Tag Archives: efficiency

Efficiency vs. Resilience

Rick SklarOn November 9, 1965, around 5:21pm in the afternoon, WABC listeners heard something unusual coming through the speakers on their battery powered transistor radios. WABC was playing Jonathan King’s “Everyone’s Gone to the Moon,” but it sounded different. It sounded like it needed a shot of Geritol, as the recording turned slower and slower. Even WABC’s famous chime was off key, and popular afternoon personality Dan Ingram tried to make fun of what was happening. You can hear that moment by clicking HERE.

The 1965 Northeast Blackout

As it was happening what no one knew, was that the power grid was collapsing. Inside Dan Ingram’s studio, the lights were flickering, the music cartridges were playing at slower and slower speeds and the journalists in the WABC newsroom were beginning to see the wire services report that city after city along the Eastern seaboard were going dark.dan ingram 1965

From Maine to New Jersey, America was experiencing a regional power grid failure. Many radio stations without emergency generators were silenced, but WABC was still on the air due to the station’s transmitter facility being located in Lodi, New Jersey. New Jersey was on a different power grid than New York City.

WABC would rush Dan Ingram to Lodi with a stack of records and have him continue his show from there.

Rick Sklar & Building Resilience

Rocking AmericaRick Sklar wrote in his book “Rocking America” that the blackout helped him to focus his attention on technical reliability. “A station can have the best mix of music and the top jingles, but if the tapes break, the cartridges jam, or the music fidelity is off, the ratings (aka audience) begin to evaporate,” Sklar wrote.

Early in his tenure as the program director at WABC, Sklar would be frustrated by the technical obstacles that got in the way of his building Music Radio 77 into the #1 radio station in The Big Apple.

Lessons Learned at NASA

When America was ready to put a man on the moon, Sklar decided he wanted to be there for that significant moment in history.

He was fascinated by the confidence of NASA that they would land men on the moon and bring them back home safely. He was envious of their certainty and of their equipment and systems to get the job done. He wanted to attain that same kind of certainty for WABC when he returned home to New York.

In drilling down mission control’s engineering confidence, he learned that NASA used triple measurement and triple backup on everything. Sklar would learn from Walter Häusermann, the man who designed the guidance systems for the V-2 rockets, and those of the Apollo command module, “If two of the three readings on any measurement agree, we assume that it is the third meter and not our readout that is at fault.”

WABC Builds Resilience

When Rick Sklar got back home, he began to implement what he had learned at NASA, in the operations at WABC. He built two identical main control rooms and made sure a production studio could act as an air studio if needed. He built the studios with eight cart machines, instead of the previous five, three being ready in case of a failure of any of the primary five machines. He had every one of the two thousand-odd cartridges that made up the WABC sound, duplicated for each studio. The studio to transmitter broadcast land lines were broken into a northern and southern route from the main studios to the transmitter site in Lodi, with a microwave link as the third method for delivering programming to the transmitter.

George Michael WABC in NASA inspired studio

George Michael at WABC in NASA inspired air studio (photo by Frank D’Elia)

Rick Sklar had thoroughly reviewed every element of the operation and implemented ample redundancy to insure a consistent and reliable delivery system for his programming.

Resiliency in People

There’s only so much repetition in equipment that can protect you from disruptions, in order to truly have a “fail-safe” operation, you must have good backup people.

And there’s the real rub in today’s radio world. Where are the people?

As I wrote in last week’s blog, Good Money After Bad, the need to build efficiency in my Sussex, New Jersey radio property saw the elimination of not only full-time employees but the backup people so critical in providing the over-the-air and online services so necessary during times of winter storms.

Global Pandemic

COVID19 is revealing the tradeoffs between building operating systems for efficiency, versus resiliency. These tradeoffs have been occurring in all areas of corporate America, not just broadcasting. This pandemic presents us all with opportunities to rethink of how prepared we are to handle a Black Swan Event. It also has shown us ,simply doing things the way they’ve always been done, isn’t necessarily how they can be done or should be done going forward.

Resiliency and efficiency are polar opposites and every business needs to mind its bottom line and deliver a profit to stay in business. The leaders will learn to invest in resilience efficiently.

Look for that to be the in demand skill in all companies as we digest the lessons of this global event.

 

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What We Have Here, Is a Failure to Embrace Complexity

42The 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.”

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Is Radio Ready for a Black Swan?

Once upon a time, radio employed a lot of people. Radio stations that operated 24/7 had to have a live person on duty every hour of every day.

Radio studios were different back then too. There were multiple turntables, cart machines, reel-to-reel recorders and multiple microphones/headphones in every studio. In short, there was lots of redundancy. Radio wasn’t very fragile.

But as technology invaded the radio world, computers would replace just about every piece of equipment in the building; saddest of all were the people. They increased efficiency by a lot.

That’s what disruption does. Disrupts. Everything.

Ironically, there’s a relationship between all this efficiency and fragility. As computers increased efficiency it also increased radio’s fragility.

In those early days, lose a phonograph needle or a cart machine, it was no big deal. However, when you lost a computer, you lost the entire radio station. This drive for efficiency eliminated the redundancy. (Most radio stations today have redundant computer networks to deal with crashes; but not all.)

In New York City, many radio and TV stations left the Empire State building when the World Trade Towers were erected. A couple didn’t. On 9/11 those that kept a redundant transmitter plant in place at the Empire State building were able to stay on the air when those iconic towers came down. That kind of redundancy wasn’t efficient, but it was smart and it made those broadcasters less fragile.

The problem is that in business, becoming more efficient means eliminating human redundancies. That’s been part of our high unemployment problem since the beginning of the digital revolution. All businesses are becoming more efficient through digital ecosystems. It’s these very ecosystems that eliminate lots of jobs.

When systems become more optimized, efficient and complex their fragility increases. Fragile systems often break suddenly and with no warning.

Consolidation contributes to this scenario by stacking optimized, efficient and complex systems into an even larger ecosystem that become top down managed through “best practices” strategies. Unfortunately, the reality of “best practices” is they are often more “average” than they are “best.” Often what’s best for one location, doesn’t translate to best for others. Best practices are really a “one size fits all” situation.

Before you argue that local decisions sometimes also fail (and I would not disagree with you), the failure is quarantined to a single location and does not impact the entire enterprise.

Nassim Nicholas Taleb wrote about all of this in his book The Black Swan.

 “The Black Swan asymmetry allows you to be confident about what is wrong, not about what you believe is right.”

History teaches us the outcome of efficiency and fragility. But like the couple getting married who knows that between one third and one half of all marriages end in divorce is convinced they are the exception, companies operate with this same blind eye to the arrival of a black swan to fly into their path. Or as Taleb writes:

“If you survive until tomorrow, it could mean that either a) you are more likely to be immortal or b) that you are closer to death.”

The world we live in today is changing. No doubt about it. It’s a communications revolution. We can’t operate the way we’ve always done it. Taleb shares this example:

“Those who believe in the unconditional benefits of past experience should consider this pearl of wisdom allegedly voiced by a famous ship’s captain:

‘But in all my experience, I have never been in any accident… of any sort worth speaking about. I have seen but one vessel in distress in all my years at sea. I never saw a wreck and never have been wrecked nor was I ever in any predicament that threatened to end in disaster of any sort.’

-E. J. Smith, 1907, Captain, RMS Titanic Captain Smith’s ship sank in 1912 in what became the most talked-about shipwreck in history.”

If there’s an industry that needs to be thinking about “black swans” and balancing efficiency with redundancy, it’s the radio industry.

People don’t have a favorite McDonalds or a favorite #2 pencil brand, but they do have a favorite radio station.

When a “black swan” swoops in, will you be ready?

Your listeners are depending on you.

Don’t disappoint them.

They love your radio station.

They trust you are prepared for black swans.

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