By: Jennifer Saba
The newspaper industry is reaching “full-blown crisis” stage and will probably not be able to halt the slide without outside help, concluded the American Press Institute during a closed-door “summit” conference held on Thursday.
API released late today an executive summary of the CEO summit, “Saving an Industry in Crisis,” held in Reston, Va., where newspaper heavyweights like George Irish, president of Hearst Newspapers; Mark Contreras, senior vice president of newspapers at E.W. Scripps; Brian Tierney, CEO and publisher of Philadelphia Media Holdings, and Steven Rossi, president and CEO of the California Newspapers Partnership, were in attendance. For the compete list go to Fitz & Jen.
The all-day session was described as part “group therapy” and “part business-school class” as participants took in three segments on financial forensics, management tactics for new strategies, and best practices swaps.
The summary of the summit also provided some views of participants keeping their comments anonymous.
One lone person thought the current crisis was due to cyclical force and that heavy cost cutting should do the trick until the economy recovers.
There were a few calls to “radically rethink newsrooms.” One person suggested the hiring of experts such as actual scientists or bank regulators to replace some reporters.
The API said that attendees agreed to reconvene in six months and concludes the report with this unnamed executive who said, “Why can’t we be the disruptors? We have nothing to lose.”
First order of business had been: establish that there is a crisis.
During the financial session, James Shein described as a turnaround specialist and professor at the Kellogg School of Management at Northwestern University, explained the various “phases of a crisis” — with a chart resembling an Alpine double black diamond slope. Starting at the top was the phase “blinded” eventually bottoming to “dissolution.” The stage before dissolution is “crisis” and newspapers are in this stage, according to Shein.
“The biggest hurdles to progress [is] the industry’s senior leadership, including some people in this room,” Shein told the group. “I am not sure you can take a look at your industry with fresh eyes.”
Executives were given worksheets to determine their company’s “Altman Z score” designed to identify how close a company might be to bankruptcy. The conclusion: All but one of the public companies represented at the summit are below the safe range, Shein said.
Also on hand was Steve Miller, the executive chairman of troubled auto-parts maker Delphi Corp. He told the group, “Cutting staffs will reduce costs, but it won’t happen fast enough, and will erode the product.”
Here is what he and Shein recommended to the group:
*Act like an entrepreneur
*Create a portfolio of initiatives and kill those that fail quickly
*Don’t wait for every data point before taking action
*Use downsizing as a tool when necessary not simply as a cost cutting goal
*Leverage core competencies
*Be honest with employees
*Don’t sit and cower and weep about your problems. Inspire.
*Collaborate with outside entities
*Leverage the brand