Management has recently dialed up the criticism heaped on anyone who (for example) dares question why the board of directors lavished huge bonuses on the top brass last year -- despite a truly lackluster performance. (See: Exhibit A, above; click on the image for a more readable view.)
Why the conniptions? For one thing, readers are starting to feed me confidential documents -- here, here and here. And Corporate is surely unnerved by stuff like this. But to fully appreciate management's slow burn, accompany me, please, on a little stroll down memory lane. This is a tale about American suburbs and television; a blockbuster event in 1995 -- and Gannett's growing realization that it no longer controls what employees say.
Back in the day
Once upon a time, management and stockholders were happy as clams. 1960s-era suburban white flight and evening TV news killed off many newspapers -- creating monopoly markets where publishers exerted enviable control. If revenue fell, Gannett simply jacked up ad and subscription rates. Profits down? No problem! Cut staffing, newshole and customer service -- then head to the links for a 4 o'clock tee time.
Management also exerted tight control over all the employees. Gannett's growing portfolio of businesses was scattered across dozens of states, from coast to coast. Most work sites were small, often with just a few hundred employees. Sites were spread apart, too, rendering communications between employees difficult. Already weak labor unions were pushed further away.
A rude awakening
This world ended on Aug. 9, 1995. That was the day the old Netscape Communications Corp. soared in value, as the Web browser developer sold shares to the public. Its IPO basically ushered in the Internet Age, loosening Gannett's iron grip on its markets -- and its employees.
Gannett is, indeed, going through a transformation, to use one of CEO Craig Dubow's favorite phrases. But one of the hardest parts requires management to accept the fact it no longer fully controls employee communications. Technology -- i.e., blogging -- is leveling the playing field. The days of "head down, eyes forward" are over.
[Images: Gannett's stock has plunged nearly 61% since Dubow became CEO on July 15, 2005, Google Finance says; Ozzie and Harriet Nelson, the quintessential suburban family; Netscape's logo.]
To be fair, I wouldn't hold Dubow solely responsible for the decline. What he inherited from McCorkindale - a man who never worked at a newspaper -was dismal. McCorkindale was the king of living lush and corporate jets. His budget for designer paper clips outpaced most newspaper's marketing budgets (an exaggeration, but you get my drift). When McCorkindale was in power, he and all his cronies were looking for all the dollars they could grab, seeming to care little for the future of the company.
ReplyDeleteYes, he too deserves some credit in Gannett's demise. He started the ball of decline rolling and timed it just right to erupt once he was gone.
I sort of agree -- but only up to a point. It's been like a game of musical chairs: Dubow just happened to be the guy left standing when the music stopped. A line of CEOs before him contributed to the company's demise.
ReplyDeleteBut Dubow has been CEO since July 2005, and has had a chance to show he can manage better. Instead, he's managing like his predecessors: do more with less; keep sending fatter dividend checks each year, as though the business model hasn't changed; and keep paying yourself princely wages.
Jim,
ReplyDeleteYou are spot on!