Tag Archives: Peter Drucker

November 7, 2021 · 3:00 am

Culture Eats Strategy for Breakfast

It’s always been my belief that unless you first build a positive culture in the workplace, nothing else you try to accomplish will ever come to fruition.

So, when I read this famous quote that business guru Peter Drucker was alleged to have coined, “culture eats strategy for breakfast,” it came as no surprise that the foundation of any successful enterprise is built on its culture.

In fact, most people don’t quit companies or leaders, they quit organizational cultures.

“The best way to improve the team is to improve yourself.”

-John Wooden

The Learning Never Stops

In my capstone classes, students learned that their time at the university should be considered a launch pad to a lifetime of learning. Leaders never stop learning.

“When I am through learning, I am through.”

-John Wooden

Your Attitude Determines Your Altitude

Your own personal culture is your attitude. Whether it is positive or negative, it’s yours to control.

As a hiring manager, I always hired people on their attitude; everything else can be trained.

In life, more than any other factor, your attitude pretty much determines where you will go –  and how far you will go.

Ron Lundy

One of my favorite radio personalities was Ron Lundy. I first heard Ron on Music Radio 77 – WABC and immediately fell in love with the contagious, upbeat, positive attitude he presented on his radio show.

When WABC switched formats from music to talk, Ron Lundy found himself out of work, but would eventually be hired by Joe McCoy at WCBS-FM.

Every air shift on CBS-FM was already filled, so in order to create a time period for Ron, Joe McCoy would need to shorten everyone’s air shift, and convince his general manager why this hire would be beneficial to the radio station.

As I heard the story, Joe’s pitch to his GM was that Ron wasn’t just a powerful personality that would attract more listeners to CBS-FM, but that Ron was the type of guy that provided a positive culture inside the radio station, inspiring everyone to do their jobs better.

Attitude in Managing

One of my radio mentors was Phil Weiner (WBEC/WQRB/WUHN/WUPE). When I departed for my first solo general manager position in Atlantic City, he shared with me the most important thing he learned as a general manager, “Whatever your attitude is, when you enter the radio station each day, that will become the attitude of your fellow employees. Keep your problems to yourself and always maintain a positive, upbeat, enthusiastic attitude.”

It may have been the most important advice of my forty-year radio management career.

In my second career as a college professor, knowing that one’s attitude is contagious, I brought that same positive attitude and energy into the classroom.

“Attitudes aren’t taught, they’re caught.”

-Margaret McFarland

Everyone You Meet Can Teach You Something

No matter how far in life you’ve gone, or how many degrees, medals or trophies you’ve earned, stay humble. Every person you meet carries knowledge about life that you can benefit from. Stay curious and be willing to soak up the wisdom from everyone you come in contact with.

“It’s what you learn after you know it all that counts.”

-John Wooden

Radio is a People Business

All of my life, I’ve invested my energies in the development of people. Many of them today are owners and managers of their own broadcast operations. As a general manager, I was proud to work with some great and talented individuals.

“You handle things. You work with people.”

-John Wooden

When it comes to managing people, one size does not fit all. I treated each member of my team for the unique personality they were, valuing their talents, and skills, as well as understanding that we all come with our own issues, problems and demons.

Great radio stations, full of talented people, can be an exceptionally exciting workplace.

“The worst things you can do for those you love

is the things they could and should do for themselves.”

-Abraham Lincoln

It’s important to have a culture that allows people to fail. Often the greatest wisdom comes from things that go wrong. As long as you have given your best effort, you are never a failure.

Great managers and teachers are great coaches of people.

The Big Four

Consider these four things when creating culture in your organization:

  1. Culture is created by the behaviors you tolerate.
  2. Change starts with YOU. You can’t expect your people to change if you won’t.
  3. Leadership gives you a voice at the table, not the voice.
  4. Listen to everyone and take their opinions into account when you make the final decision for moving forward.

“Much can be accomplished by teamwork

when no one is concerned about who gets the credit.”

-John Wooden

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December 13, 2020 · 3:00 am

F’ing With the Magic

Those that know me, know I don’t use profanity. But former radio CEO Mel Karmazin, upon learning about Google’s automated advertising sales algorithm, verbalized what every nervous media and technology CEO was thinking when he said to Sergi Brin, Larry Page and Eric Schmidt “You’re fucking with the magic.” I read this in Ken Auletta’s 2009 book titled “Googled: The End of the World as We Know It.”

Media Advertising – The Last 10 Years

If we measure media advertising as a percentage of GDP (Gross Domestic Product), we see that in the last decade, media advertising in the United States was down 25% according to the Progressive Policy Institute. This think tank is reported to do some of the best research that uncouples advertising expenditures from the rest of the economy.

What caused this drop? Low cost digital ads, as compared to advertising rates in traditional media, what many of us used to call trading traditional media dollars for digital dimes.

Unfortunately, as traditional media, especially print, was seeing its advertiser base disappear, it compensated for fewer advertisers by raising its prices. Television did this too. They were assuming they held an impregnable position with advertisers. Unfortunately, they completely ignored the digital reality exploding all around them.

Radio’s Expansion

Similarly, the radio industry went about over-populating the AM and FM broadcast bands without acknowledging the growth of digital alternatives. The FCC’s “MM Docket 80-90” added over 700 new FM radio stations in the first three years after the law took effect in 1987. Then LPFM (Low Power FM radio signals) were added to help AM radio stations, as well as to provide local non-profit radio stations to communities that had no local radio service.

If that wasn’t enough, radio broadcasters began to embrace HD Radio (digital radio signals) when they learned that the same law that allowed for an AM radio station to rebroadcast its programming on an FM signal also allowed HD Radio broadcasts to be rebroadcast on an analog FM signal.

To be clear, in 1927 there were 705 commercial radio stations on-the-air (all on the AM band and most with transmitter power of under 1,000-watts). Today we have 25,819 radio stations (21,209 FM / 4,610 AM).

While all of this was going on at a frenetic pace, no one was paying attention to the 800-pound elephants in the room aka Facebook, Google, and Amazon.

Time Spent vs Ad Expenditures

It stands to reason, that the more time a person spends with a particular form of media, the more likely they are to be exposed to more of the advertising content it runs.

Ten years ago analyst Mary Meeker showed in her annual “State of the Internet” slide show, how things were trending negatively for traditional media.

For print, our media attention in 2010 was only 8%, but print commanded 27% of ad dollars. By 2018, our print attention had dropped to only 3%, and print’s ad dollars fell to 7%.

For TV, in 2010 it garnered 43% of our media attention, and commanded 43% of ad dollars. By 2018, both attention and ad dollars had fallen to 34%.

In 2010, for radio, we gave this medium 16% of our media attention and it collected 11% of the ad dollars. By 2018, our attention had fallen to 12% and radio’s ad dollars slipped to 8%.

Where did those ad dollars go? To digital media, as this Mary Meeker chart clearly shows.

More specifically, to mobile digital media.

In 2010, the smartphone in your pocket took up about 8% of our media attention and a paltry 0.5% of ad dollars spent. But by 2018, mobile digital media was commanding 33% of our attention and collecting an equal 33% of ad dollars, soon to be eclipsing TV in both metrics.

Too Little, Too Late

It’s easy to look back 20 years into the beginning of the 21st Century, and say what should have been done, but the fact of the matter remains that traditional media companies were in denial. The denial of the coming digital media world wasn’t just in the ad-supported mediums such as print, radio and TV, but also in companies like Kodak, which actually invented the digital camera in 1975, but whose leaders were in denial about it being the future of photography, and worried about cannibalizing its lucrative print film business.

Culture eats strategy for breakfast.

-Peter Drucker, legendary management consultant

Radio’s golden assets were its radio personalities and the relationships they built with the listeners. In the rush to expand, and appease shareholders who wanted accelerated growth, radio owners killed their “golden goose,” while enlarging its nest.

Radio continues to jettison the very people that connect its stations with their community of license.

Simon Sinek said, “People don’t buy what you do; they buy why you do it. And what you do, simply proves what you believe.”

For me, radio was a passion to make something great come out of a person’s radio speaker. It’s why I made radio broadcasting my career and why I went on to teach broadcasting at a university. It was my passion to create great radio!

What is radio’s WHY today?

I think that’s the question the industry needs to ask itself.

“If you keep your eye on the profit, you’re going to skimp on the product.

But if you focus on making really great products, then the profits will follow.”

-Steve Jobs

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September 8, 2019 · 3:00 am

What’s the Purpose of a Radio Station?

WSM Tower SiteRadio is a business.

Peter Drucker said the purpose of a business is to create a customer.

For radio, that means creating two types of customers: 1) a listener and 2) an advertiser and when done correctly, a radio station makes a profit.

Making Money

For most of my radio career, radio enjoyed a revenue expansion that rivaled the infamous “internet bubble.” Owning a radio station was considered a license to print money. Bottom lines often delivered a profit of 25 to 50% or more, so, while those profits were noticed by Wall Street investors the ownership limits on radio stations kept them away. Investors were frustrated that there was no way to scale up the size of a radio broadcast company.

Telcom Act of 1996

Then President Bill Clinton signed the Telecommunications Act of 1996. It relaxed radio’s ownership rules making it possible for one company to own multiple radio stations in a single market.

Wall Street loved the change! The money poured in from eager investors, and companies like Clear Channel, Citadel, and Cumulus quickly bought as many stations as they could using other people’s money. Mom & Pop radio operations had multiple companies vying for their properties and radio station values soared.

Ownership Limits

In 1953, the Federal Communications Commission (FCC) adopted its so-called 7-7-7 rule to encourage diversity of broadcast ownership. In essence, no single owner could own more than 7 AM radio stations, 7 FM radio stations, and 7 television stations in the entire United States of America.

By July of 1984, the FCC said they sought to encourage media competition and increased the number of radio and television stations a single owner could control to 12-12-12. The FCC Chairman was Mark S. Fowler. The President of the United States was Ronald Reagan. The five member FCC was 3 Republican appointees and 2 Democratic appointees. The vote to expand the ownership limits was 4 to 1 in favor.

“Bigness is not necessarily badness,” Chairman Fowler is reported saying. “Sometimes it is goodness.”

The New York Times reported reaction on Capitol Hill to the expansion of ownership limits this way:

On Capitol Hill, there was mixed reaction to the plan to abandon all limits on broadcasting ownership in 1990, although sentiment has grown in recent years for raising the ownership maximum somewhat.

Representative Timothy E. Wirth, the Colorado Democrat who is chairman of the House telecommunications subcommittee, said, ”The 12-12- 12 rule is just as arbitrary as the 7-7-7 rule.”

Mr. Wirth said a broad bipartisan consensus in Congress favors adoption of ”objective, long-term rules that assure diversity and competition.” He said such rules would provide for increased broadcast ownership but would not completely deregulate it.”

He went to say “If they deregulate in 1990, we could end up with a handful of companies owning every broadcasting outlet in the country.”

President Ronald Reagan

Reagan loved two things, cutting taxes and eliminating regulation. Remember Reagan famously said that “Government isn’t the solution to our problems, government is the problem.” Reagan’s pick for FCC Chairman, Mark Fowler, fully embraced this vision and actively applied it to the FCC.

However, the prediction of Congressman Timothy Wirth wouldn’t come into existence until President Bill Clinton signed the Telecommunications Act of 1996. It would be the first significant overhaul of the 1934 Act in more than sixty years.

Radio station ownership in the first five years under this new act went from 5,100 owners to 3,800.

Instead of opening up ownership to new and more diverse ownership, it created an opportunity for media monopoly. The Wall Street funded radio companies could now buy out the Mom & Pops and the temptation to sell at never-before-seen-multiples was too good to pass up.

Operating in the Public Interest, Convenience and Necessity

When no one really knew what radio broadcasting would become, they did know they wanted radio to be a communications business that would serve its community of license for convenience in good times and of necessity in times of trouble. The airwaves were considered to be owned by the public, so operating in their best interests was a requirement to being an FCC broadcast licensee.

Changing Competitive Landscape

Historically, radio stations competed against one another. Most markets had such battles as, WLS vs. WCFL, WMEX vs. WRKO, WPTR vs. WTRY, KHJ vs. KRLA etc. When FM radio began to take over from AM, a station such as WABC no longer had just WMCA to beat, but now WTKU-FM too, which offered better fidelity and stereo. This new radio competition replicated in every radio market in America.

Then came Satellite Radio, followed by Pandora along with other pureplay streamers, and podcasts so that today, the radio competition landscape lines are blurred beyond recognition.

Mission vs. Platform

Today’s communications company needs to clearly define its mission and needs to earn the trust of all of its stakeholders. That means building trust between its employees, advertisers and listeners.

We need to stop thinking of “radio” as AM or FM.

We need to think of radio as being the audio leader for creating an environment for convening and supporting groups. We need to be preparing for a future that is still coming into focus.

 

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March 31, 2019 · 3:00 am

Thinning the Herd

Thinning the HerdGordon Borrell recently hosted a webinar that hit on the highlights of his #LOAC2019 (Local Advertising Conference) held in New York City. The shocker, for me and many others came when Gordon said the future for media expenditures would be a process of “thinning the herd.”

Media Overpopulation

To put things in perspective, Gordon shared how an over-populated media landscape is impacting local advertisers.

  • 1,300 daily newspapers, 6,500 weeklies
  • 4,700 printed directory books
  • 4,665 AM radio stations, 6,757 commercial FM radio stations
  • 1,760 Class A TV stations
  • More than 1,000 cable systems with local sales staffs
  • 660,000 podcasts were actively produced in 2018
  • 495 NEW TV shows were introduced last year in addition to what’s already on
  • PLUS, local ad sales are taking place on Facebook, Google and Amazon

Another way of looking at this media explosion, is that a TV market now has an average of 126 local media entities. To view a recording of the webinar, contact Corey Elliott HERE

Action – Reaction

So, how are the people who buy advertising responding to this media abundance?

Gordon identified three trends:

  • They are increasing buying for types of media, from 5.5 to 8 different ones
  • They are decreasing the number of companies from which they buy advertising, from 5 to 3.5 companies
  • 90% of their media buys are being made with companies who can bundle traditional and digital advertising

Facebook – Google – Amazon

When a new Ollie’s store opened in Winchester, Virginia, my Facebook newsfeed was peppered with announcements. During the fall elections, politicians also used lots of Facebook ads to try and get elected.

I can’t go on Google or Amazon looking for something without being followed around the internet with ads for that very thing.

eMarketer says that in 2018, Google and Facebook took 60% of the total digital ad spend. Amazon was third with 6.8% but is predicted to grow it’s share by more than 50% in 2019.

Think about that, these three companies will rake in over 68% of the digital advertising dollars spent this year.

eMarketer also says that by 2023, they expect digital advertising to account for 66% of total media spend.

Post-Capitalist Society

About ten years ago, my good friend John Parikhal recommended I read Peter Drucker’s book “Post -Capitalist Society.” Wikipedia summarizes Drucker’s thesis this way:

“The book states that the “First World Nations” and in particular the United States have entered a Post-capitalism system of production where the capital is no longer present because it doesn’t belong to one person or family but to a series of organizations such as insurance companies, banks, etc. Because of this, normal citizens become virtually owners of the great American enterprises, being owners of the capital, therefore, not destroying but overcoming the capitalism. The book foresees that the post-capitalist society will become a society of organizations where every organization will be highly specialized in its particular field.”

Sound like what we are witnessing in today’s world?

Accountable Capitalism Act

Recently, Senator Elizabeth Warren introduced a bill in Congress called the “Accountable Capitalism Act.” It targets what Warren says is the root of the country’s “fundamental economic problems.” You can read the Boston Globe story on the bill HERE

In essence, we have moved from a time when corporations cared about where they lived to one where only increasing shareholder value matter.

I remember a time when the insurance companies of Hartford, Connecticut were once heavily invested in the good of Hartford. I grew up in a GE city. General Electric made a positive impact on things and participated in growth and prosperity of the area.

In the 1980s, things changed. Corporations shifted from caring about both employees and investors, to only investors. The record profits went all to investors, and the people who worked hard to produce those profits didn’t get a share of them.

Increasing Shareholder Value

I first wrote about how the concept of “increasing shareholder value” was a dumb idea three years ago. You can read that article HERE

Real American capitalism was when both company and worker did well together.

Senator Warren has also raised many eyebrows with another plan that proposes to break up some of the largest US tech companies, like Amazon, Google and Facebook. Based on the trends in digital advertising, those of us in broadcasting would probably agree with Warren.

In essence, Warren says that high tech has created an unfair playing field. They control the platform, have full access to all the data, and then can either unfairly compete with companies, buy them out entirely or run them out of business. It reminds me of the type of things people said as Walmart covered America with their form of brick & mortar retailing.

Get Bigger or Get Out

Cox Media has recently begun liquidating its radio, television, newspaper and other media properties. The company’s leadership has determined that scale will be a determining factor in the future, and they either need to get bigger or get out. Cox has chosen the latter.

Current Trends

It would appear that in reading the tea leaves for ad supported media, that everything is currently headed in the direction of fewer entities owning all the media outlets, and advertisers buying their media on those platforms that can bundle it all together.

“Monopolies are a corruption of the marketplace. Breaking them up — allow[s] entrepreneurs to enter the market, giving consumers more choices, and giv[es] workers more jobs…”

-Adam Green, cofounder, Progressive Change Campaign Committee

I know there are many radio folks who saw the Telcom Act of 1996 as the beginning of the end of commercial radio as we knew it. That act is what caused Wall Street to enter the broadcasting business and apply their dumb idea of “increasing shareholder value” to another industry. It was the beginning of the consolidation of radio and we all know how that’s turned out.

 

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January 1, 2017 · 4:00 am

Best of the Blog 2016

73Before I begin my 3rd year of blogging next week, I thought I’d take a look back of the Top 5 blog posts from 2016 and share with you the posts that received the highest readership and sharing from the year just past.

My Most Read Article in 2016

My most ever shared post received 3,725 views in a single day. It was published on February 28th and was “The Day the ‘Dumbest Idea’ Invaded the Radio Industry.” It told the story of a change in the way we measure business success. Before this new idea was born, Peter Drucker’s measure was the rule. The purpose of a business, said Drucker, was to create a customer. But that went out with leisure suits, the new crop of business wizards would proclaim. What replaced it was something that even GE’s Jack Welch has called “the dumbest idea in the world.” You can read that post here.

This post beat my beat my previous single day record of 1,816 set on September 6, 2015 with an article called “We Never Called It Content.” For my new readers, you  can go back and read that one here.

Second Most Read Article of 2016

“Radio Would Be a Great Business…If It Weren’t for the Employees” said radio is a people business. Take away the people and do you really have radio anymore? You can read it here.

Third Most Read Article of 2016

“SiriusXM Radio is Now Free” was an article that wondered what would happen if this satellite radio service offered some or most of its channels for free. What would that do to the revenues of the AM/FM radio industry? Even if they only turned on the top five music formats, it would mean drivers could listen to them wherever they drove across America, plus SiriusXM would have the ability to pop in promos for their other channels that remained behind a paywall. It’s almost too scary to consider the possibility. You can read that article here.

Fourth Most Read Article of 2016

“Don’t Let Radio End Up Like Yahoo” told the story of how radio could learn from Yahoo’s mistakes. Yahoo went from being a company worth $120 Billion to its sale to Verizon for $4.8 Billion. The article shared the Top 5 Lessons of Yahoo for radio. You can read it here.

Fifth Most Read Article of 2016

“Millennials Love Radio” shared how today’s Millennial generation nearly equal Boomers in listening to AM/FM radio. 91.3% of Millennials are reached by radio every week. 94% of GenX’ers are reached by radio and us Boomers come in at 93.5% reached by radio every week according to Nielsen. Radio continues to be the advertising medium that gets results when used correctly. Read the full article here.

Over 52,000 Readers

I’m happy to report that as I ended 2016, my second year of blogging saw over 52,000 readers come to this blog from all over the world. Broadcasters, educators and students have all stopped by to read an article or more that caught their interest.

This blog in media mentorship was created to pay-it-forward to the broadcasting industry that I will have been a part of for 50-years in 2017.

FREE SUBSCRIPTIONS

You can subscribe to this blog for FREE and get a copy delivered to your email IN box every week by going to the bottom right-hand part of the screen and clicking on the FOLLOW button. (If you’re accessing this blog via a mobile phone or tablet, that button may not be visible I’ve been told.)

Next week, I will begin year three of blogging with all new articles.

Thank You for reading.

Feel free to contribute your thoughts to the discussion in the comments. Together we can all learn by sharing our experience, knowledge and wisdom.

Happy New Year!

 

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September 4, 2016 · 4:00 am

What I Learned About Being a General Manager

48I loved being a general manager of radio stations. It wasn’t the job that first attracted me to radio however; it was to become a disc jockey. From as far back as I can remember I wanted to be a DJ on the radio. My first radio microphone was made out of tinker toys. Then I got a Caravelle (pictured) transmitter for Christmas from Santa Claus and I took to the air waves.

I started in commercial radio when I was in the 10th grade in high school, getting my FCC 3rd Class Radio-Telephone Operator Permit. Due to my age at that time, I needed to get a work permit. The Massachusetts employment office that issued those types of permits for underage workers asked me what type of employment I would be doing. I told them, I’m going to be a DJ. They didn’t have a category for DJ in their book, so they wrote “Talent” on my work permit and sent me on my way. I never mentioned that I would also be taking transmitter readings every half hour standing next to a 1,000-watt broadcast transmitter. If I had, they would never have issued me a work permit, as that environment would have been considered to hazardous for a person who was only 16 years old.

As I look back on it, it almost seems ironic that I could have a license to operate a commercial radio station, but my mother would have to drive me to work and pick me up because I couldn’t get a driver’s license to operate an automobile.

In time, I would learn that what I really wanted to do in radio was not be the person who was the product, but the person who ran the whole enchilada; also known as the general manager. To get to that lofty office, I would need to leave the air and programming and go into sales.

Once in sales I quickly rose through the ranks to sales manager, station manager and finally general manager. Yes, at the ripe old age of 32, I was a general manager in Atlantic City, New Jersey; the world’s famous playground.

Lessons Learned

So what did I learn almost three decades later? A career is not a sprint, but a marathon. You never know everything you need to know. Every day is a learning experience. That your attitude becomes the attitude of your employees, so keep it positive.

Success

Like making a baby, you can’t speed up the process of success in life. It takes time. Repetition is key. Malcolm Gladwell in his book Outliers wrote it takes about 10,000 hours of repetition and practice to master anything.

While Radio Ink Magazine named me one of the best general managers in radio before I left the industry to become a broadcast professor at a university, I would find that I would learn even more about my craft trying to teach it to others. So today, I think I’d be a much better general manager than when I took a sabbatical to enter teaching.

Love

They say if you love what you do, you will never work a day in your life. That was true for me about my radio career for over four decades and it’s been just as true for my teaching these past six years. But here’s the big take away: You can love your career, but it will never love you back. So you have to make time for the things that do love you back like your family. I may have been a hard working, successful radio general manager, but I never missed any of the special moments in my boys’ lives as they were growing up.

But the real credit goes to their mother. She made the decision to be a stay-at-home mom – the most important and difficult career choice on the planet – and the credit for the successful men both of my sons turned out to be, goes to her.

Marriage

Sadly, while I tried to be a good dad and a good radio general manager, I probably was lacking in the husband department. The mother of my sons and I would divorce. My life was not in proper balance. Don’t let this happen to you.

Stay Curious

When you’re starting out, you are very curious about how everything works. You’re like a sponge trying to soak it all in. Don’t lose that curiosity. Always pitch in and do whatever needs to be done. Always listen to the ideas of others; it might surprise you how much they know. Make every day a new day to learn and grow and be better than you were yesterday.

Management

When you manage people, unlike things, know that each one is different. Each person is an individual and there’s no “one size fits all” approach. Celebrate your people’s victories, benchmarks and life events. Empower your people to not need you. Compliment in public, correct in private. Compliment in a note, correct face-to-face.

Listen

You were born with two ears and one mouth. Listening is what you should be doing twice as much as a general manager. Just because you’re the GM doesn’t mean you have all the answers. You don’t. Collaboration is the 21st Century Skill Set. It’s been my experience that often the answers to the problems confronting my radio stations were inside my own workforce. As manager, it was my job to get the answers out of them.

My Boss is a Bastard

This is a tough one. You never really want to work for a boss who’s an S.O.B. But sometimes family obligations put you in that uncomfortable position of just having to tough it out until you can make a change. I tell my students when we go over case studies of employees working for a bastard that unlike now – when they are students with no other people they are responsible for – it seems like it would be easy to just walk away from a terrible employment situation, but when you have a mortgage, car loan, kids etc. you can’t. But what you can do is begin you job search and get out of there as soon as you can. Bad work relationships are toxic. Don’t stay in one.

It’s About More than Work

New managers sometimes have a hard time understanding why everyone isn’t as dedicated as they are to their job. But often, the reality is, your employees have lives outside of their workplace and those lives aren’t always smooth sailing. Each of us has a finite emotional capacity. So if their home life is stealing more than 50% of their emotional capacity, it leaves less capacity for the office. So if one of your best employees is suddenly under-performing, explore what’s going on in the rest of their life and how you, as their manager, can help them through this rough patch in their life. People will never forget how you made them feel when they needed your help and understanding the most. Even better, when that rough patch is over, you have one of the most empowered and dedicated employees now on your team.

Does Everyone Share the Same Mission?

Every company has a “Mission Statement.” Most are too long and rarely remembered, let alone embraced and understood by every employee. And that’s a BIG problem for you, the general manager.

There’s an old story about President Kennedy visiting the National Aeronautics and Space Administration complex when he stopped and asked a person cleaning the floor what his job was. The person said their job was to put a man on the moon. Now that’s a focused workforce.  What would your people say they do in your radio station if someone were to ask?

Don’t wonder what the answer is, ask your people. Get everyone on the same page.

Facebook

The world we live in today has blurred the lines between our work life and our home life. Our computers, tablets and smartphones now mean we are always available to our employer and always able to connect with our social networks. So should you ban Facebook? I was asked do to that once by one of my employees. My response was “no” I would not ban Facebook. And here’s why: First that person got all their work done and done correctly. That person was available to me at any time 24/7 if I needed something fixed regarding our program logs. If I could invade their home life, if necessary, then their home life could invade my work place.

The good news is recent research has shown that employees who take social network breaks online are more productive than those that don’t. Everyone needs to take a break and refresh to continue to perform at the highest levels they are possible of achieving.

Sales people are known to take a break after a lot of “No’s” and hit some golf balls at the driving range to refresh and get back to closing sales.

Personal Ethics

You know right from wrong. Never let any work place or manager compromise your personal ethics or values. If it walks like a duck, quacks like a duck, it’s a duck. And if that “duck” doesn’t feel right, it probably isn’t. Take a stand. Speak up, especially if you’re the manager because your people only have you standing between them and the top management of your company.

Failure is Learning

Want to learn more, fail more often and more quickly. Sounds counter-intuitive but research has proven that failure is all part of the way we learn. We only eliminate the unsuccessful paths by finding out if they lead us to success or not.

I had the opportunity to visit the Thomas Edison laboratory in New Jersey. A sign in the lab where Edison had invented the light bulb had this Edison quote: “I have not failed. I have just found 10,000 ways that don’t work.” Don’t fear failure. Learn to take risks.

Management vs. Leadership

In the end, what you really want to become is a leader. What’s the difference you ask? Peter Drucker says it best:

Management is doing things right;

leadership is doing the right things.

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June 12, 2016 · 4:00 am

Radio’s Dilemma (or Opportunity?)

38Radio’s a business. Peter Drucker said “The purpose of a business is to create a customer.” A business also needs to make profit or it won’t be in business for very long. On that we can all agree.

Surprisingly, many business people who know this still go out of business, often because they focus on the profit part and not the customer part. Plus those businesses either never had or lost their competitive advantage.

Radio’s dilemma is it lost that competitive advantage. That being having an FCC license to broadcast. Not everyone could obtain a broadcast license – they were limited by the Federal Communications Commission (FCC) – or had the ability to profitably operate a broadcast property. Profitability is when you earn money in excess of your cost of capital.

The radio business made a lot of money. Many enjoyed cash flow margins north of 50%. Its success attracted more people into radio ownership because it “looked easy” and made a bundle of dough. As more radio stations came on the air, it drove up wages, increased competition and increased multiples for valuing radio properties when they were bought and sold.

If this type of growth and expansion was all that was taking place, the “circle of (business) life” would have seen the radio industry slow down as the overcapacity from all of the new radio stations fought over the not-as-fast-growing advertising pie. It’s similar to what happen to the casino industry as expansion took off in America after just Nevada and New Jersey were no longer the only two states to license casino gaming.

Enter the great disruptor; the Internet. Radio, as we all once knew it, would be changed forever. For the Internet would now provide the world with an infinite number of “radio” options, like Pandora, Spotify, iTunes, RadioTunes et al. All trying to be ad supported like OTA radio.

Clay Christensen wrote about what happens when an industry is disrupted in his book The Innovator’s Dilemma.  He tells the reader how incumbent companies often respond to their disruptors with disastrous consequences.

Radio looked at the Internet as a “free broadcast license” and put their OTA signals onto a stream and then tried to squeeze a little extra profit by running separate ads on the stream versus over the air. It created a little extra money for the radio business but created a less enjoyable listener experience.  Sean Ross recently wrote in his newsletter “Ross On Radio” how different and better a radio station he listens to online sounded when he actually traveled to the market and heard the same station over the air. The difference was in the breaks and it was HUGE.

It doesn’t have to be all doom and gloom.

Southwest Airlines has enjoyed four decades of profitability. Like Walmart, Southwest had a root purpose for existing. Sam Walton’s Walmart mastered logistics to keep prices to his customers low and Herb Kelleher’s Southwest focused on constant improvements to make travel by air more affordable to more Americans. Like all successful enterprises, they put the customer first and profits were the result of doing everything else right.

For radio to be successful on the Internet, it needs to create a better user experience that attracts and delights the listener or that creates a new and different user experience that will enrich the end users’ lives. Radio, over the air, FCC licensed radio has the best platform to promote its Internet products. The possibilities are infinite. But each product must have a purpose beyond just making a buck.

Businesses that grow have a purpose beyond profit. Businesses that focus their growth on profits won’t have either growth or profits.

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May 8, 2016 · 4:00 am

Real Possibilities

AARPBefore I get into the meat of this week’s post, I first need to walk you through a bit of a preamble. Also, this week’s post is a continuance of last week’s post about Millennials vs. Baby Boomers, so if you missed it, you might want to read that first here before you read this week’s. Now please bear with me while I set-up the story for this week’s post.

I’ve been a card carrying member of AARP since I turned 50. When you hit this milestone birthday, don’t worry the folks at AARP will find you and solicit you to become a member.

When I became a member, AARP stood for the American Association of Retired Persons. But at age 50, I was a long way from actually retiring.

AARP was founded in 1958, so this organization could be classified a “Baby Boomer” just like me. And just like me, AARP has changed over the years. It officially changed its name from the American Association of Retired Persons to just AARP. AARP no longer requires members be retired but they must be at least 50 years of age.

In 2013, AARP launched its “Life Reimagined” program that sub-labeled the “RP” part of AARP to mean “Real Possibilities.” You see, AARP realizes that today people aren’t thinking about retiring when they hit 50 as much as they are thinking about tackling a second, or maybe a third career or endeavor.

At my university we started a wellness program in 2013. I was a charter member. Our university self-insures employees for healthcare and one of the ways to control costs is to incentivize employees to be as healthy as possible.

My university office is on the third floor of the Mass Media & Technology Hall building. We have three elevators in our building. I never use them. I prefer the stairs for two reasons: 1) they are much quicker than the elevator and 2) I use the stairs as a part of my wellness fitness program.

When a student says they’d like to meet with me for a moment in my office after class, I often find them a third of the way up the stairs when I reach the top floor (I take stairs two-steps at a time). They are also huffing and puffing. I just wait for them to catch up.

Now here’s the point of this week’s post…

Millennials Don’t Know What Age “Old” Is

Millennials are today’s media buyers. Millennials are today’s creative’s. Millennials are today’s planners. Heck, Millennials are probably the people running the place too. So if they have a warped concept of age, it is going to affect their advertising placement decisions.

Millennials now populate today’s media properties. They are the programmers, air talent, sales management, sales people and possibly the senior management.

I just met the director of Cox Digital Media in Las Vegas this past April and he is 28 years old.

Millennials Describe What Old Age Means to Them

Well AARP did some research into this question of what Millennials think “old” is. Then they asked them to show them what they thought “old” looks like. Then they introduced these same Millennials to some real “old” folks. Best of all, AARP recorded everything on video.

Watch the four-minute long video and then continue reading.

https://www.youtube.com/watch?v=lYdNjrUs4NM

See the problem now?

If you are wondering why more radio stations aren’t programming to Baby Boomers, or if you are wondering why more media buyers aren’t buying the BIG MONEY demos, now you have a better understanding of the problem. They think you and I have one foot in grave, instead of one foot away from the summit of Mount Everest.

Corvette Buyers

I live a short distance away from the only place Chevrolet makes the Corvette in the world. The average age of a Corvette buyer is 59. Boomers and people even older are the people who are buying Corvettes. They are NOT the Geritol-set.

We Are Part of the Problem

We call them Millennials, Generation X’ers and Baby Boomers etc, but another way to look at these generations is as tribes. Seth Godin has written extensively about this concept.

Seth says that sooner or later tribes begin to exclude newcomers. So each of these groups operates in their own little silo because it is easier than to keep breaking in newbies and because it could threaten the existing power structure.

Consolidation

The consolidation of media hasn’t helped either. RIFs (Reduction In Force) mainly dismissed the highest priced employees (Boomers) and left an organization of low cost employees (Millennials) all in the pursuit of increasing Shareholder Value.

Recent studies have shown that private companies out-perform public companies. The reason, they operate on the Peter Drucker principle that the only valid purpose of an enterprise is to create a customer. Privately owned radio companies also out-perform their publicly traded radio company counterparts. Same reason.

Turns out delighting customers is simple, clear and measurable, moreover it is the genuine path to successfully operating any business.

Leadership

The first question of a leader always is: “Who do we intend to be?”

NOT “What are we going to do?

BUT “Who do we intend to be?”

In other words, says Max De Pree of Herman Miller “What are we here for?”

Napoleon put it this way “Leaders are dealers in hope.”

Tom Peters says “The leader is the person who inspires us, sends us on quests to places we had never imagined.”

Think Thomas Edison, Nikola Tesla, Steve Jobs, Elon Musk and so many more just like them.

To paraphrase the title of Lee Iacocca’s 2008 book:

“Where have all of the radio leaders gone?”

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February 28, 2016 · 5:00 am

The Day the “Dumbest Idea” Invaded the Radio Industry

shareholder valueLast week I wrote about killing the goose that lays the golden eggs. It was my way of comparing the Aesop fable to the world of American radio. It got a lot of discussion. But I felt that while I touched on how radio operators twenty years ago wanted to harvest all the golden eggs immediately versus waiting to get one each day, by virtue of a last minute insertion into the Telcom Act of 1996 that basically removed the ownership caps on radio, there was – as Paul Harvey used to intone – ‘the rest of the story’ to be told.

The rest of the story involves “the dumbest idea.” I grew up about a decade after World War Two ended. This was the period when America enjoyed an extended period of economic growth and a shared prosperity. By “shared prosperity” I mean it was a time when the workers who produced a product or service shared in the profits produced by the company. Managers and workers would see their income grow together. As everyone’s pay increased, there was more discretionary income to spend. This was the rise of the middle class in America. All boats were rising with the economic tide.

In 1968, I started on-the-air at one of my hometown radio stations while in the 10th grade in high school. I was paid the minimum wage; $1.60 per hour. Did you know that 1968 was the year when someone making the minimum wage had the most buying power for that rate of pay? The equivalent in 2012 dollars is $10.34 per hour. So what happened?

Somewhere in the 1970s things changed. Firms began to focus on themselves. The productivity gains produced by the workers were no longer shared with the workers. Since no one complained, this new way of doing business continued.

The 1980s really saw this new operational style take hold. And as it did, incomes for the middle class stagnated. When the middle class incomes stop growing, the ramifications on the rest of the economy are magnified. Workers no longer have discretionary income to spend. This was initially covered up by women entering the workforce producing two wage-earner incomes. Then when that ran its course, credit cards, second mortgages would keep the party going under false pretenses.

Today we are in a vicious cycle of decline.

What changed in the 1970s was a new idea about what metric should be used to measure the success of a business. Before this new idea was born, Peter Drucker’s measure was the rule. The purpose of a business, said Drucker, was to create a customer. But that went out with leisure suits, the new crop of business wizards would proclaim. What replaced it was something that even GE’s Jack Welch has called “the dumbest idea in the world.”

What was this dumb idea? Increasing shareholder value.

In an effort to offset declining profits and performance, a new operating modus operandi was conceived that the purpose of a corporation is to maximize shareholder value. To make sure the captains of industry got the message, boards of directors would change their compensation packages to cause these business leaders to focus on increasing the company’s stock price. What could possibly go wrong?

Everything!

The concept was embraced by both America’s business schools as well as industry. Unfortunately, the new policy not only didn’t solve the problem it was supposed to address but by unintended consequences created a myriad of new problems no one foresaw.

Tell me if any of these “unintended consequences” sound familiar to you: short-term decision making, relentless cost cutting, staff reductions (RIFs), less investment in the business, virtually no innovation, low workforce morale, no raises in pay, reduced benefits, non-stop mergers, increased debt, lost ability to compete, declining R.O.I., and economic stagnation. I’m sure you can add to this list based on your own experiences. For a more detailed look at this, you should read Steve Denning’s “Why ‘The System’ Is Rigged And The U.S. Electorate Is Angry,” the inspiration behind today’s blog post.

So twenty years ago, in 1996, President Bill Clinton signed into law the Telcom Act of 1996. This would bring “the dumbest idea in the world” to the radio industry. Wall Street jumped into the new shiny investment opportunity; radio. Everything that every other industry was experiencing from this new operational style was now rearing its ugly head in the broadcasting industry. All with the same negative impacts.

Not all organizations adopted this dumb idea of operating. They stuck with Drucker’s rule. And it’s the same with the radio industry. The smaller radio operations do operate differently. Their success has others sitting up and taking notice.

However, most organizations – and not just in broadcasting – are still in denial. The evaporating middle class is not good for an industry that lives off of advertising. Advertising is pitched to the masses who are the consumers that drive over seventy percent of the American economy. I wrote about the future of ad supported media last year after I read Thomas Piketty’s book “Capital in the 21st Century.” You can read that blog post here.

Based on the tumultuous presidential election season we’ve seen so far, it would appear that the American society has awakened and is now “as mad as hell and not going to take it anymore.” Cue Howard Beal here.

Steve Denning writes: “We are now at an ‘emperor has no clothes’ moment.” It’s now clear that this way is not working and is not only leading to systemic value destruction but an economy that no longer works for the middle class.

If we’ve ever needed real leadership in America, it’s now — and from all directions.

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