When Richard Spencer goes shopping he knows what he wants and will not settle for anything less than first rate. When he decided, a few years ago, to buy a company, he looked at 650 of them, and examined about a dozen closely. His objective was to acquire a small to medium size manufacturing business that produced an engineered product not under an offshore threat; that was in a stable or growing industry with the possibility of strong cash flows; and with the opportunity to drive continuous improvement. He wanted to solve customers’ problems, integrate new technologies. And he wanted it to be fun and interesting.

Such a place, it turned out, is in Rochester, NY, USA. Label World was founded in 1985 by Bob and Janet Allardice, who grew the business from the ground up into a successful enterprise that numbers among its customers such household names as Rubbermaid, Kraft, Bausch & Lomb, Xerox, and Kodak.

“At the same time I was examining companies to acquire, Bob and Janet were contemplating retirement,” says Spencer. “They are very proud, and rightly so, of what they built here. They were looking to retire but wanted to sell to the right person or group that would protect their legacy and build on the great work that they had done for 20 years and grow the company further. They had invested a lot of energy in creating the right work environment and culture, and that really shows up in the people here. They were concerned about selling to the right buyer.

“We ended up having a conversation that went on for over a year before the deal finally happened. On January 5, 2006, I acquired the company with the backing of a private equity firm called Kamylon Capital. Kamylon specializes in investing for the long term in large local businesses, really medium size businesses that are large in either their local geography or in a niche market that they serve, and have a strong position in the marketplace, and are solid, stable, growing, profitable businesses.”

Among the many positives at Label World, two stood out and led to his investment in the company, Spencer says. “First was an incredible level of commitment to customer service. That was driven very much by Bob. Every single associate here puts the customer first, and frequently moves heaven and earth to deliver, and over-deliver, for the customer. During due diligence I talked to and surveyed many customers; rarely in my career have I ever heard the level of praise and satisfaction from a group of customers about a supplier as I heard in those interviews. I heard comments such as ‘Label World always goes the extra mile.’ ‘They pull off a miracle frequently.’ We have been known to deliver labels from concept to production in hours.

“Label World did a survey of customers in November 2005, and 88 percent said they would recommend us to someone else for labels. We just did another survey recently, and it’s 100 percent now. We are very proud of that.”

The second great aspect of Label World was, and is, its people, says Spencer. “The praise by our customers is underscored by the level of skill, experience and commitment of the work force. The people here have amazingly positive attitudes. People are very proud of the company, of being part of the company; it’s a great place to work.

“We, and before us Bob and Janet, invested a great deal in creating a great work environment. Label World won the Printing Industries of America (PIA) Best Workplace in America award four times since 2000, and last year we won the Best of the Best. That means that Label World is one of 18 companies out of 12,000 printers nationally that have the best work environment. That really shows up in the level of skill and commitment by our work force, which then shows up in their commitment and dedication to customer service, which then shows up in the success of the company.

“So I felt that this was a great company as a platform from which to grow,” Richard Spencer adds. “So far it has proven to be so.”

Market growth

Label World started out manufacturing simple labels for regional markets. Today the company is active in food and beverage, health and beauty, industrial, medical, wine, promotional, commercial, and security markets.

“In the beginning it was all industrial labeling,” says Holly Hodge, an account manager who has been with the company for 17 years. “Then we had opportunities with large local accounts, such as Wegman’s (a food retailer) and Kodak, which really helped us grow as a company and expand into other markets. Over the years we have found ourselves in all the markets, but in the past few years we have been focusing on specific areas.”

The company has presses from Aquaflex, Webtron and Mark Andy, in widths from seven to 16 inches. An HP Indigo ws4050 digital label press was acquired in late 2005.

The intense focus on service has given rise to a talented design department, whose artists will work with customers to redesign labels. “The art department gives the sales people great opportunities to present ideas to customers to help them through a redesign,” says Hodge. “Design firms do beautiful work, but they don’t understand the difference between design and print-friendly. When we take on a design we give the customer the benefit of creativity and print-friendliness. We make it cost effective.”

Spencer gives an example: “One customer had a fairly unattractive label, and they asked for our help. We came up with a redesign from soup to nuts, nine different version for their different flavors, and basically drove a 100 percent increase in sales for that customer, as a result of the label redesign.”

Great to greater

Spencer and the Allardices worked long and hard on the transition to new ownership. “We spent a lot of time figuring out how to make it seamless, how to make the associates feel good about it, how to make sure all the great things that were in place, that allowed us to win the Best Workplace in America award, would continue. If you don’t have a motivated and engaged set of associates, you don’t have a prayer of serving your customers well, and you don’t have a prayer of succeeding in business,” says Spencer.

To make a good company better, Spencer has spent the past year introducing the concept of continuous improvement. He has also installed a new management team: John McDermott, VP sales & marketing; Linda Jung, quality manager; Tom Weisenberg, continuous improvement manager; Bill Enright, production manager; and Rich Battoglia, controller.

Continuous improvement comes from Spencer’s background in Lean Manufacturing and Six Sigma. He worked with Honda and Rover implementing Lean in the 1980s. “It’s a journey that never stops, and we’ve just begun,” he says. “It will never be over. It’s not easy, but it’s incredibly powerful if you can implement it effectively.
“We want to protect and build upon the culture here, the customer service mentality, and then add to that as a complement a passion for continuous improvement, and all of the tools and techniques that go along with that.”

Spencer describes continuous improvement as “figuring out how each one of us can make our own contribution, make our job and other people’s jobs more productive and more effective. We describe what eliminating waste really is and give real world examples of it. People often have Aha! moments when they realize where the waste is. Waste is much more than just the stuff that comes off the end of the press and goes into the Dumpster. But when you point out all the other forms of waste and how they consume resources, hide defects, tie up money, and so forth, it’s a revelation to people. And if you have people with the right mindset and positive motivation toward the company and doing the right thing — which we have in spades —  it’s all a matter of helping them see the waste and then figuring out how to help them reduce it.

“It’s early,” he adds. “We started our journey in the last six months, and now we’re just getting going in earnest. It’s a long, slow process; you have to start small and have some successes and build momentum around them. The people on the floor want to see that you are changing things, fixing things. I view management’s role, in particular production management’s role, as determining how to support the operators and making them effective in the work they do. How do you solve the problems that prevent us from producing a defect-free product at high speeds all day long? It’s a mindset. The people on the shop floor will believe it when they see it, so you start out small, identifying some problems that have been bugbears for a long time, and fixing them.”

The demanding ones

Label World is taking a new direction in its quest for customers. “We are slowly but steadily looking to shift the mix of our business to the more demanding applications,” Spencer says. “We have some great capabilities, great experience in our people. We can figure out how to solve our customers’ most intractable problems. We want to do that kind of work because it’s more fun, more challenging and more profitable. Our strategy is to differentiate ourselves on the basis of the myriad of services and solutions we provide — services that help customers differentiate themselves, sell more product, and optimize their supply chain performance.”

“We are providing a more structured, systematic approach to the selling strategy,” says John McDermott. “We are trying to bring to the business a more systematic approach to how we engage with the marketplace: which specific markets do we want to go after, based on what we think our core capabilities are; what are the things we can be really good at?

“The basic orientation of the company now is that of a service provider rather than the lowest price producer on the one hand, or on the other a product innovator who is all about bleeding edge R&D. We have to find which segments value these kinds of services and solutions and then align ourselves to systematically

Richard Spencer (right), president and CEO of Label World, and John McDermott, VP sales & marketing

address that customer set. That means realigning the sales force a bit, in terms of the geographic coverage, industries served and solutions provided. It means reworking the training we provide our sales reps, the kind of data we collect, how we generate new leads, how we create awareness, and how we convert those leads into opportunities and close on them.”

“We have gone through a process of figuring out who are we, what are we good at, where we createvalue for our customers,” says Spencer. “Now let’s focus on finding those customers where that value is relevant, and delivering that value to those customers, making our customers more successful. Therefore, we in turn will be successful, and not just take anything that comes in over the transom because it happens to be down the street in Rochester.”

“What we are about is designing solutions for product branding, identification, tracking, and security,” adds McDermott. “Those are the big problems that we are trying to help customers to solve. How do we help customers get more bang for their buck from their branding on the shelf? How do we track and control product movement through the supply chain? How do we secure products against tampering, counterfeiting and theft? How do we identify products to consumers and provide them the information they need to make good choices at the point of sale to help drive sales? Those are the types of problems that we love to help our customers solve.

“Our strategic intent is this: We focus on the value added services and solutions that we can provide that are meaningful to our customers. We drive to a level of customer intimacy by understanding their business, their business problems, by supporting the marketing people and product engineers who are wrestling with the business problems that need to be solved.”

   

Label World

    29 Jet View Drive
    Rochester NY 14624 USA
                                                                        585-235-0200
                                                                        www.labelworldusa.com