Radio today is not the radio of just a few years ago, but we didn’t see it coming. Radio was ill-prepared for its future. Admittedly, recent events may have been more traumatic than normal, but given radio’s traditional volatility, it shouldn’t be a surprise that we rarely plan for the real future. These plans are always based on what is known, which is why they are doomed. It is what we don’t know that we should be planning for.
Richard Harker
by Richard Harker
Think back just a few years. Broadcast stocks were strong, revenues were growing, and radio’s future looked bright. While we were becoming increasingly concerned about the impact of new media, the greatest threat seemed to be satellite radio. Many were confident of HD radio’s positive impact. There was talk about streaming and, while some stations were already doing it, its potential benefit seemed many years away.
In retrospect, the things we didn’t worry about then seem much more important today, and the things we worried about then seem less important. Our biggest new competitor is a cell phone. Satellite’s threat seems to have faded, but so has HD’s potential. Station revenues have plummeted, and as a result radio stations are making unprecedented budget cuts including massive layoffs.
There’s probably somebody out there that predicted all these things, and many more who claim they did. The truth is that nobody envisioned a business in the shape that radio finds itself in. We weren’t prepared for the impact of new media. We weren’t prepared for a recession. Most in radio recognized the potential impact of Apple’s iPod on radio, but did we understand the real threat was the iPhone? Cell phones weren’t on radio’s radar screen. Today we understand that streaming can expand radio’s reach, but back then streaming seemed a distraction from our real job.
Radio has been transformed in both good and bad ways. Radio today is not the radio of just a few years ago, but we didn’t see it coming. Radio was ill-prepared for its future. It couldn’t look ahead just a few years, yet this does not deter companies from developing elaborate centralized one- and even three-year plans spelling out in great detail the steps the corporation is going to take to achieve a set of goals.
Admittedly, recent events may have been more traumatic than normal, but given radio’s traditional volatility, it shouldn’t be a surprise that we rarely plan for the real future. These plans are always based on what is known, which is why they are doomed. It is what we don’t know that we should be planning for.
Strategic planning is predicated on the belief that we can foresee the future, and clearly radio hasn’t been able to do that. The future is unpredictable, and the safest prediction one can make about the future is that it probably won’t turn out like we think it will.
Nassim Nicholas Taleb writing in the best seller The Black Swan: The Impact of the Highly Improbable says:
* If you shed the idea of full predictability, there are plenty of things to do provided you remain conscious of their limits. Knowing that you cannot predict does not mean that you cannot benefit from unpredictability.
* The bottom line: Be prepared! Narrow-minded prediction has an analgesic or therapeutic effect. Be aware of the numbing effect of magic numbers. Be prepared for all relevant eventualities.
He goes on to write about the importance of trial and error. “We have psychological and intellectual difficulties with trial and error, and with accepting that series of small failures are necessary in life.”
Consider CBS’s recent format changes in New York and Los Angeles. Despite consistent ratings, CHR has been out of favor for years. Once a leading format, the number of CHR stations has steadily declined in recent years. In the past, every market had at least two and often three CHRs. Today few markets have more than one.
How long has it been since CHR has had the attention of the trades, blogs, and group leaders? Who predicted that CHR would be the next big battleground? Yet in a few months CBS launched CHR stations in radio’s two largest markets. Based on the recent past, there was no reason for CBS to switch to CHR, and there was no reason for KIIS or WHTZ to develop a strategy to defend against a new competitor.
While these two format changes have made the headlines, format changes have been the life blood for radio. New stations and new formats have repeatedly reinvigorated radio. Yet at a time when radio desperately needs to be reinvigorated, radio has developed an ultra-conservative strategic planning mindset that minimizes risk and change. So format changes are rare.
In Black Swan, Taleb argues that the uncertainty of the future requires that we try new things even at the risk of failure. A century ago Louis Pasteur wrote, “Chance only favors the prepared mind.” Pasteur realized that there are going to be unpredictable and unexpected opportunities. No one can anticipate these events, but those who are best prepared for them will triumph over those who are not.
This should be the essence of planning in radio: Doing the unexpected. Capitalizing on new opportunities. Trying something new. A year from now radio may still be struggling for revenue. Or perhaps business will pick up. Are you equally prepared for both possibilities? As bad as things seem, there will be some sort of recovery. The stations that are prepared will capitalize on the turn and make gains at the expense of stations that continue with a strategy based on continued problems.
The stations that have cut expenses to the bone will be particularly challenged to respond to a recovery. Once the savings are baked into the budget, it will be very difficult to put those expenses back in, particularly in mid-year.
Looking beyond today’s problems, radio faces many technological challenges that have nothing to do with the recession. Is your station nimble enough to respond to changing opportunities? Surf technological developments, but be cautious about locking into a single path. Podcasting may be here to stay, but it may not make sense for all stations. Even if you’ve invested resources in podcasting, are you willing to pull the plug if it turns out to be a dead end? Not too long ago we all needed to be on MySpace — now it is Facebook. What will be next? Are you flexible enough to switch your focus?
If we need to prepare, not plan, is there a place for strategic research? Definitely, provided research is designed to better understand today. Research can provide an insight into the listener’s mind. Research tells us how the tectonic plates of fashion and pop culture are shifting. It tells us what listeners think of our radio station. To prepare for tomorrow we need to understand today. To innovate we need to sort through the countless possibilities and focus on the few that might resonate with listeners. This is the value of research.
People and institutions tend to develop inertia. Most believe that the future will pretty much mirror the present and plan accordingly. Realize that inertia is a radio station’s worst enemy. Instead, embrace the uncertainties of the future. Develop an agile bias for change and innovation. Expect that listener tastes will change and that what is hot today won’t remain so. Assume that in the future things will be different and that what is working today probably won’t work in the future. Instead of defending what and how we do things today, look toward, changing the way things are done. Don’t plan. Prepare!
Richard Harker is President of Harker Research, a company providing a wide range of research services to radio stations in North America and Europe. Twenty-years of research experience combined with Richard’s 15 years as a programmer and general manager helps Harker Research provide practical actionable solutions to ratings problems. Visit www.harkerresearch or contact Richard at (919) 954-8300.
