POA sets ambitious 2021 goals at annual business meeting.
Above: Employees from the video opening of POA’s Annual Business Meeting.
POA takes the word “pivot” seriously, especially since that word succinctly describes what it has been doing since March 2020.
In 2019, The Cannata Report traveled to Portland, Oregon, as part of our CR-CONNECT Dealer Tour to meet with POA President Doug Pitassi. This visit was different from our usual dealer tour visits in that we also attended the company’s Annual Business Meeting & Banquet. That event wowed us and CJ attended once again in January 2020.
Above: POA President Pitassi live from the studio while employees on the video wall behind him enjoy the event remotely.
Thwarted by the lingering COVID-19 pandemic, a live meeting was not possible in 2021. POA pivoted, and on Friday, January 15 from 2 p.m. to 5 p.m. PST, the company presented a virtual event with production values on par with its live meetings.
Above: Live entertainment is a big part of the POA meeting, and that didn’t change this year despite it being a virtual event.
The meeting traditionally allows POA executives and employees to reflect on the previous year’s performance and review goals for the coming year. Business and entertainment intersect with entertainment interludes, including rap music and song and dance numbers featuring professional entertainers and POA employees. This year’s meeting was a hybrid event with some segments prerecorded and others, including presentations by POA executives, live in the studio. The overall execution was superb.
POA’s All About That Base-themed event—Inspired by the Meghan Trainor song “All About That Bass”— celebrated its services base. The theme as well as the message of “owning the pivot,” were frequently referenced throughout the meeting.
Looking Back
Pitassi and POA’s executive team were candid about the company’s 2020 performance. Clicks were 5.7 billion, down 18% (1.3 billion) from 2019. It was a tough year for MFPs with black & white and color clicks down 24% and 23%, respectively. Other business segments experienced declines as well.
But the news wasn’t all negative. Entering 2020, POA had enjoyed 43 consecutive years of growth, finishing 2019 at $365 million with a sizable base in eight states. The budget for 2020 was $387 million. After the first quarter of 2020, POA was on track to exceed $400 million in revenues for the year. Even though the pandemic resulted in POA falling short of its goal, it still finished 2020 up $600,000 from the year before. “As Pitassi observed, “Up is up.”
Above: Pitassi and Brooks Newsom, marketing director, celebrate POA’s 44th consecutive year of growth.
Another positive, the company emerged from 2020 with most of its staff intact. In March 2020, POA had 1,165 employees on its payroll. As customer’s businesses shut down, the dealership laid off or furloughed 220 employees.
“There was no playbook and a lot of emotions about what decisions to make,” acknowledged Pitassi. “With so much unknown, I was looking to make those decisions, and to be honest, I didn’t always have the answers. I had to be visible and transparent and have fierce conversations. I had to be real and talk to each of you—look in your eyes and say thank you for stepping up during a pandemic or suck it up, this is a tough time, you need to step up and do your part.”
And do their part they did. In April 2020, business was down 60%. As of this year, it was only down 30%. Most furloughed employees have returned to work, and there are now 1,154 employees on the payroll.
“It’s not over, we have to own the pivot,” emphasized Pitassi. “The first order of business is getting the clicks back. It’s all about that base.”
Pitassi was introspective about the past year and asked employees to think ahead, one, five, 25 years as to how the dealership and each of them responded to the challenges of COVID-19.
“What will be POA’s legacy? What will be your legacy?” he asked. “To the ones that have stepped up and embraced the challenge, you are the heroes, and I thank you.”
Honest Evaluations
An important element of every POA business meeting is the branch reviews, where the entire company learns how each branch performed the previous year. This information is not for public consumption so we will not share specifics. Generally, a few branches grew sales and service revenue while most experienced a decline in hardware sales, contracts, and service revenue. Branches that performed well typically get a pat on the back while those who stumbled receive encouragement to improve.
A few markets stood out, including Bend, Oregon, which added clicks thanks to sales of production machines. Another branch that was down all year, experienced its best month of 2020 in December with hardware up $140,000 and profit up 10%. Another positive was the 13 branches that increased their printer revenue.
One initiative underway to help some of the struggling branches grow is hiring more staff.
“Let’s get all the territories filled with good candidates,” observed Pitassi.
Celebrating the Team
While the branch reviews can be harsh even in good times, the segment of the meeting devoted to employee recognition shines a spotlight on top sales performers and top talent across various departments. Employees were recognized in several categories, including Individual Recognition, Service Recognition, Future’s Club (newer sales reps), Leadership, President’s Club, and Top 10.
It’s a competitive environment within POA, and the management team has high expectations. But the name of the game is results, and POA would not be one of the country’s largest dealerships if it played it any other way.
This year 45 employees made the President’s Club, representing 21% of sales reps. These elite sales reps were responsible for 57% of all hardware sales. Across the company, 96 reps landed accounts with over $100,000 in hardware, including one rep who exceeded $1 million after selling a Konica Minolta KM-1. Five of the sales reps who finished the year in the Top 10 sold color production.
Founding Father
Above: POA’s founder Terry Newsom presents the qualifications for being a President’s Award recipient.
POA founder Terry Newsom did a super job of rallying the troops, sharing the history of POA, and recounting its first Business Meeting in June 1977 after it had grown from a $300,000 to an $800,000 dealership. He also provided a history of the President’s Club and pointed out that the qualifications required to receive the award are the same as when Newsom first created it. (See image below.)
Above: The fifth qualification, not pictured above, is “Courage.”
Candidness is a trait that permeates POA’s culture, and Newsom spoke about being approached by venture capital and private equity companies over the years who were interested in buying POA. Their pitch to encourage him to sell stressed the challenge of competing in a changing market as an independent dealer. Newsom takes great pride in spurning those advances.
“The number one reason I have never sold Pacific is because I believe in our process and our people,” said Newsom. “Our focused process-driven culture has driven us to the top, and I have faith that when you embrace President’s Award behavior you will succeed in 2021.”
Newsom also identified a key objective for 2021—getting everybody back into the office, interacting with each other, and having meaningful conversations to perpetuate POA’s culture as soon as it is medically safe.
“The greatest efficiency and support for customers comes from working in your office as a focused team,” said Newsom.
2021 Goals
High expectations and confidence in its employees go hand in hand with lofty goals. Despite a difficult year, that did not stop Pitassi from challenging employees to do better while offering a sense of optimism that better days are coming. He recalled the recession of 2008 and how POA and its employees grew the business while many other dealers did not.
“The world has gone through these hardships before, and we’ve grown from it,” said Pitassi. “Every historical adversity ends. COVID-19 is on track to be one of the shorter hardships. Do you let adversity control you?”
POA’s goals for 2021 are wide-ranging and include selling more services, gaining new customers, and retaining current ones. Beyond that the team was asked to make budget, fill more sales positions, develop the knowledge skills of its team, and create great career paths for its salespeople.
Above: One of The Cannata Report’s 2019 Young Influencers, Chris Roll, outlines the 2021 goals for black & white and color MFPs.
The amount of market opportunity selling services across the eight states where POA does business is enormous, according to Pitassi. Using third-party data, he reported there is a $6 billion market opportunity in those states for print and copy. And for services in those markets, it’s a $24 billion opportunity. That’s a combined $30 billion opportunity.
Pitassi directed salespeople to displace the competition at a higher level in print and copy. In mature markets, he asked them to hit their budgets, which includes 30-50% new business. Other business segments expected to grow includes MPS, A3, and production.
“We’ve never been down in clicks,” observed Pitassi. “We need to get our clicks back. What I wouldn’t do to get you to sell services.”
Besides services related to print and copy, critical service areas poised for growth include managed IT, unified communications, professional services, as well as mailing equipment, security cameras, and temperature kiosks.
“All departments must embrace becoming an expert on all these products, services, and processes and ensure great customer experiences,” emphasized Pitassi.
To help the company grow its managed IT business it will add 12 dedicated IT sales reps, two technical account managers, three project engineers, nine help desk service personnel for Tier 1 to Tier 3 support, and one project coordinator to help with onboarding. Another managed IT-related initiative is to increase help desk education and certification.
In 2020, revenue from IT and professional services was $39 million. The goal for 2021 is $45 million. On aftermarket, SaaS will focus on four categories: production software, IT software such as cybersecurity, enterprise software (traditional document and print management), and MFP software such as advanced scanning at point-of-sale.
In 2020, POA made over $7 million selling temperature kiosks and is looking to grow that to $7.5 million in 2021 by selling 25-50 kiosks per sales rep. A highlight of 2020 was a million-dollar deal with a school district in Los Angeles County that acquired 400 kiosks.
Besides growing revenues, POA is looking to expand branch operations in various markets, buy an IT company in a current POA market, and perhaps acquire in a state where POA doesn’t have a branch.
The Best is Yet to Come
POA’s ambitious goals for 2021 come with plenty of challenges. But there is confidence at all management levels that business will bounce back and the company will grow if everyone stays focused on the mission ahead.
“Hand in hand together we stand, and together we will prevail,” said Pitassi. “In 2021, own the pivot!”
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