Widely-respected leader returns to imaging industry in intriguing role
While attending Sharp’s dealer meeting on Oct. 2, rumors started circulating that former Sharp President & CEO Doug Albregts had joined Marco as president. Within two hours after hearing the first whisper, I confirmed the news. A week later I connected with Albregts to discuss his new role, the St. Cloud, Minnesota-based dealership’s growth initiatives, and the plans of Norwest Equity Partners (NEP), the investment firm that acquired Marco in 2015.
CR: This is a long-term play for you and Marco, correct? It’s no secret that NEP is eventually going to want to get a return on your investment. So, you’re here through that transition and whatever comes next?
Albregts: I am going into this job as if it’s my last job. This is a long-term position. You have to remember about private equity, and even NEP is they are all unique and all have different goals. Some companies buy and sell quickly. Some buy and hold. The unique thing with NEP is that they’re in this for the long haul. They are in this to create and maximize enterprise value. We’re going to try to drive growth for the company, maximize the value, create as much enterprise value as we can. Then, when that time comes, when we felt we’ve done that, that’s when there could be a transition.
CR: And when might that be?
Albregts: We don’t look at it as a timeframe. Our goal is to do A, B, C, and D. If it’s ten years, it’s ten years. If it’s five years, it’s five years. If it’s two years, it’s two years.
CR: So how different will it be working in the dealer channel considering your background on the OEM side?
Albregts: It gives me a huge advantage. I bring a background set that I don’t think was inherent here around international experience and experience within the U.S. Then the product development and manufacturing side. We have two very distinct businesses that are almost divided equally with Managed Services and the print/copy and managed print side of the business. Then within Managed Services, we have ancillary businesses that augment it very well. That gives us a significant advantage, not only when we deal with vendors, but in understanding how all those things come together.
This is the side to be on. The OEMs are in for a tough road. Print will continue to struggle to some degree. No matter what anybody says, there’s just not enough room for the number of OEMs that we have. At some point, you’re going to see consolidation. I’m on the other side of the aisle and there are tremendous benefits to being on that side.
CR: Obviously, you know Marco and its management team well since your time at Sharp, what do you like about this company?
Albregts: First, it’s a best in class culture, not just for employees but for customers. They’ve done a tremendous job of making sure they have happy and well-motivated employees and to drive value to the customers through their employees. I have a great deal of respect for the culture and for what Jeff (Marco CEO Jeff Gau) and the executive team have built.
Jeff and I have been friends and vendor partners for a long time. Since I started at Sharp, we had a unique connection with our Midwest backgrounds. I always admired the growth trajectory that Marco has been on. Annually they have grown north of 20% year over year. When you think about the culture, you think about the balance in the business. Having managed services both on not just the print side but on the IT technology side is critical to the balance of the business. When you can own everything technology-wise on a company’s network and own and manage that information, manage the security piece, and offer an entire suite of solutions is an incredible advantage. That to me is what pulled me here.
CR: You probably learned a lot about how to communicate with dealers while working at Sharp, how is that going to impact the way you communicate or deal with your manufacturers now?
Albregts: I work for Marco and I know there’s a lot of buzz about what does it mean now that a manufacturer executive has joined the executive team of one of the large channel partners. I work for Marco. When you look at the back of a Marco jersey, it says “Marco.” It doesn’t say an individual’s name. When you think about my experience at Sharp, it’s a tremendous advantage for Marco in that I know the development structure. I know the cost structure. I know how those businesses tick. At least I have a sense of how those businesses operate. That gives me a distinct advantage, not only for Marco, but it helps the OEM community as well because that understanding creates better partnerships.
CR: Your relationship with the current team at Sharp must be a plus?
Albregts: There’s a lot of buzz, and you guys have written that there are distinct advantages for Sharp. I don’t view it that way. We’re going to look at every vendor partner and what value they can provide as partners. I have more information about Sharp solutions. There’s some value in a lot of the things they showed last week [at the dealer meeting]. I was there during the early stages of the development, so that gives me a distinct advantage with Sharp if you want to call it that. But I’m agnostic as to whoever’s going to provide us the best partnership opportunities. It doesn’t matter what I have on my résumé.
CR: You were talking about the smart office with us right after the Foxconn deal a few years ago, and now it’s a reality.
Albregts: When I left, it was in development and we were in the process of developing a go-to-market strategy. Frankly, I think they’re still concerned around how do you monetize it? How do you create a recurring revenue stream? [There will be some who say,] “That’s nice to have but is it a must-have?” The sales cycle usually tends to take longer in those situations. But conceptually, technology is where the future of the office is going. There’s no doubt in my mind and Marco is best suited in the industry to help drive that more than others. As a team, we’ll make decisions on what new technologies to sell whether it’s Sharp, whether it’s other partners like Konica Minolta or anybody else for that matter.
CR: You touched on how the industry is changing earlier in the conversation. We mentioned acquisitions. Marco is no stranger to acquisitions. Are you going to be involved in identifying acquisition opportunities?
Albregts: Yes. Look, we have someone here that is doing a fantastic job—Jennifer Mrozek (Marco’s executive vice president, business development and operations)—who is phenomenal at what she does. But the unique thing about Marco is that, again, I always go back to the back of my jersey, it says “Marco.” This is a very collaborative organization. It’s not just one person doing one thing. I’ve already talked to Jennifer and said, “Anyway I can, let me help you.”
CR: I’m not sure if you’re comfortable answering this question, but could potential future acquisitions be Sharp dealers?
Albregts: I feel very comfortable because when I was at Sharp, Marco bought Sharp dealers. When a dealer is going to sell there are going to be suitors. That won’t change whether I was the CEO at Sharp or Marco. We’ve got plans that are aggressive on the acquisition side. We’ve got plans and strategic initiatives that are aggressive on the organic side. Whether that’s a Sharp dealer or any dealer for that matter, if we find value and it augments our go-to-market strategy and our expansion plans, then we’ll buy it if it works for all parties.
CR: As far as organic growth, do you see a lot of new opportunities beyond the traditional growth opportunities that Marco or any other dealer has been pursuing over the years?
Albregts: Everybody’s challenged with organic growth. Because of the diversity in our business, and the fact that we have north of 35,000 customers, and not all of them buy all our products across both divisions, we see the growth potential organically to bundling our services from a Managed Services perspective. We see a lot of cross-selling initiatives that will enable us to grow organically. There are certain things that we’re going to be able to do marketing-wise and other things to create more exposure and to expand into regions that we want to grow organically. All those things are on the table. The good news is we have a partner in NEP that is truly collaborative and supportive. Growth rates are smaller on the organic side, but we feel confident and are bullish on our organic growth prospects over the next three to five years.
CR: If you could peer into your crystal ball, how radically different will Marco look five years from now? What’s the vision?
Albregts: It’s going to look radically different in size. If you look five years back, Marco is radically different in size and scope than it is today. Our mission and our values and our customers, how we focus and how we work internally, I don’t see that changing. As you get bigger, there are operational things that need to be adjusted in how you go to market. You’ve got to start to define things that are core to your business and maybe not do those things that aren’t as core to your business. Operationally you might see a different mindset. As you start to get semi-national, things change, and you have to approach the business differently. So maybe structurally, maybe operationally, it will be different. How it operates in terms of profit, the people, and culture, I don’t see any changes. But in size and scope, it will be different.
CR: How might this new position change you?
Albregts: Those OEM jobs can be very thankless, and at times aren’t as rewarding as they may appear to the general public or the channel. Look, for me, this was a point in my career where I felt I wanted to do something that would be a rewarding thing for me, both personally and professionally. It’s not always about the size of things. It’s not always about the prestige of a position, at least from a perception standpoint. It was about working for a company that takes a lot of pride in its people and their culture and fosters an innovative spirit. That embodies everything Marco does. At this time in my career, I wanted to do something that was going to be rewarding. I don’t want anybody reading this to think that what I did before wasn’t rewarding. But this is great. You have a lot of autonomy in these positions and can make quick decisions. When you’re growing and there are growth opportunities, that’s a fun place to be.
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