Checks and Balances

In May 2006, when Schram took over at Deluxe, he liked a lot of what he saw, particularly the ongoing collaborative work. But he also saw some problems. “The business felt very siloed,” Schram recalls. “We have three go-to-market segments that we operate in: Small Business Services, Financial Services, and Direct Checks. Those businesses were self contained and really weren’t sharing or leveraging products or services or even best practices across the segments.” Even the information technology, human resources, and finance components were separated across the three divisions.

One of Schram’s first moves was to merge the management teams overseeing Financial Services and Small Business Services. He also reduced infrastructure costs, merging manufacturing and fulfillment with procurement. A production facility that had been dedicated to printing checks could now print both checks and, say, holiday cards.

“Think about what that has done for an employee who used to print just checks,” Peterson says. “They know checks are declining a little bit every year. It gives them a different look at the future and they are gaining skill sets that have to do with products that have different outlooks.”

But that doesn’t mean that every employee had a future with Deluxe. To determine whether Deluxe’s newly merged infrastructure costs were competitive, Schram put them through a benchmarking process. Out of that came a plan to cut $150 million in costs over a two-and-a-half-year period, beginning in third quarter of 2006. That plan included layoffs: A net 551 positions, 69 of them in Minnesota, were eliminated between May 2006 and January 2007.

Still, the company projects that 116 new positions will be created this year, 80 percent of which will be Minnesota based.

Bigger for Small Business

Deluxe’s Small Business Services unit works with roughly 6 million of the 26 million small businesses in the country. “We want to do three things with them,” Schram says. “First of all, we want to get those that buy something today to buy something more. If they buy a check or a form, we want them to also buy a holiday greeting card or a promotional product.” Second, Deluxe wants to tap into the 20 million small businesses that currently don’t buy any of its products or services. And third, it wants to develop both new products and services for these businesses.

In October, looking to expand its offerings, Deluxe purchased Rockford, Illinois–based Johnson Group, a custom Web-to-print company. “We believe this is a double-digit revenue-generating opportunity over the next several years,” Schram says. Before the Johnson acquisition, Deluxe had no in-house capabilities to produce high-end, full-color reports or brochures for banks of small businesses.