A visit with Systel in Fayetteville, North Carolina, reveals that diversification and thinking big have their advantages, especially when starting out in a small market.
presented by Sharp Electronics
The Cannata Report just recently kicked off the second leg of our CR Live: 2017 Dealer Tour initiative and franchise. We started our dealer tour at the Les Olson Company in Salt Lake City, Utah, in February, followed by visits to MT Business Technologies in Mansfield, Ohio, Gordon Flesch in Madison, Wisconsin, and our most recent to Systel in Fayetteville, North Carolina. All have been exceedingly welcoming to us. These dealers represent a host of OEMs, including Sharp (Les Olson Company), Ricoh (MT Business Technologies), Canon/Sharp (Gordon Flesch) and Ricoh/Konica Minolta (Systel). We will continue our tour in June and throughout the rest of the year with visits scheduled to Tampa, Florida, Sacramento, California, Dallas, Texas, and Wausau, Wisconsin, to visit with dealers representing Kyocera/Konica Minolta/Canon, Sharp/Canon, and Ricoh/Canon/Toshiba.
We are scheduling these dealer visits to provide CJ with an in-depth understanding of the issues concerning dealers for our editorial coverage. Much of what I know about this business I learned from dealers. From my view, those we’re visiting are among the very best and offer a blend of distribution for the six major A3 MFP companies. We also keep the geography very much in mind, as we look to visit dealers in various regions across the United States.
In this year’s recent April issue, I wrote about relationships across the channel and what they have meant to me. One of my most valued industry relationships is with Keith Allison, CEO of Systel. I have known Keith for nearly 25 years and he has always been most gracious and helpful. He has served on our Editorial Advisory Board on two different occasions and has always provided sage advice. Keith is a sharp business person with an engaging personality. He remains extremely active in the industry and has served on many boards, including Ricoh’s for 15 consecutive years, more than 20 years on Panasonic’s, and ours for the past 30 years.
He’s also very charitable, providing scholarship endowments at universities for under-privileged students, offering discounted CPC programs and ongoing promotions for local non-profits, and allowing employees to use some of their company time to volunteer for certain Systel sponsored and organized events.
Despite our long relationship, I never had the opportunity to visit Keith’s dealership until this year. It was a visit that was long overdue. No matter how many years we have known a dealer, we never really get the full picture of what they truly represent until we visit their dealership. Our trip to Systel was truly an eye-opener.
The Pride of Fayetteville
Fayetteville is a city of 275,000 people and is the home of Fort Bragg, which houses the 82nd Airborne Division. Military towns are not known for being in areas that are great centers of commerce, but that hasn’t prevented Systel from becoming the dominant office technology dealership in that market. What Keith has done here is nothing short of incredible. Systel continues to rank as one of North Carolina’s Top 100 private companies and has been acknowledged by Inc. magazine on the Inc. 500 | 5000 list as one of the fast growing companies in the U.S.
Keith founded Systel Business Equipment Co., Inc. on November 1, 1981. Starting out in a small house converted to an office with only a few employees, the company has grown exponentially over more than 35 years and continues to seize every opportunity that comes its way. As the company has grown, it still remains true to its roots and operates its corporate headquarters at the original office location at 2604 Fort Bragg Road in Fayetteville. Today, Systel has more than 275 employees, including 95 technical and service technicians operating out of ten locations throughout North Carolina (servicing all 100 counties) and Georgia. The dealership provides office and production print equipment and services via its own commercial print shop more than 10,000 businesses and organizations. The commercial print shop has provided Systel with a wealth of knowledge about the needs of commercial printers, which has helped the dealership sell its production devices.
In a mature industry where many of its competitors are struggling financially, Systel has grown nearly 50% since 2009 with revenues of more than $65 million in 2016. An astute businessman, Keith continues to make significant investments in the business. One of the most visible is the complete renovation of Systel’s corporate offices and the addition of a huge distribution center that resembles a regional facility, as opposed to a facility serving two states. Systel’s warehouse is a model for the industry in terms of its overall efficiency. It is one of the largest, cleanest, and best organized warehouses we’ve ever seen.
In town, the tallest building””14 floors””has a Systel billboard on all four sides. Keith credits that billboard for elevating his brand in the market. We asked Keith how he found that location, and it turns out that he owns the building. Besides Systel’s corporate office and commercial printing operation, Keith also owns a realty company. Now, that’s diversification!
In all fairness, Keith can buy a lot more real estate in Fayetteville than other dealers who are either located in state capitals or near major market areas. But that is what successful dealers do. They extract more business out of a secondary or even a tertiary market than any manufacturer of any kind can.
Look and Learn
Systel’s success serves as a lesson for dealers and manufacturers. Every time I visit with a successful dealer in a market area of less than 300,000 people, I wonder how the hell they do it. I am talking about dealers who are no longer with us and current dealers such as E.O. Johnson in Wausau, Wisconsin, who does not have a town, city, borough, or municipality with more than 80,000 people and is Canon’s leading dealer in selling the Arizona Series.
Keith is in that class of company with what he has done. He blankets the state with his ten locations and his commercial print shop. The print shop was not created to compete with other printers, but as a vehicle to sell Ricoh and Konica Minolta production print devices.
Manufacturers such as Xerox, HP, and EFI have yet to be convinced that dealers are the right channel to sell industrial print devices, instead pigeon-holing them in the SMB space. They should see what Systel has done in production print.
George Steinbrenner, former principal owner and managing partner of the New York Yankees, was once asked why he, along with partners, acquired the failing Yankees franchise in 1973 for $10 million from CBS. His response was, “To be successful in New York, all you have to do is prime the pump.” He proved the point by making the New York Yankees the second most successful sports franchise in the world.
Just change New York in Steinbrenner’s statement to independent dealers and that is what this business should be all about. Build a support structure to support dealers and sell, and you will have the most efficient go-to-market organization in the United States.
Only in the United States can entrepreneurs like Keith Allison have access to sufficient capital to take calculated risks to build two successful companies””one in the print business and the other in real estate. Between the dealership, the commercial print operation, an internal leasing company, and the real estate business, Keith is a poster child for diversification. If he has a secret as to his company’s success, it is how to do business with the military, but that’s a secret he’s not willing to share.
Dealers like Keith are truly something special. A long time ago, I decided to hitch my star to that dealer wagon and have never looked back. I expect CJ will do the same, albeit in his own unique manner, as he continues the journey that I began 35 years ago.
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Partner Appreciation
Systel Business Equipment suppliers Konica Minolta and Ricoh consider Keith a first-rate business partner.
“Keith Allison has led the growth of one of the most progressive dealerships in the country,” observed Rick Taylor, president and CEO, Konica Minolta Business Solutions. “We are very proud to have Systel represent Konica Minolta in the markets they serve.”
“Systel, under the leadership of Keith Allison continues its long history as a strong Ricoh partner in the state of North Carolina and Atlanta,” added Jim Coriddi, vice president, dealer division, Ricoh USA. “We value the tremendous growth of Systel, and the great input and perspective Keith has provided to Ricoh over the years.”
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CJ’s SPIN
(Next Page)The Next Generation (from left to right): Jacqueline Smith, VP, Marketing and Business Development, Systel; CJ Cannata; EVP and Publisher, The Cannata Report; Cara Spencer, IT/ Administrative Support, Systel; Janene Aul, Vice President of HR/ General Counsel, Systel
Spend some time with Systel’s Keith Allison learning about his path to success, you can’t help but appreciate just how accessible, honest, low-key, and smart he is. While well-known in Fayetteville, North Carolina, because of his accomplishments and contributions to the community, those outside of his home territory might not recognize that Keith is a successful entrepreneur of such scope and scale. Many within our industry aren’t even aware of who and just how successful he is.
Aside from cracking the code on how to successfully initiate and build an annuity business with the military, his marketing acumen and ability to diversify, another element that has contributed to Keith’s success is the diversity in personnel within his dealership. That diversity is on view at various levels within the organization.
Besides spending time with Keith during my visiting to Systel, I had the opportunity to meet five prominent women in the Systel organization, including Anita Willoughby, vice president, inventory management, who oversaw our tour of the dealership’s Distribution Center and showroom; Allison’s daughters, Janene Aul, vice president, Human Resources and general counsel; Jacqueline Smith, vice president, marketing and business development; and Cara Spencer, IT/administrative support; as well as Susan Williams, his executive assistant. I also met met several other employees who exemplified Systel’s diverse culture.
The diversity within Systel is rooted in hiring the most qualified person for the job without bias toward sex or race. By drawing from the broadest pool of available talent, including his own daughters, Keith sets himself apart from other entrepreneurs and sets an example for our entire industry. It’s about business, people, and what’s best for the company and his family.
In an official statement provided by Systel, “Having a diverse workforce with different backgrounds, skillsets and experience levels creates a work environment that promotes a dynamic culture to the family-owned atmosphere which drives the company’s success and performance to a whole new level. A dynamic employee fosters more creativity and problem solving skills that resonates and benefits the entire organization.”
I remain impressed by Keith’s business acumen and how he remains true to himself””a quality I prioritize. All of that may not fully explain Keith’s success to date, but it gives you a sense of the man behind that success””a man I encourage anyone who may not be well acquainted with to seek out. I can’t imagine anyone out there that does not have something to learn from him, whether it be about business or character. I certainly did””and will continue seek out more opportunities to do so in the future.
by CJ Cannata
