What’s more important as we enter a new year – not soon enough for all of us – is why the best are the best and why the worst couldn’t make the grade.
Even over the holiday weekend, several of the “worst” were firing people – Happy New Year!
What is critical for those of us who want to transcend the rubble of consolidated broadcasting is to understand what qualities make media companies excellent.
Over the weekend, I was reminded once again of the gold standard for great management, Peter Drucker. In an article in the LA Times, Drucker was quoted on the anniversary of 100 years after his birth and a few short years following his death as being right on the money -- again.
Let’s learn from the master of management:
In 1974 Drucker wrote,"The business enterprise is a creature of a society and an economy, and society or economy can put any business out of existence overnight …The enterprise exists on sufferance and exists only as long as the society and the economy believe that it does a necessary, useful, and productive job."
But that’s not what radio is doing.
In small markets, radio stations tend to stay connected with their communities doing a useful and productive job. But you can’t say that about most of the radio groups that follow their leaders – Clear Channel, Cumulus and Citadel.
Voice tracking, fewer local personalities, networked repeater radio, virtually no news and out of town weather watchers, a lack of commitment to the public interest – this adds up to a formula for failure if you listen to Drucker.
Note what Drucker is saying – the economy or society can put any business out of existence overnight. No matter how smug Fagreed Suleman is that he has bankrupted Citadel and become dictator for life, Drucker is likely to be right.
As the excellent LA Times piece points out, Drucker showed that there is no "inherent contradiction between profit and a company's need to make a social contribution," but that the former is indispensable to achieve the latter. He also warned that an enterprise that fails to "think through its impacts and its responsibilities" exposes itself to justified attack from social forces.
We know social contribution is a joke in the radio industry today. But it wasn’t always that way.
In pre-consolidation days, radio was new technology. It’s how parents and students heard school closings, how news was delivered, how people bonded with their local communities. It’s how local businesses got the word out at a price they could afford. Radio was entertainment and information but even more importantly it was the original social network even before Facebook, MySpace and Twitter.
It's still that way in smaller markets where some owners continue to do radio right.
Consolidators seem to forget this. As the LA Times article emphasized:
"Peter was talking about this in the 1950s," or long before corporate social responsibility became a formalized management principle, says Rick Wartzman, a former Times colleague who is executive director of the Drucker Institute at Claremont Graduate University. His views placed him in conflict with classical economists of the Milton Friedman stripe, who considered profit maximization the be-all and end-all of corporate behavior.
Profit may be the motivating force of the businessman, Drucker wrote, but it fails as "an explanation of his behavior or his guide to right action." Worse, this narrow view of the corporation's role inspires the hostility toward profit that is "among the most dangerous diseases of an industrial society."
So, Fagreed’s bean counting, Dickey’s reinventing the wheel and Clear Channel’s operation of the world’s largest radio group in the image of any other buy out that parent company Lee & Bain runs is in trouble if you believe Drucker and not the three blind mice.
Drucker’s concept was that a business exists to serve the customer by providing an outstanding service in both personal and social arenas.
Yet, consolidated radio companies focus on cost cutting and squeezing out profit and show by their actions and their operating budgets that they can ignore the Internet, mobile content, social networking, local radio and on and on.
And this is important because when the big “C” groups screw up, as incredible as it may seem, smaller groups follow by accepting and installing their misguided concepts. Look no further than voice tracking or repeater radio for evidence.
No radio group has even a 3% budget for Internet and/or digital – that’s amazing seeing as they sat out the Internet revolution and are now signaling that they will sit out the mobile Internet revolution that will be the growth business of the next ten years.
And what makes a good CEO?
Again, Drucker is compelling:
"Every CEO, it seems, has to be made to look like a dashing Confederate cavalry general or a boardroom Elvis Presley," he wrote in 1988. But real leadership "has little to do with 'leadership qualities'; and even less to do with 'charisma.' It is mundane, unromantic, and boring. Its essence is performance."
Fagreed’s insufferable arrogance?
Lew Dickey’s need to wear his Harvard breeding on his sleeve?
John Hogan’s surprise that he actually got the job running the world's biggest radio group?
Drucker has taught that real leaders show respect for people and their work.
Oops.
Not in most radio companies and our poll of who you think are The Best & Worst Radio Groups seems to bear this out.
Peter Drucker also warned that excessive and abusive executive compensation is one of the main things that destroy this trust and we all know that Dickey and Suleman are making millions while they are cutting back employees in a bad economy.
Drucker said 20 to 25 times what their average workers earn is appropriate compensation for a CEO. Drucker said that then – years ago – but today the likes of Dickey and Suleman make hundreds of times what their workers make.
Hundreds of times what their workers make -- even as they fire and fire again!
On executive compensation in 2004, Drucker said:
"It can only lead to political measures that, while doing no one any good, can seriously harm society, economy, and the manager as well … there is no excuse for it. No justification. This is morally and socially unforgivable, and we will pay a heavy price for it."
Drucker preferred the humble CEO – one that was selected from within the company presumably not one born into it or imported as an outside hired hand.
The good news is that radio has three groups that have excelled in many areas of excellence and I would like to commend their CEOs.
Bonneville, Cox and CBS.
Bonneville's Bruce Reese is an outstanding executive with people skills, humility and commitment to radio and radio people (both of these are important because a commitment to radio without radio’s finest talent is an empty commitment in my view).
Cox's Bob Neil gets your vote and mine as an excellent operator. He trains, nurtures and respects his employees. He leads them in difficult times by using his brains and compassion.
CBS' Dan Mason has a tough job running a radio division that is part of a company that also owns television. But he had made many smart format decisions and when he has had to fire (and he has) it has been handled better that most big companies. Mason has more of a leg up on new media -- perhaps the only major broadcaster to understand that there is no future for radio companies without the next generation.
Even these three "best" radio companies are still woefully insufficient in the digital future. They do not commit adequate budgets to webcasting, podcasting, mobile content and social networking as warranted by today’s business and sociological climate. Here's hoping that changes.
Apple is about ready to unleash its tablet entertainment system and radio can’t seem to find the will to commit great sums to developing brands and pioneering content and marketing in the digital future.
Of course, radio companies that will want to grow beyond terrestrial radio and avoid the coming decline of a former growth industry will have to step up.
But there is no taking away from Reese, Neil and Mason that they are exemplary radio operators worthy of emulation.
I love the Men’s Health feature that says, “Eat This Not That” that goes on to tell you the healthy choices between two popular foods each month.
For radio, “Do This Not That” seems appropriate.
Be Bruce, Bob and Dan.
Not Suleman, Dickey and Hogan.
And if you mean it, then do more to reject voice tracking, do local shows, rehire morning personalities, add local news done from local stations back into the format, have local sales staffs, train your people, respect and nurture everyone who works for you, compensate yourself 20-25 times more than your worker bees, serve the public interest convenience and necessity, stop complaining about the economy it’s going to be a challenge for years to come and for God’s sake …
Even the best in radio can do better is these areas.
And for goodness sakes, get into the digital future even if you are ten years too late.
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20 Days Until My Media Solutions Lab ...
My God, does anyone really get what's going on in media today?
NBC recants and puts Jay Leno back on the Tonight Show after his failed 10 pm experiment that was designed to -- well, to save money.
It didn't work.
But Comcast came along and agreed to buy NBC Universal -- Comcast was interested in -- content. So you'll see NBC in the programming business again after some ugly mopping up around the annointed "next one" Conan O'Brien.
Why is it that all too often we don't understand the consumer?
And that's why I am doing my Media Solutions Lab.
For the first time in the history of the media business, anyone can enter and win. The big companies may have access to investment funds, but they are bankrupt when it comes to understanding their audience and on innovative ideas.
So we'll talk about this groundswell that I know you can feel -- with Apple leading the way. Apple will enter the mobile TV business, steaming music for monthly subscription fees and will offer a platform anyone can access with all the infrastructure available to create a growth business.
Here are some of the benefits of attending my Media Solutions Lab:
Webcasting -- How webcasting is about to take the proverbial fork in the road -- you'll know which direction and why the present 24/7 "radio" model will fail.
Podcasting -- how to get listeners to download you and how to make money without even running a radio-type commercial or charging fees. You're going to like this -- and you can do it -- within one to three months.
Radio -- How to extend the life of your radio format and brand while finding new life in the digital age. We'll get specific.
Publishing --- Why you'll want to get in -- now that the Apple iTunes tablet platform is available. Get in if you're a station, company, individual -- there's money to be made and I'm going to get you excited about it.
Management Skills -- You know you'll have to adapt to be part of the digital future but why guess? Learn what's in the master's DNA -- see how Steve Jobs reads his audience, motivates his people, stays ahead of competitors. I'll go down a list of new skills you'll need and show you how to start acquiring the ones you don't presently have.
Mobile Media -- Look around, the entertainment system is replacing the radio in the car. Have you seen the entertainment system Audi is putting in their cars? Touch pads, Wiki directions, voice commands and screens that show maps, movies. My attendees are going to get a view of the future and not be left out.
Do-It-Yourself Advertiser Content -- Advertisers are beginning to bypass traditional media and go directly to consumers with content, sales and marketing. Their budgets may be tied up in apps that drive consumers to special marketing in stores and elsewhere. They need ideas. What an opportunity.
Brainstorming Skills -- You'll need them whether you work alone or with other people. I am going to demonstrate the system I taught to students at USC and show you how to do it yourself if you'd like.
Media Startups -- I'll have three for you. We may come up with more as a group. If you're looking for ideas, the Lab is the place.
Paid Content -- It's coming. I've predicted a lot of things over the years (thank God most have come true) and I'm saying it as bluntly as I can -- the free Internet, although still very much free, is on its way to a paid model. Consumers will have to pay for what they want by the end of the next decade and they'll pay taxes on things they are now getting tax free. If you're running a business, you need to track this -- at the very least.
Social Networking -- What is next after Facebook and Twitter? Is it more ways to communicate fewer words or will social networking be a prerequisite to all marketing and communication? Radio owners cringe when I say the talk radio of the future is -- texting. A generation obsessed with what they think not what a talk show host thinks. Are you ready for this discussion?
An Action Plan -- All this means nothing if you don't come away with a personal Action Plan. If you're running a media entity, how to keep it on track. If you want to start one, how to increase the odds of succeeding. Panels and paid speakers will not do in this digital age. Heck, anything other than a media solutions lab would be, well -- another convention. We'll have none of that.
So if you want to come go break your bosses' door down.
If you are the boss, what are you waiting for?
There are some "$200-off seats" left until they're gone. Lock one in here.
On-site Westin Hotel rates are now reduced 50% so enjoy the 70 degrees and sun in Scottsdale while you're working. Call (800) 354-5892 and request the "social catering rate" for Jerry Del Colliano's Media Solutions Lab. Or call Debra at 480-624-1348.
Want cheaper digs -- here's a current site with hotels (and comparative prices) very close to the Westin meeting location -- click here.
Let's work face-to-face in an atmosphere of approval and acceptance -- together, learning from each other.
Invest in you -- the future is here now.
Register for my Media Solutions Lab here.
