Dr. Dickey Tackles Cumulus Health Care

I’ve got bad news for the big radio consolidators.

Once the economy comes back and their money problems ease, many of their best employees will quit.

These loyal workers have been waiting to leave abusive radio groups for a long time now. Once things get better – probably by mid-2010 – the best and the brightest from Clear Channel, Citadel and the worst people-treater of all, Cumulus are going to find themselves in a bad way.

We’re seeing it now.

Many Cumulus employees have quit – even without a new radio job to go to and the ones who have left for brighter pastures can’t get over the pleasure of working for radio operators who treat you well. These may not be the big three but they are out there.

I mention this because one of the Big Three Career Wreckers, Lew Dickey of Cumulus is now tackling health care.

No -- not the public option or killing Grandma approach– he’s out to save money on the backs of the one thing you just can’t take away from employees right now – their health safety net.

He's now using software that allows him to track pharmacy claims on a daily basis. Big Brother is really watching you now at Cumulus.

Dr. Dickey is out to shave $4 million off the health care expenses of his 3,500 Cumulus employees.

The business journal Portfolio.com did a story on health care costs and Dr. Lew is one of the poster boys in what actually turns out to be an unflattering, damning article on how Cumulus operates as an autocratic entity.

Dickey fires his head of Human Resources. Then, he slams her in Portfolio.com!

"Chief executive Lewis Dickey is taking an unusual step toward tackling health care costs: He's taking charge of the matter himself. Fed up with his human resources department's inability to halt runaway costs, he personally took over analyzing health care trends for his 3,500 employees.

Most CEOs delegate such tasks. But technology is allowing top managers such as Dickey to get more involved. He uses a software system from WellNet Healthcare in Bethesda, Maryland, that tracks pharmacy claims on a daily basis, helping him size up and manage health care costs.

Dickey concurs. 'I could immerse myself in office supplies, and in 15 minutes I could have a knowledge about that,' Dickey says. 'It's a simple thing to jump into. But understanding health insurance is different.'"

The full article is here.

There is a lot wrong with this.

First, an effective CEO doesn’t immerse himself in office supply costs. He or she hires competent people who weigh cost/benefit when it comes to expenses.

Secondly, you don’t play "I’ve got great health care coverage and you don’t" with employees during this economy even if you are the supreme owner.

As I said earlier, things will look up next year – radio’s billing will improve although few analysts believe the industry can grow again without a major transition to new media products to attract digitally focused advertisers. Still, things will improve.

As the Portfolio.com article points out, the average family premium for all employer-based health plans is $13,375, up 34 percent from five years ago and up 131 percent from 10 years earlier, according to the Kaiser Foundation.

So Dr. Dickey is doing dangerous surgery at a time when he could be left without his most talented employees. Spying on them with cameras, sending the John Dickey, Gary Pizzati “Death Squads” out to exercise their firing power and dehumanizing the workplace will have a price to pay.

For example, Cumulus remains the Worst Radio Group followed by Clear Channel and Citadel according to our Inside Music Media ongoing poll of business executives (to see the rankings, click here and scroll down the right hand column).

It is no accident that these three groups – the three largest owners of radio stations – are the biggest career wreckers and also voted the worst operators. And while the bean counters and bankers were performing surgery with their employees' livings, the workforce is going to have the last laugh.

And as Confucius said, “he who laughs last, laughs best”.

People are beginning to migrate from the three consolidators that have set such a dark tone for the industry and moved on to good operators. Because just as sure as the recession ends, Cox will hire once again and so will Bonneville, Lincoln Properties, Journal, Emmis and the other good ones. Their excellent reputations will net already good companies the pick of the market.

Then companies like Cumulus will be forced to hire inexperienced workers from, say, the uniform rental business. Oh, that's right -- they already do.

In the months ahead, keep an eye on the following:

1. Good owners hiring the Worst Radio Groups best employees as they move beyond the bottom of the recession.

2. Clear Channel, Cumulus and Citadel experiencing a brain drain the nature of which they have never seen because these three groups had many outstanding managers, programmers, sales managers, account execs and on-air talent. They stayed because they needed the jobs. Now they will once again polish the old resume.

3. The radio groups that want to be growth companies will have to start spending on new media as I have been saying for years now. And many traditional employees can port on over and new ones will be trained. The three Career Wreckers will not attract this talent any time soon.

4. To get back in the game Cumulus, Citadel and Clear Channel (if they exist in their present footprints) will have to become more people-friendly. More benefits. Better salaries. Insuring a better work environment. A very difficult task without a changing of the guard at the CEO or president level.

5. They will also have to stop forcing employees into arguably illegal restrictive contracts and will have to clean up the sexual harassment I have been hearing about at some of these companies. Zero tolerance is the number for harassment at good companies.

6. The bitterest pill for the most abusive consolidators to swallow is that good people in a good economy will not work without respect and autonomy. No more top down thinking. Read Peter Drucker. The knowledge worker is what you want – not the know-it-all CEO.

So while Dr. Dickey enjoys his $4.1 million health care bonus, keep in mind that it comes at a very high price.

The year ahead is a recovery year and recovering from abusive and misguided managers is also included.

The next recession will be at radio groups that rode roughshod over their employees during hard times.

And their punishment?

They don’t get to keep the best employees some of whom are already starting to leave.

You’ll know the Big Three Career Wreckers are listening to me when you read a story some day soon about consolidators suing employees to stop them from quitting.

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