Lean Process in Broadcasting

[Goat Rodeo Cowboy]

I "did the radio thing" for a number of years.  Then I decided to chase other brass rings for a number of years.  Then I had this bright idea I might like to return to broadcasting.  I began participating here and stealing a little something from everyone's mind to "get up to speed".

  I am particularly indebted to BigA and David Eduardo for helping me to understand where the mainstream of radio is today.  (It hasn't been easy to accept! )   Like so many who post here,  I want rdio to fit that romantic picture of what we remember ( or THINK we remember ) from the past.  It doesn't!

One of the non-broadcast things I did was to get involved in Business Process Improvement which has now become LEAN Process.  One of my own offspring has made the transition from Healthcare FACILITY Consultant over to Healthcare LEAN PROCESS Consultant.  I enjoy just talking shop in that area.  (A hospital company was one of the brass rings in my chase.)

Here is my question:  Are the broadcasting companies that are discussed in these forums daily practicing the concept of LEAN PROCESS?

[ChiefOperator]

I've read quite a bit recently regarding Lean Processing.  Basically, it's the same techniques that have been preached in the past but now renamed.  Henry Ford practiced it and Peter Drucker lectured about it in his books, but they called it something else. 

Just remember that when one hears about "new" management theories, they are often just renamed, existing theories (maybe tweaked a bit).   This is the reason why Fred Smith, founder of FedEx, said that he read only a handful of the existing classic management books (Michael Porter's Five Force Model is one of the classics) and ignored the rest. 

Goat Rodeo Cowboy, I'm not being critical of your post.  Please don't take it that way.  Lean Processing is definitely worth studying.  I'm just making the point that many here probably understand the concept, but perhaps under a different name. 

[Goat Rodeo Cowboy]

I'm not being critical of your post.

No,  I had no problem with the wording of your post.

My experience with BPI was circa 1998-2000.  Unfortunately the company was in what would soon realize was a dead-end line of work.  We were a "distributor" of desktop computers.  Dell was proving that they, HP, Compact, IBM and others didn't need distributors.  Just sell direct. 

Our company was acqjuired  (or merged, depending on who is telling the story) and the surviving management wanted no part of BPI.  We were reassigned to the nasty, gritty task of moving 55 district offices over to the surviving internal computer systems....  some systems like accounting, from Company A,  some systems like repair tech dispatch from Company B.  The whole thing ended up in LIQUIDATION bankruptcy.  (That means slam te doors shut and send everyone home.)

The available books, literature and seminars of that era were highly focused on MANUFACTURING and Warehousing LOGISTICS.  We were trying to clean up the process if dispatching computer techs out to a customer site to repair machines under warranty  (along with service contracts) and the...  the $15 million dollar rat-hole...   somehow make sure that the service call was "captured"   invoiced, and we got our reimbursement from Dell, IBM, HP or Compaq for fixing their under-warranty machine.  At that time there was not a lot of "off the shelf" literature on how to create and enforce quality management of a highly dispersed service-industry workforce.  We were inventing new methods on-the-fly.

My Real Question

I have been following the recent thread about "Should I buy this Station?".  For an entrepreneur to go out and buy one station and nurse it back to health usually requires an owner that has a lot of native talent  (just like a football quarterback) and a lot of energy to just drag the existing station out of the quick-sand and make it a success.  When the task becomes an observable success,  the entrepreneur sometimes cannot explain how he did it.  (He may try, but we who listen are rolling our eyes and saying, Yeah.... right!)

I get the idea that when the "big boys" including Clear Channel, Cumulus and others who play at that level....  they go in knowing exactly what is going to happen,  and know how to move non-producers out of the way when the plan is not being implemented as written.  Do they get this done with "slick planning"   (a.k.a.  Business Process and/or LEAN PROCESS) or do they just do a lot of internal bludgeoning of people and throwing "more mud up on the wall to see who sticks".

For the smaller operator who has never experienced a market turnover under one of "the big boys"....   should they spend time understanding what PROCESS means?  Does the kind of PROCESS that GE and other manufacturers use have a place in broadcasting?

***One More War Story
Back in the 1970s my employer wandered out in a western state and acquired a cotton farm.... we're talking in excess of 20,000 acres.  We were doing building construction planning and discipline using the "Critical Path Method".  He had the computer people stick the cotton farm details into the CPM software.  The original plan was not to change how they farmed, but to give him something to read when he flew to the farm and he could get off the plane and ask relevant, intelligent questions about the status of planting or cultivating, etc.  Eventually it did result in a "Business Process Improvement" of the cotton growing process.  I tried one day to explain all this to my mother who had spent a lifetime living on the farm along with my father the farmer.  She listened to my story and then ended the whole discussion with this question:  "So,  does this computer of your call up God and tell him when to rain?"



 

[TomT]

From what I've seen of the local CC cluster they obviously not only don't have a process but lack a clue as well....

[TheBigA]

This is one of those sociological discussions where the image and mythology of something plows headfirst into the reality.  And it's never pretty.

You mention healthcare, and earlier this year a sick family member pulled me into that industry for a few months.  I got to spend some time in what I now call the Medical Industrial Complex, a system of hospitals, insurance companies, drug companies, and related facilities like rehab centers.  The mythology is that their main goal is to do good things, and help people.  The reality is their goal is to make money.  Sometimes the goal of making money trumps helping people.  Like the discussion I had about keeping the family member in the hospital for another weekend, rather than discharging them on Friday.  I asked a simple question: Is there a medical reason why this person is being kept here for three more days?  The answer was no.  Then why?  Because we can.  The insurance company will pay.  Meanwhile the patient wants to go home.  Too bad.  The bills are starting to come in, and we see the difference between what the hospitals charge, and what the insurance companies pay.  Who pays the difference?  The patient.  Did the patient know this before entering the hospital?  Was there a way to shop for the best deal before being taken to the Emergency Ward?  No.  You go where the ambulance takes you, and you deal with the costs afterward.

So you ask if there's similarity in broadcasting?  Probably.  The mythology is the airwaves are owned by the people, and broadcasters operate in the public interest.  The reality is the government turned operations of broadcasting over to private companies, saying run them however you see fit, within the framework of the law, just keep them on the air in case of a national emergency.  So those who believe the mythology can't understand why these profit making companies are trying to make money.  Don't they understand they're supposed to help people?  No, they don't.  Broadcasting isn't a quasi-governmental agency, built around hiring people, giving them lifetime jobs, providing pensions and security.  Yet those who work in the industry are often shocked when they find themselves dealing with the reality, because it is so different from the mythology.

We are a people who want to believe the mythology.  George Washington chopped down a cherry tree.  Abraham Lincoln studied law in a log cabin.  They make great stories.  We believe we're a good and generous people.  We want to help others, and see everyone have a great life.  Then the reality shows up and bursts our pretty balloon. Young people get pregnant before they're married or have jobs.  Companies are trying to do the most for the least amount of money.  Customers are always looking for a bargain.  So sure, there was a time when radio stations operated differently.  It was a time when there were only a few thousand stations, and radio was the ONLY electronic mass medium.  Then, in the last 25 years, all that changed, radio lost its exclusive, and now companies are forced to cut costs in order to compete.  The mythology is that competition leads to quality.  The reality is competition leads to cost cutting.  How do you cut costs?  You fire people, and consolidate operations.  You see it best in the retail world.  But also in manufacturing.  At one time, American electronics were the best in the world.  Then came Japan, Korea, Mexico, and Malaysia.  Each time the price got lower, and the quality went down.  But at the end of the day, Americans gave up making electronics because of competition.  Who is to blame here?  The other countries who made products cheaper?  Or consumers who wanted to pay less?  You tell me.  In radio, consumers want to hear their favorite music, but they don't want to pay.  They don't want a monthly subscription, and they don't want commercials.  So how do you give them what they want?  You cut costs to the bone, consolidate operations, and do one or two commercial breaks an hour.  If there was another way to do it, they'd try it.  But these are the cards that have been dealt.  It all flies in the face of the mythology of radio serving the public interest, but we all know that's mythology.  Don't we?

[Goat Rodeo Cowboy]

Tee-hee.  Here it comes.

DAMN!   I'm glad you got that out of your system.

I understand your verbal picture of the hospital perfectly!  And though I am going to quibble with a few points and concur on a few points,  it is a good parallel to lay it down beside the current status of the radio world.

At one time I worked for a company that was an early entrant into the concept of corporate-ownership-of-hospitals.  I know what it is to attend seminars and workshops of the American Hospital Association and be the only person in the room with such a rude and vulgar connection.  For the last 13 months our local hospital has been my home away from home as this dear lady who has put up with me all these years goes about the business of conquering Ovarian Cancer.  (7 out of 10 with this diagnosis are not alive 15 months later!!!)

Every time I have gone with her for a CT Scan, an Echo-Cardiogram, an MRI or what ever,  I have interviewed the doctor of the technician as they set up.  How long you been doing this?  What did you do before?  If I had a child who wanted to do this,  where should they go to school?  What special training would they need?  Will this career last for the rest of your working years?  Will you need to train and transition to something new?  What would it be?

Here is what got me thinking about LEAN PROCESS for broadcasting.  The member of my family who works with healthcare facilities planning meets with hospitals who are about ready to build.  Maybe an expansion.  Maybe a whole new facility and tear down the old.  And part of the process is to make sure the client has a 20, a 30, a 50 year plan.  And here is where lean comes in.  Would you plan the future of your facility the same way if I could tell you for sure that in a matter of months or years,  the entire healthcare funding system would change to one where you are paid for outcomes.  We don't care if you keep them 2 days or 20 days, we are going to pay you a flat fee of $?,??? to remove that appendix.  Our flat fee for heart bypass surgery is $?,???.  Would you build a building that is more efficient?  A building that results in a higher number of successful outcomes?

If you build that more reliable and more efficient hospital, and they DON'T change the healthcare funding system,  what have you lost?

I probably won't live long enough to know if any of her clients come back to her years later and say:  "Thank God you wouldn't let us settle for less!"  Her husband is a professor of medicine (clinical) helping train the next generation of doctors who will be making healthcare decisions in those buildings.  Doctors are coming on line who know the "gravy train" could get switched over onto the LEAN Track one of these days.

I heard a book review of a biographical sketch of Mitt Romney the other day.  It was not a flattering sketch.  It described the life of Mitt Romney (as visualized by the author) from the time he came out of school,  became a consultant in the Bain organization,  the author's version of how Romney moved from consultant top venture capitalist, etc.  History tells us that Mr. Romney could look at a target company,  write a business process customized to the circumstances of that corporation, and get it implemented.  It could be a starving company on the edge of bankruptcy.  It could be a fat, healthy old line company where the founder wanted to cash out at top dollar.  Mitt and crew had a business plan that would wring the maximum return out of anything.  It was on paper.  A copy could be handed to everyone in the target company with responsibility and it would say:  This is what you are responsible for, and this is the target you must meet.

Small time entrepreneurs are more likely to put a manager in place  (for a radio station or other line of business) and tell them:  Make it work or else.  And if the managers asks if the company has a plan, the answer may be:  That is what we hired you to figure out.

Let me ask my original question in another way:  If I owned about six small or medium market stations and I wanted to understand how the big boys who have a formula, a process would approach my properties,  who would I be looking to get to know at a broadcasters convention and try to get them to go to dinner with me in hopes they would "share some light".

[TheBigA]

If I owned about six small or medium market stations and I wanted to understand how the big boys who have a formula, a process would approach my properties,  who would I be looking to get to know at a broadcasters convention and try to get them to go to dinner with me in hopes they would "share some light".

I think formulas don't work.  Anyone who has a formula for success opens the door to someone who has a different approach.  Today it's not as much about coming up with formulas, but ways of changing and adapting formulaic approaches to fit specific uses as purposes.

I'm reminded of Malcolm Gladwell's lecture about Howard Moskowitz and spaghetti sauce. 

http://www.ted.com/talks/malcolm_gladwell_on_spaghetti_sauce.html

Every time I'm looking for inspiration, I go back to this speech.  Absolutely brilliant.  I may have mentioned it here before.  And it really deals with how media has changed in the last 25 years.  Broadcasters could learn a lot from the lesson it teaches.  So what am I saying?  If you're going to learn from an out-of-market expert, why not start with Malcolm Gladwell?  He gives you all the tools.  He would say you need to do research in each of your markets and see where the opportunities are.  Don't go in with pre-conceived ideas.  Go in with an open mind.  You might get surprised.

[TomT]

See my comment above about the local CC cluster.  Good management is not about applying some formula concocted by an outside expert that may or may not fit the local situation.  Especially in radio, and in small market radio.

If you have reasonably good facilities in a top-50 market, there is so much money floating around it takes some effort to really screw things up. In a small market you have to be competitive because there just aren't enough dollars to support all the stations.  "Competitive" does not necessarily mean "cheap."  Nor does it mean that you would try to do things as they are done in the larger markets.

Each station, each market, is different. We have two satellite-fed music stations, and one live music station, in three distinct markets. Market 1 is 25 miles from Market 2, which, in turn, is 20 miles from Market 3; Stations 1 & 2 shares studios in Market 2, where our traffic and billing is handled.  Our ops manager lives in the big city--and telecommutes.  He's down once a week to record a live show sponsored by a local dirt track.  Market 1 is a county seat of 5000, in a county of 17,000.  Market 2 is a city of 2400, in a county of 8400; while Market 3 is rated, 12+ above 100,000.

Station #1 is a class A competing with an AM-FM combo, and a scattering of out of market FM signals.  The town is dying, five years ago it had 4 full-line new car dealers--now it has one. A major local employer is an aluminum smelter--Chinese and Russian dumping wreaks havoc with this industry. We program this station with satellite classic rock, some H.S. sports, and pro football.  The competition is dollar-a-holler, so we sell lots of cheap packages and stick the station in the back room.  The return isn't there, but our expenses are nil since we built the station from scratch.

Station #2 is in an even smaller county seat but we've been there since the early eighties. There is another daytime AM in the market, paired with an out-of market FM, they don't sell locally.  My station is a B-1, so we capitalize on our regional coverage-the signal reaches 25 miles into station A's market, as well as into three other counties with no competing commercial signals and into market #3 as well (albeit with only a small share, since we are one of 10 FM's in that market).

Again, small market, so it is satellite fed with an AC format, including Delilah evenings, and Tom Kent 80's weekends. Like the old days, we run news top of the hour (Fox), and Accuweather forecasts.  We do a lot of H.S. sports; and promotions and remotes through-out the year, including a coats-for kids in the winter, and remotes from cancer walks this time of year.  Our business comes from a mix of small business in these rural counties, and regional advertisers such as car dealers and furniture stores from the metro market we cover who seek buyers from the seven county area we are strongest in. We have one main sales person, who has been with us since sign-on (starting out as a receptionist/secretary).  Since she has been with us that long, many of our sales campaigns are completed over the phone.

Station #3 we just bought 2 years ago; the station is licensed to a smaller city in the adjacent rated market.  There are 8 competing FM's, including a B and two B-1's, and six AM stations. The station is an A, it had been in a JSA with the CC cluster. It is live, with its own building on a main road half-way between the studios for the two main clusters in the market. We have an eighties-based AC, with only minimal local news (although we've discussed adding a full-time newsman--sales need to be built up first). We've done some H.S. football, covering suburban teams since the two clusters have the main schools tied up.  Was a money-maker last year, we're debating impact on ratings.

Although the station has been on the air for ten years, with essentially the same format (and respectable 35+ numbers with women, despite this being a rock & country market) we have a ways to go with sales. In the JSA, it was sold in combo with the other stations in the cluster, & the staff stuck in a dirty 9X8 closet studio. We inherited most of the air staff, but none of the sales staff, who were tied with non-competes to the cluster. The air staff are all radio veterans in this market, we can't pay them that much but tried to keep them happy in other ways. We moved the station into a 3 bedroom split level, with a brand new control room built in the master bedroom (in fact, was just over there this morning as I had new carpet installed). The PD finally got a real office--one of the other bedrooms, (his former office was 5 X 4). They now have a new production studio as well (instead of cutting spots on audition).  With the youngest staff member 49, we have a flexible leave policy.  For example, one staff member's mother has been ill & he is her only local relative, so we accommodate his need to take days off to attend to her needs.

Sales have improved since we closed on this station, but we are handicapped in not having a second full-time sales person, a difficult position to fill.  Our one full-time sales person can't keep up with all her accounts in the metro, let alone the small accounts in our other markets.

Now, as you can see--one size does NOT fit all.  The management challenge is to deploy one's resources (especially financial--we have a fair size loan to pay off) to maximize not only current return but future growth. I'm engineering and legal for the stations--my business partner, who spent 20 years in major market radio (sales and programming, including sales at a legacy AM station) is GM and sales.

[landtuna]

We were trying to clean up the process if dispatching computer techs out to a customer site to repair machines under warranty  (along with service contracts) and the...  the $15 million dollar rat-hole...   somehow make sure that the service call was "captured"   invoiced, and we got our reimbursement from Dell, IBM, HP or Compaq for fixing their under-warranty machine.  At that time there was not a lot of "off the shelf" literature on how to create and enforce quality management of a highly dispersed service-industry workforce.  We were inventing new methods on-the-fly.

Back in the early 80's I worked for the Field Service division of a Fortune 100 company who had the same requirement.  In addition it needed to bill for service calls which were outside of warranty and contain a logistic application capable of re-order, re-stocking, shipping while producing a mess of management reports on all manner of equipment failures, subsequent failures after first fix and efficiency of repair personnel.  Originally it was designed to work with in-house logistics but was later modified to use outsourced logistics from Fedex and interfaced with their logistics systems.

We developed it in concert with a company out of Boston and named it "Fieldwatch".  For lack of a better platform, and to fit in with our real-time dispatch service, it was a mainframe app but the logic could have been ported to any number of other platforms (PC's weren't yet capable of running such a monolithic application and distributed processing was in its infancy). 

There were many companies that needed the same capability and we had many inquiries about building a bundled software package for resale.  Unfortunately, Field Service, the division that had literally saved the corporation in the early 80's, wasn't seen as a major revenue producer and the corporate suits didn't see itself as a service company and wanted instead to emphasize the more glamorous aspects of chip building. We were downsized, sold, re-acquired and then dissolved once again.  Major short-sightedness.

It doesn't only happen in radio.   



 

[TheBigA]

This topic got me to do a search on Lean Process to get a better understanding of exactly what you're talking about.  I found this web site that seemed to sum things up well:

http://www.pinnacleprocess.com/lean_solutions.htm

I thought it was interesting that point #1 is People, and it's not just about fewer people, but the motivation of those who remain.  It talked about "self-motivated" people, and it's my experience that those are hard to find.  Being self-motivated about work is tough when people have family and other issues on their mind.

The other point was that it's more difficult to impliment lean process in a larger company.  I think that's true too.  The farther the employees are from the decision makers, the harder it is to get them to be self-motivated. 

TomT's post is a good one too.  He talked about not applying formulas to every local situation, and I think most of the radio companies have seen that to be true.  It's why they retain local management, and provide them programming choices and options that they can use as tools.  And it's also about delegating authority to the local level.  That way, you retain good people.