Landmark's Vision: To become the leader in all our markets

Landmark managers' meeting, May 1993

People in Landmark have asked: "Why are you shaking up the company? Aren't we making enough money?"

The simple answer is, "The bottom line is just fine, but the competitive trends are not worth a damn."

I've been around enough to know that the companies that are comfortable and satisfied are the ones that take the biggest falls. They never saw what hit them until it was too late. Look at those seemingly invincible giants, General Motors and IBM.

Of course, Landmark is not GM or IBM, but there are some surprising similarities.

During most of my career and the careers of many in this room, our newspapers and TV stations operated in protected markets. The newspapers were monopolies and nobody challenged our dominance of local advertising. The stations were protected from competition by government licensing. These were the perfect kinds of monopolies, because our prices were not even regulated.

I don't need to tell you that none of our businesses is a monopoly today. They face fierce competition. The newspapers and stations are steadily losing market share to competitors. Even The Weather Channel faces big changes as fiber optic and digital video transmission will spawn scores of new cable networks aiming for our viewers and advertisers.

This imposes on us an urgent need to change the way Landmark operates. If Landmark's media are not to become endangered species, we must learn to become superior competitors rather than monopolists.

How are we going to make that transformation? Obviously we have to do a lot of things better than we did when customers didn't have anywhere to turn but to us. Let's focus on the main things we need to achieve.

About a year ago we published something we called Landmark's Vision. It was a simple statement of where we wanted Landmark to be in the '90s. That statement expressed the combined judgment of Landmark's corporate and division managers, after days of debate.

The statement expressed some nice aspirations. You probably read it and may well have forgotten it. But let me tell you what it means to me.

The Vision set five targets for Landmark.

Here's the first. We didn't just say Landmark wants to understand and be responsive to customers and provide good service. We said Landmark will be THE leader in all of the markets.

That's not a platitude. It's a very specific target. It's an ambitious target, and the result is measurable.

We stuck our necks out on this, because it's the most important thing we can do to gain competitive advantage. The only reason for existence of our business is to create products and services customers want at prices they will pay.

If all of us recognize that a central part of our jobs is to gain real insight into what customers want and expect from us.
If we learn what really matters to our customers and what does not matter.
If we consider the customer in all our decisions.
If we convince our people that their livelihoods depend on satisfying customers.
If we create a climate in which our people enjoy delighting customers and take pride in satisfying customers.
If we do these things, we will go a long way toward becoming the leader in our markets. We intend to reach that target, and we will measure the progress of each division every year.
The second target in our Vision ... Landmark companies will be the most efficient producers of media products and services at competitive prices.

In Landmark, we have always thought of ourselves as efficient, as being careful with resources. Some think we are lean operators. But the truth is that we didn't have to worry much about productivity in all the years we operated in protected markets. We were more productive than the average newspapers and stations, and that was good enough. When we wanted to add staff or raise pay, we could pass along the costs to our customers. And we did - with price increases exceeding inflation year after year.

What's changed is that we no longer own our markets. Competitors with lower costs and lower prices are siphoning off our revenues. You know the competitors: cable TV, direct mail, ADVO and others. Much of our pricing flexibility has vanished, and many of our prices have become competitive problems.

That means productivity has become a survival issue for Landmark and for all traditional media. And our track record is not pretty. Revenue per employee in a number of divisions has declined.

In the 1960s and '70s, we did make impressive gains in the newspaper production departments with new technologies. We invested most of those savings in larger staff in other departments. In recent years, productivity has declined steadily.

Increasing productivity is not easy. We believe the best way to make lasting gains is through systematic use of the methods and tools of Continuous Improvement. There are many advantages of CI methods:

They carefully analyze the work we do - step by step.
They simplify complex processes. Complexity is the enemy of speed and productivity.
They root out the things we do every day that are of little value to customers.
They identify the things we don't do that customers expect of us.
They rely upon the knowledge, experience and ideas of the people closest to the work and closest to customers.
In Landmark, we have never attacked productivity systematically. Through CI, the opportunity for improvement is enormous. The survival of our businesses requires us to reduce the cost of making and delivering products and services our customers need. It's that simple. Continuously improving productivity and satisfying customers are bound together. We cannot satisfy customers without raising productivity.

In contrast to most other companies in the media business and elsewhere, we have been able to accomplish staff reductions through attrition rather than involuntary layoffs.

I have no doubt that Landmark can achieve the kind of gains in productivity that are required. Other businesses were threatened by competitors long before competition revolutionized the media business. We have seen hundreds of examples of quantum improvements in a variety of these companies.

Just as we will measure our progress in customer satisfaction, we will also measure productivity gains in each division.

A third part of our Vision says: We will be exceptional in developing new products and services using new technologies.

I think one thing that has set Landmark apart has been our record of success with product innovations. To name a couple, some of our newspapers were leaders in perfecting zoned editions far ahead of the industry. The Weather Channel was the first and is still the only network to deliver localized television commercials to national advertisers. In both cases, we found creative ways to meet customer needs. No customers told us they wanted a Beacon in Virginia Beach or ways to deliver local messages in national commercials. People in Landmark understood the customers and figured out unique ways to satisfy them. These innovations have been major factors in our success.

The need for new ideas and new ways to satisfy customers is much greater today. Our competitors are innovating, and technological change is escalating at an incredible pace.

To develop exceptional skills in innovation, we need to think and act like innovators. That means we must be willing to experiment, to take some risks and to fail at times. We've had our share of failures. We can't expect to make improvements that really matter if we are afraid to fail.

It also means that we must engage the whole organization in the search for ideas and ways to serve the customers. This is a fundamental precept of CI. In the past, most of our ideas for innovation came from managers. But think of the power we can generate if we engage the people who are closest to customers in finding new ways to serve customers.

The fourth leg of our Vision focuses on things we must do better: Develop our people and engage them in improvement.

We have provided a variety of training opportunities to managers in Landmark. But we have never had a systematic effort to provide skills training to our entire work force. We must fill that void in people skills to have the kind of organization that is able to compete in the future.

We will commit the resources needed for first-rate training. Training people is essential to gain competitive advantage. It is also important to provide our people with larger opportunities for their own growth. Emphasizing and using teamwork is a skill all of us must learn and perfect. We have tended to focus on individual performance more than teamwork.We will continue to value individual achievement, but we must also learn how to balance that by celebrating and rewarding teamwork.

Enlisting the whole organization in improvement and customer service, developing people and building teamwork will require extraordinary leadership. There is no more important task for Landmark managers than providing thoughtful, sensitive leadership in a time of unsettling change. You have to care about people to lead them. There will be a premium in Landmark on people who are able to lead their organizations through these challenges.

The last part of our Vision is to: Enter growing new media businesses. Landmark started as a newspaper and broadcasting company in Norfolk. We expanded these businesses. But every few years we also branched out into new fields. Successively we entered cable TV, community newspapers, cable programming, specialty publishing with Trader and other publications, and most recently, business information. We are continuing the search for opportunities to enter new fields.

New technologies will reshape the media business in the next 10 to 15 years. Some of the changes will be revolutionary and will have an enormous impact on how people get information and entertainment. To mention a few, people will have access to as many as 300 to 500 cable channels. Many will be interactive - offering consumers wide choices of specialized news and information, entertainment and advertising. Multimedia technologies will lead to overlapping roles for print and video in ways that are not yet clear. In order to remain a vital enterprise, we intend to be an active player in the new media that will emerge.

I started my talk by saying that our business is doing OK now, but that the trends and competitive threats are daunting. Strange as it may sound, I welcome the competition. No company ever became great until it had to confront and stay ahead of strong competitors.

I hope I have convinced you that we have a vision for making Landmark a world-class competitor - the leader in all of our markets. To accomplish that, we will have to focus on delighting customers, improving productivity, creating new and better products, and developing our people. I believe that's a winning game plan. It's an ambitious plan that will not be easy to accomplish. But I am confident that we have the will and resources in Landmark to become winning competitors.

Copyright 1993 Frank Batten