Media Publishing and Organizational Management
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Media Publishing and Organizational Management

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Changes in how we have to manage for innovation in a disruptive marketplace

Changes in how we have to manage for innovation in a disruptive marketplace

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Media Publishing and Organizational Management Media Publishing and Organizational Management Presentation Transcript

  • 1 Howdy I’m really thrilled you could make it! Creating context for organizational changes in a rapidly changing media marketplace. For AAN 2007 Presented by Terry Garrett 1
  • 2 Today’s agenda Innovation Systematic process Reinventing your organization “Wow! You know that’s a really good word. I’m probably not the first person to use that term, but I’m sure (and Dwight can back me up on this) I’m sure I’ve used it more than any person on Earth.” 2
  • POV 3 Global Local 3
  • Objective Reality 4 Global 1. Media Ecosystem: advertising sales proportion 2. Historical Perspective: fluctuating status of media and innovations 3. Social & Political Changes Two of the most important factors effecting media. 4. Demographic Changes 4
  • Media Ecosystem 5 2005 Ad Sales (U.S.) Business papers $4 B Magazine Other $12B Direct Mail Print Alt-weeklies $55B $35B $550M Internet $12.5B Daily Newspapers TV $49B $68B Radio Yellow $20B Outdoor Pages $6B $14B 5
  • Rise of Newspapers and Magazines tied 6 to a new socio-political reality 1873—1968. Socio-political changes: Government as the progressive cause controlling the economy and direction of society. Why Industrialization advancing on a major scale: mechanization of production processes, the rise of the city, vast expansion of communication facilities, the age of steel, harnessing electricity for light and power, invention of ‘invention’, population doubled and new business growth exploded. 1873 1968 Explosive growth 1870 1900 period 1,967 # of Dailies 489 15 M Circulation 2.5 M 12,000 # of Weeklies 4,000 6
  • Rise of Newspapers and Magazines tied 7 to a new socio-political reality 1873—1968. Socio-political changes: Government as the progressive cause controlling the economy and direction of society. Why Industrialization advancing on a major scale: mechanization of production processes, the rise of the city, vast expansion of communication facilities, the age of steel, harnessing electricity for light and power, invention of ‘invention’, population doubled and new business growth exploded. 1873 1968 Explosive growth 1870 1900 period 1,967 # of Dailies 489 15 M Circulation 2.5 M 12,000 # of Weeklies 4,000 7
  • 19th Century Print Innovations 8 Other innovations added mightily to James Gordon Bennett founded accelerate the financial viability of the New York Herald (1835) on periodical publishing: the premise that a newspaper had to: High-speed typesetting 1) have enough income to be Stereotyped plates and webs replacing editorially independent and type-revolving presses 2) cheap enough to reach mass Use of half-tone photographs circulation. JGB, Jr. Color presses He used the tech knowledge- Innovations bases of the the telegraph and Chemically produced wood pulp, which high-speed printing. lowered the price of newsprint from $440 per ton to $42. He also relied upon the rise of mass literacy, which supported Improved labor relations and localization the notion of mass circulation. of conciliation and arbitration procedures. 8
  • Contrast scale of newspaper economic 9 power from 1890 to 2005 Created Joseph Pulitzer’s advertising to New York World a mass Innovation 1890 audience. Net income $1M Adjusted to 2005 Dollars Created bid pricing and $822M self-admin advertising to a targeted audience. Google NY Times Group 2005 2005 Net Income Net Income $1.46B $253M 2004 $399M 9
  • 10 The Socio-political Divide of 1973 “The period 1968—73 is a divide fully comparable to 1873. Whereas 1873 marked the end of laissez-faire, 1973 marked the end of an era in which government was the “progressive” cause, the instrument embodying the principles of the Enlightenment.” Peter Drucker 1989 10
  • 11 Ch-ch-ch-changes Socio-political Demographic Civil Rights movement Baby Boomers Economic upheaval Segmented database (oil shock, floated dollar) marketing Women’s Rights movement Environment movement Shift to non-conformity 11
  • 12 Print media has been losing relative economic status for 50 years. Electronic media has gained significantly. 1955 1980 2005 $161 B $100 B $75 B $50 B Web ’06 $17B $25 B Ad sales target to maintain relative share $10 B of GDP, or economic power status relative to 1955 level. N M TV R Tot N M TV R Tot N M TV R Tot Newspaper — N • Magazines — M • TV — TV • Radio — R • Total — Tot 12
  • 13 “Innovation is the specific tool of entrepreneurs, the means by which they exploit change as an opportunity for a dierent business or a dierent service. It is capable of being presented as a discipline, capable of being learned, capable of being practiced.” Peter Drucker 1985 Focus on creating systematic innovation within your company. As a means of survival in disruptive times. For future prosperity. 13
  • 14 Innovative perspective... Half empty? Half full? Is there a third POV? 14
  • An efficiency expert 15 might say, The container is too big for the contents. 15
  • 16 What Innovation Isn’t Rarely, is it ever... Reliance upon the “flash of genius” Being kissed by the muses 16
  • Innovation Do’s 17 Analysis of opportunities organized and performed on a Aim at leadership systematic basis. doesn’t have to be a big business, but does need to strive Conceptual & perceptual to be a leader. must satisfy the values and needs of users. Start small capable of consuming little Simplicity investment, few people, serve a small or limited market. Focused, singular objective that it satisfies a need, produces a result. 17
  • Druckerisms 18 There is no such thing as a resource until Black gold, Texas tea someone finds a use for something and endows it with economic value. Innovation changes the yield of resources. Defined in demand terms instead of supply, i.e. changing the value and satisfaction obtained from resources by a consumer. 18
  • 19 If necessity is the Mother of innovation, then who’s your Daddy? 19
  • Areas of Management Concentration: 20 Strategic Development Technology Sales & Organization Culture Marketing Project Management Financial Performance 20
  • Organization Culture 21 Three Structures for getting things done Responsible Hierarchy Heterarchy Autonomy The one most Dispersed rule, No external rule; commonly used. balance of complete autonomy. Top down, powers. Relies Specific objectives command and on cooperative for outcomes control in principles instead monitored for pyramid of bosses of absolute performance. and staff. authority. 21
  • 22 Organization Culture Most companies Company A Company B blend structures 80% 60% Hierarchy 20% 30% Heterarchy Responsible 0% 10% Autonomy 22
  • Management By Responsibility Matrix 23 7 Dimensions Basic Performance Leader- Use of Goal Conflict Management Delegation Evaluation ship Power Setting Resolution Philosophy Methods Style Responsible Achievement 5 levels Conformist Self- protective Unconscious 23
  • Lower Levels 24 Basic of functioning & Management Use of Power Goal setting Delegation dimensions of Philosophy management Conformist View of staff (VOS): Seldom delegates Aversion - power Let the staff do it. weak, need to be effectively. seen as domination. Permissive - feels protected. Unable to assign Low need, unwilling staff won’t like People concerns realistic priorities & to use power. them if they push. emphasized. meaningful tasks. Viewed as indecisive Low to moderate MO: Maintenance of Creates staff wanting & inconsistent commitment. status quo. to be “rescued”. Sets goals for Delegates only VOS: incompetent, Domination power staff not with functions they lazy. used to control them. dislike. Productivity and High need - used for Feels that to let Creativity and Self-protective people concerns authority to demand staff be involved decision making mutually exclusive. obedience. is a sign of discouraged. MO: Coercion & Viewed as dictator, weakness. Creates fear of force ruthless. Low commitment, making mistakes. sabotage. VOS: powerless & Powerlessness - Avoids goal Doesn’t delegate; trapped. power is avoided. setting. staff should know Productivity & people Low need, perceives Will rely on what to do. Unconscious concerns self as weak & precedent and Non-participative. unimportant. ineffective. policy. Creates non- MO: withdrawal & Viewed as No commitment. productivity. non-involvement. incompetent. 24
  • Lower Levels of 25 functioning & Performance Conflict Resolution Leadership Style dimensions of Evaluation Methods management Conformist Provides little direction for Accommodating (yield/lose) Infrequent others. Relationship - primary Used to build morale. Acts as support person to importance Positive; cliche ridden. provide social and Conflict viewed as destructive Negative - -avoided- staff technical needs. of relationships. viewed as fragile. Self-viewed: morale Hesitant, timid approach. booster and provider. Competing (win/lose) Expects strict and rapid Infrequent Personal goals - primary compliance with orders. Used to display authority. importance. Insist on close, constant Self-protective Positive - seldom given. Social survival at stake; to lose supervision. Negative is punitive and to means weakness. Self view: strong and determine fault and blame. Aggressive dogmatic approach. dominant. Non-existent Avoidance of any contact. Avoiding (lose/leave) Avoidance of all feedback. If necessary, resorts to Hopelessness; no win, total If forced by organization will policy or refers to Unconscious avoidance. have staff make out their superiors. Withdrawn and detached own or prefer adjective Self-view: weak, my approach. checklists. hands are tied. 25
  • 26 Higher Levels Basic of functioning & Management Use of Power Goal setting Delegation dimensions of Philosophy management VOS: productive and Delegates maximum Inclusion of staff creative. Altruistic - used for authority functions, in goal setting Productivity and common good. priorities with staff. process. people concerns High need to have Aware of staff Promotes Responsible integrated. impact and be capabilities and creativity in MO: involvement influential. motivations. objective setting. with staff through Viewed as fair, just Creates teamwork, High level of delegation and and strong. harmony and commitment. participation. accountability. Achievement VOS: moderately Personal Doesn’t delegate productive, but need aggrandizement - Sales specifics. for manipulation. used for personal consultative Last minute Productivity gain. approach - “sells” delegation, changing concerns High need - to build staff on goals. priorities, improper emphasized. empires. Moderate to high planning. MO: management Viewed as level of Creates urgency, by crisis; inadequate exploitative and commitment. frustration and planning and aggressive. confusion. delegation. 26
  • 27 Higher Levels of functioning & Performance Evaluation Conflict Resolution Leadership Style dimensions of Methods management Frequent, regular basis. Leader views self as Synergistic: win/win Used as learning team member. If relationship is to last, all experiences. Encourages others to Responsible goals must be met. Positive-realistic, genuine contribute. Candid, creative, problem- feedback. Self view: a contributor solving approach. Negative-constructive, of special resources. candid. Achievement Frequent, though based on Maintains open door Compromising: win some/ positive or negative policy. lose some performance. Management by Attempts to soften losing by Used to increase exception, fire-fighting limiting the gains. performance. when necessary. Persuasive, manipulative Negative: based on Self view: flexible and approach. productivity failures, due adaptable. dates, etc. 27
  • Culture Determines How You’ll Proceed 28 with Strategic Development Arrives at Develops and Objectives Implements Top management Key performance mandates goals and expectations handed Hierarchal objectives. down, implementation Achievement-oriented tightly controlled from “Sells” it to staff. top. Team approach, key Group conference performance establishes goals and distributed, authority Hierarchy/Heterarchy objectives. levels assigned, Responsible group and individual Staff buy-in by virtue of responsibility participation. balanced. 28
  • 29 Important Questions to Ask 1.What results are needed? 2.Where within our own system do we do this already? 3.If not within our company, where within our industry is someone doing this? 4.How do they do it? Can we replicate it? 5.What does management do that supports you getting results? 6.What does management do that hampers getting results? 29
  • 30 Preparation for Strategic Development Historical Perspective Where have we been, what have we accomplished? Where are we now? Where can we improve? Benefits Establishes congruent story among all staff members; provides understanding especially for newer staff. 30
  • 31 Preparation for Strategic Development Mission, Values, Major Objectives Where do we need to be next year? In 2 - 3 years? Key performance indicators identified: Financial, marketing, etc. Quality of life issues Benefits Establishes same page starting point and defines scope of plan. 31
  • 32 Two-sided Market Content Supply Demand Advertiser Media Audience Demand Supply Attention 32
  • Long Tail of the Web 33 Aggregators/Portals Long Tail 100 Google, Yahoo, MSN 80 60 Head 40 Top news sites 20 Millions of sites 0 Long Tail Aggregators attract huge volumes of attention and broker ads to reach subsets of audience with price variables unique to each subset. Their reach is from the head through the long tail. 33
  • Seeing Opportunity & 34 Brainstorming Ideas What do they What are our Who are they? need/want? ideas? ? ? ? Customers Non- ? ? ? customers “Marketing starts with all customers in the market rather than with our customers.” “The first aim of any business is to create a customer.” 34
  • Prepare Ideas for Implementation 35 Identify assumptions and risks Quick financial parameters Identify resources needed Finances Personnel Processes Technology Space/place, tools Prioritize best ideas 35
  • Example of a Web 36 Business Directory Idea Idea: Create a web business directory to mirror an annual print directory } source guide with 1,400 listings. Critical assumptions: • Advertisers would pay to be online Research, survey, assess in addition to print; some may opt risks, i.e. what for print or web only. happens if this • Sales reps would sell it. assumption is • Consumers would use it. false? Can it be • It would be cash flow positive within corrected or converted to 6 months true? 36
  • Quick Financial & Resource View 37 Calculation for Salary Wages Salaries Staff per week $ 3,850 % of 40 hr. wk dedicated to selling product 10% Costs Time Leads 37
  • Quick Financial View 38 Breakeven Analysis—Directory Model # Sold Ads Monthly Revenue Months Monthly Cost 600 $7,000 Monthly Net 1 2 3 4 5 6 7 8 9 10 11 12 $6,000 500 $5,000 437 401 $4,000 365 400 327 $3,000 Ads Sold 289 300 $2,000 250 211 $1,000 170 200 $0 129 87 -$1,000 100 44 -$2,000 0 0 -$3,000 38
  • 39 Financial Statements The 3 Bottom Lines Dollar figure that shows whether or not Net Profit your sales are greater than your expenses. Operating Cash Flow Dollar figure that shows whether or not OCF you’re converting your profits into cash. Return on Assets Ratio that tells whether or not you’re ROA optimizing the value of your resources. 39
  • Flat sales, declining profits and operating cash flow. 40 40
  • 41 Mobley Matrix 41
  • Key Performance Indicators 42 KPI KPIs are only meaningful when they are connected to your triple bottom Standard KPIs line. Average page yield (tot.) Average page yield (ads) AND Sales per 1000 circulation Net profit per employee Sales per page per 1000 circ Production costs per page When everyone Sales per employee (tot.) Print costs per page knows what they Sales per employee (sales) G&A expense per employee mean and how to Sales per category Distribution costs per 1000 effect them positively. Number of ads per issue Editorial costs per page 42
  • Financial Literacy 43 Income statement Owners/ Management Balance sheet publishers/ Staff Team Cash statement CFO KPIs See & regularly ? ? ? discuss financials and performance Understand & ? ? ? interpret financials with strategic obj. Project financials to plan future ? ? ? performance metrics 43
  • Sales and Marketing 44 Aligning with Local Interests Resource Coordination BALLE/Media Model for Collaboration Coordinate for Start- BALLE up of local network Media Executive Staff Company SF Co-create Co-create Local BALLE Recruit members for Recruit members Network start up from existing through promotion & ad customers. network volunteers. M M M M M M M M M M M M M M M 44
  • Sales & Marketing Follows Strategic Plan 45 With the new Implementing Operations ventures, Strategy products, etc. Largely, the Workflow processes management challenges are Changes in hiring criteria found in Multiple products operations. Training requirements across multiple media platforms This is true to Compensation plans some extent for Rep dedicated to one or other more product lines? departments. 45
  • Project Management 46 Strategic Strategic Inputs Outputs Initiatives Project Results of Need/ Management Value Opportunity Process Steps Project High level Plan Execution Close-out Initiation Planning Development 46
  • Technology 47 Hierarchy of Questions What does it enable us to do that we can’t do now? Treat tech Does that serve the results we like any need in our plan? capital How much should we invest? What’s the return? (NPV-calc) expense. What’s our learning curve to assimilate it? 47
  • 48 The End 48