Connect with FOLIO:
         

ADVERTISEMENT



When Corporate Cultures Break, They Can’t Be Easily Fixed

And it’s scary that so few of these leaders recognize that.


Tony Silber By Tony Silber
12/02/2009 -16:51 PM






The corporate culture at Cygnus Business Media is toxic. So, perhaps, is Advanstar’s. And Nielsen Business Media’s. The Prism part of Penton Media used to be.

These places and many others have become nasty cauldrons of resentment. It gets expressed every time FOLIO: writes a story about them—expressed in the hundreds of comments from past and present employees.

I’m not blaming the employees. The reasons for their unhappiness are obvious. These companies have been through too many cycles of change in ownership, changes in management, downsizings, layoffs, salary cuts, loss of talent, loss of spirit, loss of camaraderie.

It doesn’t matter anymore who’s in charge. CEOs come and go, and always talk about how “thrilled they are to lead a company with strong assets and proven brands.” That’s called whistling into the wind, my friends. Job one should be fixing the culture. It’s scary that so few of these leaders recognize that, especially given the profoundly unsettled condition of the print-based media industry these days.

Let me take you through some of the evidence. I’ve elected to use recent examples only from Cygnus, but it could easily be one of the others.

A few weeks ago, the latest CEO, John French, announced a management restructuring. Three senior executives departed. The story, as all Cygnus stories do, generated an avalanche of comments. Consider these verbatim snippets:

“What goes around comes around. I agree about the Interactive and IT divisions. With few exceptions, they are a total disaster. Unprofessional, unskilled, mired in red tape and playing favorites. Zero help from these groups. Zero leadership, zero communication. Got what they deserve.”

“He [Edit note: I removed the person’s name.] was in over his head certainly and he knew it. He fell into the Idea of protecting his turf rather than working for everyone else. Although the team was mismanaged when he got it, he didn't know how to restructure. His political tactics were designed to punish everyone else and he cut himself off from the world to avoid further exposure. For Cygnus, the mistake cost dearly in time and resources. Too bad it took so long.

“You are so on the money. The culture that [he] and others represents is one of mistrust. They literally came on board and said "we don't trust you." Everything they did said "we don't trust you." How can you build a team without trust? Theirs was a culture of intimidation! Yes, HR got behind this negative culture—and so did the sitting President! This culture was destined to fail.”

Then, back a bit earlier this year, Cygnus filed for Chapter 11 bankruptcy. Here is a bit of what some of what the commenters thought:

“The System Works? Wow, what a great system: A bunch of fools invest (throw away) tons of money buying b2b magazines, proceed to strip them bare, lay off as many editors and sales peoples as possible, eliminate middle management so that the magazines have no relationship to their industries, and then try and sell them off another bunch of losers. Then failing that, they declare bankruptcy. Wow, what a system. Glad it’s dying.”

“We’ll know when they emerge from this, if they are serious about their business: Get rid of the dead-weight management, bring actual talent back, re-establish the core values that have been lost some time ago, and do business based upon principals that leave room for integrity and ethics, as well as profits. The only thing that seems to be certain is this: If they leave the two clowns [a reference to the co-CEOs whom French replaced] in place, it will continue to be a circus, and we’ll sit in the cheap seats and listen to the drum rolls as they perform another high-wire act without a net.”

“Cygnus properties were third-tier when they bought PTN. They’re still third-tier unless they’ve re-defined the tiering system to add a fourth tier.”

As part of the bankruptcy process, Cygnus released financial projections, which foresaw a 35-percent revenue decline in 2009, and which FOLIO: wrote about. The reaction:

“Hah! I love it. Earnings before Interest, Taxes, Depreciation, Amortization...and RENT! How about EBITDARS—add salaries in there too! What, isn’t rent a REAL operating expense? Finally the air gets let out of this poor old balloon full of fourth-tier, under-funded, properties (that’s not to blame the hardworking staff that has been bled to death for years). So what is “interactive” revenue—oh, I remember, back in 1998 that’s what we called online revenue. I’d like to see Cygnus increase “interactive” revenues by TEN MILLION dollars next year as it is projected above - sure, no sweat. It’s dollars to dimes people and when we get right down to it the dimes are becoming pennies.”

“Cygnus’ tipping point was the moment the owners brought in [the former co-CEOs] to save the company. The two whiz-kids from out East “streamlined” Cygnus by firing a lot of experienced, talented, knowledgeable people, and then what did they do? They created countless high-paying upper management positions for each and every one of their little friends. Suddenly rank-and-file employees were inundated with orders and commands from people they had never heard of before, with jobs that never existed before, and it all went to crap. The mammoth effort to “go interactive” has been a textbook study in mismanagement. The CEOs really thought that replacing $5,000 print ads with $500 Web ads would save the company. A lot of good people have been screwed over, are being screwed over, and will be screwed over before the dust settles. Note to businesses everywhere: Never hire two CEOs who share one brain.”

When Cygnus hired John French, the commenters—presumably the same people who beat up the former co-CEOs, went crazy. A few samples:

“Why don’t these old publishing houses start looking at younger more experienced, Web-oriented publishing professionals that are capable to pull a company like Cygnus out of the rut and into the future? Look at the people outside the inner circle for example? There a many highly qualified, forward looking, quick successful B2B publishers that can manage to the bottom line and create good morale which translates into success. Every time.”

“John French “left” Penton a year ago. Now, he returns, a savior, to Cygnus, using the same “skills,” to “stabilize” Cygnus? Wow.”

“The last we heard from John French, in B to B’s “Who’s Who,” July 14, 2008: “Earlier this year, when French saw that Penton would not hit its year-end revenue goal, he acted quickly to make some difficult and unpopular choices, including instituting salary and hiring freezes in April and eliminating 42 positions in June. In memos, he told staffers the moves would help position Penton for future growth.” B to B, three days later, said this: “Penton Media, one of those troubled B2B media companies, is seeing more upheaval: John French, the CEO, is resigning. He will continue to stay on Penton’s board and will work with Wasserstein and MidOcean, the two joint PE owners of the company, on new media opportunities.”

So, can we expect the same kind of behavior? Come in, lay off people, exit? Expect another wild ride at Cygnus.”

In these difficult times, you need vision, adequate resources, and especially, motivated, talented people who support each other, believe in each other and their managers. At many traditional media companies, that’s gone. And so, those companies themselves might be gone too.





Tony Silber By Tony Silber --

Post Comment / Discuss This Blog - Info/Rules


RECENTLY in B2B dots icon

MOST READ on FOLIOdots icon

FOLIO: Alerts & Newslettersdots icon

Sign up for our news alerts, special offers & feature updates:



FOLIO: Alerts
Breaking news & industry updates

FOLIO: Publishing Technology
The Latest on Trends, Issues & Products (2x Monthly)

FOLIO: Special Promos
Special offers & announcements from Partners, Sponsors & Red 7 Media

FOLIO: Update
Webinar, content & service feature updates



CONNECT WITH FOLIO: NOW
         


CAREER CENTER dots icon