Do you remember photocopiers? Those huge monsters that used to roar away at the back office for hours on end? Some unfortunate temp had to stand next to them all day looking for paper jams, papers not running straight and the occasional unwarranted attention of a male member of staff.
Well, they have evolved – the machines have anyway, and probably the temps, though I can’t vouch for the male members of staff. Photocopiers are now known as multifunctional devices, or MFDs, and you don’t have to stand next to them any more. With a simple click of your mouse they can automatically scan, print, and copy, not to mention email.
There might even be some that will make you a mug of tea. But what does all that mean for the poor souls who have to service and sell such machinery? With all those changes, there must surely have been any number of supposedly innovative new models that ended up going nowhere, new technology that was rapidly superceded – the fax machine, for example – and much in the way of legacy devices and systems.
In fact, the office itself has gone through enormous changes in the past 20 years, with more and more people choosing to view, edit and send their documents entirely through the ether, possibly making the traditional photocopier redundant.
So back in 1991, would you have wanted to be starting out launching a new photocopier re-seller company, just as all manner of new digital and desktop inventions were coming in? Wouldn’t it be rather like setting out to market a brand new style of horse-drawn carriage in Detroit in 1908, determined to pay no attention to what that irascible fellow Henry Ford was doing just down the road? Well, no.
1991 was the year when Adrian Fitzpatrick and five other colleagues – some of whose experience in the office supplies business went even further back to the purple ink of the Banda machine - decided to branch out on their own.
And 19 years later, although three of those directors have retired, the company they founded, the Arena Group, is still going strong, selling and servicing MFDs made by Toshiba, Ricoh, and most recently Kyocera. It produces software for some of these machines too. All Cunard liners, for example, run with Arena Group software on board. And Toshiba has just appointed the company to be a direct reseller for some of its bolt-on products. The company has also been through some considerable expansion.
Since 1999, it has made six acquisitions of traditional MFD resellers, and most recently has also acquired a document management business. Fitzpatrick, 45, says the company deliberately didn’t run away from the changes the industry has seen.
“More complex machines were seen as an opportunity,” he says. “We were stealing a march on an awful lot of traditional photocopy companies which were staffed with people in their 50s who didn’t know whether to invest in these new machines.” And there hasn’t even been a retrenchment in these leaner times, either. Fitzpatrick says there was only one thing the £12m company put on hold throughout the whole of last year.
That was a plan to refurbish the remaining three wings of the four-wing headquarters building in Wakefield they bought from Marshalls Mono – one satisfied client – in 1996. Other than that, nothing. No job cuts, office closures, or anything.
“We have kept everyone on,” he says, “and haven’t made any cost efficiencies. The business did take a slight downturn, but we thought it would be completely the wrong message that the first time things get a little bit sticky, we ditch people. In any case, we didn’t make a loss, we just made less profit.” Fitzpatrick puts this success in battling through even slight adversity partly down to the open culture he and his directors have generated within the company.
With 126 staff, the company still finds time to produce a monthly newsletter which keeps staff regularly informed about how well they are doing.
“The only thing we don’t share is how much we paid for an acquisition and how much the directors took home,” he says. There is an “open book” on staff training needs.
“As long as it has a business benefit, we agree to pay. I can’t recall ever turning down a request for training.” And the company has a profit share percentage pay out scheme, which it has recently widened.
“Originally, we did it on length of service,” says Fitzpatrick, “but we did recognise that someone might come in brand new, would do a great job, but because it was only for a year would only get a tenth of what someone else might get. I really believe that you should treat your staff well. The most important thing is that we as directors say thank you. I try to say good night to everybody when I leave.”
It’s perhaps not surprising that Arena was voted Best Company to Work For in Yorkshire in 2006, which also happened to be the year of its biggest ever profit.
But Fitzpatrick doesn’t rest on the recognition of one national award. Other anecdotal evidence, he says, suggests his staff are content in what they do.
“In 2006, we had said that if we break through a certain profit barrier we would all have a company night out. We did, so we went to Bibis, then to see Grease, then a nightclub. And we got a 96% uptake on a Friday night.
It’s not just a one-off, either. In the last three years we have had just short of 99% attendance.” Much of this way of thinking stems back to what Fitzpatrick calls the “seminal year” of 2002, when the company had been facing some staffing issues, particularly around the quality of new hires.
For the annual conference that year they booked Steve McDermott, a motivational speaker. But McDermott ended up doing a lot more for the company than just giving them all a slap on the back.
“We had been struggling to plan that conference,” says Fitzpatrick, “mainly because we had just been through an acquisition. Steve came to meet us, and said, ‘what do you want the staff to do when they go away again?’ And that got us thinking. We did have problems with people. We weren’t paying peanuts to get monkeys, but we were filling gaps quickly.
“So we said we needed to identify the real quality people in the organisation and make them stay. As Steve said, we needed to get people on the bus and get them to the right seat.
“We also had to be more careful about who we brought into the business. In some instances that meant paying more, but that was the right thing to do.”
It wasn’t, however, all just a matter of people. Fitzpatrick and his co-directors were quick to realise which markets they needed to be in to give the company a secure foundation. So they very quickly moved away from just supplying the small businesses where they started, to increasingly serving the public sector.
The Yorkshire Purchasing Organisation and Barnsley Council, for whom Arena was the sole supplier of MFDs, were early successes. The company is now focusing particularly on the education sector. It makes up around 60% says.
But a need to be more aware of public sector clients’ needs to keep costs down is partly what induced the company to become a Kyocera dealer last November.
“Their machines have long-life technology with a ceramic drum,” he says. “They are very efficient to run. Dealing in them also sends out a very strong green message. That sits alongside our ISO 4001 accreditation. But we are not looking to replace one model with another, because that doesn’t add value to our clients, it just means churn. We are looking to make people more efficient.” And that is the other change the company has made over the years. Fitzpatrick hates the term ‘management consultancy’.
“It’s a dirty word,” he says, but the company has been moving more into consulting with clients on how they manage their printing and photocopying needs. That’s where the money can really be made. It was the need to improve the company’s ability to do this that led to the acquisition of a Chesterfield-based document management business - the most recent acquisition the company made - in 2006. Taking that business on means the company now has the capacity to help its clients, however they choose to deal with their documents – either by printing them or storing them electronically. It won’t be seen as a consultancy that in the end just wants to sell photocopiers.
“We can be a trusted adviser with document management,” says Fitzpatrick. “We are able to look at our clients from a truly objective perspective.” Moving into a relatively new area like that has, however, involved some culture change.
“We have probably only grown that business by about 30 per cent so far,” he says. “It has taken us a while to get into it. The business was also very product-focused. Out of 20-something employees, there was just one salesperson. We wanted to change that approach and bring sales people on board.” Such ambitions have been somewhat thwarted by a reluctance in some of what Arena was hoping would be key sectors for them to target – in particular professional services – to go wholly down the road of storing everything electronically.
“When we spoke, the company was in the process of arranging a seminar for legal firms at no less a venue than Anthony’s in Leeds – tempting the lawyers of Leeds with fine food in order to try and sell them the virtues of document management.
“There is still a real nervousness among them about destroying the original,” he says.
“Yet it’s a massive cost to them.” There has also, of course, been the downturn.
“There have been good opportunities which could have had a return on investments as low as six months,” he says, “but people are still holding off. I am sure that will come.”
The new business will, apart from anything else, allow the company to spread its footprint wider without having to open new offices. For the moment, the physical side of the business is based largely in the North of England. And Fitzpatrick wants it to stay that way.
“We don’t even go into the Midlands, although we do do Cheshire. It’s the work/life balance,” says the father of three.
“I am very rarely away from home.” Another addition Fitzpatrick and his fellow directors are keen to ward off is any potential private equity investor.
“I know private equity is changing,” he says, “but it still wouldn’t sit with us. No matter what share they take, private equity still has a significant say in how a business is run. And I am not very good at taking orders.
“In fact, if we can’t afford to do it and the banks won’t support us – which has not happened yet – we might look at it again and say, ‘why are we doing it?’ We have 120 families to feed and we have a responsibility to them.” It’s a chastening message for these times, but a sure sign of why this business is likely to be around for a good while yet.
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