Thursday, September 17, 2009

The promise of CI

Landmark managers' meeting, May 1994

Last year I spoke to you about Landmark's Vision ? the five critical targets we set for making Landmark a world-class competitor. People have asked what those five targets add up to. What will Landmark be when we accomplish them?

All of our core businesses - newspapers, television and cable programming - operate in an incredibly vibrant market. There is a rising tide of demand for information and entertainment. Everybody wants to get into the media and communications business. So competition has become intense and is accelerating.

In industries where demand is strong and competition severe, the best competitors will thrive. Others will decline or fall by the wayside.

There's nothing complicated about our strategy. It's to become the best competitor in every market we serve. When we reach the targets in our vision, we will be the top competitor. That means the leader in satisfying customers.

How will we get there?

By being the best in understanding and responding to customers. By being the most productive so we can deliver competitive prices and high value to customers. By developing innovative products and services for customers. And by developing the skills of our people and empowering them to achieve results for customers.

This is the essence of our vision. It centers on our customers and our people.

Landmark will be regarded as the leader in all of its markets in:

Understanding customers.
Being responsive to customers.
Providing reliable, trustworthy service.
Let's look at each of our targets.

This year we made more headway in understanding our advertising customers than in any other time I can remember. We've made many efforts to study the interests and habits of readers and viewers, but the Cambridge studies were our first in-depth attempt to dig into the needs and attitudes of advertisers. And advertisers deliver two-thirds of Landmark's revenues.

We learned a lot. Some of it was uncomfortable. But the studies gave us a long list of opportunities to improve our performance for advertisers. Every division has teams at work on these opportunities. They range from service improvements to efforts to deliver more value and better results for advertisers.

Throughout Landmark, scores of teams are also making improvements aimed at satisfying readers and viewers. They are at work in our news, circulation and production departments, The Weather Channel's meteorology and engineering departments. The exciting thing for me is to see departments that once were absorbed with internal agendas focusing on customers now.

Last year I said we would measure progress toward this target. We have already done our first two baseline measures of advertiser satisfaction, and we will conduct advertiser satisfaction surveys every quarter from now on.

Measuring reader and viewer satisfaction is more complex. One newspaper is experimenting with a reader satisfaction index. We will be undertaking some innovative research on readers and viewers later this year.

I think we have made a good start toward this target. But our customers are telling us that there are critical problems in their perception of our value and in some of our services. We have a long way to go before we can say every Landmark company is the leader in customer satisfaction.

Landmark companies will be the most efficient producers of media products and services at competitive prices.

Our second target means improving productivity to deliver competitive prices and better value to customers.

Some have interpreted this is as a cover to cut costs, cut costs, cut costs. The fact is, we did a good bit of cost-cutting through a bad recession. Staffs were reduced, and last year we offered incentives to people to retire early. We took these steps to break the self-defeating cycle of raising prices to pay for cost increases and to avoid involuntary layoffs. I hope the economic improvement of recent months will continue and we can avoid this kind of cost-cutting. To make that work, we must succeed with long-term efforts to improve productivity through process improvement.

All of our media use exceptionally complex processes. The nature of our business is complex. Each of our media produces a new and different product every day. There are no cookie-cutter businesses in Landmark. So we have a wealth of opportunities to improve productivity by streamlining and simplifying our complex processes. That is the promise of CI.

The reason I'm optimistic is that we have seen so many impressive productivity improvements in so many departments while we were just learning to use the tools of CI. As we become more proficient with CI, we will begin to tackle the really big opportunities for improvement. These are the large, complex, cross-functional work processes.

Landmark companies will have exceptional skills in:

Developing new products and services.
Making innovative improvements in existing products and services.
Making successful use of new technologies.
The relationship between productivity and competitive prices should be obvious. Perhaps less obvious is how to continuously add value to what we deliver to customers.

One thing is certain. To compete, we will have to engage in perpetual innovation.

For example, I believe we will need to offer more and more targeted, customized products and services to customers. Newspapers will need to deliver address-specific news and advertising packages. The Weather Channel and The Travel Channel will need to deliver interactive services to individual viewers.

Targeting and customization will add another level of complexity. That will make it more important to perfect our processes so we can keep pace with what customers want at prices they will pay.

We will have to experiment more and move faster to innovate. CI is based on facts and analysis. But too much analysis can paralyze innovation. Sometimes we need to try things based on strong intuition, and be willing to fail.

We decided to start The Weather Channel on instinct - after a few hours of discussion. Then we spent several months developing a business plan to justify the decision. Nothing happened like our business plan projected. If we had analyzed The Weather Channel exhaustively, we might have talked ourselves out of it.

To be exceptional innovators, we need to listen to customers, pay attention to our instincts, and try things. Nothing will turn out like we expect, so our game plans need to be flexible.

Landmark has a pretty good track record with innovation. But we need to do more of it in every part of Landmark.
Landmark will be regarded by its people as exceptional in:

Providing opportunities to grow and develop skills.
Celebrating and rewarding teamwork.
Engaging people at all levels in Continuous Improvement.
Developing leaders.
Whether we really delight customers or just give lip service to them depends on the skill and commitment of Landmark people.

There's a reservoir of talent in Landmark that we have never fully utilized. We haven't given people enough opportunities to practice and develop their skills. We haven't enabled them to make enough difference for customers.

How will we tap that underused resource? First, by making a much larger investment in training. A Landmark task force studied the training practices of a number of companies known for excellence in developing their people. Its report will be published early this summer.

Here are just a few things it recommends.

Very few of our new employees go through orientation now.New employees should be required to go through a well-organized orientation before they start work.
Early on, they should be given an in-depth introduction to CI's basic tools and principles.
Each employee should be given a minimum of five days of organized skills training each year.
Landmark should develop first-rate training resources with a variety of courses and professionally developed materials.
A Landmark-developed supervisory training program should be required of all managers.
We should design a process to help employees take primary responsibility for their own career development. In time, each employee should have his or her own learning plan.
The report is thoughtfully presented and contains many other excellent ideas. It will help us make Landmark a continuous-learning organization.

But our people will need more than talent and skills. They need authority and opportunities to produce results for customers - whether internal or external customers. That means flattening the organization, eliminating layers of approval, and pushing more and more authority to the people who do the work.

We've already learned in early experience with CI that people who have never before been asked have a wealth of ideas for improvement. They want to contribute and produce results. With good training and coaching, they can also make decisions that benefit customers.

Landmark will be engaged in several new lines of businesses with excellent growth potential in media and communications.

The last target in our vision is to enter new media businesses. The media landscape is changing fast. We need to take advantage of our abilities and resources to enter emerging media that serve our customers in new ways. Some will be extensions of our newspapers, TV stations and cable networks. Others will be entirely separate businesses.

This year we launched a travel network in England and expect to start others in other parts of the world. They will not be the same as our American channel, because viewers' interests and languages differ. But they will rely upon our skills and resources in Atlanta. We believe we can develop an international identity in travel programming that will open other opportunities for information and transaction services.

Our new online database service, InfiNet, is being launched in Norfolk, Roanoke, Richmond, Greensboro and Nashville. InfiNet is small today, but it gives our newspapers and stations an opportunity to learn and experiment with online services.

Antique Trader and our joint venture, Trader Publishing, have created a number of new publications aimed at markets different from our traditional products.

Other new ventures are on the drawing board. I'm excited that so many new ideas and initiatives for new ventures are coming from our operating units now.

A couple of weeks ago, I heard Tom Peters say the winners in the media revolution will be the ones who at first look like losers - the ones who try a lot of things and look stupid at first. I can relate to that. I remember when the world thought we were goofy to program 24 hours of non-stop weather. There were times when we doubted our own sanity. Many of my publishing colleagues and some in Landmark, too, turned up their noses at the Auto Trader business.

We need to encourage people to stick their necks out and take risks. Risks with new products and services for customers, risks with process improvement, risks in empowering people to act. To make that possible, I'll suggest something revolutionary. I think we need to celebrate some failures as well as successes.

We still have a long journey before we can realize Landmark's Vision. But the commitment you have shown to engage and improve makes me certain we will get there. When we do, we'll have a company that will compete and win.

Copyright 1994 Frank Batten

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