An interesting story from the financial pages recently involves one of the companies we talk about a lot in this blog – Starbucks. It seems that CEO Howard Schultz is experiencing some feelings of remorse about the rampant growth of his massively successful corporation. On the one hand, Starbucks is now sitting at 13,000 stores, and is poised for wider expansion. On the other, Schultz laments the loss of that intimate feeling his coffee shops once had, as hand-grinding the coffee has been replaced by automatic espresso machines. Schultz points out that the hominess of his stores is being threatened by that chain store effect – and yet, the company’s growth plans are moving along unabated.
Clearly, you can’t have it both ways. But Schultz’s apparent angst reminded me a lot of what radio has experienced in the 10+ years since consolidation became the accepted architecture for our business. What has been lost in radio as voicetracking first became the substitute for overnights, and then 7-midnight shows and weekends? How much of that local feel is missing when the morning show is beamed in from a city a thousand miles away, heard on 75 stations nationally? And how can a general manager overseeing six stations possibly nurture them all, much less create important, meaningful relationships in her community?
A lot has been lost as rampant growth has become the highest priority. And yet, in the past couple of years, even radio’s one-time high margins ran out of favor with Wall Street. Today, companies are struggling for modest growth, while new technology that surrounds radio is blossoming. When expansion eclipses everything else in the business model, a company (or an entire industry) can easily lose sight of its original goals.
And that’s what Howard Schultz is worried about today. And yet he continues to grow his coffee empire, content to worry about these cultural issues at a later date. Clearly, the positive state of his business is intoxicating, so why stop with 13,000 stores?
You have to wonder what radio’s CEOs would tell Schultz about bigger being not necessarily better a decade past that go-go consolidation period.
Jacobs Media has consistently walked the walk in the digital space, providing insights and guidance through its well-read national Techsurveys.
In 2008, jacapps was launched - a mobile apps company that has designed and built more than 1,300 apps for both the Apple and Android platforms. In 2013, the DASH Conference was created - a mashup of radio and automotive, designed to foster better understanding of the "connected car" and its impact.
Along with providing the creative and intellectual direction for the company, Fred consults many of Jacobs Media's commercial and public radio clients, in addition to media brands looking to thrive in the rapidly changing tech environment.
Fred was inducted into the Radio Hall of Fame in 2018.
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Hi Fred.
Thanks for the Starbucks post. Howard Schultz did a pretty good job of articulating the DNA (the mission, vision, core values and bedrock beleifs) for Starbucks in his book, “Poor Your Heart Into It” some years ago. Since, they’ve strayed so far from the DNA. For a while, their expansion was fractal-style, i.e., every new store contained the original DNA. A core “DNA” component was their “Third Place” position they aimed to occupy in peoples’ minds. I believe they killed their “Third Place” position in three key ways: building drive thrus; adding hot breakfast sandwiches (it slowed down the barristas waaaay too much); and expansion (it did the same thing it did to major league pitching — not enough passionate talent to fill the ranks). Result: They sent a message contrary to their “Third Place” core value; and combination of over-extended barristas and untalented, uncommitted barristas made the line wait too long and the experience of waiting unsatisfactory. No time or desire left over to sit down and make use of the “Third Place.”
The lessons seem directly transportable to what we do or don’t do on the air.
Bruce Carson, WQBW/WRIT/WOKY on-air guy in Milwaukee