Glen Taylor returned as CEO of Taylor Corp. two years ago because he refused to accept that his company had to decline with its broader industry.
The market for printing and direct marketing was terrible, as print industry sales had declined about 15 percent in 2009 and were off closer to 22 percent from the pre-recession peak. But Taylor didn't move up from a part-timer stamping wedding napkins to the ranks of Minnesota's most successful entrepreneurs without a determination to prevail.
"They [the management team] had accepted that we were going to go backwards," Taylor said. "When I came back I said no, that is not what we are about. We have been a growing company our whole life.
"We talk about opportunity and security for our employees. ... In everything, growth is our culture. So we have to grow. The question is, 'So how are we going to do that?'"
Seated in the Founders conference room at Taylor Corp.'s North Mankato headquarters, Taylor talked at some length last week about the "how." It wasn't one idea or strategy, and not everything has worked, but pretty much all of the new initiatives represent a departure from what built the company.
Now best known as the principal owner of the Timberwolves, Taylor spent decades building Taylor Corp. The company may have been a printer, but its core business was acquisitions.
While not exclusively an opportunistic buyer, it became known in the industry for buying printing and direct marketing businesses for book value (or less) from sellers who had run out of money or good growth ideas. Glen Taylor relied on his experienced team to quickly increase sales and productivity.
A traditional commercial printer in 2012, Glen Taylor said, "is hurting." He will still consider buying a printer's customer list and the right to hire salespeople. He won't buy printing presses at almost any price.
The hurt in the industry has resulted from more than the recession. The National Association for Printing Leadership, an industry group, said the domestic industry's sales peaked 12 years ago. Use of digital communications has kicked up a strong headwind for printers large and small.
NAPL chief economist Andrew Paparozzi said the industry's sales may not rise even 1 percent in 2012, but at least they have stopped dropping. More than 10,000 commercial printers in the U.S. have exited the business in the past 14 years, a contraction of nearly 28 percent.
"We have been writing about this since 1998," Paparozzi said. "For the prepared, now is the time of historic opportunity. For the unprepared, there is a profound threat. Part of it is you have to recognize that you are in the communications business and not in the ink-on-paper business."
Glen Taylor's own views line up pretty well with Paparozzi's, as he intends to make the transition.
"We have a company here in Mankato, Corporate Graphics, and at one time that was the job shop of Mankato or southern Minnesota," Taylor said. "But right now what they do is little books, children's books, for publishers all around the United States. So that is one way we can continue to grow."
Another strategy was simply to use the recession as an opportunity to hire more sales staff, as Taylor suspected strong performers were available.
Taylor focused many of the new hires on prospects that communicate regularly with customers, pitching services such as printing and mailing a warranty package to the buyer of a new refrigerator or documents sent policyholders when an insurance contract renews. Taylor Corp. units can handle that whole process.
Acquisitions remain part of his growth strategy as well, now focused on technology-enabled service providers, like the recently announced acquisition of Venture Encoding of Fort Worth, Texas. The company sells communications services to financial institutions, a good fit with Taylor Corp. But what drove the deal is that Venture was one of the first to offer an online service that streamlines payment information and other communications with borrowers.
Glen Taylor owns about 97 percent of Taylor Corp. and it does not disclose financial information, but Taylor said revenue is up so far in 2012, the growth from newer initiatives strong enough to offset continuing weakness in traditional businesses. Taylor said the company had two unprofitable years with declining revenue in the recent past. Taylor Corp. peaked at about $1.7 billion in annual revenue, according to published estimates and about 15,000 employees (a figure Glen Taylor said sounds high) prior to the recent recession. Employment has since declined to around 9,000.
Taylor said the company will be nicely profitable in 2012 but perhaps not reach his goal, adding that his goal was aggressive. Taylor said the company has continued to recruit staff in roles such as marketing services, sales and information technology. Jobs in the production plants -- how Taylor himself started years before he bought controlling interest -- have continued to erode, now mostly due to attrition.
In looking ahead, well, Taylor said, he can't help himself, he is an optimist. His plan is for his company to grow.
He told his management team two years ago he would stay only one year as CEO. But it was obvious from our conversation that the 71-year-old Taylor has no interest in stepping down.
"He is now more energized than he has ever been," said Tommy Merickel, an executive vice president who joined Taylor Corp. in 1988. "I can tell you, he is planning on going for another ride."