Call it indoctrination or trial by fire, but when Sam Errigo took the stage at last week’s Konica Minolta “Full Throttle” 2022 Dealer Summit, the recently named president and CEO stood in front of hundreds of dealers, partners and media during perhaps the most critical juncture in the history of the office technology business.
Long known for his reputation as a straight shooter with genuine candor, Errigo didn’t sugarcoat or assume a Pollyanna persona as he addressed attendees at the manufacturer’s Ramsey, New Jersey, facility. He got right down to business, outlining current and future challenges while providing an overview of where Konica Minolta stood with many of the most pressing issues on the minds of the reseller community, namely supply chain and the difficulties in sourcing equipment and toner.
Executive-speak was nowhere to be found in Errigo’s presentation. He was optimistic, yet honest. He unrolled a map for a more productive and prosperous future, but he pointed out the valleys and hazards along the path. Most importantly, Errigo underscored the OEM’s commitment to the dealer reseller community and his willingness to prioritize them. There wasn’t an iota of BS to be found in his presentation—the journey forward will continue to be difficult for at least the next six months, but Errigo and Konica Minolta have the dealers’ backs. And he has a plan to help Konica Minolta’s resellers keep their heads above water, despite the rising tide of disruption.
Errigo graciously sat down with ENX Magazine to provide his initial thoughts on the meeting and discussed how his breadth of experience over the decades yields the proper perspective to navigate the pandemic-addled circumstances that have beleaguered the office technology space. While he would never say as much, it’s readily apparent that Errigo—given these conditions—is clearly the right person for the job.
The Dealer Summit was a watershed moment not only for you in this juncture of your leadership position, but for the organization as a whole. In the days following the event, what has been the reaction/feedback you’ve received, and do you believe the Summit checked off all the boxes in terms of what you were looking to accomplish?
Errigo: The reaction so far has been great and we’ve received tons of positive feedback, which is encouraging. The dealer community as a whole hasn’t had a lot of opportunities to engage with one another—we’re one of the first manufacturers to do a hosted event since the pandemic started. I think we did accomplish what we set out to do during the show. One of the main aspects we sought to communicate was our commitment to the channel. A lot of this stems from the challenges I discussed, such as toner and the difficulty in getting hardware, which has impacted our dealer and direct channels. Reinforcing our commitment to the channel was top of mind for me. As you know, this business is built on long-term relationships and trust, so face-to-face engagement and continuing to build trust are both important. Transparency is another critical area. We spend a lot of time communicating through email, phone and webinars, and meeting dealers in person to let them know where we stand in terms of inbound hardware for the quarter. Our toner recovery plan was also something that I was not going to shy away from. I thought it was important that we did it face to face.
It was also a great opportunity to say thank you. The last couple of years have been tough, especially for our smaller dealers that rely on Konica Minolta to deliver hardware, and we’re the lifeline for their business. They’ve stuck with us and we appreciate that. So it was a good opportunity to not only say thank you but to talk about the programs that we’re putting in place to help them prosper in FY22.
Your career spans more than 25 years in printing and document management, from Kodak to Danka and Standard Register, with sales, business development and marketing experience in your back pocket. Talk about the value that adds to your new role as the top executive?
Errigo: I think timing is important in a person’s career. The timing was right for me to take over this new leadership position. Ultimately, all those different jobs prepare you for this type of position. From an experience standpoint, it allows you to have perspective around the entire business. When I’m meeting with marketing, I’m also looking at the impact it has on sales, and how it impacts the dealer community. Are all the parameters in place in terms of a well-written, thought-out plan? It allows me to step back, look at the holistic business and make better decisions. I also offer guidance to those teams, because there’s always a learning opportunity to share past experience, things that work, things that maybe didn’t work, and modifications to ideas, programs, communications—whatever it might be. Having that well-rounded experience allows you, as a leader, to be in a position of credibility and thought leadership.
What do you hope to accomplish during your first year on the job?
Errigo: For the next six months, we have to keep a strong focus on the dealer channel. There are two areas I will focus on: one is the allocation of hardware to the channel. We’re going to do a 75/25 split for dealer and direct (75% of office product, 50% of production) to help alleviate the backorder situation as inventory comes in. The second area is making sure that we gain traction on our toner supply chain issues, and we’re doing a good job there. It’s quieted down, but I wanted to make sure that we’re clear and have good sight in front of us in terms of inbound, so we can put that issue to rest. I also mentioned during the dealer meeting that I believe I have a personal obligation as the president and CEO to the dealer channel. This is their business, it’s their livelihood. So we have to make sure that they prosper, and that’s going to be the top thing. Secondarily, we need to support the direct channel. We’re striking a delicate balance between the two; we need to focus on both sides and not at the expense of the other. Balancing that out is going to be paramount.
In conjunction with that, we’ve accelerated our DX business and our MRR engine. We have to build that business and accelerate what we do to help operations offset some of the decline in print volume. We’ve got a great platform and strong products and services, so we can gain traction as a company in this area.
The third piece is really improving diversity within Konica Minolta. We’d like to get to 50/50 split between men and women in our company. In a technology company, that sometimes can be a challenge, but we’re up for it and we think we can get there. We have to make good strides to achieve our objectives by FY30, and we’re setting a good pace. Lastly, we need to improve automation and must continually do those things that improve overall efficiencies in our business. Using tools like RPA (robotic process automation) or other technologies to automate a lot of our backroom is proving to take the expense out of the business and better leverage resources within the company to do more productive things. Finally, we’ll seek to grow top-line revenue. We have to grow and we have to improve our operating profit in FY22.
How do you plan to leave your imprint on the company, and what will be the keys to success moving forward?
Errigo: Over the last 13 years, we’ve accomplished a lot as a company. We introduced managed IT services, video services and solutions, and our software programs are doing really well. But that’s not going to be enough. The next piece has to be to generate new growth engines to replace the decline in print. We know print volumes are going down 1-3% year over year. That’s something that is out of our control. But you can’t bury your head in the sand and say “woe is me”—you have to figure this thing out. It’s really going to revolve around new MRR revenue. We have to find replacement revenue for the decline in print. There’s a way for us to do this, which is to gain market share. Last I checked, the office industry is still a really good business to be in. Is there room for all the manufacturers sitting out there trying to take you a little piece of that? Well, I think there has to be consolidation in the marketplace. We’re going to go after this organically and take share from our competitors. When you do that, you get new volume. Until we have 100% market share, I really can’t worry about the decline in the market. I just have to get more business. That gives us a runway while we’re building the MRR plan.
We also have to create a culture of diversity. As we look at the future, diversity in our employee base is going to be really important because we’re changing as a company. Having the same people in the company do the same things is not going to be progressive. If we’re going to move into these new areas, it will require different skill sets, talent, and people from other industries coming in to help lead and really take charge of this footprint.
Lastly, it’s creating real value for our partners, because they have a choice. They’re not beholden to Konica Minolta. Many are dual-line or three-line dealers, and over time, they have to make decisions. A way for us to grow is to create better value and write better programs for our dealer partners so that they prosper. By virtue of that, I do believe we take share. If I can do all of those things and strengthen our foundation for the future, then the next person in line has a great foundation in place. They can then continue to tweak, modify and add to that platform. That allows this company to prosper long-term.
We’ve talked about a number of sober and serious issues. In general, how do you feel about the opportunity to lead Konica Minolta?
Errigo: It’s a great honor and privilege to lead a company like Konica Minolta. I couldn’t be more excited. I’m so passionate about the growth and opportunity this industry provides. We’ve got a great employee base, people who are helping us build for the future. I’m excited for what FY22 brings, but more importantly, it’s really about setting the stage for the future.
