Saturday, 3 August 2019

In 1990 Arthurs Jones rockets through the Topline of $28,000,000 producing Custom Made Projects

On Leadership: 1906 - 2001

With battered machinery producing commercial printing projects for the likes of Rust Craft Greeting Cards and Advertising Agencies who always demand more at less cost to gain its business - Arthurs Jones has emerged from the dust of the 1960's to the top of Canada's printing industry by 1990.
AJ had its birth in 1906 when Mr. Arthurs started the company; Mr. Jones joined in the 1920's and Mr. Adams and Mr. Reid McGregor purchased control in the 1950's; Mr. Duncan McGregor, right out of Ryerson University joined in the early 1960’s, and earned its presidency and ownership in 1976.
While this dollar amount of $28,000,000 annually may not seem like a significant amount, please consider that blocks of type and relevant photographs produced in any colour of ink on any manufactured paper stock, and finished in a variety of ways for every single individual project will limit an ability to create the volume possible in other production facilities. However, this characteristic of our business gave us the opportunity to create and establish superior techniques and craftspeople that, simply put, did it better than our competition. That is a saleable commodity - and one that was used and practised by every person who worked at AJ.
Hiring individuals who would learn and apply these practices followed; the addition of top quality printing and pre-press equipment from Heidelberg followed; the addition of a new modern 75,000 square foot manufacturing and office building built by Orlando in Mississauga followed in 1984; and most importantly our reputation as a trusted and quality supplier of important documents such as annual reports, advertising and various promotional materials surely followed.
The driving force behind all of this is without doubt Duncan McGregor the son of Reid McGregor who had asked me if I would like to join the sales force in 1963. My life changed when I accepted the inquiry and his father accepted me.
This post is about a company of people who had optimal leadership not  always found in many companies. Duncan McGregor had the guts to speak out on issues he deemed fair, smart and dedicated to his goal.
During each day decisions were made for and against but the goal was in sight: to be the trusted, quality supplier of important printed documents beyond repute. Year after year, example after example cemented that trust between our clients, prospects and our employees.
In 1986 Jannock Corporation liked AJ within the industry and made an offer for 50% of AJ with a Put and Call for the other 50% in 1991. Duncan liked the opportunity to join a larger corporation and accepted their offer on behalf of his five partners. We were delighted and accepted the cash for half our shares.
During the next five years the "MacAttack" kicked in and everything about our industry changed. Designers became typesetters; printers became commodity producers whose differentials could not easily be distinguished. With these changes AJ's intrinsic value eroded somewhat and the intelligent decision was to accept the price and sell the balance of ownership to Jannock in 1991.
The next several years have no real significance to this post other than stating that Jannock waited for a buyer while AJ produced top quality work as always. Duncan recommended that I report to Jannock while the For Sale sign hung over AJ’s head until 1994 - when Leland Verner made an offer to buy using 10% of his money and the balance payable by Arthurs Jones.
His offer was based on the intention to take AJ public on the TSX after he secured the support of our key employees and the Bank of Nova Scotia. To his proposal I added a proviso that all of AJ's employees including Duncan McGregor should have the option to buy in at agreed-to share price. Leland Verner accepted, Duncan accepted, I accepted and 60% of our employees bought shares in AJ at 12.5% of the IPO price.
The IPO was an unmitigated success except that control and top-level decision-making did change hands. It was now in the hands of the Chairman and new CEO Leland Verner.

Let me close by stating that the 'Hands on Control' that made this enterprise successful would never be the same without skilled executive, tradesman and qualified leaders in our industry calling the shots. The collective leadership that had built this great company resigned under the circumstances that followed Mr. Verner's vision and tutelage. Unfortunately I was right, AJ closed its doors forever in 2001. The rest of the story is for someone else to tell.

Gary McDonald 2019

(1941 -)

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