From the Corner Office – November 2009
November 1, 2009
Hobby or Business ?
I recently had an interesting conversation with my good friend Jeff Smulyan, CEO of Emmis Communications, regarding the importance of our industry embracing today’s interactive technology. Greater Media recently signed on as a partner with Emmis Interactive to enhance our stations’ websites and related internet efforts. During my discussion with Jeff, we talked about the strategic role of some of the latest social platforms and other interactive initiatives at our stations, and how we can use them to better serve our listeners and our advertisers. The most important question that emerged from the discussion was this: is it a business or a hobby?
Not that hobbies are bad; they allow us outlets for our creative juices and a level of control that we may not have in our professional lives. We can become passionate and perfectionist in our pursuit of satisfaction and emotional reward as we nail that golf swing, restore a classic car, win a fantasy league, or manicure our front lawn.
Business has an economic imperative that shifts the priorities and decision-making process. Business is not the pursuit of innovation at any cost; it is the judgment of risk and reward as dollars are allocated to the various parts of the operation. At the end of the equation, we invest money to get a return – operating profit for our investors. Our industry finds itself in the difficult business position of having to focus these days, sometimes almost exclusively, on paying down debt, often at the cost of the very innovation that is the lifeblood of the radio industry. It is more challenging than ever to judge which investments will make a return as financial resources are stretched. But we must.
As we continue to make the transition from the radio station of yesterday to the local media company of tomorrow, there are growing pains that manifest themselves in different ways. There’s the lack of person-power to get everything done; the “bright shiny new object” syndrome that compels us to rush out and adopt every new technology that we read about, many times with no good purpose. There’s the inability of legacy systems, such as accounting and traffic, to deal with the myriad of new products and solutions we are bringing to market, and there’s the inability of most salespeople to adapt from selling inventory to selling ideas.
With so many competing and conflicting priorities, how does a manager make sense of all of this? From my perspective, it’s straightforward: it’s either a business or a hobby. If it’s a hobby, it gets one chance to be transformed into a business. If it cannot meet the litmus test, it should be abandoned in favor of more promising initiatives that have a clearer path to profitability. That is not to say that everything we attempt has to turn a profit in months or even years. But there has to be a clearly defined path to profitability. That means market research, metrics for goals, and a sound business judgment that the new efforts we implement can be executed within our core competencies.
When it comes to radio’s digital and interactive efforts, we must take the time and identify those tools, systems and human talents that will be most productive for our local business clients, and then make them a priority. For example, we need to invest the time and the training for our salespeople to make the transition from “sellers of time” to “solvers of marketing problems.” If I were on the street today, I would apply every time management skill I had to make sufficient time in my week for new business. And when I refer to new business, I do not mean checking X-Ray and calling the radio accounts that haven’t utilized my station in the past year. No, I mean getting out and getting my hands on businesses who are new to media and marketing, and investing the time to listen and really hear their problems. And then, if I believed that my stations could help them grow their business, I would invest the time, energy and creativity to build a custom marketing solution for them. I would use all the tools in my portfolio – online, interactive, social networking, on-air – to surround the listener with a 360 degree message from the station and advertiser. Then, I’d stand back and let it work.
On the product side, there are so many pieces of technology being pitched to stations that the phone doesn’t stop ringing and your head can’t stop spinning. We added mobile texting, then Twitter, then Facebook widgets, and who knows what it will be next week? If we keep adding without specific goals or focus, we end up with a patchwork of gizmos, none of which is innovatively or consistently utilized in support of the overall station brand. What can happen is that staffers pursue their individual passions and hobbies but lose track of the station’s goals. The midday talent friends people on Facebook; the night jock Twitters every 20 minutes. Great personal initiative, but what does it do for the station’s relationship with the listeners? Is there a strategic plan behind all this activity, or are we doing all of this just to be able to say we do it? If the answer is the latter, then it’s a hobby, and an expensive one, both in dollars and staff time.
Every manager must lead his or her staff through the difficult process of determining which technologies we can sustain and what their brand goals and business goals will be. Then, he or she needs to take a hard look at the staff and determine who will be responsible for each aspect of the overall strategy. It’s also important to determine which activities, some perhaps longtime station staples, need to go in order to free up time and manpower for the new initiatives. The listeners’ approach to their world is changing, and we cannot be afraid to change ours to keep pace. There are new skills that we need within our operations; now is the time to either grow those skills or acquire them with new contributors.
The most important decisions facing us are not which software to use or which video camera to buy; the most important decisions are making sure we have solid business logic and informed risk-taking behind our efforts. We do not need to get caught up in the next new thing, but rather need to focus on the capabilities – existing or new – that we bring to our listeners and advertisers.
There’s a lot of potential with interactive technologies to remake our businesses for the future, but only if we avoid the trap of creating a hobby and expecting it to grow up to be a business.
I always want to know what’s on your mind; you can feel free to pose any questions that you’d like me to respond to at AskPeter@greatermedia.com