Tag Archives: Warren Buffet

Fool’s Gold

We’ve had years and years of the bean-counters’ metrics: declining advertising, declining circulation, declining profits. And, as an industry, we swallow more and more of this bitter medicine. Every year managers at all levels receive the newest set of measurable goals knowing these goals are not only not achievable but they are, really, poison to a very sick industry. Remember how they use to use bloodletting as the panacea for all ills?

We’ve been trained to ask for the leeches, when we are already weak and should be fed, not drained.

It seems to me that we in the news business — in ALL areas, not just the newsroom — have let “them” tell us who we are, and what we do. We have let them decide what the markers of success are.

Well, it’s April 1st. Time to play the fool no more.

We have been almost inchoate as we try to articulate what it is we do and what is its value. We haven’t had the counter-proposition to their neat columns of figures that spell gloom and doom. It’s true that some, like the oracle of Omaha, are turning the received wisdom about newspapers, especially, on its head. Once Warren Buffet says there’s value in newspapers, legions of bean-counters check their figures and wonder what does he know that I don’t?

Certainly I can’t profess to know what Buffet knows, but I’m guessing that most newspapers — most news organizations  — have some intelligence to offer on what is valuable about them. Only no one has ever asked.

It’s time — as Hamlet suggests — to take arms against a sea of troubles, and by opposing end them.

It’s time to find a new way to measure the inherent value of our news organizations and not just settle for the way “they” want to define us.

It’s time to ask ourselves: What is our value?

I suggest we turn their metric world on its head, and invent our own measure in something called qualitative metrics. For many readers, that term is an oxymoron. But in the wide world out there, academics, especially in the social sciences, have discovered its use as a tool for solving really knotty problems, finding answers to the why of things, not just the what.

It’s soft-tissue information, blood and muscle to add to the bones of the already existing quantitative metrics to come up with a better understanding of a problem. It’s talking to people, individually, to gain their varied perspectives. Most of the time those personal perspectives can agree on some points and will diverge on others. It’s up to the questioner to gather the information and make the best sense of it that he/she can.

So I’m saying that it’s time we took the time to ask each person in our newsrooms that central question: What is our value?

Each news organization, in any media, can define its questions to ask, its qualitative metrics for itself, though as this ripens we’ll begin to see similarities across the whole landscape. I also insist that this process is NOT just for newsrooms. The value of a news organization is broader than that.

It is, after all, one of our unique qualities that — in order for the former owners to make the profits they could make from these news engines — they harnessed the divergent energies of three powerful horses — newsrooms, advertising and circulation — and somehow saw how they could pull together.

Qualitative metrics to measure the value of a new organization must, in fact, break through the walls that have separated news and advertising and circulation. Not to sell our souls but to save them. The measure of our value lies in the combination of our roles.

For me, of course, the heart of the news business is always the newsroom — a room full of storytellers. It’s time to unleash the storytellers to tell our story. Not as one person’s notions, or hopes or blind ambition, but with those notions, hopes and blind ambitions united and made powerful.

I imagine this starting in newsrooms, since that’s where I’ve lived my “news” life. But something similar should happen in the news organizations sister departments

So, in a newsroom. Give the very top guy/gal — and it should be the very top — a week, a month, whatever to talk to each of his/her employees. It will vary according to the size of the newsroom.

And even if you have the money to do so, don’t hire consultants to do this.

Hire instead someone to help the top editor do his or her usual job for the length of time it will take to get this done.

Top editors for too long have been stolen by the bean counters and the management team. It’s time for the management team to recognize that the solution for the current crises/mess lies outside the mahogany ghetto and in the rank and file of the people who do the work.

(I say this with all due respect. I have myself inhabited the mahogany ghetto and it seems a fine place to do the job that the yet more senior level managers ask for. I ask now, that those yet-more-senior managers, relinquish their death grip on the intelligence that inhabits most mahogany ghettos and let them be agents for inquiry.)

The best consultant usually gets those “best” insights from talking with the factory floor or the grassroots or whomever is at the coal face DOING the work. It would be a great exercise for the top guy or gal to have these conversations just for the revelations they might garner from their own people.

I’d suggest a predetermined set of questions to be asked; developed by each newsroom to find out the answer, for that newsroom: What is our value?

The questions that I’m thinking of — to start the discussion:
Why do you work in a newsroom?
Why do you work in this newsroom?
Is there anything about your job that you’re passionate about?
What do you think is our value? Or, why do we matter?

Sure some reporters are in a particular newsroom because it’s a stepping stone to another. Some copy editors are in newsroom because it’s the job they’ve been doing for so long they can’t figure out what else to do. Some clerks are there simply to pay the bills.

But if each discussion is an individual one, the interviewer should ask enough to find how this person fits his or her own value into the larger value story.

The next step is hard for me to dictate, since it should arise from these conversations. But at the very least, that editor should be able to enunciate the answer to “What is our value?”

He or she should be able to make it smart, thorough and meaningful, even to a room full of bean counters. It should be both abstract and concrete and talk about big issues and small ones.

Some of the insights gained in these interactions would reflect the very real interactions that each person in the newsroom has with the outside world. It’s not just the editor who gets stopped in the produce aisle to have a reader comment on something he or she likes or doesn’t like about the way something was handled. The interactions that each person in the newsroom has with the world OUTSIDE the newsroom has affected each of those people and their view of their job. It’s an invisible yeast that floats in through the windows like those yeastie beasties that helped to create Belgian beer.

After all, most people work hard in most newsrooms. They WANT their work to matter to the readers. Those reader opinions are the slow drip of water that smooths away rock. Clerks talk to readers about listings, weddings, and all matter of “small” stuff that readers find incredibly important. Reporters talk to movers and shakers all the time whose opinions about the coverage of themselves probably isn’t worth much, but their opinions of the news coverage in a broader context is valuable in a different way.

And on and on it goes. A cornucopia of insights just beneath the surface, which simultaneously can offer the value of the paper to the people to whom it matters, and a new way of doing things that increases that value.

There are benefits to these conversation that multiply as I’m thinking about this, even without the the grand prize that I’m touting.

There may be new ways of doing the newsroom’s job that could arise from these conversations, from simple (but very valuable) work flow improvements to what does and doesn’t go in the newspaper (or on air) and what goes on the website (and why).

At the very least, morale would improve immeasurably. Most editors get cocooned from their staffs even when they don’t want to. There’s so much to do in a day that talking to the rank and file is a sometime thing.

It also needs to be the top guy or gal since news organizations — like almost all other organizations — hire from outside and the result is, most leadership teams are NOT familiar with all the grassroots mechanisms that create the paper.

Intimate identification with the people and their work is the spark for the fire. No consultant, no matter how gifted, can piece the mosaic of the whole newsroom together the way the editor can.

No one is better suited to put the pieces together in a way that gets at the heart of what is THIS newsroom’s value.

There are next steps and next steps. Most should be identified by the people in each news organization.

If it were possible to marry the conclusions of the news department with those of the ad and circulation departments, what treasure might be revealed? What mistakes and missteps might be overturned?

And going further into a still more fuzzy future, perhaps there are different sorts of surveys for readers/users of the products. Maybe there’s a way that the trio of leaders from each of the departments go out as a team and hold the same conversations with people outside of the news organizations.

Or, there might be a way to marry up these sort of qualitative findings with the quantitative metrics that are already routinely gathered and mostly left to gather dust since those metrics don’t answer the fundamental questions.

What is our value? How do we strengthen it?

How we set our sights beyond the dreary profit and loss?

It’s time to stop wasting our energy mining for pyrite, and pan, instead for gold.

“Chaos often breeds life, when order breeds habit.” from The Education of Henry Adams

Before I talk turkey, let’s talk ketchup.

On Feb. 14th (Valentine’s Day, sweet day for a merger) the acquisition of Heinz by Warren Buffet’s Berkshire Hathaway was announced.

Not many days before,  Dell company founder Michael Dell, Microsoft, and the private equity firm Silver Lake Partners announced their deal to take computer maker Dell private.

Are these good ideas?

Beats me. I haven’t a clue. Remember, I’m a journalist, and, God help me, a poet. The making of money is a gene or a genius I do not have.

Here’s the way Heinz CEO William Johnson summed up the advantages of the acquisition, which meant the public company was going private offers (NPR All Things Considered on Feb 14, 2013):

“The deal provides Heinz with more flexibility, and as a private company we can be even more focused, more competitive, more nimble and benefit from much faster decision making.”

Nimble is good. So is faster decision making.

The NPR reportage on the Dell deal highlighted a behind-the-scenes dynamic. As a private company Dell can pay less attention to the quarterly returns and more to the innovation that often spells success for the long term — though it can play havoc with the short term.

H’mmm.

If investment, and ignoring the hollering from Wall Street analysts are good ideas for a ketchup company as well as for a innovation-starved computer company, might they not also benefit a communications company? Especially a news communication company?

Newspapers, particularly, but most media outlets, get short shrift from Wall Street analysts who have predicted the imminent demise of newspapers and their media cousins, for more than a decade now. Oddly, those media institutions haven’t disappeared yet. I’ll grant you they are getting weaker.

Here’s another oddity: While circulation has fallen — cataclysmically — the number of eyeballs has risen. By that I mean, folks who still pay for their news, dead-tree variety, are getting more scarce. But the on-line readership of newspapers and many news-gathering companies has SKYROCKETED!

We have MORE people reading MORE news now than ever.

The problem lies not in ourselves, but in our stars, is how I might reverse Shakespeare’s phrase.

The problem is not that there aren’t readers for the news that journalists of all stripes are producing, it’s that no one has figured out how to make money off those readers.

And no one, for lo these many years, has considered newspapers, especially, a good investment. Yet there ARE all those readers… perhaps there needs to be some time and money spent in connecting those dots.

I’d hazard a guess the lack of investment is because too many people with money to invest have been listening to those doomsayer analysts who live in big cities, where multiple news outlets offer news in 57 varieties. And most analysts probably want their news ASAP or sooner, and they’re likely to be living on their smart phones and digesting news tidbits like a hungry dog chowing down on dinner… in the bowl or from the garbage can.

They prize fast and first. What is true takes a back seat when whiffs of a hint of a rumor can tank a stock or send it soaring.

The reality outside those media-saturated markets is entirely different.

There are many places where if there’s even ONE media presence it’s likely to be a newspaper, perhaps even a weekly newspaper. And the scarcer the outlets, the more the individual brands are recognized. Which should mean — shouldn’t it? — that those outlets are worth something?

Even in the big cities, where you get your news matters. It matters if you’ve heard/read about that court decision on NBC or Joe’s blog, even if Joe is a lawyer. Or the city’s union dispute, or the teachers’ contracts.

When there are enough media to create a media scrum, you’ll still turn to someone you recognize as a reliable source.

Brand recognition and credibility. Wow. That’s something to bank on.

News companies’ producers and publishers, from the corner office to the ad department to the newsroom have been starved of money for years and years. This is why they are not nimble, not innovative.

Analysts seem to relish hitting news companies when they’re down. Those analysts have developed the habit of blaming them for their lack of nimbleness, as if those on the ship would wish to sink it.

Many innovative ideas these days come from outside news organizations, from think tanks of various kinds, from university-based projects as well as those outfits stating right from the get-go that they they are not in the profit-making business, like ProPublica.

I applaud the increasing involvement of smart people from all sorts of places in the various news businesses. However, I still detect that the best thinking coming from all of them is straining to make itself felt at most news organizations, little or large. The purse strings are too tightly held for fear of that dreaded quarterly report.

I’m not going into the ins and outs of the benefits and risks of a leveraged buy-out for Dell, but I think it’s striking that Dell’s founder — who might know a thing or two — is joined by Microsoft, in walking this particular plank.

Why?

In the coverage given to the story on NPR’s All Things Considered on Feb. 5th, the conversation circled around some statistics on new patents gathered and studied by Josh Lerner, a professor from Harvard, who is also author of the book The Architecture of Innovation.

“When one spends money on R&D,” he said, “it’s expensed immediately, and it drags down your earnings, yet the benefits from doing it aren’t seen for years to come.”

Trying to figure out if this notion of increased innovation does indeed come from less emphasis on quick returns, he explored the number of patents granted to companies and compared the numbers between public companies and ones that went private.

He found little difference in the numbers. He did find, however, that the quality of the innovations was substantially higher in the patents for those newly private companies.

As summed up by NPR’s technology correspondent, Steve Henn: “These patents were cited by other inventors more often, and they had a bigger impact on these companies’ bottom lines…when managers are freed from chasing quarterly profits, they seem to make smarter long-term investment decisions.”

Let’s go back to Warren Buffet. Before he bought Heinz, he bought The Buffalo News. In 1977. He has had for quite a while a sizable share of the Washington Post. In 2011, when no one was buying, the oracle of Omaha bought the Omaha World Herald.

Last year, he bought 60-plus newspapers from Media General.

Two weeks before the ketchup deal was announced, he bought the Greensboro (N.C.) News & Record.

“In towns and cities where there is a strong sense of community, there is no more important institution than the local paper, “ he said after the Media General purchase.

I recognize that his company, Berkshire Hathaway, is itself a publicly traded company, and that it could be sensitive to investors and analysts. But his track record shields him from that noise. He, in turn, shields the senior managers of his companies.

If it works for ketchup, why not newspapers?