Tag Archives: Media News

Driving a New Leadership Paradigm

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Ursula Burns, CEO of Xerox

Ursula Burns, CEO of Xerox

I was intrigued to see a number of articles recently  in various media that all touched on some themes that I find are continually playing out in our new digital world.  The trends mirror what I’ve been seeing with my clients as well, but these seem so stunning.  What are they?  In our change from a physical world to a digital and social one, we are seeing some of our premier companies making that transition under the leadership of women.  Apparently there is no glass ceiling in the digital world, and as Martha would say…”that’s a good thing.”

Who are some of these leaders – the heads of IBM, Xerox, and HP.  Some of the bluest of the ‘blue chip’ companies and all facing great challenges, and most are doing well…extremely well!  I was taken by this trend because I started my career as a sales rep at Xerox in the early 70’s.  Xerox then had just recently started then to hire women in the sales force.  They were a novelty to most of the managers, all men, who wondered if they should treat them differently than men.  Xerox had a culture very similar environment to my old fraternity house.  Men got yelled at when they didn’t perform.  Could they do the same with women.  Could they take them into their offices and counsel then=m, with the door closed?  What if they started to cry? The good news is that everyone learned and adapted quickly and within a short period of time, a couple of years, half of all hires were female, and many of the new managers were also women.

At IBM  who we competed with in the copier marketplace we noticed a similar trend taking place and I knew a few of the early female sales managers, and they were great, and they prospered and grew quickly up the ranks as IBM was very interested an taking advantage of the new resource.

At HP, the course was a little different and men were still the dominant group and they intended to stay that way.  I knew a number of HP managers later on in the 80’s and they still acknowledged that it was still mainly a man’s world.  How the world has changed.

In these three organizations, leaders in their fields, are now headed by women, a fact a rarity in the corporate world of giant organizations.  All of these women, and many others, too numerous to list here, have changed the paradigm forever.  Now, a quick look at these three outstanding women.

At Xerox , Ursula Burns,  is now the CEO.  She started at Xerox as an intern, then an executive assistant and then succeeded Anne Mulchay in 2009.  Now that is amazing, for a woman to succeed another woman in a technology company.

“I took over a company that was solid, but every day was becoming significantly less important in the minds of people,” Ms. Burns said.

This transition happened all while Xerox was moving from selling copiers to selling services and providing backoff support.  A big change from 40 years of growth, but they are pulling it off. This is not something easy to pull off – “That transformation is earth-shattering for our company,” she said recently  To cement it, Ms. Burns led Xerox’s $6.4 billion acquisition of Affiliated Computer Services in 2010.

“What we do well, unlike these really sexy companies like Googles or Apples that have these great things you can see and touch and feel, we actually work in the back office of large companies,” she said. “So most clients don’t really know we’re there.”

IBM built the computer industry, and dominated the word processing field when it was all about typewriters, and later copiers.  Now computers are everywhere, but few are in the ‘clean rooms’ of old where IBM was the dominant player.  They now exist on desks, the cloud, your pocket – they really are everywhere, and IBM is leading that charge to conquer the world of ‘big data’.  This is now the third wave of computing they will discover and and learn on their own – just like “Watson” the supercomputer that conquered Jeopardy.  We are now in the age of cognitive computing!

Virgiani Rometty, CEO, Chairwoman of IBM

Leading the charge as CEO and Chairman of the Board is Virginia Rometty who has spent her entire career at IBM.  Under her watch IBM’s stock is now at its highest point in its history.  IBM is now a consulting company and sifting through all of the ‘big data’ that is spewing forth all over the world.  The key for IBM is constant reinvention.  A good metaphor for all of us to keep in mind.  Change is the new constant.

“Part of it is I get the honor of taking over a company that is a strong company,” she said.

But, she said, she knew she could not coast on their success, and instead charted a clear way forward, including work in cloud computing, analytics and growth markets.

“One of the great things I learned from Sam and Lou is no matter what, you always have to focus on reinvention,” Ms. Rometty said. “Never love something so much that you can’t let go of it.”

Meg Whitman, CEO of HP

Meg Whitman now CEO at Hewlett-Packard, is facing different challenges – survival.  After a great career in consulting and early leadership at EBay where she cemented her reputation. Meg Whitman is now heading HP in trying to turn around a company that has suffered over the last several years of a revolving management team and rapidly changing focuses.

HP is struggling to find its focus in software and hardware and to become relevant in a word this is now incresingly mobile focuses and led by Apple and other tablet makers.  After launching their own tablet in 2010 they quickly killed it…too soon many said.  The current forecast is grim for 2013, and Meg is looking for enough time to turn this around.

Though Meg attempted a run in politics in California, losing to Jerry Brown, she maintains close ties to Mitt Romney.  If HP doesn’t work out there could be something in Washington for Meg, if Mitt were to win.  She is a continual winner, and given enough time, she will find a way to win.

Why are these women import to this narrative?  We have entered a new era, and everything is different.  Business is different.  Old legacy businesses including all media is rapidly going digital.  Mobile communications has changed how we communicate, and when we communicate.  Barriers are being broken down that perpetuated the status quo.  Through all of this we have discovered whole new ways of living and working, whether we want to or not there is no going back.  Women are now fundamentally a part of business, and rightfully a part of management.  We are all the better for all of these changes.

What Does Warren Know That We Don’t Know?

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Warren Buffett - Now Loose with Open Check Book

Warren Buffett – The New ‘King of All Media

Warren is on the loose…again, and he brought his check book.  What does the Oracle of Omaha know that the result of us don’t.  For one thing he knows a great investment, and that means something he can own for a long time.  That habit is not in vogue in todays fast trading world.  Warren is looking to own assets that will appreciate over time, while bringing in some great cash flow, year in and year out.  I remember those days, but then my idea of long range planning is “what are we going to do after lunch?”  Warren is worried about the next decade, not what’s for lunch!

Warren, really Berkshire Hathaway, bought most of the print units of Media General, sans the Tampa Tribune, which will stand on its own for Media General, or until they find a way to sell it off as well.  Media General got some great cash and a chance to stay alive for awhile, something many major media companies are trying to do.  Warren got all of these holdings at a good price along with the real estate.  The price is significantly lower than the multiples paid in the past decade when all of these media companies sold or recapitalized, and then the bust hit.  Media companies can still make money, if they are not mired in debt – that is what Warren knows.

With our transition to a digital media world, in progress as we speak, there is still room for print media in local markets.  I should qualify that and say ‘print’ is not really the operative word going forward, but news media leader in a local market with a print product is more to the point.  As the ‘voice’ of the community – their earned mantle – they can be important and profitable businesses.  Kind of like having gone through a takeover by a venture capital company.  Make it leaner, and meaner and you can still make a buck.  Lots of jobs will be shed, but then that is better than oblivion.

With this deal Mr. Buffett and Berkshire have seats at the table with Media General, as well as with The Washington Post Company, as well as a stake in The Buffalo News. He is quickly gaining influence throughout the industry by his unabashed belief in the continuing role of the newspaper in the community.  He provides both financial and moral support to an industry in need of both, and at a very critical time.  The biggest players like the New York Times, Washington Post and Wall St. Journal exist on a different plane.  They are national papers of record that large audiences look to, their issues are different. Local and regional papers have different needs and Warren understands.  With his purchases, not only does he have a seat at the table, but now he sits at the head of the table, and all eyes are on him.

Facebook is launching today what could be one of the truly huge IPOs with a value over $100B.  FB is one of the contributing factors to the demise of newspaper readership.  No they are not the main culprit, but more of a symptom of the decline of newspaper subscriptions.  The newspaper was the watercolor content provider for social currency up through the last 10 years.  If you wanted to be able to join the conversation at work, you read the newspaper.  TV was also a source of conversation with your friends and co-workers.  Now you keep in touch by digital means, texting and emailing…and the Facebook.  Newspapers, in this new age, have lost a lot of their relevance of social currency.  By the way it opened at $38 and has moved across $40 where it is as of this post.  Oh for the days when newspaper sales attracted half of the attention of the FB IPO.

Warren understands that the local market is the last great place to have a real chance to still have an open forum in the community.  There is still a chance in our ever growing social world that the local paper can have a real chance to drive that social discussion.  As in the past, this is not about altruism, it is about having a good earning business.  Newspapers will never command the high multiples when they are sold, because they will never be the monopolies of the past.  With low debt and reduced operating costs newspapers can deliver a return that a ‘buy and hold’ kind of guy like Warren can appreciate.  This strategy can be the one that can save local papers, and I don’t see much else that will.

Good luck Warren!  We are all pulling for you and your strategy for the sake of our industry, and our communities.  We’ll be waiting for more good news in the future.  By the way how about some love for Orange County – The Register is available, and I hear the price is too good to pass up.

Integrated Marketing – an Imperative for Success Today

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The Wheel of Marketing Choices

The integrated imperative!  That’s where marketing is today.  Heed the headline, or perish. There really aren’t any options.  Over the last several years my clients and I have noticed that marketing has gotten harder to do well, we had fewer choices and those produced good results.  There are more marketing choices, channels and media options than we thought possible just a few years ago.  Choosing wisely and making it work across channels and markets – integration, is what it really driving our marketing world today…and to do it well is hard!

On May 10, Steve McKee, in Business Week, authored the article “Integrated Marketing: If You Knew It, You’d Do It”  He starts with the opening paragraph – If it ain’t broke, don’t fix it, is such a cliché that it has spawned its own cliché: If it ain’t broke, break it. Unfortunately, that’s just what many companies do unwittingly to their branding programs, playing into the hands of public enemy No. 1 in today’s marketing environment: Fragmentation.

The rest of the article made the case for integrating the marketing, mainly keeping a consistency of messaging across multiple platforms we all endure today.  It is a delightful read, and one that many of his readers commented on in a favorable manner.  For the most part I agree, but the key message he iterates is ‘integrated marketing is hard!’  Yes it is, and this is why so few are able to do it well, if at all.

The boomer generation grew up with tightly bracketed marketing channels.  You bought the best and then hoped for good results.  The good news is that your audience had fewer choices and they were generally on the receiving end – be it newspapers, television, radio or out of home.

That world doesn’t exist today, and everything is hard.  So many choices, and so many places for your audience to be hiding.  The digital world is wonderful with all of its options on both sides, but for the marketer it is tough to juggle all those balls.  Three key channel options for most, have now turned into 8 to 12.  On top of that it is now ‘social’ so your audience can talk back to you…and you better be listening, because they’ll carve you up if you aren’t.  Trust me, I have, and they have left scars for not listening and not responding fast enough.

The McKee article is a good read, and I implore you to look at it.  You should also read the reader comments which come mainly from industry participants, who mostly agree, but they also have their particular bents.  They are in agreement that ‘integrated marketing is hard.’  Yes it is, but there is no choice.  The world we knew was broken, and there is no going back.  Multiple channels, both analog and digital need to be attended to and used appropriately to reach your target ‘audiences’ (emphasis on the plural) if you are to survive.

Many of my clients have long histories, they love their new options, but still talk about how it ‘used to be.’  We commiserate, have a cup of coffee, and then get on with reality and plan how to cover their broad patch of media options.  All of this with careful attention to keeping the message consistent and true to each channel of their multi-faceted customer and target base.  It takes more time, and more money, but it produces better results.  Isn’t that what we are all looking for?  It’s a new world, and I love it!

Sam Zell…First in Our Hearts and Last In Line for $$$

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The following article ran on April 2, 2007 in the Media Bistro under a byline by Kate.

 Sam Zell – Tribune’s New Owner

Sam Zell, the new owner of the Chicago Tribune Company, has quite a reputation as a motorcycle-riding, cowboy booted swashbucker who came up the hard way.

He’s on the Board of Directors of Equity International.

He likes to take risks, according to Forbes and he’s #52 on the Richest list.

He’s the biggest landlord in America or was, in 2004.

He’s called the “grave dancer”.

He’s “salty to the point of crass”, according to the CJR.

He owns, at least in part, two baseball teams.

So what does this mean for the LA Times? Got any predictions? Send ‘em our way.

After a short run in which he fleeced nearly everyone in sight, including the employees of the Los Angeles Times where he used their money in an ESOP to fund a major portion of his purchase – Sam has finally met his match.

Judge Kevin Carey of the U.S. Bankruptcy Court in Wilmington, Del. ruled that Sam Zell should be the very last creditor to get money in any payout from the Tribune bankruptcy proceeding. The judge found that “Mr. Zell’s investment ranked dead last in the Chapter 11 payment priority competition, ‘at the bottom of Tribune’s capital structure,’” the Wall Street Journal reports.

Ouch…but it couldn’t have happened to a more deserving guy.  We wish you well Sam.  No, actually we don’t!  Go away and don’t come back again.  You will forever be the poster child for all those who hastened the demise of U.S. newspapers.

AT&T Exits From the Yellow Pages – check it out on Yelp

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It was announced this week that AT&T has agreed to sell a majority stake in its Yellow Pages business to Cerberus Capital Management. The price was reported to be $950 million dollars, for a declining business that AT&T was happy to jettison and get on to more important areas of their business.

The deal was for primarily cash with AT&T receiving 750 million in cash, with a 200 million note on the backend. AT&T will maintain a 47% stake in the business, but Cerberus will handle all day-to-day operations. Cerberus has pulled a number of rabbits out of their hat in the past, but this one looks to be particularly difficult.

During its heyday through the 1990s the Yellow Pages franchise, which included AT&T and a number of other telephone companies, and even a number of independent publishing companies, had a wildly profitable business. Recently the business, as a print operation, has become a boat anchor.  Revenue was down 30% in just the last two years.  The goal for Cerebus is to help turn the business into a digital operation that will compete with a number of newer players including Google and Yelp.

It has been a number of years since my family has kept or used a printed Yellow Pages directory at home. Like so many our tendency today is to simply Google what we are looking for hit the return and we have our answers. If we are looking for additional information, we’ll take the time to go to yelp for additional feedback from users where have actually used the service were looking for. In Orange County, CA where I live, Yelp is helpful but certainly not the powerhouse that I found when I was working in the San Francisco Bay Area. There looking through Yelp was like reading a novel, and I discovered a number of incredible writers who took the time to elaborate on their personal experiences at the various restaurants and shops they wrote about.

AT&T will use the time and the money to help grow their electronic portion of the communications field. With their growing competition this would seem to have been a good move. Cerberus will attempt to do something I that seems impossible, but they have done the impossible before, and I’m confident they have a plan to do it again.  As a private equity firm they don’t have to meet the needs of the market and shareholders and that is critical for them to have the time and hard efforts to pull this off.

Good luck to both AT&T and Cerebus, we won’t hold our breath, but we wish you well. I wonder if Cerberus would also like to buy a few good newspapers, I know of a number that can be had for well under $950 million. In fact they might be able to purchase several former large newspaper-publishing groups for the same figure.  There is one that is headquartered in Orange County (Freedom) that I hear can be had for well less than a billion.

Gary Pruitt and the Future of Newspapers and Journalism

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Gary Pruitt, new head of Associated PressIt was announced yesterday that Gary Pruitt will be leaving the leadership of McClatchy, the 3rd largest newspaper chain in the U.S.  Gary, just 54, was the leader of the charge of newspaper conglomeration in the early part of the 21st century.  Timing is everything, and Gary’s was not good on that call.  Now it seems that he will be making a better call by becoming the chief executive of The Associated Press.  This is a plum job in journalism and Gary has made his way to the top of the pile of what is now print journalism.

I’d like to give Gary a new nickname – Prescient Pruitt, for knowing when it is time to leave.  The definition of the word  prescience [ˈprɛsɪəns] n – knowledge of events before they take place; foreknowledge [from Latin praescīre to foreknow, from prae before + scīre to know].  I think that says it all in the face of the current state of the newspaper business in 2012.

Not to say that Gary can take all the blame, there is enough of that to go around for all who failed to see the train coming down the track, but he was the big gun with the big check book who bought everything in sight, just before the bottom fell out.  With so many papers have been sold for high multiples, the debt they took on has helped to sink nearly all of them.  This in the face of a natural decline of the media in the face of the digital onslaught they were about to face.

I wish Gary well in his new role, I had a number of professional dealings with McClatchy when they were my client in the 90’s, and they were a class act.  From everything I have heard of Gary, he is as well.  Now he will have to help journalism from this new position at A.P. providing content (not news) that will flow through the presses and the digital screens of readers to keep real journalism alive.

There is much more to say about the state of newspapers and marketing – once they were a singular entity, but now more loosely linked – and where the state of media is going.  Newspaper revenues have declined to 1984 levels in 2012 – I know Gary did not see that coming – and digital revenues are screaming upward.  Can newspapers maintain their position of strength?

A similar issue faces the U.S. Postal Service – after great periods of growth for decades their volumes have declined, and they face major cutbacks and reorganization to remain viable and cost effective for mailers and mail recipients.  Both media are linked together in their future.  What do they need to do to survive, and the bigger question is – can they survive.  More TK!

Last Chance for Newsprint and Local News

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It was fun to work in the newspapers world…a long time ago.  Times have changed, and things aren’t just the same.  Circulation is down, ad revenues are down, and most of my friends who are still in the business aren’t having much fun.  It is with this in mind that I came across a recent article that gives me a little hope that someone might have an answer that could work.

David Carter wrote a timely article in the New York Times on John Paton, the new leader of MediaNews Group, the second-largest newspaper chain by circulation in the country.  Formerly lead by Dean Singleton who fashioned MediaNews into the giant that it is today.  Long known as a very costly effective (cheap) operator who bought distressed papers Dean was dethroned by the board, and the the note holders (banks) who had backed his grand plan.  I never competed with Media News, my newspaper days ended before they hit the stage, but many of my former associates have gone onto careers their.  Some are still breathing, others not so much.

Mr Carr does a terrific job in profiling John Paton, and the challenges MediaNews, and every other newspaper faces in today’s digital world.  The biggest challenge is that the new owners of many of these papers are now banks and hedge funds, and they are not patient people.  Talk about your perfect storm – declining circulation, decreased advertising revenues, and the banks want more now!

Newspapers in the U.S. hit their peak in the 90’s and carried the good feelings and profits into the 00’s.  The results and profits, and the chance for market dominance lead to a major buying spree by a number of chains who managed to hit the jackpot.  They won on “Black”, but soon the real number came up and it was “Red.”  Mid way through the 00’s they could see that everything was melting down.  The Knight-Ridder chain had been gobbled up, and the remains were hitting the skids in terms of circulation and advertising dollars.

MediaNews was one of the big buyers, along with a number of hedge funds, like those who purchased Freedom Communications (The OC Register).  The family sold out after a small group wanted to cash out.  The early sellers from the family still have a lot of cash to count, those who stayed and took stock with the new buyers, are looking very sad, and their purses are bare.

What happened?  Demographics and Digital.  The world for newspapers will never be the same.

Demographics changed and the those in the post Boomer groups never became the consistent readers and consumers of daily newspapers.  They never picked up the newspaper reading habit of their parents.  Those of us in the newspaper world at the time thought that this would change as they got older and took their real place in the world…but it didn’t happen.

Digital also happened, and this meant that there was a whole new alternate universe of communication going on.  News could be had, without having to get ink on your hands.  It was on your computer screen, and it cost you nothing.  Hey, you could also text your buddies at the same time if you found something worth sharing, something you couldn’t do with newsprint.

There are other trends that have played into this transition, but this is a post, not a term paper.

The Digital Challenge that the newspapers were faced with was that digital revenues could never replace those of the print world.  Why?  This happened because the newspaper charged extraordinarily high rates – because they could.  They were the dominant media, and generally had a monopoly like position in their markets.  Rates went up every year, and advertisers really had few options.

When digital came along there were real options, and most were free.  In order to compete the newspapers had to offer similar services for free.  Newspapers are only now attempting to offer real paid services, and showing the discipline to effect a transition.  Even I now pay for a number of services I used to get for free.  I also used to get 2 daily newspapers, but now only one, and that only for the 4-day weekend special rate.

So the real challenge for newspapers is that they used to make money hand over fist and were the only game in town.  Now they have to compete for a slice of the pie, and that hurts.  Many are trying to lead the transition, and perhaps John Paton can make it work for MediaNews….and for his role in Digital First.

In my next post we’ll talk about how Digital First, under John Paton’s leadership is trying to change all of the previous concepts about how newspapers can continue in the digital world…and actually make money.

The Great Southern California Media Auction

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The Orange County Register

The Orange County Register

The dance goes on for control of the Freedom Communications media ‘empire.’  Both in a WSJ article on the sidebar, and then again in today’s LA Times article in the business section it appears that the bidding to purchase Freedom, including the crown jewel, OC Register, has broken down.  That means the price was too high for the outside financing to cover the purchase.  Media News, led by Dean Singleton, is the 2nd largest newspaper chain in the U.S., behind only Gannett.  Media News has a large stable of papers in the area and this would make the chain the dominant player, in terms of circulation, in the state.  The Tribune Company, owner of the Los Angeles Times, was also rumored to have been in the bidding.

In April, the whole saga was laid out in the Newsasour blog by Alan Mutter.  For anyone who cares about the state of print journalism in the state, or in general, it was a comprehensive and fascinating treatise on how things could play out in the bidding for Freedom Communications and the case for media consolidation in the entire Southern California area.  The article “Big Duel Likely for Orange County Register” is a great read, and I would encourage all to view it.

So what happens now, and really what does this mean to consumers and to businesses.  Next we assume, is that the sale process for Freedom goes on.  Terms may change and this could open things up to additional buyers, but Media News and Tribune are still the ones with the most to win.  If either wins, then they will have the dominant print media position in Southern California.  The new larger player would have better economies of scale and could spread their expenses over a larger base.  It would also place the loser of the two media companies in a diminished position, which could in fact, open further discussions to a total combination of ‘winner take all’ as the only real survivable posistion.  What a major change from just a decade back when all groups were profitable.  Looks like a kind of a ‘race to the bottom’ from that perspective.

For consumers this really means fewer choices for their print news, if they even care.  Demographics are working against newspapers and circulation continues to decline, and with that, declining advertising revenues.  Most will be forced to get their news online, and advertising will always find a way into the home – perhaps by a Groupon or one of the new clone ‘dealers’ who will send out their daily messages to subscribers.  In today’s world when so many have clamped down on their wallets this could work for a while.

For businesses they will lose a powerful and flexible tool to reach likely consumers on a daily targeted basis.  This helped to make the newspaper a potent tool in nearly every community, and created virtual monopolies and cash cows for publishers.  Those days are gone.  Newspapers will have to evolve to stay relevant and profitable.  Perhaps they can, but the cards are stacked against them.  I still love to read my paper – but now only 4 days a week.  My wife says I am weaning myself down, and I guess I’ll choose to go along with that.  In reality, as a professional from the industry and heavy news consumer, I too find that newspapers are not as relevant in my life anymore.  Time to take out the recycling, and to read from my new iPad.