Friday, July 14, 2006

"You can't polish a sneaker." William H. Swanson

From Swanson's unwritten rules of management, unwritten rule number 29:

"In other words, don't waste effort putting the finishing touches on something that has little substance to begin with. I apologize to those who dearly value their sneakers, but the point is, if you polish a hollow shell, it's still a hollow shell, albeit a shiny one.

Polishing a sneaker can inadvertently convince others that the sneaker has a value that it doesn't possess. This can distract an organization from important pursuits or lead an organization down a dead-end."

Gary Sutton, writes (in his book Corporate Canaries)...

"Your business is in deep trouble when...

1. Sales have dropped two years in a row.

2. The competitors' sales have dropped two years in a row.

3. Nobody's making money."

Broadcast needs a new business model. Things are not getting better, the best used by date has more than passed. For most this is another poor year. Efforts focused on "getting better" at the same business model is not the solution. It's a dangerous waste of time. In this context it is irrational to believe you can sell your way out of trouble or save your way to success. Clearly, we have a leadership problem. Too many GMs, MMs, regionals and corporate staff simply have no idea how to fix what's wrong. Rather than focus on driving topline they have become distracted, obsessed with micromanaging the operating income line. Too many corporate teams continue to employ outdated "financial engineering" practices in the futile attempt to buy another quarter with the street. What is needed now is nothing short of game-changing innovation. Let's take radio...

The first step is to stop rationalizing failure. GDP growth, retail sales, "the market" is not going to get better this year. Get over it. Stop putting lipstick on a pig. A 1.9 share is just that, a game losing 1.9 share, don't waste time polishing that sneaker (e.g., "the 12+ is up 1.9 from a 1.7 but the real story is we are up 42% men 35-44 middays, we've really turned the corner in this trend" - that's baloney, and you know it. Any PD giving you excuses like this might better serve the team in promotion or sales but you need to get them out of programming asap.). Leadership is paid to produce results not excuses.

Second, get serious about the question "what would have to happen for us to be successful?" Stop hiding the failures in the aggregate. Every property should produce and if they don't you have a problem that needs to be fixed. If they are not helping you they are hurting you.

Third, engage the talent, imagination and every resource available to drive the toplines of ratings and revenue.

Fourth, reinvent the sales department. Every other department has evolved, changed or been blown up over the past thirty years. Sales is past due. A failure of imagination is at work here.

Fifth, exit the managers that don't get it - staff needs responsible, accountable hands-on leadership not a scratch golfer or leaves early on Fridays "executive". Beware the MM or GM that advocates firing as a fix. Firing the $28K sales assistant, $23K receptionist and $52K NTR manager does not change or fix anything, it is a one time only savings that - in fact - only puts more pressure on retained staff. Should that same MM or GM also budget themselves for an increase in base next year (COLA or otherwise) you have the wrong person in charge. The person you need and the staff deserves is a great general manager.

It's here now...a perfect storm of crises..product and sales. Leadership needs to step up and make something happen. As the 2007 budget dance begins we need fresh thinking, new ideas, a new perspective...broadcast needs to reboot or else. All that's important is what comes out of the speakers, what's on the screen, everything else is a footnote. Want a discussion of specifics?

It has been said that during the final days of the last century a trained seal could have produced the same results as most general managers, it was hard to get out of the way of the money. People got paid large sums of cash to show up, manage the inventory and keep the cost of separating the commercials and running the joint to a minimum, ah the good ole days. Those days are not returning, welcome to the world of managing decline, of entropy, of systemic collapse. A new day where management is proud to say they were down this quarter but not as much as the market. This condition is, in my opinion, iatrogenic (a five dollar way of saying we, the experts, the professionals, did this to ourselves, we put the business in the hospital). Read on, more here.

One year ago today - the real deal on JACK FM here.

LATER - thanks, lots of emails on this multiple page post. Please allow me some time to get back to you. One point made by many - radio has not qualified under Sutton's point 3. Agreed, while radio has not yet returned to the days of 1993 when 60 out of every 100 stations lost money, it has seen two down sales years in a row. If we don't improve topline, operating margins(ebitda) will continue to erode. Broadcast is still a good business but we have an urgent need for business model reinvention.

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