Friday, June 02, 2006

"The future we're living in isn't just like the past."
Dave Winer

Dave Winer's blog is a joy to read. A software pioneer he founded UserLand Software and has since made a number of significant contributions (e.g., blogging, outlining, scripting, RSS, XML, SOAP, podcasting). Never one to hold opinion in reserve, Dave speaks his mind. Rather than play nice or get along to get along, Dave's writing is fraught with raw emotion, passion, and a rare unvarnished candor. Opinion, his opinion, and those others that get his attention are front and center without excuses. You may find yourself in agreement with Dave only to discover in the next paragraph a guy who could not be more wrong. That, is the very cool essense of Dave Winer. You may find his blog here.

News in the broadcast trade this morning concerning the continuing explosive revenue growth of Online (versus the slow growth or declining revenues captured by broadcast). The solution is to abandon what is not working, to face reality as it is, not as it was or as you wish it to be. Change up your game. The key metrics on your dashboard need to remain ratings and revenue, your approach to each needs more attention. "You must be the change you want to see" Gandhi

A lot of good news out there, folks having really exceptional years, enjoying record success. Far more are not. Ratings are off, sales are a struggle. For these folks things are only going to get worse. They are using the same approach and working harder expecting to achieve a different, positive result. It will not happen. A colleague sent me an email this morning with an excerpt from one of the trades. The item about the CBS stations now on the block and their said to be poor condition. The common 1990s corporate strain of anorexia is fatal. The solution, in part, is to abandon price based costing and embrace cost based pricing. How much does it cost for you to create an avail? Profit-maximizing strategies alone will not grow the business, whereas topline-maximizing strategies will serve to enhance profit by simple consequence. It takes courage. Faced with declining toplines, the only solution is change. It is impossible to save your way to success. One time savings create one time comp gains and nothing more. Success requires investment even if that means a fresh re-deployment of the same resources. The first step is to get the most out of what you are investing rather than investing more or investing less, invest different!

Benchmarking against your own silo is not only increasingly irrelevant but potentially dangerous. Managers focused on "beating" the market when that means focusing only on aggregate like media rather than the much larger total ad sector are unneccessarily putting their enterprise in harms way . A manager writing "The market was down 5% but we were down 1%, so we beat the market" should be cause for a sit down and reality check especially when "the entire market" may actually be up 3.5%. Managing decline is a fool's errand. This holds true in product as well. The PD who fronts "the format is down" or "the network gave us another weak lead in" as rationale for poor performance requires an awakening if not a new posting.

The clarion call: PDs need better sellers, SMs need better numbers. Group heads and GMs need to put a stop to rationalizing failure. Accepting "special Olympics" metrics (i.e., only having to best your numbers) is a symptom of end stage mediocrity. Parity in physics should demand parity in ratings delivery, one based upon established market standards (if one class B can consistently deliver a 4 rating, a 1 rating by any another class B is simply unacceptable failure, one without excuse - in this case for a PD to deliver a 1 rating to sales only to say "it is what it is" is rationalizing failure, it's maleficence)

Asking PDs to get better numbers with the same resources imposes limits. The resources, team and competitive environment may have combined to achieve the sweet spot - delivering an in demo rating of 4.0; to then ask that, under the same conditions, one must reach a 4.5 or 5.0 while irrational is still possible. To suggest that the 4.5 or 5.0, once achieved, can be maintained without revisiting investment is to discount the competition, the possible blessing of a "good statistical bounce" and the common sense alive in any good judgment. The calculus needed to understand where you are, your starting point, and the arithmetic needed to ascertain your effectiveness is to track your cost against performance. How much are you spending to achieve one target demo rating point? How much investment is required to deliver one occasion? What is the six book trend? Where are you going? How much "head room" do you have in your business model? What, exactly, would have to happen to reach and maintain #1 rating in your demo? Winning is about cume, occasions and effective leadership of a creative enterprise, all else is stage craft, politics, vanity, the intrinsic noise of research, the requisite dance of commerce. Measure your PD by not only what's on but what is not on and why. Very important: What new stuff is in the pipeline?

Asking SMs to get better numbers with the same resources imposes limits. The resources, team and competitive environment may have combined to achieve the sweet spot - delivering a new record high rev month and a related record rank in Miller-Kaplan. To suggest that a SM can continue, indefinitely, to grow topline with the same inventory and the same numbers while irrational is still possible. The calculus needed to understand where you are, your starting point, and the arithmetic needed to ascertain your effectiveness is to track your revenue against all market revenue. How many of the top 100 newspaper advertisers are on this month? How many of the top 100 television advertisers? Cable advertisers? Outdoor advertisers? Online advertisers? Yellow pages display advertisers? What is the twelve quarter trend? How many new advertisers are on this month? What is your trend in new business development? How are each of your sellers performing? What is the quality, quantity and result of each call? How much of their time is spent actually selling? What, exactly, is your plan to develop new revenue? to develop each seller to their full potential? Winning is all about driving, obsessing over, topline while keeping a firm grasp on COS. It's about knowing the value of all your inventory not just prime and putting every avail to work, 24/7. Price becomes an objection only when one fails to articulate value. Creating your own demand is key. SMs should be measured not only on what they bring in but what they walk on and why. Very important: What new stuff is in the pipeline?

"If they're not helping you, they're hurting you" Norm Goldsmith
If your PD or your SM is not producing results, not helping you to reach your goals then stop wasting time with double secret probation and other progressive discipline tools - just let them go and hire the leaders circumstances require and opportunity demands. Field an "A" team. Go big or go home, go for greatness and stop tinkering in the margins.

All that's important is what's coming out of the speakers or on the screen, everything else is a footnote

On the day job I am blessed to work with great teams, truly gifted people. We are obsessed not with getting better but with getting different. The business book we give to all new clients is Michael Lewis' Moneyball. You can only manage what you can measure, the secret is to measure the right things, to pay attention to what is, and is not, happening. To make daily changes as needed, to question the status quo, to abandon what is not working. To celebrate small success and build on them.

Bonus Susan Crawford's FAQ on Net Neutrality here. Bravo Susan, well done!

Your comments are always welcome. Have a great weekend.


Anonymous said...

way to go dave, you've nailed it, thanks for speaking truth to power and thanks for the tip on winer, don't understand much of what he is talking about but what I do is worth the visit. R Durpachi

Anonymous said...

bloody well said Dave Cheers, Milo