Year in Review and Work Plan

Last year at this time we were undertaking a major reorganization of the company — both to survive the most precipitous decline in revenue we had ever experienced and to position us for the speed and flexibility we need to thrive in the fast-changing local media world we are going to be experiencing for some time to come.  I am very thankful that our team was able to cut expenses commensurate with the revenue decline so that we could maintain a minimally positive operating cash flow in a very challenging year.  Many companies did that last year.  I am more thankful that our team was able, with all that operating pressure, to begin to imagine and implement a new way of doing business which continues to be what we believe is our best hope for thriving in the future.

We are doing this work as one company, with 11 operating departments, providing goods and services to the market or to each other.  Those 11 departments and their leaders are:

  1. Marketing (includes all products) – Tim McDougall
  2. Sales – Chris Edwards
  3. Color Web Printers (commercial printing and distribution) – Jim Burke
  4. Organizational Development ( including Human Resources and Facilities) – Cathy Terukina
  5. Information Content Creation – Becky Lutgen Gardner
  6. Commercial Content Creation (including Content Repository Project) – Audrey Wheeler
  7. Community Manager and Publisher (including Editorial Page Staff) – Dave Storey
  8. Broadcast Production – John Phelan
  9. Digital Production – Randy Shields
  10. Information Technology – Mike Coleman
  11. Accounting  – Dave Everson

In the last year, we have created these departments;  shuffled our people, budgets and operating procedures to support this new structure; began to separate content creation from product creation; hired new key leaders from outside the company (Tim McDougall, Chris Edwards, Jim Burke, Randy Shields and many others); grew digital revenues and operating margin substantially with a focused effort by Shannon Booth’s team; selected our key vendors, based on the architecture of Abe Abreu, Sr. of e-Me Ventures, and successfully launched our atomized content repository; began a focused, metric based product development effort under Steve Lorenz‘s leadership and began to develop a new branding structure for the whole company.

Currently, when we want to refer to the whole company, including all products, we use GFOC (Gazette Family of Companies), The Gazette Company or Gazette Communications.  All of these names connote the newspaper.  Both Becky Lutgen Gardner, with her information creators feeding all products, and Chris Edwards, with his sales force selling audiences through all products and services, need a better name and branding identity as we go forward.  We have begun this work, and are in the final stages of confirming our direction with internal and external focus groups.

The operating environment for media companies is changing very rapidly. The traditional ‘franchise” for media companies was based on scarcity.  Most communities, including our own, had one newspaper and a few television news broadcasts originating local news.  Advertisers trying to reach our market wanted to use our services to reach the most people in the shortest time.  The advertisers knew that much of their effort was wasted on people who were not interested, or did not want to be interrupted, but advertising was still effective enough to make it worth the expenditure.  Historically, advertising revenue tracked the economy.

We are now living through both “structural” and “cyclical” changes in this traditional model.  The cyclical we are very familiar with – the economy softens and companies don’t want to hire people, so employment advertising drops precipitously.  We have seen these cycles before.  We are beginning to see some signs that the worst of the cyclical downturn is behind us.  The structural is more difficult.   In the last few years, advertising in traditional media is becoming more decoupled from the changes in the economy.  While the audiences for our traditional products are still strong, the ability to monetize these audiences is under pressure.   Advertisers have more options, and are seeking ways to directly reach their customers in more efficient and effective ways, such as developing their own websites, and using social media.

Some media companies are trying to determine ways to recreate the scarcity economy that drove our success for the last few decades.  We don’t believe that will be a successful strategy.  We need to embrace the ubiquity of digital information, and create a platform for local information through which any individual in our service area can find the information they need, when they want it, on the device of their choosing.  While creating that platform, we need to support the legacy products on which we depend. We need to decide how many resources to allocate to support the legacy products vs. capabilities to address future needs. This is a significantly difficult undertaking, which requires new tasks, new work processes and a new organization.  We now have to make that implementation more personal, and powerful.  That requires a common vision of the future state, and many integrated projects.  I have used many different words, and images, to try to convey the fundamental change in our business. Please add your own version, or changes and additions to my descriptions.

At the core, we are moving away from a business revolving around scarce assets (a newspaper press and broadcast tower) to a business organizing a ubiquitous network of information coming from many sources.  By necessity, we have to operate both of these diverse business models at the same time (planned schizophrenia). For economy, and physical survivability, we need to make sure that the actions necessary to feed the network also feed our legacy products. And, we need to make sure that the production of our legacy products is done as economically as possible. For example, the sales force consolidation under Chris Edwards and the combination of all news gathering resources into Information Content under Becky Lutgen Gardner have to work as effectively as possible.

We cannot create all of the tools we are going to need for the new networked business.  However, we can create a common vision, and information architecture, and select the best tools and relationships to make the network powerful.  We can also discern, better than anyone in our area, the most critical issues for community development.  We can seed the most important conversations.  We have the commercial relationships to create the networked marketplace.

Since the tools and the consumer devices and behavior are changing so rapidly, we need to focus on speed and flexibility.  To do that, we need to be able to make things happen now by developing core issues in small groups of 3-5 people.  While many things are changing, we know that, no matter what happens, we need to:

  1. Optimize print production – Color Web operations and structuring regional product flow – Jim Burke, Steve Lorenz, Dave Schroeder, Chris Edwards or designee
  2. Optimize broadcast production in new facility – John Phelan, Kirk Schroeder, Project Manager
  3. Create information content in elements (atoms) and track those elements through various levels of curation, up to local wikis – Becky Lutgen Gardner, Cathy Terukina and Chuck Peters
  4. Develop an information content architecture, based on content repositories –  Audrey Wheeler, Randy Shields, Mike Coleman
  5. Create an integrated product strategy and branding strategy based on basic consumer insights – Tim McDougall and his team
  6. Create selling organization based on audience reach and effectiveness – Chris Edwards and his team
  7. Create a focused and effective product planning and development process – Tim McDougall, Chris Edwards, Dave Schroeder
  8. Nurture a creative and constructive culture – Cathy Terukina and her team
  9. Develop nested performance metrics and financial metrics – Dave Schroeder, Daniel Spellerberg, Dave Everson
  10. Determine new location, layout and financing of physical space – Cathy Terukina, Chuck Peters and Ken Slaughter
  11. Nurture potential regional partnerships – Dave Storey, Chuck Peters, Ken Slaughter

All of these work plans need to be developed within a shared vision of the overall goal.  Like any business, we are trying to have fun, and make money.  Put another way, we are trying to serve our community in a manner that adds economic value. We are trying to do so by being the information source of choice for our community.  Wherever you are, on whatever device or product, you can explore the current information, history and multiple voices to satisfy your need for relevant information, in context.

In order to do this, we need to create a network of local information comprised of many individual voices, accessible from many points.  We are creating that network to allow the community to be engaged in critical community issues, and to ease commercial transactions.

I visualize this network, and the flow of information as follows, with the information content flow in yellow and the commercial content flow in green. Much of both streams of content will come from outside the company.  And as those streams flow, we need numerous feedback loops, which are depicted in gray:

While 2009 was a year of many changes, we have had the same Mission Statement for the last twelve years, which remains unchanged:

Our mission is to be the information provider of choice through a dynamic mix of innovative products and services.
We will create and maintain mutually beneficial, long-term relationships with our customers, employees, and the communities we serve.

In 2008, we embarked on a process to reshape the company to pursue this vision over the next ten years:

Strengthening Communities by Engaging and Informing Participants Through Interactive Processes

While we have made much progress in the last year, we are still in the process of moving from a culture suitable for maintaining a franchise to a culture capable of supporting multiple new innovative products and services on a common community platform.  We have changed the organization from supporting jobs and work processes that focus on the newspaper and television broadcast, to ones that are digital first, and can support multiple products, but we have work to do to change the culture, tasks and outcomes that will allow us to serve our communities best.  We need to make fundamental changes to our technology infrastructure to make this happen, starting with the content repository. This slide shows that we are clearly in the beginning stages of a long work in progress.  Like building a house, you have to start at the foundation.

These are big changes, but we have dedicated employees who are capable and committed to making them happen.

What do you think?

14 thoughts on “Year in Review and Work Plan”

  1. The new scarcity is user (reader, player, listener, viewer) time.

    Some of this time will be used in an “active search” mode. Some will be used in an “active participation” mode. Some will be used in “passive reception” mode.

  2. Charlie, I agree with that.

    If everything a media company has to offer is broken down into elements, topical areas as well as traditional packaged products, consumers should be able to find what they are looking for and are interested in in the limited time they have.

    What do you think?

  3. Can I assume in the section below you are only speaking of the traditional side of the company?

    Here’s the quote:
    “We are now living through both ‘structural’ and ‘cyclical’ changes in this traditional model. The cyclical we are very familiar with – the economy softens and companies don’t want to hire people, so employment advertising drops precipitously. We have seen these cycles before.”

    But it is my understanding we have had a near-record month/quarter when it comes to employment sales. Are you referring to only print revenue? If so – why? We seem to be big talkers when it comes to the concept of pushing towards a digialt future – but when the rubber hits the road we fall back into our analog roots.

    This kind of talk always leads me back to a concept you shared about 2 years ago when you said we need to figure out the minimum number of people needed to create the traditional products so we can take the remainder of the people and have them go explore new territories. It just feels like we’ve never go let anyone explore. we’ve tried – but the chains of traditional media where never removed before they began.

    1. Tom –
      I was not referring specifically to any aspect of our company’s business, or current conditions. I was just trying to describe the difference between cyclical and structural changes.
      Thanks,
      Chuck

  4. Christoph –

    The “interested in” and “looking for” in your comment correspond to the “passive reception” and “active search” in my comment.

    For passive reception, readers rely upon editors to make choices (listeners rely upon DJs, viewers rely upon channel programmers).

    A good example of optimizing a reader’s limited time is the New York Times website (http://www.nytimes.com/pages/todayspaper/index.html) It contains several headlines plus abstracts, followed by “Jump To” that is organized by topic. A regular reader can choose edited articles from a “menu” that s/he is interested in.

  5. Thanks for the discussion, Charlie.

    I usually read the Times’ mobile version so I hadn’t seen this link. Thanks for sharing it.

    Another way of optimizing a consumer’s time is by giving them an easy way to get the info on the topics they want.

    For example, let’s say you are interested in business, but not all business, just Rockwell Collins business.

    A consumer could bookmark just the “page” that gives all “Rockwell Collins” tagged posts. For example, for our business blog here’s the relevant link: http://www.easterniowabusiness.com/tag/rockwell-collins/

    Or they could also bookmark the search results page: http://www.easterniowabusiness.com/?s=Rockwell+Collins

    Pretty optimized, except those are way too many steps for a consumer to get figured out where a narrow topic can be found.

    Somehow, at some point we’ll have to make that a bit easier for the casual consumer.

    Any ideas?

  6. Hi Christoph,

    I’m working on an application that permits readers to “subscribe” to digital content. The app uses dynamic menus that offer readers the opportunity to subscribe to publication, or publication and section (business, sports, fashion, etc), or publication/writer. All of the “subscriptions” are delivered to the app, rather than a user navigating to web pages for different publishers.

    Our business proposition for publishers is “we will buy your content without advertising; you set the price”.

    We will sell hyper-local advertising and match it with digital content. If advertising revenue exceeds the price specified by the publisher, the reader perceives the content to be free. If not, the reader pays the difference.

    The name of the app is “Without Or With (WoW)”.

  7. Hey Charlie Kelly – the description of what you have built:

    “The app uses dynamic menus that offer readers the opportunity to subscribe to publication, or publication and section (business, sports, fashion, etc), or publication/writer. All of the “subscriptions” are delivered to the app, rather than a user navigating to web pages for different publishers.”

    sounds like Google Reader? What makes it different?

  8. Hi Tom Altman,

    The major difference is the mix of content and advertising. Two readers viewing the same article, at the same time, will probably see different advertisements.

    WoW separates content production from advertising sales. Unlike Google, we work with publishers. Our business proposition for publishers is “we will buy your content without advertising; you set the price”. Publishers determine the value of their content; and set the price accordingly.

    If the revenue that WoW earns from advertising exceeds the price set by the publisher, then the reader perceives the article to be “free”. If the price set by the publisher exceeds the advertising revenue, then the reader pays the difference.

    1. I think readers will pay for utility – whether the complete packaged paper, as it was printed, or for relevant information, in the context of the moment (location, intent, mood, etc)

  9. Hi Christoph,

    My starting point is research by Forrester (and others) that 80% of Internet readers want advertising supported (free) journalism, and that 20% will pay directly for Internet journalism. I assume that the 20% includes people who will pay for utility.

    The essence of WoW’s approach is that people have the option to pay on an article-by-article basis. If something is particularly interesting (has high utility), readers who are “usually in the 80%” can purchase that article (or song, photo, game, video).

    WoW’s approach provides benefits for both the 80% who want advertising supported content, and the 20% who want direct pay content. This is consistent with our business proposition for publishers: “we will buy your content without advertising; you set the price”.

    Christoph, the answer to your question is that I agree with Chuck, some people will pay for utility. The benefit of WoW’s approach is that publishers earn revenue from people who are willing to pay directly, AND from people who want advertising supported journalism. This advertising is hyper-local advertising that earns much higher CPM, than current Internet advertising.

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