While variously attributed to sources including the late ex-Beatle John Lennon and writer/cartoonist Allen Saunders, the phrase, “Life is what happens to us while we are making other plans” came into full view this spring. In this case, “The best-laid plans of mice and men oft go astray” might be more appropriate. Where we are currently and where we intended to be have precious little in common—both from a business and personal standpoint.
Take Toshiba America Business Solutions (Toshiba). The venerable OEM had scheduled its cornerstone LEAD conference for the first week of May. It would have allowed the company to mingle and collaborate with its reseller community, helping partners capitalize on the tools Toshiba can provide that bolster the end-users’ ability to conduct business. But COVID-19 entered the international vocabulary and ushered in an era that is quickly sculpting a new norm.
While the ways and means of doing business have experienced a pause, Toshiba has not relented in its pursuit of market excellence. The firm remains fully entrenched with client engagement; if anything, Toshiba has ratcheted up its efforts to stay abreast of reseller needs. Coming off a strong fiscal 2019, the manufacturer is striving to forge a continued path of growth or, at the very least, laying the foundation for continuous success.
We spoke with Scott Maccabe, president and CEO of Toshiba America Business Solutions and Toshiba Global Commerce Solutions, to learn how the company has reacted and pivoted during this unprecedented period in recent history, including the future of LEAD, new product unveilings and the resiliency of the Toshiba team. He offers an unflinching look at how the office dealer landscape may be impacted, and shares his views on what it will take for businesses to flourish in a post-COVID era.
How would you characterize Toshiba’s business performance in the six-month lead-up to the coronavirus outbreak? What were some of the key variables driving your results?
Maccabe: Toshiba was on pace to achieve substantial unit growth gains for our fiscal half year ending in March, with especially strong growth in our Toshiba Business Solutions (TBS) direct business and major accounts. Even with the pandemic difficulties that started in March, we ended our fiscal year 2019 up in total units. In fact, Toshiba achieved its highest market share in our history. We were also up year over year in our managed services business, with a lot of momentum in managed print and document management. Bookings were up significantly in both areas. Going into April, things started to slow down across the industry, but we still saw good bookings, had really good backlogs, high potential business and high confidence factors. Then things really started to come to a significant slowdown when businesses closed. But fiscal year 2019 was really good for us, I’m very happy to say.
With all the talk surrounding how companies have reacted in light of the outbreak, tell us a little about the people at Toshiba and how they have responded to unprecedented change being thrust upon them.
Maccabe: Talk about heroes. With everything that was going on, the Toshiba team really remained positive. We have plans in place to deal with significant issues that affect our business, primarily those that would affect us geographically—floods, tornadoes, business outages, earthquakes, things like that. After this hit, our team truly remained positive and focused, and communication was exceptional. I was very pleased with the executive team and the organization as a whole. They remained firm in their resolve to do their jobs safely and responsibly, by taking care of their health and looking after their families. We really came together as a management team and started to put our plans in place to phase our people into a work-at-home type of environment and ensure that everybody is on the same page and understood what to do. We’re an essential business, and as such, we have some employees on-site at headquarters, throughout our regional offices and our TBS locations. The rest are working from home and doing a great job—they’re staying connected using Microsoft Teams and other technologies. They’re doing a lot of training using online tools, so we’re truly keeping in touch with each other and our clients. Our functional leadership has schedules and processes for ensuring that their teams are engaged every single week and communicating appropriately. We keep them all up to speed.
From an internal business standpoint, the loss of Toshiba’s LEAD Conference cost the company much face-to-face interaction with its reseller community. What measures has the company taken to reinforce its relationship with these key partners?
Maccabe: We’ve never been disengaged, but we are significantly increasing and enhancing our engagement activities. Our sales and support staff have been in constant contact with our resellers since the start of the lockdown period. First and foremost, we’re concerned about the health and well-being of our partners and their families, as well as our employees. We have, in many cases, relationships that span generations of families. So, there are really close ties. One of the things our resellers ask for information about is the various programs available to small businesses, so we brought in an expert speaker to address that, to give insight about how they can be supported in their businesses and other COVID-19-related business subjects. We’ve also significantly stepped up the frequency of our online education classes to keep our resellers engaged, and used the time to provide a great learning experience. And, we’re focusing on the numerous ways our technologies help clients create corporate offices at home with print, scan, fax and digital solutions that ensure a smooth transition to a remote workforce. We want to help dealers and clients continue business operations with as little disruption as possible during this unprecedented time. My oldest son is a sales rep for our dealer side. He commented to me that he’s never spoken to our dealers so often, on so many occasions, on so many subjects. And we’re focusing on sales training and courses to help dealers stay more connected with clients when they can’t meet face-to-face, such as how to use social media to prospect and how to stay in touch with current and prospective customers. That’s been a beneficial derivative of this whole thing.
What are Toshiba’s tentative plans for LEAD moving forward? Could it become a virtual event?
Maccabe: We have LEAD 2021 scheduled for May 11-12, to be held at the Bellagio in Las Vegas. We sincerely hope that LEAD and other large events can continue to be held with live audiences. There’s nothing better than face-to-face interaction; it’s personal. But if not, we’ll continue to communicate with our customers as we have during this stay-at-home period. We’ll continue to hold several end-user seminars as we have in the past, and touch on topics that are important to them. But we intend to continue with LEAD and also supplement some of the things that we’ve done to some level of virtual engagement, which has been productive and shows great promise.
We’re also investing in artificial intelligence and machine learning to create service applications that can predict failures, helping dealers and our TBS direct organizations improve service delivery and profitability.
– Scott Maccabe, Toshiba
In last month’s ENX roundtable feature, you noted that production has not been impeded and 2020 products are set to roll out. Can you provide a preview of the technologies you will be unveiling?
Maccabe: We have more than enough inventory to meet our backlog and demand, so we’re not at risk from that standpoint. By year’s end, we’ll be launching the first Toshiba-developed and manufactured A4 MFPs. The two products we’ll be launching are the eSTUDIO338C and the e-STUDIO400AC. They’re color A4 products that operate at 32 and 42 pages per minute. They’re the first products that will feature our new 10.1” touchscreen panel. They have the same walkup interface as our core A3 MFP lineup, and they also support integration with third-party applications, such as PaperCut and DocuWare, as well as Elevate and other Toshiba-made applications. Recently, we released three apps that extend the value of our MFPs. Our e-BRIDGE Plus for DocuWare allows users to initiate workflows from the Toshiba MFP. Our e-BRIDGE Plus for G-Suite enables printing and scanning to and from Google G-Suite applications. And our e-CONNECT Translate allows users to scan a document from one language and translate it to one or more languages, and then print in those languages.
We’re also investing in artificial intelligence and machine learning to create service applications that can predict failures, helping dealers and our TBS direct organizations improve service delivery and profitability. You’ll see us continuing to do more with cloud-based solutions and cloud connectivity.
Recently, the company named Steven Sauer to head Toshiba Business Solutions. How have the direct sales operations been handling these business conditions, and what will be the key to garnering momentum in the second half of 2020?
Maccabe: The direct sales organization operates much like independent dealers do, and as such, they’ve had to face the same types of challenges, with business closures, restricted access to facilities and dramatic slowdowns in activity. TBS has taken all the same actions to adjust its structure to the business climate. That being said, the timing of Steven’s change was previously planned to be implemented in the April timeframe, which is our fiscal 2020-A period. Steven is just an exceptional businessman who has been with Toshiba for 16 years and was a business owner himself. Steven is a great leader as well. His oversight of the central region has made it a standout organization for the company. This business slowdown has provided Steven and his management team a window of opportunity to implement their strategic plans and enhance dramatic changes in training across the entire business. We expect they’re going to be well positioned to respond to the opportunities in the second half as businesses open and employees return to work.
With so much uncertainty surrounding the economy and consumer confidence, what can Toshiba do to ensure it is positioned to capitalize on opportunities to increase its market share?
Maccabe: While there are still many uncertainties about the return to economic normalcy, I think it’s safe to say that we’ll continually adjust to position ourselves to expand our business opportunities. Fortunately, we believe that we have the industry’s best managed print program, and we intend to continue to aggressively promote our ability to help our customers save money and improve productivity. I suspect that there is a circumstance in which there will be some degree of the population of remote employees that will continue to operate remotely. One of the enhancements of that is it positions the staff to be more in touch with our account base–even though it’s a challenge, it’s an opportunity. It helps us to focus on engaging and doing what’s necessary to support our partners. We anticipate an increase in cloud-based document management and collaboration systems, where we’ve done well, but we think that’s going to continue to grow and help us continue to expand our business.
How do you see Toshiba evolving technology- and strategy-wise over the next few years?
Maccabe: One of the outcomes of this entire pandemic has been the economic pressures on businesses in general. People are going to have to utilize technologies to work smarter. The current crisis has certainly validated our investments in cloud-based technologies. We have already executed and implemented machine learning capabilities in our platform of A3 products. We are expanding with AI in-service capabilities. In general, over the next several years, I think we’ll see more investments by everybody in cloud, with emphasis on solutions that enable secure access to infrastructure, regardless of what the location is.
While there are still many uncertainties about the return to economic normalcy, I think it’s safe to say that we’ll continually adjust to position ourselves to expand our business opportunities.
– Scott Maccabe, Toshiba
Mr. Takayuki Ikeda, president and CEO of our parent company, Toshiba Tec Corporation, retired in June. He was replaced by Mr. Hironobu Nishikori, who comes from Toshiba Corporation, where he was president of company’s cloud-based business group and services. They were primarily focused on Asia as a customer base, but they have dramatically grown and implemented a lot of capabilities and services in that space. One of the strategic initiatives has been for Toshiba Tec to expand outside of Japan, and the Americas is the largest market opportunity. Mr. Nishikori brings that discipline. We used to work together at Fujitsu when we were both in the storage industry. He has a significant depth of knowledge and experience. That telegraphs where we are committed and dedicated to taking our businesses, and our parent company is focused on retail as well as print. There are common opportunities to be able to bring technology into both of those business segments.
In your opinion, what does the future hold for the office dealership industry?
Maccabe: I talk to a lot of my dealer partners, big, small and medium, and have gotten their feedback. We try to keep our finger on the pulse. We have really tight relationships with our partnership base, and are working with them through this crisis because it’s taken a toll on many. Those that are positioned strongly, I think, will continue to prosper. The current crisis has certainly validated the fact that office dealers need to diversify their offerings. To be clear, there’s still a lot of life in print. The dealers need to be cloud-savvy as we’re adjusting, they need to understand security while continuing to shift and adjust to best meet client needs. It would stand to reason that with these economic pressures, some of the circumstances may likely result in the increase of exits for some of the dealers that weren’t as resilient with their businesses. In every industry, there’s always going to be people that operate on the edge. Even very large organizations that may have been consolidators of dealerships may find themselves already in challenging circumstances. There’s a lot of potential change for the office dealership industry going forward. Near term, they’re going to try to come out of these circumstances. In the mid-term, covering the next year and a half to two years, we’ll find some people exiting, consolidation increasing and some companies getting bigger. Partnerships are going to be critical—as they were before this circumstance—for organizations to be able to survive. You can’t be dormant, that’s for sure.
What are your goals for the second half of 2020 and what will you look to accomplish?
Maccabe: This is still very much a fluid situation. There’s a lot of speculation about what the second half of 2020 may or may not look like. One would expect that there’s some degree of pent-up demand. We don’t know what issues we may face in the second half in total, but we believe we have to be flexible and adaptive. From a general business perspective, we do believe that the vast majority of our pipelines remain strong, so we haven’t seen a fallout in those areas. We believe business is going to come back. It’s all process-oriented and timing, but first and foremost, we’re going to continue to focus on the safety and well-being of our employees and business partners. As our country begins to open, that requires us to execute a well-thought-out, preplanned, appropriate schedule and process to ensure that there’s a safe transition of our work-at-home staff back to their respective offices. Humans are social animals, so we believe that working in an office environment is a productive environment for most people. We have been well prepared and equipped, with plans and timing regionally to be able to execute that.
Our collective workforces across the nation, our dealers, our direct operations, have all been dramatically affected. As we phase into some normality of business, we’re going to have to adjust our personnel needs to meet the business activity. It will be a significant activity for Toshiba and our dealer partners. This will be disruptive. It will require us to work closely in partnership so that we can get our collective businesses back on a path of growth. As we look toward the end of 2020, we’ve communicated to our partners that they can rely on us and that we’re committed to them. We’re going to do everything we can to be flexible and to provide supplemental services to help them as they phase up in their recovery. Beyond that, we’re going to remain flexible and adaptive, and continue to do what we’ve always done, which is to be a steady, predictable partner. As our crystal ball becomes a little clearer, we’ll continue to adjust.
