K/P Corp.--Achieving Purpose And Profit

BY ERIK CAGLE

Truth be known, San Ramon, CA-based K/P Corp. is a mom-and-pop printing organization that grew legs. Really, really big legs.

Founded in Salem, OR, in 1929 as Unruh-Knapp Printing, the company became known as Knapp Printing in 1963 and, later, K/P Corp. It quickly became a staple of the Northwest printing landscape as it expanded into Utah and California. Operations expanded to include direct mail services in 1982, fulfillment capabilities in 1993 and full-color digital imaging in 1994.

K/P has since complemented its arsenal with a full barrage of Internet capabilities. A massive growth spurt this year saw the company tack on an expansion at its printing facilities in Salt Lake City; a mailing and fulfillment center in Atlanta and Salem, OR; and a printing plant in San Leandro, CA.

K/P, which still considers itself a regional printing, mailing and fulfillment operation, now serves many major, national customers through its 12 facilities in five states—Oregon, Washington, Utah, California and Georgia. In 1997, the company turned its back on the consolidation craze when owner Jim Knapp transferred control to 650 new owners—his own employees—and offered stock for sale. As the page turns to a new millennium, K/P is enjoying robust sales of $95 million (for 1999) and shows no signs of slowing. In fact, the company still appears to be garnering steam, with long-term plans for national expansion.

"A lot of the changes we're making, especially with the move to employee ownership, are to try to preserve the values and work environment that Jim Knapp has worked so hard all his life to create," states Bill Taylor, California division president for K/P. "There are a lot of us here committed to keeping those values in place. With all the acquisition activity going on today—not just in our industry—we felt that if we were to have an ownership transition, we prefer it be to employees as opposed to someone not familiar with our history or culture."

Once a collection of companies with individual identities, K/P has developed a core set of values that has helped to augment its perception as a single-source solution rather than a set of singular specialties. K/P was born out of a goal "to create an organization that offers people a chance to do something worth doing and be something worth being," according to Rick Scott, president of the Northwest/Utah region. "To reach that goal, all K/P employees are expected to practice the core values of honesty, responsibility and love. It is our desire that business decisions are being made close to the customer and not at headquarters."

The single-source approach was a result of K/P doing its homework and understanding the customer's desire to bundle its needs. Printing and mailing now walk hand-in-hand, and many customers are integrating printing, mailing and fulfillment into one program. Recognizing those needs and responding in kind has enabled K/P to carve out its role in the marketplace.

Role carving can be a pricey proposition, but K/P isn't bashful about writing checks. A sampling of the additions:

• A $2.5 million investment was required to expand and upgrade the Salt Lake City locale, including a six-color Heidelberg Speedmaster CD press, with digital proofing and platemaking equipment slated for installation in the near future. The company is leasing 25,000 square feet one mile away from the plant to house its new fulfillment operation.
• K/P staked its flag in the east with a 14,400-square-foot facility in Atlanta. A $160,000 investment, it provides mailing, fulfillment and in-bound telemarketing services.
• The Salem, OR, plant received an infusion of $175,000 in new equipment and automation for its new mailing and fulfillment capabilities. This expansion, including 15,000 square feet of space, is a direct result of the influx of Internet-based companies looking to bolster distribution methods, including such new clients as EltonJohn.com and BandMerchandise.com.
• K/P moved one operation from a smaller Oakland locale to 150,000 square feet in San Leandro, 40,000 square feet of which is occupied by the print division and the balance by fulfillment. Two new Heidelberg presses: a six-color, 40˝ Speedmaster CD press and a two-color 40˝ unit, were among the investments. Digital proofing and platemaking equipment was added to upgrade printing capabilities and enhance workflow.
• To address the increased demand for direct marketing work, a six-station, 10x13˝ Kirk Rudy (KR 521-6) automated jumbo inserter was installed at the Kent, WA, facility. The $60,000 investment replaces hand stuffing.
• Meanwhile, in Seattle, $500,000 was plunked down to acquire a computer-to-plate and digital proofing system. Included are a Heidelberg/Creo Trendsetter Spectrum 3244 electronic Proofsetter that generates Imation Digital Matchprint halftone proofs and Kodak Polychrome Graphics plates, and a Barco Impress Digital Dylux ink-jet plotter.

The cost of being a single-source provider has paid handsome dividends, according to Scott. "Instead of having to manage different vendors for print, mail and fulfillment, customers need to call only one number—and that's powerful," he says. "That helps make us quicker than the competition."

To speed up the process, K/P offers a bevy of Internet-based products and services. Customers can go online to place and track orders, make payments, review proofs, print reports and check inventory levels—all in real time.

Its trademarked services include Click On 3.0, an online method of ordering business cards, letterhead, envelopes and other corporate identity products. Logos To Go is an extensive selection of ad specialty items customized with company logos or promotional messages.

Literature Express is a system for ordering customized packages of literature for prospective customers or investors. Express Images provides full-color, on-demand, digital printing of proposals, binder covers, overheads, presentation materials and other short-run collateral.

According to Taylor, K/P has been able to develop and grow through its approach to customers and markets by providing complex, single-source tools in a way that is simple for the customer to understand and utilize. It entails a collaborative work environment that feeds off the company's core values, which was underscored in a speech Knapp delivered to his employees two years ago. In that speech, Knapp discussed the need to strike a balance between P&P—purpose and profit.

"We have a very collaborative work environment where people care about each other and want to make each other successful," Taylor remarks. "That, to me, is the key factor in keeping up with change. It makes change exciting rather than a threat, because change can absolutely be both of these.

"I want to prove that our dual goals of purpose and profit lead to a company with better financial returns," he adds. "To be honest, you don't get any credibility until you have that, and you just get the reputation of being a nice place to work. But you're not really creating wealth like successful companies are; and one of the key things about K/P trying to achieve purpose and profit is that as we create wealth, we want to be sure it's distributed fairly within the company. We try to have a company of capitalists."

It should be stated that K/P is also a nice place to work. Scott and Taylor point out that they are not keepers of the idealistic flame; an entrepreneurial spirit envelops each member of the K/P team. The proprietary notion exceeds stock certificates. Employees boast a sense of personal investment—a culture of entrepreneurial thinking and accountability normally reserved for higher-ups permeates the entire K/P organization. The company gospel is not housed in a dusty strategic plan sitting on the bookshelf in San Ramon. It is brought to work each day by the employees.

"It is really the trickle-up effect," Scott remarks. "We listen earnestly to what our customers and our people are telling us, and we help them try to achieve it."

By following the fundamentals that have enabled K/P to gain its current success, Taylor believes the company can continue to improve and grow. "I want people to look at us and say, 'That's the kind of company I want to work for; I wonder if it's for real,' " he says. "I don't mind people being skeptical about it, as long as they're willing to work toward making it real."