Hopeful That Old Media Can Teach New Lessons

Today’s hottest industries and companies run the risk of being tomorrow’s troubled also-rans if they do not continually enhance value propositions. I believe nothing

Tribune Co. has hired investment bankers to advise the media company on whether to sell the division that includes the Los Angeles Times, Chicago Tribune and six other daily newspapers. Above, the Los Angeles Times building in downtown L.A. (Mel Melcon, Los Angeles Times / November 16, 2012)

The Los Angeles Times building in downtown L.A. (Photo: Mel Melcon, Los Angeles Times  11/16/12 – click on photo to go to original LA Times.com story)

illustrates that better than February’s blizzard of activity in the media sector where Time Inc., pursued a sale of its lifestyle magazines to Meredith Corporation, the NY Times puts the Boston Globe up for sale and Tribune Co. retains JPMorgan Chase and Evercore Partners to sell off its newspaper properties. These instances highlight issues that are important for any emerging company executive to pay close attention to!

Companies now easily dismissed as tired old media were thriving trend-setters not that long ago. Arrogance and lack of meaningful market leadership created a false set of rules where media powerhouses failed to understand who their competition was and certainly lost touch with their market.

The real action and useful insights will come from the post-merger integration of publications switching hands. I can’t think of any field where company culture is as distinct as it is in media –acquiring companies that fail to appreciate the distinct culture of The Globe for instance, but are more interested in getting their hands on a still valuable asset–will ultimately regret the deal even if they get New England’s most respected Daily at a bargain price. Given the size of that transaction, I sincerely hope Des Moines based Meredith places a premium on managing the cultural integration of the very Time Inc. staff.

Private equity firms, other investors and even board members oftentimes initiate mergers and acquisitions because they look good in concept without ever taking in to account how important company culture is. These problems are compounded when company management engages post-merger integration strictly through business function, including cost-reduction, incorrectly believing culture is something that will take care of itself. No matter how organized a company is, successfully executing strategies and plans depends on people. Staff already rattled by a merger will never rise to the challenge if they do not believe the new entity feels like corporate home. This can’t be done as an afterthought or by lip-service; understanding and bringing out the best in corporate culture is anything but soft skill stuff.

Entrepreneurs and emerging company executives are often told to look at old media for lessons in what not to do. I urge these leaders to pay particularly careful attention to how the latest round of mega media mergers emphasize culture. Perhaps this time traditional media can show us what to do.

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