On late Friday afternoon, Feb. 17 we received an e-mail from Akira Oyama, corporate executive vice president, Ricoh Company Ltd., outlining a new organizational structure for the company—a structure that shakes things up globally, but even more significantly, shakes things up in the Americas.
According to Oyama, this new organizational structure will reportedly allow Ricoh to focus on its Office Solutions, Production Print, and Office Services businesses where it will seek to grow new revenue streams with increased profitability. The company is also realigning into a new Business Unit structure on a global level, which Oyama says will bring a strong level of collaboration and focus on specific customer business priorities.
To align this global Business Unit structure across the Americas, Ricoh says it will enhance its focus on key customer segments and create what it calls seamless alignment throughout Ricoh's global value chain—Research & Development, Marketing, Sales, and throughout its Services and Support organizations.
Closer to home, the new Business Unit structure for the Americas is as follows: Office Solutions Business Group led by Peter Stuart, executive vice president, Office Solutions. This business unit encompasses the sales organizations in the Americas, including U.S., Canada, and Latin America (excluding mindSHIFT). Stuart now reports to Kuni Sato, corporate executive vice president, Ricoh Company, Ltd.
Office Services Business Group led by Mona Abutaleb, executive vice president and general manager, Office Services. Abutaleb will also assume leadership of the global Office Services Business Group. Abutaleb now reports to Jake Yamashita, recently named President and CEO, Ricoh Company, Ltd.
Commercial and Industrial Printing Business Group led by Jeff Paterra, executive vice president, Commercial and Industrial Printing. He reports to Peter Williams, corporate vice president, Ricoh Company, Ltd.
The letter further revealed that these three customer-facing business units will be supported by the Shared Services Business Group which will provide Human Resources, Finance, Legal, Supply Chain, Customer Administration, IT, Process Improvement, and Marketing support across the Americas.
As part of the new Shared Services Business Group in the Americas, Joji Tokunaga is returning to the U.S. as executive vice president and deputy general manager, Shared Services. Tokunaga will report to Jeff Briwick, executive vice president and general manager, Shared Services.
In addition, Glenn Laverty will assume the role of senior vice president, Ricoh Americas Marketing reporting to Tokunaga. Laverty will be focused on aligning and positioning Ricoh’s solutions and services portfolio as it continues to transform, and will also continue to serve as President and CEO, Ricoh Canada.
Odd Man Out
Odd man out in this reorganization is Martin Brodigan, whose position as Chairman and CEO of Ricoh Americas has been eliminated.
Coincidentally, readers of The Cannata Report may recall that Brodigan and Abutaleb were both identified as people to watch in 2017 in our December/January issue. We’d been hearing rumors, or at least sensing dissatisfaction with Brodigan in our conversations with dealers, so his departure is far from a surprise. And it looks like Abutaleb, will continue to make a significant impact, much as we predicted.
We also heard from Jim Coriddi, vice president, Dealer Division, Ricoh Americas Corp., who told us that his job remains unchanged. For Ricoh dealers, we consider the status quo surrounding Coriddi’s position a good thing.
We understand the rationale for breaking out the business into three operational groups. The Office Business Solutions Group and Production Print Group are the two that matter most for dealers. But what warrants further scrutiny under this new structure is that the leaders of these groups in the Americas now report directly to different individuals in Japan. In essence, Ricoh has created four silos—the three groups who report directly to Japan and the fourth, the new Shared Services Business Group.
At its best intra company communication for a company of this size is extremely difficult. Having four people report to Japan that is not conducive to a collaborative approach to the market. If they were all operating on separate P&Ls that might make some sense, but at this juncture we do not know that.
It appears that Peter Stuart will lead both dealer and direct and we know how that goes. We do not know Peter and we cannot make any judgements as to his competency in leading this core business group. What will matter most to dealers is how well he handles the inevitable conflicts between branches and dealers.
As for Jeff Paterra reporting to Japan that is difficult to understand. The top 50 dealers at Ricoh drive that business and if Jeff and Peter are not on the same page in a given situation what are they going to do, take the fight to Japan? How is Jeff going to position dealers going forward? We all know how well John Fulena (Production Print) worked with the dealers and we can only assume that John will still be very much in the picture.
As for the other two groups, are their efforts going to be integrated in their go-to-market strategy? What role will dealers play and how well they will be supported? At this juncture, we cannot say. What we can discern is that Ricoh mandated a leaner and more integrated organization. They may well have accomplished the former, but not the latter. When you are running a business with four different leaders you had better ensure that the U.S. leaders know how to talk to each other. Most important, they must fully understand how critical the integration of all their efforts is to making this work.
For Further Consideration
These moves have clearly been in the planning stages for some time. The Japanese Headlines column by Tetsuo Kubo, which we received on February 12 for the upcoming March issue of The Cannata Report, hinted at big changes ahead for Ricoh, albeit, we weren’t expecting an announcement of this magnitude so soon.
His column covered the January 26th announcement that Ricoh Company Ltd. President Yoshiji Miura will retire on March 31 and Yoshinori Yamashita, vice president Infrastructure Business and general manager of Ricoh’s Business Solutions Division, will take over as the next president and CEO at that time.
Kubo-san reported that when Yamashita assumed his current position of vice president in June 2016, he was directed by Miura to organize and map out Ricoh’s new three-year plan (19th mid-term business plan), with an emphasis on revitalizing Ricoh while achieving what the article described as “satisfactory [financial] results.”
Yamashita’s comments at the Jan. 26 press conference announcing his promotion may have yielded additional clues as to a future restructuring when he said that he would like to make a new start without any bias towards the previous performance of the Ricoh Group.
“The rule and principle of management must be customer first,” stated Yamashita. “I believe that we can create new markets from innovations that will be generated where we pursue products and services that impress customers while imagining customers’ future, always putting customers at the center.”
As Kubo-san commented in his upcoming March column, “…what stands out most to me is Yamashita’s concept of ‘customer first.’ I believe he is focused on making it a rule and a principle as a way of expressing his intention of re-examining future structures for Ricoh’s manufacturing and sales.”
Even More Food for Thought
While we’re on the topic of Ricoh Company Ltd., it’s worth noting some of the other developments taking place with the company in Japan, which may or may not have accelerated the timeline of the restructuring. Ricoh Company Ltd. finished its last fiscal year with revenue and profits down. It was also reported by the press in Japan that Ricoh will close or relocate four offices in Japan and close its Saitama manufacturing plant as well as its Shinagawa Ward office in Tokyo. These moves impact 3,000 workers. The intent is to reduce expenses by 3 billion yen annually. The company is also canceling its lease on its headquarters in the Ginza district of Tokyo and will move headquarters to the Omori manufacturing plant in Ota Ward. We further learned that the company is considering a plan to encourage workers to apply for voluntary retirement and may reduce personnel in and outside of Japan.
Moving back into the Americas, we’ve also heard that the market research firm GAP Intelligence has suggested that Ricoh Americas Corp. may reduce the prices of its MFPs to offset underperformance in the U.S. market and a decline in revenue of 12.2% in its most recent quarter—the second consecutive quarter of declining revenues.
At press time, we have not seen an official press release on the restructuring nor have we had an opportunity to connect with anyone at Ricoh who could provide us with further details on or off the record. The e-mail that was circulating on Feb. 17 likely contained more information on the reorganization than one would find in any press release. On the positive side this is a bold and far reaching move and Ricoh may have well locked onto something that will lead to very positive results. At this point all we can say is ask us after Convergence 2017 (October?) and we will let you know if it is working.
(Editor's note: Frank Cannata also contributed to this article.)
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