Some 20 years ago, I wrote about what was then an emerging trend: Publishers, for the first time, letting staff go in order to cut costs.
Much of the downsizing seemed logical to me, reflecting changes in technology that led to increased efficiency and effectiveness. Since then, we have seen the balance of achieving greater performance transformed into often-desperate measures in a quest for survival.
Over these 20 years, I have no idea how many articles and reports I have written reflecting (I would hope) the spectrum of our industry’s future and practices. I’ve enjoyed praise and criticism in equal measure, and had plenty of fun along the way. But without a doubt, the stories that seem to resonate most are those about people, because that’s what we are about.
If there is one perk to be derived from age, it has to be the benefit of hindsight. What does history tell us about what we did right or wrong, and how we should reprogram for our future?
Despite all the protests and prognostications about “cuts” (what the media reporters say to the few people who read them) or “re-engineering” (what the consultants say to sound good to their clients) or “optimization” (what the CFOs say to the shareholders), most of the changes have been valid, although badly timed.
As technology took over the production process, we let go of all the compositors, and at the same time lost the craft of typography.
In reality, we employed far too many production journalists in an unnecessary workflow process with too many steps and indulgences. And we left this too late, believing it was part of our art and culture.
We have depleted our advertising sales resources to the point where I only know one advertising department in our global industry that has enough staff. We’ve lost a higher percentage of advertising staff than we have of revenue, and ignored issues of cause and effect.
My estimate, in the U.K. and U.S. at least, is that half of our circulation decline was self-inflicted. Coca-Cola continues to spend a fortune on branding and marketing (17 percent of their turnover), to ensure they remain a household name. Why, when their availability is ubiquitous? Newspapers are disappearing not simply because of declines in interest, but because we no longer invest in our presence. We spend less than 1 percent of turnover on communication.
As we increasingly move into the digital age — and I genuinely believe we have a successful and profitable future unfolding — it is vital that we promote our brand values. Ask yourself why Google, Microsoft and Dell advertise in newspapers and on television and so skillfully manipulate their image through PR. It is because their communications people know that their brand values will sustain their futures. It is ironic that we are great at telling stories about other people but lousy at promoting ourselves. Have you ever heard a TV news anchor talking about how his audience is declining faster than ours (which is a fact)?
A client of mine, who was the CFO and then CEO of one of the biggest newspaper groups in Europe, told me that as he looked back over his career, he realized he had made one big mistake. That was opting to pay staff to leave because he thought it would be a cost-effective option in terms of maintaining profitability, i.e. “managing decline.” His argument, without serious analysis it must be said, was that if he had invested 50 percent of the money that he wasted in making staff reductions in a program to create a more entrepreneurial and confident culture, his company would have grown exponentially.
Another client tells a story of transformation for the digital age. As his company embarked on this journey, his executives assumed that the younger staff would adapt easily to new working practices, but the older people would fail. In fact, what they found was that the younger people tended to opt out and find other jobs (cheap redundancy), while the older staff were delighted to be offered training for the first time in 20 years, and to be given a new set of challenges and skills. The average age of the established workforce went up.
Many publishers — not most, but many — are reaching the tipping point where their digital activities are growing faster than their print businesses are declining, and this is before the true benefit of tablet publishing kicks in (which it will in the next two years). Now is the time for investment — not more short-term cuts — in creativity, flexibility and technology.
One of my mantras is in regards to what I call the Four Es of performance, namely: effectiveness, efficiency, economy and enterprise, where enterprise is the ability grow and diversify. My observation is that traditional managers generally seek to achieve them all, but see them as mutually exclusive.
Accountants in particular do not understand the dynamics of our industry. So we cut advertising sales resources without sufficient cognizance of the impact this will have on advertiser retention.
We raise cover prices knowing that it will impact circulation (roughly a 2 percent rise in price causes a 1 percent fall in circulation, and think of all those yummy savings in paper and distribution), without considering how that fall in circulation will affect advertising revenue, which in the majority of cases, has a more significant effect on profitability.
We cut staff rather than think about the value of redeployment and diversification.
And so it goes on, and so do I. But the lessons are all there.
The past isn’t what it used to be. But without learning from it, there will be no future.
Jim Chisholm can be reached at firstname.lastname@example.org.