The world we live in today is a complex place. The KISS operational style seems like it would be a good idea. (KISS = Keep It Simple Stupid) But maybe not.
Turns out in a complex world, being agile is more importance than being efficient. Being efficient kills innovation. Innovation today is the primary driver of building value and creating value is one of the basic reasons for any organization to exist.
Managing Complexity is a 21st Century Skill
People who can manage complexity will be the leaders of the future. Managing a radio station was complex due to the fact that radio has two customers, which want totally opposite things. One customer is the radio listener. This customer wants information and entertainment. This customer usually isn’t fond of commercials. The other customer is the radio advertiser. Anytime their ad isn’t dominating the airwaves and driving consumers into their store is a moment the radio station isn’t doing its job. To add to this complexity are the talented people needed to service both of these customers. Air personalities that attract listeners and sales folks that service advertisers.
Consolidation & Complexity
As the radio industry began consolidating after the Telcom Act of 1996, the traditional thinking of protecting margins was amplified. This resulted in reducing labor costs. RIFs became commonplace (RIF = Reduction In Force). For those that were left wages became stagnant, little money was invested in training and the number of people left in the workforce was reduced to a bare minimum.
The problem is, when you have low paid, poorly trained and overworked people, your operation lacks new and innovative ideas that can improve the business. When the only ideas that are introduced come from the tippy top, they rarely connect with the challenges seen at the front line.
Zeynep Ton writes in her book The Good Jobs Strategy about a discount retailer that took a different approach to their operation than most companies when the great recession of 2008 struck the world. Rather than cut wages or reduce staff, Ton says they asked their employees to contribute ideas. The result was that this company managed to reduce prices to their customers by ten percent while increasing their market share from 15% to 20% from 2008 to 2012.
Herb Kelleher writes in his book NUTS! about how Southwest Airlines created a culture where employees are treated as the company’s number one asset. Southwest does a number of things to benefit its employees, including such programs as profit-sharing and empowering employees to make decisions. This empowerment during the period when oil prices hit a high of $145 per barrel in 2008 saw the Southwest pilots taking the initiative to plot more efficient flying altitudes and work with ground crews to get in and out of the gates quicker to control the Southwest ticket prices and not lay off any people while maintaining a positive profit margin. These actions did not come from the corporate home office but from employees in the field.
What to Do When You Have Maximized Efficiency
Let’s face it; the ability for any radio operator today to squeeze out any more profit through efficiency is over. Radio consultant George Johns puts it this way: “Radio today is in the no business, it has no money, no time and no people.”
So what’s the answer? Collaboration.
The radio companies of the 21st Century will need to develop the ability to make collaboration a competitive advantage. The game has changed from what you own and control to what you can access. Access happens via platforms. Radio needs to create platforms that bring consumers and producers together, much like the Apple App store does globally, but locally for their service area.
Radio needs to find a way to attract listeners by causing them to be fearful of missing something if they’re not listening while directing them to local places via platforms they control that can fulfill their wants and needs on demand.
In other words, radio needs to “think different.”
DickTaylorBlog 
So well-written: Succinct, to the point and actionable. As you say, we need to think differently. I’d add that some of the new thinking we need can be found in the timeless practices and procedures of our finest local, small-market operators They STILL provide the kind of service that makes their listeners feel as if they must keep listening, or they’ll miss something vital…like their own name!
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Excellent observation Lindsay
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Dick, I still insist that the biggest challenge facing any radio company today is the same thing it always was, but few broadcast managers ever want to face: It ain’t easy to be creative and interesting. As with most businesses, the corporate types, “consultants” and other self-styled experts in the field try to reduce the talent needed to run a great radio station to some magic formula, such as just playing X number of “hits” that research proves are the right songs to play, telling announcers to shut up, or looking at what successful stations in other markets are doing and copying that, etc. Usually it’s a matter of simply trying to take the easy way out, reduce any risk, or eliminate the need for skilled, talented staff.
Notice that the most successful radio stations and personalities throughout history never did these things; Alan Freed, Wolfman Jack, Cousin Brucie, Steve Dahl, Dan Ingram, Don Imus, Rush Limbaugh, Paul Harvey, Howard Stern, stations like WCOZ, WBCN, WNEW, WPLJ, WCCC, WBAB, WPLR, WWCO, WMMS, KLOS, WTIC, and countless others. Like ’em or not, all of the above were unique, creative, exciting and fun to listen to. And yes, some people will simply settle for Pandora or Spotify, just like there have always been music freaks who would only listen to LPs, cassettes or CDs. But there are far more who don’t have the time, energy or ability to ferret out their own entertainment or pick out the worthwhile music or news from the clutter of material available, and they enjoy having friendly, fun, trusty professionals present it to them. (The same with TV variety and talk shows.) But, uh oh! It’s not easy to find and hire people who are good at that stuff! It’s much easier to BS owners, shareholders and people with executive titles about how it’s the Internet’s fault or that they have to do what the other guys are doing (who are also just treading water or going under, such as iHeartRadio).
Personally, I’m waiting to win Powerball or find a way to scrounge up the bucks to buy a station when iHeart, Cumulus, CBS, etc, decide to throw in the towel and sell off their stations…because that’s how stodgy, dull-witted corporate managers solve problems; dumping something that isn’t providable is far easier than fixing it, especially when you have no idea what “talented” or “creative” means.
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Thank you Brian for contributing to the discussion.
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Well said, Dick. Companies that are smart enough to see the organizational pyramid with the customers (listeners and advertisers) at the top, closely followed by front-line employees who are “supported”, not “directed”, by senior management will take our business to the next level. This takes courage and trust from the CEO (like Kelleher). Dick (or anyone reading this), who do you see as current media company leaders that get this?
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Bill, you ask a great question and I’m going to stay silent and let others weigh in on this one first.
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I hear a lot of crickets.
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Dick: “Complexity” Well said, and love your idea of platforms.
As you know I don’t write much but had a wonderful experience a couple of weeks back you should know about. An old friend of mine asked if I could help him spruce up programming as he took over operation of a small radio group (3 AM, and 2 FM) in Sebring FL. This included upgrading the rotations of two music stations, and overseeing a format switch on one of the AM’s from oldies to ESPN. The idea here was to use technology to give them more time for the things they do best.
The willingness and professionalism of the existing staff to complete this project in a very short time frame was a pleasure to behold. We explained the concepts and then asked for and got their enthusiastic help. We also asked for and received recommendations on how to best serve the market both musically and promotionally. These people know and love the Highlands area of Florida, and also what does and does not work for their audience. We listened and executed accordingly.
The other wonderful thing about this cluster is that three of the stations broadcast local shows. In fact, the country station, WWOJ is local from 5:30 AM until 7 PM. Their morning person has been on the air there forever and he along with the rest of the on air staff are all involved in outside promotions.
I have to agree with Lindsay Wood Davis who said that, “we can all use a dose of the finest local small market operator’s.” With the right leadership, at least in Sebring Florida, the desire and work ethic is there to develop new concepts like your suggestion of platforms. I saw the staff of local small market radio at its best, and for me it was fine.
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Jay, that’s a truly inspiring story about what’s taking place in radio across America that isn’t in the spotlight and often goes untold.
Thank you for sharing it!
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“The idea here was to use technology to give them more time for the things they do best.” Well Said.
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