After a 20+ year career in B2B media, I made the leap earlier this year to local media. Why? Two things drove my decision: 1) Business transformation in the media space is my passion and while consumer and B2B are well on their way to new, sometimes radically different business models, traditional local media is still struggling with the basic transformation issues of business model, culture, talent, technology and investment. 2) While many view local media through the lens of the newspaper business and its multi-year decline into revenue oblivion, I view local media through the lens of the incredible opportunity presented by the interaction of social-local-mobile media, the strong revenue growth of a $150 billion a year business, and the non-stop innovation of companies like Google, Facebook, Groupon, Foursquare and others. Just as in consumer and B2B, the legacy companies in local still have the opportunity to transform and compete with a large paid subscription base, significant national & regional advertising partners and a local merchant community that is becoming more and more digital savvy. So as a digital guy parachuting into a newspaper company, what have I learned? (hint: you’re not in Kansas anymore).
1. Hope is not a strategy
I am a big believer in hope. If you have hope, no matter how small, you have a shot. If you have no hope, you’re done. But hope is not a strategy. You can’t hope that the print revenue decline is cyclical, not structural. You can’t hope, that the economy will rescue you. You can’t hope that your customers will buy digital products from you just because you have been a long time “trusted partner” in print. If you are going to budget for digital growth, you better understand that what drives success in the digital media world can be very different than the print world. Audience development is different, product development is different, performance measurement is different. You need to have a clear plan for each, you need to have the talent to execute, and you need to move fast, fail fast, and change course fast because you will need to often. In my 100 days in local media, I have yet to have someone convey what they believe this business will look like in 12, 24 or 36 months. How will it fundamentally change? What is the plan? How will you leverage your unique strengths and minimize your inherent weaknesses? How will you stay one step ahead of the market, your competitors, your customers? Strategy is not a math exercise. Hope is not a strategy.
2. Culture eats strategy for breakfast
A great line from Peter Drucker. Even if hope is not your strategy, the greatest strategy in the world will be crushed by a crappy culture. As a legacy media company you can talk about your new, digital focus all you want, but if you don’t transform your company culture first to mirror that of successful, employee focused, truly digital companies, you have no chance to succeed. This starts from the top. Employees want basically 5 things from management: 1) To be treated with respect. 2) The truth, even if it is difficult. 3) To have a plan and articulate it clearly 4) Passion for what you are doing. I’ll following you anywhere but show me that you care. 5) Accountability. When things go right, all credit to the employees, when things go wrong, it’s on you. Not hard stuff and something that any true leader ought to be able to deliver on. You can’t transform a company if you don’t leave your office. You shouldn’t have to introduce yourself at all-employee meetings. You need to get out and talk to the people. All the people. Take them to lunch, buy them a beer, ask their opinion. You never know where the next great idea might come from (Hint: probably not you). When you make decisions, make them fast, like in hours not days, weeks or months. Minimize forms, processes, approvals and procedures. How much time do you spend in internal management meetings compared to conversations with employees, partners and customers? How many meetings and conference calls that just lead to more meetings and conference calls? Entrepreneurial companies don’t do these things, your new competitors don’t do these things, they can’t afford to. They are focused on talent, product, and customers. That’s it. The rest is just noise that defines a failed company.
3. Local media begins and ends with community
My 71 year old Mother called me a while back and told me that she was calling to cancel her local paper. When I asked why she said, “they keep raising the rates on me. I don’t care about the money so much but there is nothing in the paper any more about my local community. They used to write about people I know, places I know, and businesses nearby. Now there is none of that”. Nothing speaks louder to the failure of local media than a long, slow disconnect from the communities they serve. In trying to become more efficient, they have become irrelevant to many. Even with the financial challenges we face, this doesn’t have to be the case. We can engage the community in producing content through local blogs and social media. We can ask their opinions on what we cover and how we cover it. We can tear down the walls and point them to quality content wherever it may reside, even with our competitors. While it is easy to criticize the business model of Patch, most people I know in my community get their local news and information from “The Patch”. Every merchant knows the local Patch editor because she is out in the community on a daily basis. This is not just an editorial issue. The business side of the house has lost touch as well. Every week there are local events in most towns, farmers markets, fairs, oktoberfests, etc. We should be taking the opportunity to get out in the community, sponsor these events, introduce ourselves to local merchants. We do some of this but not in a strategic, comprehensive way. We need to re-connect with community non-profits, government agencies, business groups, etc. Truly become a vital part of the community again. Oh yeah, my Mom kept her subscription, ….after negotiating a 50% discount.
4. Diversity matters
This is a sensitive subject, but your company and your management team need to reflect the diversity of the business you are in and the markets you serve. An effective management team should be represented by different backgrounds, skill sets, points of view, experience and demographics. If in 2011, your management team is primarily made up of old white guys (and I say this as someone rapidly approaching old white guy status), I’m pretty sure you do not have the diversity that you need to compete effectively. Diversity drives understanding and leads to better informed decision making. Diversity allows you to connect with the multitude of communities you serve and employees you depend on. Diversity is a strength of great companies.
5. Selling online is not the same as building a sustainable digital media business
Building a great digital business is not a math exercise. It’s about building great products, growing audience in quantity and quality, and delivering unique, clearly measurable results for your marketing and advertising customers. Selling something once is the easiest thing in the world to do. Selling it again, if it wasn’t the right product or didn’t deliver the results that the customer expected is very difficult. There is too much focus on “the sale” and hitting random revenue targets and not enough focus on the quality of the products and the performance and unique value they deliver. This leads to moving money from the left pocket to the right pocket, not truly growing the business by tapping new, incremental budgets and taking market share on the merit of your products. You can’t build a credible, sustainable digital media business on the cheap. You can’t do it through a series of generic, “me too” white label products and “partnerships”. Someone said to me the other day that one of our “partnerships” where we sell another company’s advertising product was “a strategic objective of the company”. If it’s a strategic objective to give away 50% of your revenue, you’re in deep trouble.
6. Yes, you are a technology company
I read an email or something the other day that said “We’re a media company, not a technology company”. Guess what, it’s 2011, if you are a successful media company, you ARE a technology company. Look around at your new competitors, they all GET technology, technology is a competitive advantage, they will succeed or fail based on technology. That doesn’t mean that you can’t outsource, go “off the shelf” or open source, but it does mean that you have to hire people who get modern media technology and you are placing bets on proprietary products and services that will give you unique competitive advantage in the marketplace. It means you need to make the investments necessary to eliminate all of the old, slow, back office systems that kill your employees productivity so that these employees can focus on providing world class support to customers and identifying new ways to serve their needs. You can’t be a great media company without being a great technology company. Period.
7. The answer is all around you (your people)
Whenever I have taken over a new business, I have made it a priority to get out and meet the people who work for me at every level of the organization. I prefer to do it in a casual setting, lunch, coffee, whatever. I like to take the opportunity to introduce myself, put names to faces and ask the employees their opinions on the business, what they like about their jobs, what they don’t like, what we could do to make the company better. It’s amazing what you can learn when you actually ask employees what they think and solicit their honest feedback. After doing this for a few months in my latest gig, I am blown away by the employees, many of whom have spent their entire careers and adult lives working in this business and in many cases their company. They care deeply about the people they work with. They care deeply about the company, the products, the importance of quality journalism, and the mission of the fourth estate. They care about their customers and helping them succeed. They take to heart when someone comes in to place an obituary and what that person and their family must be going through. It makes them feel good to in some way make things just a little bit easier. The employees of local media, yes the newspaper business, are some of the most amazingly caring and dedicated people I have met in my career. I really had no idea. What do they want? Yes, Respect, The Truth, A Plan, Passion, and Accountability. I have not met one person who didn’t understand the challenge or was paralyzed by fear of change. The answer to the challenges of local media is all around.