Konica Minolta – From remote management to hands-on management

Tai Nizawa took over as the managing director of Konica Minolta India on 1 April 2020, just six days after the Covid-19 induced total lockdown was declared by the Indian government. He has undergone several quarantines in the past year and was compelled to begin his assignment from Japan – using the web and other remote communication tools.

Konica Minolta India has generally been the most transparent communicator of information, technical and business insight in the Indian print industry. It is no surprise that this came across in our interview at the beginning of February 2021, with Tai Nizawa and Kuldeep Malhotra, the vice president, and director of Konica Minolta India. In the pandemic, the best tool to run the company at a time of lower demand and logistical constraints was communication.

The second thing reaffirmed in our conversation was the solidity of the organization. Konica Minolta’s scale (offices, warehouses, distributors, workforce, management) and its sticking to best practices and human concerns paid off during the pandemic. And these should help the company maintain its market dominance as the economy recovers.

Naresh Khanna –  Please comment on taking over Konica Minolta India’s leadership during the pandemic and just a few days after the 25 March 2020 lockdown announcement.

Tai Nizawa –  Konica Minolta is a global company that always tries to implement the management philosophy of having the best people in each company. Similarly, in India, it was not as if we were starting from scratch – we already had an excellent organization here for more than eight years. There were some challenges, and as an instance, I had only met Kuldeep-san once before at a company meeting in Hong Kong – and at the time, neither of us knew that we would be working together.

I had traveled to India just once before. I had a bit of an idea about the country since I was in the Middle East earlier. I have worked out of Japan for 20 years, including postings in the USA, UK, Middle East, and Vietnam. I was supposed to come here from my assignment in Vietnam.

Last February, India still seemed ok. (We had a board meeting on 24 or 25 February 2020 in Japan, and everything was ok in India). In March, the government policy disallowed the entry of foreigners.

A few days before my starting up, the total lockdown was announced on 25 March. We switched immediately to remote working overnight because our systems supported it. We worked remotely throughout India in the past year, with myself working remotely from Japan.

We were working from home and following the government guidelines. Now a few people have been coming to the office on a selective basis as needed – a mix of work from home and coming to the office. For instance, not more than 25 people are here today.

Naresh Khanna – What was the process?

Tai Nizawa  – We started to have a management meeting every day. We discussed targets, achievements against the target. Every day we had an intense discussion. Then, day by day, we called each of our several hundred people.

In our daily meeting, we started monitoring the print volumes. Once the print volumes began coming back, it was an indication that eventually, the demand for new machines’ placement will also come back. We began to see this in May-end and in June 2020. We monitored the daily consumption levels of toners. This was a new strategy, and it told us what was happening in each region. For instance, since the pandemic situation remained adverse in Maharashtra, not much happened there till September.

Kuldeep Malhotra –  At the same time, the elections showed some increase in print demand, whether it was local or state elections or panchayat elections. These helped to grow the print volumes. Specific sectors helped this market to come back. Thirdly, since it was working from home, the corporate sector went in for only printing their immediate needs – and this also boosted the short-run requirements.

Naresh Khanna – What about the photo album business – Has the pandemic and lockdown helped the shift to digital print – will more digital come into the commercial offset territory sooner?

Kuldeep Malhotra –  We cannot say that the lockdown has necessarily shifted the market, but yes, it has forced people to rethink in favor of digital. And here, our mid-production volume machines have helped—the 83 High Chroma+ for instance. The placement of these machines has helped us in the photo segment also.

The number of persons attending marriages has come down. Although the pandemic has affected the wedding card and photo album business, it has not affected our business as much as might be expected. It may have even helped some of our customers, and since the capital cost of our machines was much lower than some others, they could remain viable and competitive with lower volumes. The High Chroma business and the photo business have helped us in coming back. The photo volume is coming back, and both the 73HC and the 83HC have helped.

Naresh Khanna – How about the press service and maintenance functions?

The servicing functioning was based on the call centers as the first response. It helps that we give good training to our customer’s press operators and check on a machine remotely. About 40% to 50% of our devices can be connected to the Customer Service Remote Centre (CSRC) via the internet. As you know, many of the jobbers do not have perfect internet connections. Secondly, not every customer is very comfortable yet giving access to a third party to their machine or operations. The big commercial printers and jobbers are very comfortable giving us full access to remote troubleshooting and maintenance.

This facility was already there when we started, but our customers were not using it, since there was no need. We also launched a phone app for servicing so that customers could reach out, even from home. Toner, of course, was a challenge, especially in the initial stages since couriers were not working, but somehow we managed.

We have around 50 warehouses pan-India for all our products which include our office products. We have 700 plus employees, including those for our digital production presses and our office multi-function printers and other products. Overall, the technology systems worked, the call logging systems worked. CSRC worked. The apps worked, and our infrastructure around the country worked.

Naresh Khanna – What is the quality of the recovery? Any shifts from offset?

Kuldeep Malhotra –  From July onwards, we started to see a recovery, and since then, our overall market share is more than 50%, with our market share in the low production segment 60%. In the mid-production segment, it is also over 50%.

Not just from July but from September onward we have seen a good movement in the market. The deviation of recovery in the economy is relatively high. After September, we can see a really good recovery in both print volumes and press placements in most of the segments we are in. This includes the LPP, High Chroma, MPP segments, and even the monochrome segment. Perhaps there is some shift from offset to digital, so more book printing is coming to digital.

When we look at our office machines, there is not a drastic drop in volumes. This may be because back-office printing is down, but the in-plant printing and print in factories and manufacturing have seemingly gone up. The increase may have compensated so that the overall impact is not that great.

Tai Nizawa –  Some surveys indicate that there are several typical ways that information is consumed. One way is all digital, and the other is to print out the information and then consume it. This correlates with our impression of office printing. If you look at various sectors such as real estate or other product marketing like automobiles and others, they need print for their go-to-market activities. Some of this may have shifted to digital or even office printers.

Naresh Khanna – Have you been able to sell presses over the web?

Tai Nizawa –  The virtual launch at the beginning of December helped us change our customers’ mindset. Traditionally, they wanted to see the machine, but now some are used to virtual demonstrations.

We have made some videos and revamped the Konica Minolta India website to make it more user-friendly. Although we have not seen an actual sale happening over the internet, the contacting and product knowledge and product demonstrations have moved to virtual. For the negotiations and order booking, people still want to negotiate with a real face presence.

At the same time, before negotiation, we have a system for media trials with the latest machine installed in Malaysia so a customer can really see the quality of output on their media at the fastest output speed.

Naresh Khanna – What were the challenges in remote management over the year?

Tai Nizawa –  People are very emotional, and sometimes it is tough to communicate without eye contact. When we interact, we have to communicate using our eyes and expressions, which is challenging. But of course, we can increase communication time and try to be clear and make sure of the information or request by reconfirming.

We had to change our business plan. We could not make a plan in April, May, and June and just looked at our employees’ and customers’ health and safety and to protect our customer’s interests. We also had to look at protecting the business.

We have around 4,000 production customers and a multiple of this footprint for our office machines (since we have distributors also) in India and 700 employees. We didn’t cut any salaries as this is our policy and all of our employees have comprehensive medical insurance.

Cashflow was a problem since the money owed to us at end-March could not be paid by printers since they were closed. But from July onwards, some of the cashflows came. We cut many of our costs, including some of our marketing costs, and our financial team did an excellent job with cooperation from the head office in Japan.

Product launches

Tai Nizawa –  Most of the products that were to be launched for drupa have been introduced to the market. We have some important launches in the pipeline that we hope to launch in India in the second quarter of this year. Globally, the company is working on new products, but we cannot say when they will come to India. We have to look at demand globally. For instance, although China and India seem to be in recovery, the European and American markets have still not recovered from the pandemic.

Naresh Khanna – What is the progress on the KM1?

Kuldeep Malhotra –  It takes more time to sell a press like the KM1 and establish its ROI in India, although it is doing very well globally. And when we were on the verge of signing some deals here, the pandemic came. We have a pipeline on the KM1, and we are optimistic, although we may have to re-look at our go-to-market strategy. In the past year, we have launched the KM1E for the packaging segment as well.

Tai Nizawa – We an ongoing trend of the optimization of the printing companies in the US. The smaller companies are closing, and the larger ones are growing, which may indicate a greater future demand for higher production machines in the future. This consolidation is something that we have experienced in other segments such as the retail sectors. We will see what happens in India. Overall, we are bullish on India’s economic recovery, and the government indicates that the next financial year will be very positive.

Naresh Khanna – What will be the change from remote to hands-on management?

Tai Nizawa –  It’s complicated to describe, but I immediately felt that this was a big country when I landed in India. I felt the size and history of the region. It was a feeling similar to when I landed in China or the USA.

Digitalization is a strong trend. More and more people want to work in the digital environment. When countries and economies actually change, we need to stay on in the market to be part of this trend. I am very excited to be here so that the communication becomes smoother – we will now combine actual meetings with digital communication in a hybrid style.

Thank you.