I had the opportunity to sit in on a webinar on “The Creative Economy” that is considered to be the direction the future of business is headed in compared to the traditional business methods of the past. What is meant by the term “The Creative Economy?” It’s one where business revolves around the customer versus the past where the customer revolved around the business.
The Creative Economy also breaks from tradition in the sense that it means the goal of a company is no longer about making money for the stakeholders but about delighting customers. But, you ask, isn’t “maximizing shareholder value” the mantra of Wall Street? Good question. Listen to what these CEOs have to say about that mantra:
Jack Welch former CEO of GE: “the dumbest idea in the world”
Vinci Group Chairman/CEO Xavier Hulliard: “totally idiotic”
Paul Polman, CEO of Unilever: (has denounced) “the cult of shareholder value”
Marc Benioff, CEO of Salesforce declared this still-pervasive business theory “wrong”
I guess it’s quickly losing favor with those who should know.
The Internet and “The Cloud” are enabling “The Creative Economy.”
Which brings me back to my initial question, “What if…”. What if radio stations were supposed to be small operations? What if the radio industry wasn’t meant to scale?
When I entered the radio business, companies were limited in the total number of radio stations they could own; in the entire USA. It was known as the 7-7-7 rule. A single company could own not more than 7 AM, 7 FM and 7 TV stations in all of America.
What this created was competition between owners of radio stations in a market. Each station was a team of people working as hard as they could to win the audience in that market. The focus was all about the listener or the viewer. Win the most listeners/viewers and advertisers would soon follow to showcase their wares on that radio or TV station’s airwaves.
Hearing “The Creative Economy” described on this webinar was like radio déjà vu.
In 1996, President William Jefferson Clinton signed the Telcom Act of 1996 into law. That was the moment that the “land rush” for broadcast properties began and Wall Street became heavily invested in the radio industry. Wall Street would bring its “maximize shareholder value” mantra to broadcasting.
This point was really brought home to me in 1999 when my stations were sold to a large radio consolidator. The head of this “big box” radio operator told us that we needed to “sell, sell, sell” that it was all about making money for the company and “maximizing shareholder value.”
This “pump up the troops” speech left me cold. I was brought up in a radio world that was about operating “in the public interest, convenience and/or necessity.” I was brought up in a world where if we treated the members of our team well, our team focused on delighting the listener, the advertisers would flock to our station and the owners would be rewarded for doing everything right. That view of life served me well my entire radio career.
Needless to say, I opted not to remain with this new company.
However, I would find myself playing “musical chairs” going forward as it was getting impossible to not be working for a company that hadn’t adopted this modus operandi.
Steve Denning, who writes for Forbes, lead this webinar and pointed out that economics was driving the change for companies worldwide. He told us that no company is doing it all right. Companies like Apple, Amazon, Google and Salesforce are moving in the right direction. In fact, Tim Cook is better at navigating the change to this style of management than Steve Jobs ever was and it no doubt is contributing to Apple being the most valuable company in the world. To give you an example of what it means to focus on the customer first, consider Tim Cook telling an investor in Apple this:
“If you want me to do things only for ROI reasons, you should get out of this stock.”
That was kind of radio world I grew up in. We always tried to do the right thing for our employees, our listeners, our advertisers and the money would follow.
I’m encouraged that radio people who sold out when Wall Street was buying, are now getting back into the radio business with that same ethic, spirit and sense of innovation that seduced me into a four decade long radio career. They understand the concept of “The Creative Economy” because that’s how they built their radio companies the first time around. They also understand that today, radio is more of a concept of operation than a method of delivery.
I’m excited to be working with the next generation of radio broadcasters at my university knowing that radio’s future has never been brighter.