In the search for better business performance there is a management doctrine that says "measure what you want to improve, and focus on the measurement." If you chart the metric, you’ll get better results is the theory. But while measuring things tends to alter outcomes, there have been many examples of how hard it can be to measure the RIGHT thing in order to get the desired outcome.
Many years ago the U.S. federal Government Accounting Office (GAO) was concerned about how much was being paid to programmers working for "beltway bandit" consulting firms. These firms were paid by the hour for programmers, and new development could take hundreds of thousands of hours of programming time. So the GAO decided to measure the lines of code per worker per hour – and even set a standard of 35 lines/hour/programmer. What was the result? Incredibly long programs. Some so long they would abort the computer before compiling and the program wouldn’t even run. What a computer needs isn’t more code – it’s more efficient code. "Good" code. Good code gets more done with fewer computer cycles, less memory and less disc space – all really important to mainframe applications like the government was buying. By measuring lines of code the GAO made outcomes worse, not better.
Now Tribune Company is doing the same thing. The company is going to measure the "content output" per writer to determine productivity (read article here.) So what would you expect? Maybe longer stories? Doesn’t this remind you of high school when teachers said "give me 1,000 words" rather than making you write something intelligent? Do the length of articles determine the value of journalism?
Tribune Company is in a mess. Like I predicted back when the Sam Zell deal to take over the company was created, the market shift in newspaper readers – and thus advertisers – was not going to reverse. Leveraging Tribune with a ton of extra debt would hasten its demise, as the newspaper-centric company would have to cut costs even more drastically than it had in the past – and would have no resources to define a new solution for delivering news and ads to customers. But Mr. Zell and his lenders looked the other way and dove into this project full of real estate developer bravado that he could do what know one else in America had done – turn around a declining subscriptions and ad revenue.
Now, with no reversal of declines in sight, Mr. Zell is looking to whack cost. And he’s looking to do it by improving the number of words written per reporter. Really. This reminds me of the "books by the pound" banners I used to see in strip malls. Only when I went in the stores the books were nothing anyone wanted to read – and were best used as fire tinder (mostly out of date textbooks and obscure overruns of academic works.) Do I want my reporting "by the pound"?
Companies deep in the Swamp, and falling into the Whirlpool, look for anything to try and save themselves. At a time when new ideas are desperately needed, the ideas generated are usually geared toward some sort of draconian notion of cost savings – like in this instance somehow quadrupling the output of words per writer. Or, as this article even discusses, counting how many pages the paper will be and using page counts to determine the "value" a reader receives! Really! Like in the internet age we all care about how thick a book is – or newspaper. We want the important news, we want it accurately, and we want it fast. What we don’t want is a bunch of stuff we won’t read and that gets in the way. There are 4 page bi-monthly newsletters that cost $1,000/year – demonstrating it’s the value within what we read – not the quantity- which determines what we will pay.
A few years ago Reuters news syndication found itself facing financial ruin. But it got creative. The company shut down all operations in England and USA (a major Disruption) and put all of their copy editors in Bangalore (creating White Space.) Today, 100% of the releases you find on the web or in print from Reuters come from Bangalore. Reuters built an entirely new Success Formula with entirely different costs for old and entirely new internet customers. Today, Reuters is smaller but doing nicely. And that’s what companies in the Swamp, facing the Whirlpool, have to do. Completely Disrupt operations and open White Space far removed and with permission to find a new Success Formula.
Tribune Company cannot survive as it formerly existed. Today, it’s doubtful the sum of the parts are worth the debt. The company has to transition to a "new media" world where the internet is everywhere and information is medium free. No one cares if it’s print, TV, radio or internet. Information is now seemless – something Mr. Zell still doesn’t understand. And he can count words or pages all he likes – but he won’t save Tribune company by trying to whack costs within the traditional Success Formula.
