When Alan Schultz took the helm as chairman, president and CEO of Valassis Communications Inc. in 1998, the company had tunnel vision.
The organization was narrowly focused on newspaper advertising inserts — a singular product that served a singular customer base.
“We basically had one product that served the consumer packaged goods industry,” Schultz says. “We basically had one geography, which was the U.S.”
On the surface, it was a good set-up. The company was making money, kept customers satisfied and gave employees a stable work environment. There was no apparent reason for change. But when Schultz looked at the horizon, he couldn’t deny the storm clouds that were gathering. And the storm was big.
“One of the problems with being a one-product company is we were competing against Rupert Murdoch and News Corp., and he has a reputation for being a bit of a shark at times,” Schultz says. “If we continued on as a one-product company, and Rupert Murdoch came after us and put us in his crosshairs, what would we do? We’d have nowhere else to go for revenue.”
Starting in 2002, that’s exactly what happened. Murdoch came after Valassis’ market, driving down the company’s profitability. Schultz was faced with an evolution-or-extinction decision. Either Valassis had to develop new products and find new markets to serve and get everyone in the company on board, or Schultz had to face the very real possibility that his company would be killed off by Murdoch’s media giant.
The solution was simple on paper but far more difficult in practice: Valassis had to change.
