Mike Marusic makes no bones about it. The humble MFP was, is and always will be the key launching pad from which opportunities can abound for office technology dealerships. But that’s not to say the president and CEO of Sharp Imaging and Information Company of America (SIICA) isn’t excited about the possibilities that the future office brings to the tech table.
Just having completed his first year at the helm of SIICA, Marusic is flush with double-digit growth in placements among dealers. This spring, he led a successful four-city roadshow that enabled him to take the pulse of what dealers were seeing with Sharp, and the feedback was sterling. And now, with the national dealer meetings on tap in October, the OEM is set to unveil its smart office platform of hardware and software designed to take information sharing within the office to another level.
Critical to Sharp’s success in the smart office realm is its relationships with some of the biggest technology players in business today, beginning with Microsoft, with which it authored the new Windows collaboration display. Best of all, from a dealer standpoint, Sharp isn’t looking to drag its valued customers outside of their comfort zone, and Marusic is confident the OEM can help dealers stay in step with the evolving office needs of end users.
We caught up with Marusic to gain insight into his first year in the corner office. We also learned more about how Sharp will leverage its own strengths, and those of its valued partners, to maintain the momentum it has enjoyed.
Tell us about your career path leading up to your current position at Sharp.
Marusic: I was a political science major who somehow ended up going to an accounting firm, and now I work in technology. It’s been a strange path. During grad school I started with Arthur Andersen, and it was a nice way to understand the financial side of businesses. After graduate school, I went to Panasonic, where at the time I thought I was going to be doing fun stuff like TVs and stereos. But I ended up being in the office automation group, which was the office products area. It’s funny how fortunate that turned out to be. I worked in a variety of planning, sales and product manager roles in their computer peripherals group. I did that for about 10 years, the last two of which I ran marketing for the copier group.
That set the path for joining Sharp. I’ve been here almost 17 years, and I’ve had two great bosses in Ed McLaughlin and Doug Albregts. Both of them were great at letting me go off on projects in addition to marketing, which helped me understand all of the facets of the business. About eight years ago, I saw a big opportunity in the display area as an office tool, and I asked if I could run the sales and marketing for that area. I did that for a couple of years and had some success. When Doug joined about a year after that, he asked me to come back to the copier side. Ironically, my last act in the display area was hiring John Sheehan to replace me running sales for the display business, and he’s my senior vice president of sales now. I took over the COO role about two years ago, and that was the perfect cap to get me ready for my current role running SIICA.
It has been a little more than a year since you took over as president and CEO of Sharp Imaging and Information Company of America. What have been some of the challenges and successes that marked the first year?
Marusic: I did have a heads up about assuming that role, so I was able to get a running start and that really helped. Doug was great during the transition. Coming from the organization, I already had the team in place that I wanted to work with—we’re all on the same page. That was invaluable to me going into the position. I think the biggest challenge was the dealer community would have a number of concerns about losing some of the leadership positions at Sharp. John Sheehan and I hit the road and visited as many dealers as we could while addressing their needs. John has done an amazing job of managing our sales team in the last year. Our market share in the dealer community dramatically increased last year, after being flat to declining for several years. Through June, our best month so far, dealer placements are up nearly double digits. I’m pretty confident that the trend is going to continue.
The biggest adjustment for me was the direct side of the business, where I hadn’t spent a lot of time during my previous roles. These days, I’m spending more time focusing on Sharp Business Systems. For a manufacturer, it’s a tough balance between direct and indirect operations. Obviously, from a placement standpoint, close to 75-80 percent of our placements are through our dealer channel, but we need the direct channel for representation in certain markets. Last year, for the first time since we started SBS, the mix between SBS and the channel business changed. It had steadily been moving toward SBS but this year, the mix shifted back toward the channel. And that’s even with SBS showing some nice growth. We don’t have an exact target mix of what we’re trying to do in our direct operations, but it’s always good to have both sides growing organically.
Outside of the external things, for me the biggest change in what I have to think about every day is the development of our people. We’ve dramatically increased our spending in training across all levels of our organization. We started our first women’s leadership development program, called WISE (Women Influencing Sharp’s Evolution). It was one of the first projects I initiated last year. I’m optimistic it’s going to drive not only additional opportunities for our people, but more importantly as an organization, it will ensure we have leadership that’s more reflective of our markets and our team members. That was a real positive for us in the last year.
The last piece is an investment we started in college recruiting. The common theme among dealers is how hard it is to get good people to join this industry. We’re being more aggressive recruiting people out of college and bringing really talented individuals into the field. So far, that’s already been a noticeable success within the organization. We’re hiring tech-savvy people who have a completely different perspective on the office and collaboration.
In June, Sharp showcased a smart office setup at InfoComm 2019 with its latest Pro AV technology. How was it received by dealers?
Marusic: It’s the largest Pro AV show in this space. For us, that smart office concept is really gaining traction across the dealer community. We are in a unique position relative to our competitors in the document space in that we have a large IT business within the Sharp brand. Not only are we leaders in the display space, but we also purchased the Toshiba Notebook business last summer. We have front-row seats to see what’s happening in the document, display and IT spaces. We’re hitting those spaces aggressively, and I think it’s really helping us leverage that into what the leading IT companies are doing.
InfoComm was overwhelmingly positive, especially the Windows collaboration display from Sharp, which is a revolutionary offering. Across all our spaces, it was valuable to show how displays and laptops could be integrated to help move information throughout an organization, and we received outstanding feedback. This spring, we did the roadshows with our document dealers and gave them a taste of what’s to come with smart office. When you look at both channels, I think it gives us an insight into what’s happening, especially in the document channel, where the opportunity for dealers to expand their offerings within the concept of their business model and programs they’re familiar with, is overwhelmingly positive. We’re not asking dealers to diversify outside their strengths. We’re giving them more opportunities within what they know.
Can you provide an overview of the Windows collaboration display?
Marusic: It’s really a unique product that we’ve developed with Microsoft and Foxconn. We’re taking the advantages of the Microsoft Office 365 suite and leveraging it across all of the office spaces with different hardware than you normally see from Microsoft. It blends hardware and software for a unique user experience that allows the information to move around with them. At its core, the WCD is an interactive display, and that’s a space we have a lot of experience in with our AQUOS BOARD interactive displays. Because it leverages 365, Microsoft Teams and the Azure Cloud platform, it revolutionizes how people will work by interacting with their office technologies. Whether you’re hosting things in the cloud, using Teams to collaborate or just using the Microsoft 365 suite, it allows touch to become a key part of how people interact with information. I think it’s a home run.
For the dealer channel, it provides another recurring revenue stream without having to learn a completely new space or market. If I look at one of the most valuable things in addition to the hardware part, it’s the experience we’re getting at Sharp. It’s hard for a document OEM to change how people work in the office. It really has to come from these companies that are leading in the software space. Being able to do that with Microsoft has been a real plus. Not only do we have this outstanding product in the WCD, but we’re also gaining tremendous insight into how it can impact our document business.
What will be the key to scaling future office/smart office solutions within the dealer community?
Marusic: This is probably the biggest challenge. We’ve got a good handle on the technology part, but it’s more about the change in the mindset of the dealer. If you focus on the hardware and the clicks only, it will be a tough migration for dealers. This channel evolved from the typewriter industry to copiers and smart MFPs. Throughout that time, we’ve been leveraging different technology tools that allow people to share information. While the technology changes, that core role doesn’t. The ability to help customers make that transition is what the dealer community has always been about.
We are in a unique position relative to our competitors in the document space in that we have a large IT business within the Sharp brand.
Mike Marusic
As we look to make this migration, a lot of those tools that we’re so comfortable with—the business model, the comp plan, other copier-centric processes—they need to be adjusted and modified to reflect the ability to get into the IT spaces. Maybe software becomes a bigger part of the business. For a company like Sharp and the dealer community, it’s the biggest adjustment everyone’s going to have to make. Will dealers be able to change that mindset and go after this business? They’ve always been able to adjust to technology changes in the past. The scalability of it is not so difficult. We’re already launching these initiatives in our direct operation. It’s really the dealer community and adjusting their mindset to what’s important to running their businesses.
What was the strategy behind holding a series of roadshows in four cities in addition to October’s national dealer conference? What kind of feedback did you receive from the roadshows?
Marusic: The roadshows are very time consuming and expensive to do, but they’re invaluable. We find that we meet a different group of people at roadshows than we get at our dealer meetings. At the dealer meetings, we’ll get the owner and maybe top leadership of a dealer. With 400 dealers, it’s really tough to drill down into the organization. At the roadshows, we get the dealer’s sales reps, sales managers and service managers, because it’s more like a training event. I think my favorite part is we get a lot of one-on-one time with sales people, and their feedback is great. There’s no filter on a salesperson, especially when you’re at a cocktail hour. They won’t mince words with what’s good or bad in your organization. We’re implementing a lot of the insights and ideas that they give us. The dealers’ reps like that more personal touch of a roadshow, which has 150 to 200 people per show, versus 1,000 people we have at a dealer meeting. But we love doing both.
The core business for Sharp and its dealers will always be the MFP. It really is an enabler to allow Sharp and dealers to get into other categories.
Mike Marusic
At the Chicago roadshow event, you noted that Sharp is in talks with Apple, Microsoft, Google and Amazon to review products that will come to light in the next few years. How critical is third-party partnerships to the vitality of today’s traditional MFP manufacturers?
Marusic: There are a lot of smart people in this industry, and all of us have innovative ideas. From a practical standpoint, it’s hard to be able to encompass all of the technology coming out that will impact the office. I think the document space is really too focused on the not-invented-here mentality, where all of the OEMs believe they should build all the tools and products. That’s simply not how success can be built in the IT space. I saw that directly when I ran our display business. You realize that in a true conference room or video-conferencing system, our displays are probably 10-15% of the total cost of the integration. Then there are large IT companies that will drive most of the innovation. When I look at how we’re going to approach this market, we talk about the Windows collaboration display. At the dealer meeting, we talked about a meeting bot that we were going to introduce. Our relationship with Foxconn got us into the door with Microsoft. All of our ideas were on target, but the ability to implement it without a Microsoft and without understanding their approach to the office and how they’re going to move information…I think it would be foolhardy for Sharp alone to create how work will be done.
Partners like Microsoft, Amazon and Google are all innovating in the IT space. Let’s face it, they have a larger customer base, and they’re more mission-critical to a lot of the office customers. Working closely with them to develop products is the key. When you meet with them and talk to them about two-, three- and five-year roadmaps of technology, I think that is so invaluable to Sharp. We didn’t have that access before Foxconn became involved with Sharp, but because they’re partnered with these companies, we’re getting insight into what’s going on. I think it really helped us in planning out our future strategy. I think we’ll see all of the traditional MFP manufacturers paying more attention to that space and trying to get those relationships, because they are critical to really developing the future technology we’re all going to use.
As the Smart Office continues to emerge and evolve, what does the future of the MFP look like in dealer portfolios?
Marusic: The core business for Sharp and its dealers will always be the MFP. It really is an enabler to allow Sharp and dealers to get into other categories. We are unique in our industry because you often hear people are trying to disrupt the service model of our industry. During the roadshows, I made the point that the service model is the magic sauce that helps this industry survive. Having that close relationship with your customers and helping them through problems is critical.
Over time, you’re going to see the mix of the business change. Everyone understands that the category of pure document MFP is flat to declining in terms of revenue and placements. But that doesn’t mean it’s going to go away. With information-sharing categories of displays, tablets, laptops, even the software that helps collaboration, dealers leveraging them will be able to continue to grow. The copier will always be the core of our technology offering, but we’ll be able to sell so many other products by understanding the other technologies that are adjacent to information sharing. Paper and digital are the only ways you can share information. If it’s digital, it’s either on a phone, laptop, tablet or large-format display. Obviously, having the laptops and large-format displays, as well as desktop displays, puts us in a great position.
What are your goals for the balance of 2019, and what will you look to accomplish in 2020?
Marusic: We must continue to build on our momentum. We got off to a great start the first three months of this fiscal year, when we were planning the roadshows, and we wanted them to help continue that momentum. In April, we had our internal kickoff meeting, and the team said we should name it “Accelerate,” to accelerate the momentum. In April, May and June we had double-digit sales growth, so I guess it’s working, and we want it to keep going. For the balance of the year, we want to maintain that sales growth and prepare for the smart office launches. This fall, we’ll introduce the hardware and software that’s the cornerstone of our smart office strategy.
As we continue to grow the revenue, we need to find time to build out the future. That is very time consuming, and the team is excited about not only the results we’re getting now, but it’s optimistic about the smart office because of the feedback we’ve received. In 2020, it’s purely the execution on that vision. With all the innovations on tap in the second half of 2019, we’ll be helping our dealers enhance their business and getting them involved with smart office technology and new revenue streams. In October, when we have our dealer meetings, we’re going to be fully loaded with all of the smart office products and technology. I believe it’s something nobody else can offer. I think 2020 is going to be better than 2018, and 2019 is already off to a great start. If we can keep this up, I think people will look at Sharp in a different way. Hopefully, we convey and execute that in the next year.
