Every business has its special quirks; know them or suffer the consequences.
Updated: Apr 16
By Wythe Walker
Management 101 Series
One of the greatest managers of the 20th century was Harold Geneen. As CEO, Geneen grew ITT Corporation from a medium-sized business with $765 million in sales in 1961 into an international conglomerate with $17 billion in revenue by 1970.
Geenen understood two principles of superior management. One, be a good manager who understands basic management and, two, learn the specifics of each business you’re in. By the time he left, ITT had evolved from a utility into a multi-faceted company with 375,000 employees spanning 80 countries with 250 business units, all successful, turning a consistent profit almost every quarter for 11 years.
In the field of niche publishing where I have done most of my consulting work, I have witnessed two things. First, I have seen successful publishers from mass-market dailies attempt to manage small niche products and fail because they weren’t willing to understand the differences in the products. Second, I have seen outstanding journalists launch publications without understanding the importance of a proper sales culture and watched them fail repeatedly.
Here is one example. I was called in to consult with an award-winning business journalist in New Mexico where I was living at the time. The fellow had been the business editor of the Dallas Morning News, a large metropolitan daily. He was an excellent reporter, had covered countless business successes and failures in his time at the Morning News. After years of working there, he and his wife decided to move to Albuquerque where he was eager to be his own boss. He found a backer and launched a newspaper. With appropriate fanfare, he kicked off his product which was well written, hard-hitting, interesting, and quickly garnered a loyal reader base. Unfortunately for him, although he had a fine grasp of the editorial side of things and managing writers, he had never been a publisher of a small newspaper, hadn’t researched what special skills he might need, what pitfalls might lay ahead.
Even worse, he told me as I was getting to know him and questioning him about his lack of sales revenue at his publication, he said, “Wythe, you know I don’t know that much about selling. In fact, I kind of hate salespeople. When I started this newspaper I thought I would just hire a sales manager, pay them a salary, put them in a room and they would bring me the money.”
Well, there you have it. I couldn’t have put it any better myself. He unknowingly made one of the worst mistakes a niche publisher could make. The most important factor in the success of a niche product like the one he had launched — an alternative, weekly news product in a small market — was having a high-powered publisher willing to sell ads one-to-one. Without that, the likelihood of finding a sales rep with the passion required to take a new product and establish it in an existing market was slim to none.
And, that’s exactly what happened. Over the years before I was consulting with him, he had had one salesperson after another, and all had failed. He was unwilling to lead the sales effort and because he didn’t understand the challenge, he balked at paying the top dollar salary it would have taken to lure a salesperson to his newspaper with the drive, experience, willingness to sell his unproven product. Instead, he hired salespeople at incomes he thought were ‘fair’ and ended up with mediocre sales reps, mediocre sales, mounting frustrations, and, eventually, his financial backer unwilling to back him anymore.
By the time I arrived, he had lost over $1million and the doors were soon to be closed. We met, developed a plan, and I believe we would have succeeded. But unfortunately, I had to leave town. A few months later, the publisher decided to shut the paper down.
There are no mysteries here beyond the strange quirks of the human mind and its inability to see what is in front of itself.
Before Geneen became the CEO of ITT Corporation he worked for years as an accountant, studying various businesses, interacting with different managers, understanding the fine points of various businesses. As he gradually assembled the conglomerate that was ITT he reveled in acquiring new businesses and digging deep into the particulars of each.
Few CEOs have the raw energy and intellectual curiosity of a Geneen. But, most anyone can take the time to study the business they are in and understand what is vital to the health of that niche. And utilize the basics of good management to run the company.
After he had left ITT, Geneen wrote a book on his philosophy, Managing. I recommend it. Here’s a brief excerpt:
“Successful management is an endurance race, not a sprint. Good managers work hard at keeping their employees and their business focused on both the general and specific needs of their particular niche. Management is a skill like any other that can be learned, improved, understood. Like any craft, it requires daily work, practice, study, diligence.”