson-Kelly Technology or Monica Wilmore at Virginia Business Systems. We want to provide a community like they have with the CDA or SDG peer groups. The demographics and customers are changing, so the more we can help dealers find great female talent in new places, the more viable this industry will become. I’m very excited about the possibilities.
What can we expect to see this year from Konica Minolta in terms of new product rollouts?
Blackmer: We only had one product refresh that was planned. There will be more firmware upgrades as opposed to hardware rollouts. We’re also doing more solutions upgrades. Konica Minolta has come out with an incredible number of software solutions around our Dispatcher line. There’s a lot of good software development happening both on the machines themselves as well as in our software offering. We do have a major hardware rollout on the monochrome production side that’s been bumped to January of 2023. We wanted to really focus our energy and attention on the supply chain side and make sure we could deliver a product that’s already been sold. There’s been a push for developing more products that are supply chain resistant and will be less impacted by future challenges, with consideration for how they’re manufactured and what’s in them. A lot of energy is going into that, which is wise, because honestly, I don’t think these supply chain challenges are behind us.
What are Konica Minolta’s goals for the balance of 2022?
Blackmer: Getting rid of the backorder situation is my number-one goal. I also want to get better at managing in this type of an environment, since it isn’t going to go away. If we catch up in October, I think we all have to expect that another issue could happen in the winter or next year. So many things are affecting this, so we have to be prepared to implement supply chain plans B, C and D immediately. A lot of it is making sure we’re building that resiliency. That’s a huge goal for me. The second goal is to see dealers really maximize the benefits of Rev’d Up, and growing their production business or growing DX. We’ll provide the aforementioned internal training and external learning and development to really help them. It’s a huge opportunity for us. Supply chain is going to be a part of our language for a very long time, but I want to help the dealers manage, plan and get through it, so that the next time it hits, we’re all in a much better position.
