An Executive With Seriously Offbeat Ideas About Budgeting, HR and More
Active Interest's Don Peschke isn't just a smart businessperson, he's a smart person.
I saw Don Peschke, founder and CEO of August Home Publishing, at an event this week. He sold his company last year to Active Interest Media and has stayed on to run August Home as a unit of AIM.
Typically when that happens, the founder/owner stays on for a transition period, and eventually moves on.
But Don isn’t typical. Don is a rare executive who’s totally offbeat, with radically different ways of looking at media-company operating assumptions. A one-time editor, he built a multi-title company with magazine brands at the core of a thriving content ecosystem.
And with no advertising at all. At August Home Publishing, subscribers and readers pay the whole freight.
I don’t think anyone in the industry understands as well as Don the dynamics necessary to slice and dice content in ways that make subscribers willing to buy stuff they probably already consumed in one form or other.
Don’s very self-deprecating. He's the fairly uncommon smart businessperson who also happens to just be a smart person. But that self-deprecation doesn’t deflect from the value of his thinking. Here are just a few examples.
Don says he doesn’t believe in budgeting. “To me, budgeting starts out as a guess of the future,” he says. “And as you move forward, you’re held responsible for why your guess didn’t come true.” Rather than budgeting, Don says, August Home would do three-month forecasts. “We’d look at what the next three months look like, and if we don’t like it, we change it. You’re making an adjustment looking forward, and budgeting is an excuse made looking backward.” A strange way to run a business, you say? “We grew revenue every year for 30 years in a row,” Don counters. “We grew at a rate of nearly 15 percent CAGR.”
After our budget-philosophy discussion this week, Don says to me: “You want me to read you our employee handbook?” I think, 'Ummm, no?' Don has it memorized, he assures me, and commences: “You have a professional responsibility to do what’s right.” That’s it. Don’t the HR people and the lawyers object to that? “There are legal (government) requirements that have to be in an employee handbook,” he concedes. But for policy, the nine words is it. "HR and the lawyers were reluctant at first," he says. "Now they like it. We do things this way because it demonstrates the most respect and trust in the professionals we work with.”
Don also tells me that at August Home, when people were being separated from the company, he would pay for them to get legal consultation, just so they had assurance that what was happening, was, in fact, legal.
All of this is in line with another Peschke philosophy: No performance evaluations. “The professional development program we use at August Home is called Think GRAND. (It replaces the old notion of performance evaluations),” he says. “The key is that the professional (sometimes called employee at other companies), sets his/her goals, presents them, and reviews progress.” GRAND is an acronym:
G: Goals—What are your goals for the next year? For the next three-to-five years? (Manager: ‘Here are the company’s goals.’)
R: Review—How are you doing on progress of meeting your goals? Any changes/revisions?
A: Acknowledgement—Manager: You are doing a great job in these areas. Professional: I want to improve in these other areas. Together: Here’s how your goals fit with the company goals.
ND: New Directions—Since your last set goals, is there anything new to add or change?
“I used to dread performance evaluations (both giving and getting),” Don says. “Now, listening to the goals of other professionals in the company is the most uplifting, enlightening, affirmative, and enthusiastic part of my job.”