He talks to Jo Francis about bikes, big presses, his near-career at a print dotcom and how running a business during the financial crisis was actually a positive experience.
Jo Francis How did you get into print in the first place?
Christian Knapp By coincidence, mostly. My father worked at MAN Group for almost 50 years, but not in the printing business. At the time, MAN had a scholarship programme for the children of employees.
That sounds like a neat idea.
The thinking process behind it was quite smart. If you had a parent who worked in the company, you wouldn’t have a son or daughter working in the group who slacked off. I applied for jobs in all of the divisions that my dad didn’t work in – I didn’t want to be junior Knapp in the same business as him. I could have ended up in the space division! But at the time, printing presses were doing very well. The first big News International contract had been placed just weeks before I began working there. It was a growth industry, a technically innovative product, and I loved it.
Good choice. And you subsequently found yourself on the radar of Gerd Finkbeiner, who went on to become chief executive.
Yes. He was looking to push some people along. One day, he asked what can we do to help you develop further?
I came back to him and said ‘I want to do an MBA at a London business school for a year, and I want you to pay me’.
Brilliant. Classic case of if you don’t ask, you don’t get.
Absolutely. MAN sponsored me, for the second time, and paid for the fees of my Sloan Fellowship programme. It was just after Drupa 95, which had been very successful. So maybe it was a little thank you.
So off to London I went, and afterwards I returned to MAN Roland. I had no problem with this. My father had been a MAN employee for decades. I saw no reason why I would leave. Good products, good people – it all fitted together.
How, then, did you come to join KBA?
It was a bit of a coincidence. I never thought I’d go from MAN to one of its competitors. Back then, a couple of people I knew were working on an e-procurement platform. It was the time of the whole print dotcom thing, and we were going to start a company together. At the time, it promised to be a revelation and improvement for business. The trick was what we called dynamic pricing. We pitched the idea, got first-round funding, then the bubble burst and it all went away.
Ouch. So it was a real case of one door closing and another opening…
At the same time, a close personal connection put me in touch with Claus Bolza-Schünemann, the present chief executive of KBA. I liked the way he conducted business and how he dealt with people, and his hands-on, not super-corporate approach. At the time MAN Group comprised 50,000 people and Manroland 11,000 people. KBA was refreshingly different because it was more agile and flexible. After the dotcom bubble burst, KBA called and said ‘we have a job for you’, so I took it.
And that’s how you came to the UK?
I took this job in January 2001 [Knapp replaced Kelvin Lowe as UK managing director], because I saw it as a great opportunity to grow and develop something.
Did you find many cultural differences between working in Germany and the UK?
I think that in the UK you have to be able to make fun of yourself. And probably there are people who would argue that I only partially succeeded. People ‘take the mickey’, that is a big cultural difference.
But there are lots of other cultural differences. I chose to live in the UK because I liked the mentality and I prefer it in many respects. That’s the thing about living in different countries. As a German married to a Canadian, England is one of the best compromises.
Thinking about the timing, you’ve experienced some of the best and worst times to be working at a press manufacturer, haven’t you?
The worldwide demand for web presses used to be around €2bn (£1.7bn); last year it was around €200m. So it’s a tenth of what it was. Yet we still have six printing press manufacturers. It cannot continue.
Surely technology has also played a part, such as one new press being able to replace two or even three old ones?
I love the aspect of technology in this sector, but the technology has also created a lot of problems. Just look what wide web technology has done to commercial web printers. You can’t stop technology, so you might as well be at the technological forefront.
But if the market disappears, what’s the use? Then you have a lot of those ‘zombie’ companies, and the UK insolvency law hasn’t been particularly helpful in that respect. Instead of helping the printers, it has prevented a clear-out.
Do you think we’re almost at the point where we’ve had the clear-out?
I don’t think it’s done yet. And on top of it comes this migration from print to electronic media. Be it mobile phone or Kindle or whatever. I’m waiting for [a communications medium on] leaves of something that look like paper, but are plastic, that you can download information onto.
Everlasting paper?
Maybe not everlasting. Look at how contact lenses work nowadays.
That’s an interesting idea. Going back to what you said about the huge structural change in the market, your job can’t have been much fun in the past few years.
No. Some people I’ve known for many, many years suffered badly and some of them lost their businesses. There’s been a massive cash squeeze. Cash is reality. Without cash, a business will fail.
However, although it sounds strange to say it, managing a business through the financial crisis was actually a fantastic experience. Not one that I want to repeat, but I learned a lot. It’s easy to be a fairweather captain. When you face storms it’s a whole different argument. And we had the perfect storm there.
The financial crisis certainly took its toll on printers. What’s it like when an important customer’s business fails?
Some of them failed in different or difficult circumstances. With some, it was self-induced pain. I’ve had a soft spot for some of the people involved, but they fell into the trap of fighting market pricing by reducing prices. If you do that you’re in danger.
How do you think things will pan out among the press manufacturers?
I’d expect there to be co-operation, rather than outright competition like we have today. But I’d expect it to be centred on segments. Maybe a company that is your competitor one day will be your partner the next day. I think there will be geographic players, probably a European group of two or three companies, an Asian group of one or two, and that’s it.
A more flexible approach, then?
Yes, look at other industries like the mobile phone industry, or the motor industry. There you will find that sort of co-operation.
We’ve established that it’s a tough job running a press supplier at the moment. What advice have you given to your successor, Andy Pang?
Be true to yourself and have belief in your core values. I think that’s what matters. There have been instances where I’ve taken a very particular line and people didn’t understand that line. But I still think that, at the time, it was the right decision. If you believe that it’s the right decision, then stick with it.
Have you learned any big lessons from your time in the industry?
At MAN we thought KBA had some sort of special advantage because they could beat us on price. As soon as I moved to KBA, it was the same thing in reverse!
It’s just the salesman’s fear of losing the deal that often drops the price.
The most difficult word for a salesman is the word no.
I can see a few print bosses putting that on a motivational poster.
Profit is not a dirty word. You need to retain profit to make the next investment and to reward the people who are working with you. One thing I did learn in these past years is that you don’t have a deal until the customer has paid in full. Just to have a signed document doesn’t mean you have a deal. Until the thing is paid for, delivered and installed it’s not a deal.
Does that also mean analysing the customers you have to see whether they’re worth having?
When I joined KBA, our then-chief executive said ‘let us drop the 10% of our worst customers and we will make, on the bottom line, a lot more money’. And he was right.
What’s the biggest change that you’ve seen?
The lack of profit in the industry is the biggest change. But the amazing thing is – and your PrintWeek Top 500 shows it – there are companies that make good money. They are the ones prepared to change their business model. Those that aren’t prepared to change will not make as much money, or in the end they will go out of business.
Unfortunately for some companies, the most difficult decision to make is the decision to scale down. They don’t need four presses or that extra shift. ‘Busy fools’ is an expression I’ve learned here in the UK.
Apart from the busy fools, what’s the biggest mistake made by printers?
It’s the herd instinct. The biggest mistake is not to make a proper analysis. If you properly analyse your circumstances and where you want to be with your business plan, your decision might be a different one. Too many of those decisions are made not from the brain but from the gut. And sometimes they’re made from the gut because the guy down the road made that decision. But what he analysed and was right then for him might be completely wrong for you.
We got so close with many companies. We completely convinced them of the financial and technical argument, but in the end they could not step over their shadow and go for it.
This whole issue about herd mentality can be very dangerous, because at times you end up making sub-optimal decisions. You don’t step out and do something different that would give you that longer-term advantage.
I suppose an example of this is the German web-to-print specialists that have adopted VLF presses. But not here in the UK.
Exactly. There will eventually be a big UK sheetfed magazine printer that will go large format. And he will wipe the floor with the others. But at the moment there isn’t one.
Any regrets?
At times, specifically as a sales and service organisation, we have sometimes tried to promote products that aren’t quite ready.
That was my experience with one particular project. Sometimes it’s better not to quote or supply, because you’re not quite ready yet. Every company lives on sales; without sales there is no future. But it’s got to be a sale that can be fulfilled. That said, the companies I’ve worked for have always sorted it out. I’ve said this to customers, that we never quit on a customer and we will get it right.
You never worked for Heidelberg. Do you wish you had?
No.
Might you do so in the future?
One should never say never. Let’s face it, over the past 20 years all of these companies have substantially changed. Would Heidelberg be at the top of my list? Well, with my style, I wouldn’t fit into that organisation.
And how would you describe your style?
People who know me know I’m not necessarily known for my diplomacy.
I’ve always called it how I saw it. When you get into very serious positions in German corporate governance, then you have to be so much more diplomatic. I’m not so sure that’s for me.
Which are your favourite customers? Who do you have a soft spot for?
I particularly like the ones that pay their bills.
Ha-ha! Good answer. What’s your proudest achievement?
That I managed to keep the KBA staff motivated after 2008, and making money in exceedingly difficult circumstances.
I think from where I took KBA when I started, from £5m turnover and £500,000 loss to become the number two with, at the time, £30m turnover and in profit, was pretty good. Yes it crashed afterwards, but it crashed for everyone.
I’m also proud of the fact that, on balance, I picked a lot more good people than bad people. And there’s a very good management team at KBA UK today. That I can be proud of.
What about the one that got away? Would that be Buxton Press?
Yes.
How disappointing was that?
It was disappointing, because we had a strong and long relationship. In the end, as I learned from Mr Galloway [Bernard Galloway, Buxton Press chairman], it is only ever business.
Would you like to be a printer?
No, I don’t think I’m clever enough for it. I think about what printers have to do. I have a lot of admiration for those guys.
Giving up a good job without something else to go to is quite an unusual move. Why have you done it?
A good buddy of mine is terminally ill and that puts a perspective on things. And I’m lucky that circumstances make it possible.
I might have more money if I just carried on working, but I might not have the health to swing my leg over my motorbike. And I want to go biking.
Ah, motorbikes. You have a passion for fast wheels as well as fast presses. What’s happened to your bikes?
The Triumph Tiger has been sold and the Triumph Bonneville has been shipped out to Florida. One of the things my wife and I are going to do is tour Arkansas and Mississippi riding through the Ozark Mountains.
Send us some pictures and be careful on the bends. What will you miss about the industry?
I’ll miss the people. I’ve spent more than 20 years in print, and you meet a lot of people and you make a lot of friends. And printing presses are fantastic. There are about 100,000 parts in a modern printing press. It’s fantastic technology and I love it.
We second that. Any funny stories to tell from your time in the UK?
Being called Arnie (as in Schwarzenegger), when chasing money made me giggle every time.
When your six months of biking and general chilling out is up, what will you do next? Will we perhaps see you back in print or in a related field?
I want to look for an opportunity where I can actually grow something again.
Growth in the printing press industry is going to be small and at the expense of the others.
So, a nice growth business is your ideal?
Yes, I like the idea of putting a strategy and a plan together, then going and executing it and seeing how it works out. You need the right timing, product, people, pricing and a portion of luck. Those are the five things that are essential.
My two pet projects and ideas are based around technology and innovation, and economics. Without economics, there is no business model.
So speaks the economics graduate. Good luck Chris, we hope it’s bis später rather than auf Wiedersehen.
