Category Archives: US Military

Print Media is Running Out of Time

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No More Time!

No More Time!

The transition from our legacy analog world of ink and paper is accelerating.  Major changes in newspapers over the last several years with revenues significantly down to levels not seen in 10 years.  Growth ceased, and status quo is hard to digest to those in the industry that used to grow by showing up.  Population growth meant circulation growth.  Those trends no longer exist, and print media outlets are starting to drop like flies. First it was newspapers, now the trend has extended to magazines and direct marketing publications.

In a recent Daily Beast article by Daniel Gross “Why Time Warner Felt It Had to Spin Off Magazine Unit Time Inc we see why this is happening.  Its all about stock prices.  This trend is now making its way felt through the entire communications field from newspapers, magazines and direct marketing publications.

 Newspapers were the first to feel the pinch of declining revenue.   The grind of producing, printing and delivering daily papers IS not easy, and its expensive to do it every day, especially on those days when the paper is not full of ads.  Recent changes in newspaper ownership around the county brought some promise of hope when heavy hitters like Warren Buffett bought in and gave some hope to other owners that were still viable.  But Warren likes to buy and hold, and he likes to buy things he knows a lot about – and HE still reads his paper daily.  Not everyone agrees with Warren, nor do they all have his deeps pockets.

Even with his very deep pockets Rupert Murdoch owns bunches of papers in the US and in Australia and England, but Rupert also owns lots of digital media in those markets as well.  He also sees the enduring value in the print, but he was one of the first to see that revenues were lagging in print, and those lagging revenues reflected poorly on the ability for the overall stock value of these publicly traded companies to grow.  He has lead the move to split his holdings into discrete segments – digital on one side and print media on the other.  Future dollars for investment and growth are attached to the digital side, and print you’re now on your own now.

Recently Time Warner felt the urge to ‘unmerge’ its holding and to spin off its magazine unit, including Time, Fortune, Money and Sports Illustrated and make them a new stand alone organization and take them public as their own group.   The magazines are still profitable, but they cannot keep with the market and are thus a drag on corporate earnings.

Harte-Hanks, Inc. originally started off as group of small Texas newspapers, but chose a different way to grow outside of newspapers and moved into direct marketing, and over 20 years sold off all other holdings, including all of their newspapers and became a powerhouse in shoppers publications covering millions of households in California and Florida.  A still thriving industry for small communities covering a market just below that of the newspaper they provided cost effective targeted advertising and in the process stole market share from larger local newspapers.  Those golden days are now over.  Having written down all of their goodwill equity in the declining value of The Pennysaver, they were able to unload them quickly.

In December the Florida operations were sold back to their founder Dick Mandt, a former boss of mine, and his team of highly effective industry managers.  Were they losing money -no, but they had to go.  Sources tell me that the same thing is likely in California where the original Pennysaver circulates.  Staff cuts are being made, offices are closing, and they appear to be on the same trajectory as Florida.  Can they still make money – yes.  But they can’t grow in the manner that a public company needs them to.

Like Time, Inc., Harte-Hanks, is a publicly traded company and must show growth.  The huge revenue base of the Pennysaver could not keep up the growth curve for Harte-Hanks and stock prices lagged. Decision time came, and decisions were made.  Heads rolled, and the new management staff has a mandate for growth, and a tight timeline.  This is the new story for print and direct marketing, especially for those mailed publications.  If you are on the big march and you fail to keep up – we’ll leave you a canteen of water, and a couple of biscuits, but your on your own.  Tough love, I think we call it!  Time is not always on our side.

Postal Reform Now…Will Congress Act to Save or Kill USPS?

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Is the Postal Service going downhill??

“Industries Fear the Ripple Effects of Proposed Postal Service Cuts” – Was the title of the article in by Ron Nixon in the New York Times yesterday.  It is a good statement of some of the key issues that are being taken up starting this week in Washington.  All sides are lined up to help shape the final outcome.  Today ,CCN Money  has picked up the story as well.  It seems that all eyes are on Congress as they take up the issue of “postal reform.”  All this while all the ears are on the Supreme Court as they take up the issue of ‘Obamacare.’  We certainly do live in interesting times.  As the pace of change and disruption our world picks up we must expect many more battles in the future to go along with these two. 

Congress has begun work on their vision for Postal Reform, if reform is what they really have in mind.  All of the various constituencies are lined up on both sides of the issue.  Some want more, and others want the USPS to do less.  On the plus side are the wine and beer lobbies that want to be able to use the USPS to ship their products, something the USPS is prohibited from doing by law.  On the negative side the insurance and banking industries are lined up to ensure that the USPS not move into their fields, as some in Congress has suggested they do to create more revenues.

Like the newspaper business which is also undergoing its own transformation, the USPS is a huge enterprise that employees nearly 600,000.  Beyond that the entire direct marketing field, including mailing companies, printers and direct marketers employees over 10 times that amount.  This is a big deal, and we need to get it right.  As was noted in the article the field supports over $1 trillion in annual economic activity.  It helped to put both of my sons through college, so it is still dear to me.

Nearly every business relies on the post office to deliver packages, advertise services and send out bills. This postal supply chain supports millions of American jobs in fields as diverse as banking, agriculture, media and manufacturing.  This is an urgent issue since the USPS is losing nearly $36 million a day.  As volumes of mail have decreased with former users now going to digital methods of delivery.  Even the USPS has said that it does not expect to get those missing volumes back in the future.

The USPS is also saddled with a Congressional mandate to pre-fund future retirements, the only government agency to have to do so, to the tune of $5.5 billion.  Relief from this mandate would cut the shortfall in half.  A sign that this is a big deal is the nearly $300 million spent over the last three year by those lobbying on all sides of this issue – both the USPS employee unions and industries who work in the direct marketing field.

Postmaster General Patrick Donahoe has proposed closing half of the post offices, approximately 3700 and shutting half of the mail processing centers, 250 there.  Both changes, along with stopping Saturday delivery, would also help to bring down the shortfall.  In a world that has gotten to email and instant messaging for time vital business and personal communications, there would seem to be some wiggle room for printed mail – derisively called ‘snail mail.’  A big question is how fast do we need to be, especially if we want to price reduction, or at least fewer price increases.  And yes, the USPS is also asking for a 50 cent first class stamp.

Postmaster General Donahoe said in prepared testimony.  “If Postal Service were a private company, we would be engaged in Chapter 11 bankruptcy proceedings.”  The Senate is beginning the process now, and the House will begin deliberations, probably next month.  A key deadline for consideration is May 15, when a moratorium on closing postal facilities will expire.

Currently under consideration is a bill that passed a Senate committee in November that would tap the overpayment of the future retirement benefits, currently at $10.9 billion to pay down postal service debt (to the U.S. Treasury) and use up to $2 billion for incentives to get a number of long term employees to retire.  The USPS has also planned to open its own health care for employees in hopes of cutting their costs, but there is pretty widespread opposition to that from Congress and the employees.

The USPS is a legacy system with a long history.  Like so many of our other ‘legacy’ systems, including newspapers, they are in deep trouble with the change in the economy in our broadening digital age.  Change is great for some, though it sucks for others.  I live in both worlds, and yes, I still want things the way they used to be.  The question is how much am I willing to pay to have that.  We make those choices each day, and we are making those choices now regarding our postal system.

In the face of the current situation I have to applaud Postmaster General Donahoe and his staff, though that is a strange position for me.  I prospered under the USPS, and endured a lot of petty regulations as well.  They clearly understand where they are today, where the world is going, and have surfaced a plan that will help them to move forward under their current legal and financial burdens.  Congress has the keys to open doors for them to endure and preserve the current levels of service many still desire.  They also have the keys to the vault and say no more.  I compliment the PG for a real and thoughtful plan, and I hope our elected officials will make the right choices.  In the face of the coming elections later this year – this should prove to be good theater, and maybe even good politics.

Lt Gen William Caldwell Beats the “Rolling Stone” to Dust

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General William B. CaldwellSometimes mistakes do get corrected.  Back on March 9th I wrote about the case against Lt. Gen William Caldwell, a very old associate of mine, who was covered by  Rolling Stone.  The accusation against him was that he had run a rogue operation attempting to brainwash visiting government officials and elected representatives into supporting the mission in Afghanistan.  Coming on the heels of the article that forced the removal of Gen McKristol for his, and his staffs remarks denigrating their President.

I spoke in defense of LTG Caldwell because I knew him, and I thought I understood what had taken place.  I was right, or at least the Army and of its’ investigators thought so as well.  He was acquired of all charges and will continue in his role heading up the training of Afghans for U.S. and NATO commands.  This is a big tough, and thankless command for any senior military officer.

The good news here is that a good man had his reputation restored.  After all the press comments after the Rolling Stone article I felt he would need a lot of luck to achieve a positive outcome…and he had it.  A career of stellar and exemplary service will continue.  We are all the better for this outcome.

For everyone else undergoing a trial of their reputation should take notice and heart.  Good things can happen to good people – even when a reporter from Rollng Stone is asking you questions.  Good can prevail!  This time it did.  His dad, my former boss, must be smiling from above.

Lessons in Reputation Managment

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General William B. CaldwellIn my last post ‘Runaway Journalist Attacks Again’ I focused on the story of LTG William B. Caldwell, an old acquaintance of mine who had been charged in a The Rolling Stone article of using ‘psyops’ on visiting U.S. dignitaries in order to secure more resources for his assigned mission in Afghanistan – training Afghan forces to take over their own security.  Knowing something of the man I was taken back by the very strong accusations.  I was also alarmed by the speed of the vast condemnation in worldwide media – calling it ‘a wildfire’ doesn’t do it justice.

My plan was to immediately do some quick research on ‘reputation management’ that I could use to enlighten everyone with.  I felt strongly that he had been maligned and needed some digital help to improve his ‘brand.’  Two things happened – I started the research, and the ‘noise’ began to quickly subside.  Good news on both fronts.

In my work on reputation management, something I had worked with clients before on, never so publicly however.  What I found first was that my Google search on the subject immediately returned nearly 1 million hits – wow, where had I been.  Two years ago it was a fraction of that.  Was there more information – no, just more bodies offering to help.  It comes from the SEO arena with its unique approaches, to the PR side of pushing out a better message.  I was truly blown away since this is something I don’t focus on heavily for defensive reasons, mainly just building an identity out for ‘newbies’ breaking into the arena.

I guess that the shear size of the ‘reputation management’ services industry points to the fact that this is really a big deal, and a lucrative one.  With our reputations now on the line 24/7 there are lots of opportunities for them to get tarnished, or even trashed.  Glad we didn’t need it for General Caldwell at this time.

What went well, and why did things subside.  After the initial flare up, cooler heads started to look at the situation and see that it was really more about the journalist and a single disgruntled officer, the ‘psy-ops’ trained junior officer who had, perhaps made more of the issue.  It appears that this had already been in process and that General Caldwell had legal counsel who had approved his actions – really PR and not brain washing.  Some key journalists also came to his aid with some positive articles you will find in the sidebar to your right.

The other thing that pushed this out or the fire and into the background were larger challenges in the arena including that of the bombing of nine Afghan boys while gathering firewood.  This brought new challenges to General Petraeus, Caldwell’s superior officer.  As I was taught at Infantry Officer Basic School – there is nothing like a good diversion to help you advance against the enemy.  This time that has worked for General Caldwell, but it may not help him earn his 4th star.  Time will tell if the full reputation will be restored to this honorable man.

Runaway Journalist Attacks Again

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This last week he had another article on the leaders in Afghanistan byMichael Hastings of The Rolling Stone.  The target of this article is the three-star general who heads the training for Afghans – William B. Caldwell.  General Caldwell is a past associate of mine who I briefly profiled here back in August.  I worked for his father, then a BG in Germany, and I met his son William IV and helped to prepare him for West Point just before I left the service in 1972.  His father was an exceptional officer, and I have followed his son’s career with some personal pride.

All of those things came into play when I read the article “Another Runaway General: Army Deploys Psy-Ops on U.S. Senators” published in The Rolling Stone last week.  Where do I begin?  The article is aimed at bringing down another General – Caldwell, and also takes on Gen. David Petraeus who is waging what he calls – King David’s War.  After my years of service is a junior Army officer I grew to have a strong distaste for the Vietnam War, and for all war in general.  I think we should not be in Afghanistan, having written against the Russian incursions years before when I was a graduate student in Russian history.

I don’t know all the facts of the incidents purported by Hastings in his article, but I do know a hasty mob lynching when I see it.  Part of my career today is helping executives manage their reputations and those of their company’s on the Web.  This was a quick and vicious hit aimed at the integrity of the man and the Army, and it was quickly adopted by a larger media frenzy who saw a story that brought out the very worst in people’s opinions.  Ninety-five percent of all the comments on the articles regarding General Caldwell had him drummed out immediately.  New facts are coming to light now that show a different side to the situation.  Far from using brainwashing techniques on visiting Senators and Congressmen, it appears to be the use of very modern tools we see everyday in our online and print media used to sway opinions.

Why is this important to me, and to you?  For me it is about the man first, and the truth later.  In our immediate world when everything can go viral in a nano-second, reputations can be smashed in an instant.  That certainly happened here.  No matter the outcome of the facts that will be reviewed at the highest levels – Caldwell’s career has either ended,or hit a dead end.  These kinds of events in the military have major consequences.

Tomorrow I’ll talk further about this situation, reputation management and the future of our military with thoughts from Robert Gates from a recent West Point address to the Cadets.

Feeling A Little Proud and Nostalgic

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Years ago I served as an Infantry officer during the early 70′s. I had a number of duties as a junior officer, but the proudest was when I was selected to serve as an aide to a General officer. His name was William B. Caldwell III, and he was a one star general and was the assistant division commander of the 1st Armored Division.  In my brief term working for BG Caldwell I handled a number of issues, many very mundane.  One of the most enjoyable was helping his sone get ready for West Point.

His father later rose to the rank of LTG – three star general, and had a distinguished career.  He was the personification of everything you might imagine – a true officer and gentleman.  I’m so pleased that his son William B. Caldwell IV has turned out as well.  He is now a LTG and in charge of training the Afghan military and police personnel we hope to take over from U.S. forces in the near future.  From generation to generation we are in great hands.