In another life, Doug Pitassi would’ve been the host of a TV game show or perhaps “Dancing with the Stars.” Relatable and genuine, self-deprecating with a touch of deadpan humor, the president and CEO of Pacific Office Automation (POA) adds a showman’s touch of personality to a leadership role that often requires a larger than life persona.
Pitassi spends more than enough time dealing with the Xs and Os for a company that has scaled the office technology dealership mountain, with sales that eclipsed $365 million for 2019. He’s earned the right to take a break and front the Beaverton, Oregon-headquartered firm’s annual sales kickoff meeting in fine style, whether it’s “parachuting” into the opening ceremony, doing his best KISS imitation or performing other popular parodies.
Don’t be fooled, however. It’s not mere entertainment; there’s method behind these presentations. There’s a high level of expectations that come with working for the largest dealer in the country. When the “Uncomfortable Choir” sang about getting out of the comfort zone at their annual business meeting earlier this year, there was a crystal-clear message to be absorbed. Status quo doesn’t carry a company to the precipice of $400 million, and there are no sacred cows. MFP sales may keep the lights on, but managed IT, telephony and other serviced-based offerings are the path forward. And at a time when COVID-19 threw a wrench into everyone’s plans, Pacific Office Automation sounded the pivot bell, sourcing personal protective equipment and temperature-reading kiosks to address the new normal clients are facing.
Full Arsenal
Founded in 1976, POA is certainly built for speed, augmented by 1,150 team members in eight states and 24 locations. The company represents virtually every major manufacturer in the industry, serving the needs of a laundry list of verticals led by health care, legal, education, government and SMB. Beyond MFPs, copiers, IT and phones, the company offers wide-format and production printers, scanners and faxes, security cameras, visual communications (video conferencing, interactive whiteboards), shipping and mailing, to name a few. Managed services (print and IT), data security and software are also a significant aspect of POA’s arsenal. The company’s “relationship wheel” ensures sales reps walk clients and prospects through the complete breadth of its offerings.
We sat down with Pitassi to learn how COVID-19 has impacted business and POA’s approach, and to get a sense of the opportunities the market will bear as the country navigates the pandemic and embarks on returning to some sense of normalcy.
How was business in 2019? What were the keys that dictated your success?
Pitassi: It’s interesting, because we had growth in every category across four different regions. Displacement is an important strategy, because we’re in an industry in which print is flat to declining. That doesn’t apply to large-format printing or high-end production, and not necessarily printers under contract. The growth has to be by retention of the client and adding more customers at a higher rate.
We had a lot of new takedowns; we added 11,000 printers under contract, which is up from the previous year. We call it relationship sales, and what we track is how many services our salespeople sell into beyond copiers and printers. Whether it’s telephony, IT services, mailing, high-end production, software-as-a-service, or security, we focus on the relationship and sell within the client. Our IT business represented about $29 million of our overall revenue. That includes unified communications, a part of our business that is growing in 2020 as well. Even though it’s a small portion of the overall revenue, it’s still very encouraging.
What sets POA apart from the competition?
Pitassi: There’s nothing really magical about POA; I wish I could say we have some secret sauce. But I think we have honor in work. We wake up early, work a full day and want to outwork our competitors. Our true competition is really growth; if we can grow, we’re winning. Our people are very prideful about that aspect. Personally, I learn a lot from other dealers and their experiences. While people may view other dealers as competition there really is a strong network of collaboration which has assisted POA immensely. That collaboration is more important than ever in light of the events occurring in 2020.
So if there’s no “secret sauce,” what catapulted POA to the top of the sales ladder?
Pitassi: Organic growth is much bigger and much healthier (than acquisition growth), in my opinion. We see what is happening in our industry, and the growing private equity. They’re growing with that money, and it enables them to grow quite quickly. At POA, we’re conservative in our approach to growth. We try to grow by winning the business inside a territory. We’ll grow by one acquisition a year and it won’t be a big company. But you need a market foundation. We’re not currently in Sacramento, San Diego, Las Vegas or Reno. There are some cities that make sense for us, so finding a dealer to acquire—with trained technicians and a local understanding of business—can provide that infrastructure. But overall, we’re much more geared toward organic growth than acquisition.
You enjoy spicing up POA’s sales kickoff meetings with memorable, out-of-the-ordinary opening performances. What was the catalyst behind it?
Pitassi: Motivating people is one part of it. But it’s important for people to feel as if they’re part of something bigger than any one person, group or market. There is always room for improvement, but I’m very excited about POA and the pure pride and loyalty surrounding what we have built. POA has created something that’s pretty cool. I want to motivate people and articulate to them continually that we’re a business that provides for our families, provides for our extended families and provides for the community. If we can be good in all aspects of that, then we absolutely matter.
It’s not about how many copiers we sell. It helps to sell copiers, but that in itself is kind of boring. Who wants to talk about copiers and printers? There’s not a lot of sizzle. It’s really important to articulate success, and do it in a way that’s a lot of fun. We like to celebrate our success and kick off our goals in fine fashion, so that everybody understands expectations. Everyone understands their role as part of a team. It’s also important to brand your culture. It defines who we are, what we do and how we do it. We have 10 culture words, including accountability, passion and trust—all terms that mean something to us.
During your sales kickoff at the start of the year, the topic of conversation was the drive toward the $400 million mark. Tell us about your business in the three-month lead-up to COVID-19, and how you’ve readjusted goal setting.
Pitassi: The kickoff meetings play a huge role in starting off the year on the right foot. We review the previous year, talk about successes, and kick off our goals for the New Year. Our 2020 goal was “Take the Leap,” to figure out how to get to the $400 million mark. The January and February run rate had us on track for that goal, but that’s not going to happen now.
In March, when the virus happened…it challenged all aspects of everyone’s personal and professional state of mind. I have a lot of sympathy for people and what they’re going through due to the pandemic, and POA is trying to be understanding and supportive. But on the other side, though, we’re working hard to maintain the business, which goes back to us providing for so many people and their families. We’ve refocused on selling during a pandemic, and we got aggressive about promotions and helped a lot of clients with refinancing their current contracts. We brought on new products that might help clients get through what could well be a prolonged ordeal. I think this new normal is going to be with us for a while. I feel strongly that companies will embrace some of the technologies that we’re selling.
Tell us a little about some of these products you’ve pivoted to, from temperature-scanning kiosks to hand sanitizer and personal protective equipment.
Pitassi: A key word we have tried to instill in our staff during the pandemic is offset, and that ties into the other products POA has pivoted to. We believe in, and want businesses to think of, POA as an all-encompassing office equipment solutions and service provider. Whether that be a copier or, in these days, the equipment and services a business will require in order to now operate under the current circumstances. With that in mind, POA has added temperature-scanning kiosks, personal protective equipment, back-to-work safety kits and additional home office solution packages.
The temperature kiosk is just one way of helping offices reduce the risk. This is relevant to all businesses when they are determining how best to welcome back their workforce safely, but it is especially relevant to the hospitality business, assisted living/nursing homes and health care facilities. We’re seeing some pretty good success right out of the gate. There are a lot of technologies that use different methods for taking a temperature. We’re not sure what direction it might go, but we’re invested in it. We have to be ready to see how the market shakes out.
We’ll also be rolling out personal, back-to-work safety kits—large, medium and small—that include many different types of PPE in them. But again, it’s all about that word, offset. Our people who were selling chargeable supplies, such as toner, are also selling gloves, disposable face masks, hand sanitizer, those types of things. Customers are appreciative that we can get them the supplies they need, and I think it could be a reorder business.
As you have facilities in eight states, each of which have various phased-in degrees of business resumption, tell us a little about your coordination initiatives and efforts to get back to some semblance of normal.
Pitassi: This is a big challenge for all of us. Health and safety always come first at POA, and there are a lot of mixed feelings about the threat of the virus. Part of the challenge we face is that there are positions in our company—technical staff, deliver drivers, warehouse—where we are supporting essential businesses. So, the thought process cannot just be about how we make our own buildings safe, but also how we protect our employees when they are visiting a customer’s location. We created an internal task force, and trained employees on the best practices and taking precaution, including producing a training video on technician safety precautions.
For employee positions that may not rely on coming into a POA office, we’ve left it up to the employee. Whether it’s a salesperson, a contract biller or an IT support desk person, all of these jobs are working from home company-wide. We have to balance two things. One, for anybody with pre-existing conditions that could put them at a higher risk, we want to work with them on their entry back into the office when it makes sense for them to return. The second part, it’s currently a personal choice for employees. That could change by market. It could be that in a few months, we will say that if you’re a sales person, we want you back in the office. But we’re not there yet, and I’m going to hold out as long as I can. As long as we’re productive, we can continue to assess the health and safety risk factor. We know that ultimate return date is a moving target. I don’t know if it’s two weeks, two months or 10 months from now, but there will be a day when most people will need to come back to work.
Considering the experiences of the past two months and the aftermath of COVID-19, what might your playbook for 2021 encompass?
Pitassi: As a dealer, you can either stay put and be a victim to what has happened because of COVID-19, or you can finally pivot to the other services, such as IT, telephony, etc. This business is 10 times the opportunity of print and copy. We’re in the infancy of the IT world, and this just forces us to get into that business at a much higher level. So, 2021 for me is going to drill down to the territory level, determine what we might have lost in services from print and copy, and seek to get it back by selling the other services.
If a portion of billing is by usage, you’re going to have a pretty big downturn. As the volume comes back, will it return to 100% of what it was in terms of print and copy, which is the core part of our business? I don’t think so. By July 1, I’m estimating a 20% downturn. It’s just a math problem. The service part, our aftermarket, is a monthly recurring number. It’s broken down into revenue and profitability. I want to drill it down to the field level, to the rep. They need to determine how much their revenues are down, and then we need to devise a six-, 12- or 18-month goal of getting back to the rep’s previous revenues. So, whatever the downturn, we need to incent our sales team to sell services.
Prior to COVID-19, as the trend of prints per machine were challenged and became flatter, we wanted to replace that revenue by offering other services. Now, COVID-19 caused (the decline) to be abrupt, so we need to be just as abrupt in pivoting to other services. I think we’ll be back fine in 2021. The scary thing is, will we have another outbreak in a bigger way, from November through January? That’s my biggest concern.
What does “getting out of your comfort zone” mean to your employees and POA?
Pitassi: It is an interesting thought process, but it’s tough to do. It’s challenging people to do the uncomfortable, and making that the habit. If I only sell to mid-sized companies, I don’t sell any big deals. Or “I only sell copiers, I don’t sell IT.” Technicians that are break/fix have to pivot to fixing computers. These are self-imposed boundaries that a person refuses to push past. In the comfort zone, fear is the first obstacle. Once you get past fear, there is the learning zone and the growth zone. Complacency is a big part of it. A lot of people are in their comfort zone because they don’t want to take the chance, they don’t have the confidence. Maybe they don’t want to be a manager or don’t think they could be one. Our “Uncomfortable Choir” did a great job of articulating that in their performance at this year’s sales kickoff.
Do you anticipate being active in the M&A landscape in the near term?
Pitassi: As mentioned earlier, POA believes in organic growth over time. COVID-19 will thrust some companies that don’t pivot and change technology into a tough spot. Frankly, they might be challenged losing the services that were paying the bills, prompting many companies to sell. I think there are going to be opportunities there, and POA will examine those closely while still adhering to our focus on organic growth.
Post-acquisition, do you rebrand companies to POA?
Pitassi: It’s all subject to the situation. Some will benefit greatly from us putting some structure in, that POA flavor. We also like decentralization and allowing companies to have autonomy. For example, in Idaho Falls, we still answer the phone as Yost, because the local community identifies with that name. So we’re open to being flexible with the branding. With some acquisitions, we insert our culture and expectations in a strong way on day one. But if something is working, there’s no reason to break it.
What do you like most about your job?
Pitassi: I like developing and mentoring hard-working people and being an ingredient in their success. It’s gratifying seeing them flourish, whether that is financially, career related or personal success and growth. It’s all about the development of people in a career and not a job. It’s a huge reward for me to see people succeed in life.
Outside of work, what do you do for fun?
Pitassi: I’m a wannabe drummer and play in a rock-and-roll band called The Denominators. We play classic rock cover songs. I’m good in my own mind, but I’m the lowest common denominator. If you put a band of really talented people around you, you can actually be pretty good. I’m having a lot of fun. I have to hire myself because sometimes we don’t get any gigs, but that’s OK. I love to play.
I have one grandson, Mason, and it’s all about him. He just had his second birthday, and it’s so fun being a grandparent. He’s the best.
