I have been roped into appearing on a panel on Wednesday, March 24, at the Mercer County Economic Summit. I say “roped” because no one really wants to appear on a panel, particularly one dealing with economics. And no one really wants to appear on a panel about making do with less, a subject that suggests your business is not as great as you would like it to be.
But I figured I didn’t have too much pride to lose: The downturn in print media has been in the headlines for the past two years or so. Papers have recorded huge losses and made massive layoffs due to the twin towers of disasters: competition from online media and the recession.
So I said yes to the panel, “Management: How Do I Do More with Less,” and have tried to assemble some take-away points for the audience at the Mercer Community College Conference Center (and my faithful readers):
1). If your business is down, admit it. Over the past 25 years spent running a business-oriented newspaper I have been amazed at the responses offered to the simple question: “How’s business?” The tortured answer might allude to current “softness” with a quick segue to “an uptick in pre-orders for the third quarter. We’ve never seen anything like it!” In our case the simple truth is that our revenue is down 20 percent from two or three years ago. Our fulltime staff has been reduced from ten to nine (not a big deal, I could argue, but that’s 10 percent), and a few of the remaining staff have been furloughed one day out of ten.
2.) Understand why revenues are down. Newspapers have been ravaged by the recession and by the Internet. We clearly saw the impact of the recession and the financial meltdown in most every sector of advertising.
But the impact of the Internet was much less clear. We have had two potential advertisers in the past year refuse to do business with us because they wanted to buy online space only, and they declined to purchase the package of print and online we offered. Many of our print advertisers have shown no interest in the online presence, even though we offer it to them for free.
Classifieds supposedly are another story. Thanks to Craig’s List no one ever has to buy another classified ad. And so I wasn’t surprised that our classified section — never a major contributor to our revenue — began to decline. But then came our furloughs, and the person in charge of our classifieds quit to take another job. I took over the classifieds while we hunted for a replacement and discovered customer after customer who wondered what had happened to their ad. We hadn’t been following up on renewal orders — nothing to do with the Internet at all.
3.) Share the process with your staff. As caught up as business owners and managers may be in the financial storms around us, it’s easy to think that the staff is paying as much attention as you are. Think again. In U.S. 1’s case, I sent out one memo saying that we were going to have to think about downsizing, another memo saying that the time was growing near, and then a final one saying that the process had begun.
Along the way Princeton University, the deepest pockets of all in our community, was explaining its own cutbacks. In one of my memos I quoted Princeton president Shirley Tilghman. That probably carried more weight than anything I had said to date.
4.) Make sure everyone understands their cost to the company. A few years ago I started including the cost of health insurance in salary discussions. Instead of saying we’re going to hire you for X dollars a year and we’re going to give you health insurance as a benefit, I began to say we are going to hire you for Y dollars a year, and Z dollars of that is going to be spent on your health insurance, leaving you with X dollars paid to you.
5.) Recognize that downsizing can mean more than just lowering costs. Downsizing should also be rightsizing — it’s a chance for people to do the work of other people. At a small company like mine it meant that I got to do classifieds (as explained above), and other people have seen their jobs dramatically change.
In a contracting environment, a worker may not want to be more productive, or brag about it if they are. By saying, “look at me, I can get my job done in 20 hours a week, not 40,” they might be inviting a furlough. Look for new areas in which people can contribute.
6.) Try to re-establish the entrepreneurial basis of your company. If you started your company from scratch you may still recall the early days, when people worked extra hard to establish new areas for the company. As U.S. 1 grew a core group of people threw themselves into it, working nights and weekends to figure out how to make it all work.
When it did start working, I then began spending time trying to make the company a saner place to work — to establish more regular, family-friendly work hours that would keep people on board not just for a year or two but for a decade or two.
Of course that morphed into people having easy days and hard days, and then — human nature being what it is — easy days and even easier days. In short companies get a little flabby, just like people. And it’s a lot easier to put on the weight than to take it off. At U.S. 1 I have been trying to re-ignite the entrepreneurial approach with a string of online initiatives (yes, you can now follow us on Twitter, and you can be a fan on Facebook). But I have had a hard time getting everyone as excited about the possibilities as I am.
7.) Remember that you still have to spend money to make money. During our downsizing, the staff has been quick to suggest ways to save money. Some surely will be penny wise and pound foolish. In this risk-averse environment suggestions for spending more money are rare.
The other day one of our people announced that there was a way to E-mail the coupons soliciting information for our annual business directory, but that our E-mail software would not support it. What would? A package that would cost us — are you ready? — $87.95. We bought it, did a test on a small sample of our database, and earned back the cost just on that sample.
8.) Don’t count on new technology to reduce costs. When revenue is sliding downhill everyone is looking for the silver bullet that will turn the business around. New E-mail software promises to eliminate the need to buy another postage stamp.
In our business we are now seeing cash-strapped arts organizations post their press releases on their Facebook pages and leave it up to the outside world to seek the information out. I am reminded of the first Internet bubble, the one that burst in the spring of 2000, when everyone from grocers to dentists thought that, if they had a compelling website, people would come back to them time and again to see what new offers they had.
9.) Don’t throw away your old technology. With the opportunities offered by Facebook, Twitter, Foursquare (coming soon and probably putting Twitter out of business), Digg, MySpace, and others none of us have heard about, I have thought a lot about how we should get the substantial content of U.S. 1 out in front of prospective readers.
I do not discount any of the online choices, but I also wouldn’t give up on print. In the last year we purchased a dozen new steel news boxes and refurbished another dozen. Part of the marketing game involves standing out in the crowd, and we stand out more than ever, particularly since there are fewer boxes on the street now than just a few years ago.
10.) Conversely, don’t be afraid to change your old ways. Until a few months ago we spent a few hours every Wednesday morning carefully sorting, labeling, and packaging about 150 papers to be bulk mailed to individuals and companies outside our geographic area. One day we wondered what would happen if we just didn’t do it. Eventually we heard from a half dozen people who were really counting on getting a hard copy of the paper. We converted them to $150-a-year first-class subscriptions and forgot about the rest.
It freed up a half day of labor for other pursuits, and it meant that we no longer needed the third-class mailing indicia in the upper right hand corner of the paper. That, in turn, has led to several new variations of our cover design — today’s issue is a good example.
And that’s the big take-away of this exercise: That it’s still possible to make lemonade from lemons, to gain from the losses, and — if your business is writing a column — to make something from nothing.