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Competitiveness

Business transformation and how to handle it: lessons from the front-line 

Published 10 February 2022 in Competitiveness • 8 min read

Konica Minolta is known as a printer company, but a dual transformation is underway. Sam Errigo, Chief Operating Officer at Konica Minolta Business Solutions in the US, talks to Ric Roi about the challenges of handling such a rapid change of culture. 

 

The big challenge facing Sam Errigo, Chief Operating Officer at Konica Minolta Business Solutions in the US, is the digital transformation of a powerful legacy business.  

Tokyo-headquartered Konica Minolta, formed through the merger of Konica and Minolta in 2003, built its reputation and business around being one of the world’s leading suppliers of business and industrial imaging and printing equipment, most famously its multifunction products (MFPs).  

Now Errigo’s goal for its US arm – a business with 6,500 employees and $2 billion in annual revenue – is tapping the hyper-growth possibilities of managed IT and data services to create a far bigger business based around helping its customers take costs out of their operations and generate more revenues. 

“Today, most customers would characterize Konica Minolta as a printing company with multifunction products. But we don’t want to be known as a copier company in five years,” said Errigo.  

“What we want to be known as is a consulting organization that helps other organizations tackle those things that are most critical to running their office operations – their office infrastructure, security, backup, help desk and all the data analytics that take place in their office environment.” 

 

Dual transformation 

At the heart of this strategy stands a dual transformation: adding new service offerings in the managed IT, data capture and data management sectors, while continuing to capture and grow its long-established MFP and printing devices business, then combining both elements into a holistic offering for customers.  

“Our concept is to move forward with what we call an MFP-plus-plus model,” said Errigo. “That means not only continuing with our MFP core, which is a very stable and highly profitable portion of our portfolio, but investing heavily in areas that add the most value, create longevity and build a much stronger brand.” 

Key attributes: as well as talent, new hires must be able to bring guidance to customers in a holistic manner

The transformation has the potential to be radical as more and more companies supplement or replace equipment with IT-based services. “My expectation now is that we’re moving into a hyper-growth period as our customers move from having equipment on their premises to adopting cloud-first strategies,” he said. 

Errigo also believes that giving Konica Minolta a steady stream of payments for imaging technology and data components will bring the company a higher level of predictability for its income stream – and thus the foundation for delivering a better overall customer experience. 

“We’ve invested heavily in infrastructure to serve all our markets – SMBs, the mid-market and enterprise customers – over the last 12 years, but business transformation takes time,” he said. “Whenever you tackle an initiative this large, you’re fighting inertia and the legacy of what worked in the past. You have to break that to accelerate the business. 

“That can be done with a radical break from the past or through a more evolutionary approach. We’ve opted for a systematic process of infusing talent and new capabilities to help with the transformation across all levels of the business. And to do this, we’re making sure that all new hires bring talent into the organization – technologists that can provide guidance to customers in a holistic manner.  In this way, we ensure the necessary talent and capabilities are in place to both transform our core business and to create new business models and revenue streams for the future.”  

The company also provides training and education for all existing staff with a desire to make a career in Konica Minolta’s new businesses, starting with those managing its most important clients. 

“Because they are dealing with global and enterprise customers, we’re changing the top track first. It is absolutely necessary that those individuals are well educated in what we’re doing and can talk holistically about all of our offerings, not just our MFPs.  We need senior leaders that can think and manage across both transformations we have in play,” said Errigo. 

“I look for those individuals that have that ability to listen and foster change, then – most importantly – to execute that change. Those that move too slowly, they’re really not with you. They may nod their head, but only those who can act and truly start to infuse change ”
Sam Errigo

“To succeed, an individual has to be receptive to change and not let inertia get in the way. For those at the top, that means having the ability to be self-aware, and making sure they can step back, listen and really internalize then lead the change. Then you’ve got to go full speed at it – you can’t wait for things to happen. 

“I look for those individuals that have that ability to listen and foster change, then – most importantly – to execute that change. Those that move too slowly, they’re really not with you. They may nod their head, but only those who can act and truly start to infuse change will help your business grow and accelerate.” 

Infusing talent 

Transforming a business holistically calls for putting in place a whole set of new capabilities across the gamut of its technology, talent and business models. To do this, Konica Minolta has opted to combine organic internal change with acquisitions in key areas. 

“For managed IT services, we knew we didn’t have the talent pool to develop such capabilities internally – that would have taken us way too long. Instead, we chose to go outside the company and acquired the All Covered entity. We did the same thing for our intelligent information management business, acquiring several companies and bringing talent into the organization,” said Errigo. 

“We’ve done a good job at cross-pollinating – taking those acquisitions and making them part of our overall business by having members of our core business and engineering teams with high potential move into them.”  

A critical outcome of this is that all Konica Minolta’s systems and billing have been combined into a single architecture, instead of being separate standalone businesses or business units. “Our desire was to have much more collaboration between our core business and our emerging businesses. We’ll continue to focus on acquisitions for the hyper-growth areas where we don’t have expertise, then once we’ve made an acquisition, look internally for the people that can add incremental value and bring more resources into the fold.” 

 

 

I’m on the phone daily with our largest customers and our largest dealer network. You can’t sit back and rely on your team, you have to roll up your sleeves...

Triple focus 

On a personal level, Errigo’s biggest self-insights have come from focusing on a handful of key messages. “The number one thing has been the constant reinforcement of what we’re up to. Now, every single call starts with vision, strategy and our digital transformation. That has trickled down to all of my direct reports: they now start their meetings with the same three slides [showing these].” 

Those messages are then passed down to the rest of the company. “We have to make sure that every single employee, regardless of the role they play in the company, understands the strategy. They have to internalize it, then figure out based on their job function, how are they helping to reinforce that strategy, how they are helping us to think differently and drive toward the end-state vision that we continue to talk about. That would be the first thing.” 

Also vital for Errigo is that the flow of information goes two ways. “As a leader sometimes you think you have all the answers, but you have to surround yourself with a trusted team of advisors.  

Candidate ambidextrous leaders

“I treat my direct reports as peers. They’re smart people, they know this business, so sitting back and listening more before making a decision, being more open, is really important. If you can engage your management team and make them part of the solution, you’re going to have a much better chance of accelerating your digital transformation and growing the business.”  

For any company approaching or undergoing a big transformation, getting advice is a must. “A lot of companies have tried to change their business and failed. Understanding why they failed and the lessons that can be learned from their experiences is really important so you don’t make the same mistakes. 

“Surround yourself with trusted advisors, have conversations with peer groups and businesses both similar and different to yours. They can all can share insights about both success and failure that can help you make better-informed decisions.” 

To keep his finger on the pulse of the market, Errigo’s key tool is the phone. “I’m on the phone daily with our largest customers and our largest dealer network. You can’t sit back and rely on your team – you have to roll up your sleeves and hear about the major concerns in the marketplace and the opportunities being fostered by the changes that we’re seeing now. 

“I’m also on daily calls with various members of my management team and standing calls with each of them every week. There are no quarterly reviews – every single week we’re reviewing and discussing what we’re doing to strengthen our management team. That’s what it takes to stay engaged with the people who are most important to leading our business transformation.” 

Authors

Ric Roi

Richard Roi

Professor of Leadership and Organization at IMD

Ric Roi is Professor of Leadership and Organization at IMD. He is a senior business psychologist and advises boards and CEOs on matters related to board renewal, CEO succession, top team effectiveness and leadership transitions.

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