Hunter: "Everybody quickly learned that I would never accept an incremental idea"

Hunter: "Everybody quickly learned that I would never accept an incremental idea"

In the latest of her dispatches from the Trend Hunter Future Festival in Toronto, Lucy Britner looks at how FMCG manufacturers might learn from one of the major names in US media.

In this era of unprecedented disruption, the need for businesses to reinvent themselves in order to succeed has never been so great. But, what if a company could capitalise on disruption itself, in order to create better business opportunities?

Speaking at the Trend Hunter Future Festival in Toronto last week, Tony Hunter, the former CEO of the Chicago Tribune Media Group, shared how he guided the newspaper through one of the toughest periods in its history. Hunter took on the role at the height of the 2008 global recession - he also had to contend with the consumer shift away from newspapers, driven by the rise of digital and social media. "The icing on the cake," he told attendees, "was when our parent company filed for bankruptcy."

The physical disruption "dislocated" the company's business model, according to Hunter. "We had an antiquated cost structure - all of a sudden, we couldn't afford what we did before."

In order to capitalise on the opportunities created by the disruption, Hunter believes it is important to "play offence".

With the benefit of hindsight, the former CEO outlined the six steps that got The Chicago Tribune business through a period of extensive turmoil.

Assemble a diverse team

"I knew the people that built the culture and the company that we had were not necessarily the right people to change it," he explained. "So, I made significant changes in the senior team - I looked for people with cross-cultural experience, diversity of perspective. I did not hire them on technical skills ... I wanted leaders – we were in a fight for our lives."

Define the right culture

"We knew we needed to define the culture ... this is a step I think people skip."

Hunter said he inherited a culture that was slow-moving, bureaucratic and risk-averse. "We knew we needed to define the culture ... this is a step I think people skip. We were very specific: We needed to be faster, more agile. We also needed a combination of decisiveness and collaborativeness. Don't choose, do both."

Hunter stressed the importance of sharing information with employees; a move, he says, that caused his colleagues at corporate a little angst. "I wanted alignment. We couldn't have marketing going one way and sales going another, operations going another. Everyone needed to be on the bus."

He said part of "playing offence" is to talk about rewards, rather than risk. Getting the culture right is highly important, he added, quoting management consultant Peter Drucker: "Culture eats strategy for breakfast."

For Hunter, Drucker's take on culture doesn't go far enough. "I believe it has a bigger appetite: if you let it, it'll eat organisations for dinner."

Simplify the plan

"We explained to every employee that if we did not change, we would be out of business," Hunter said. "We showed them the numbers. We told them the truth."

The first three steps took months. "I believe in the approach of slow down to speed up when you're doing this," he said. "I needed everyone buying in, seeing their fingerprints on the plan."

Taking time at this stage, Hunter added, allowed the business to go "further, faster", despite the pressure to transform.

Transform the business model

"We knew the newspaper business was not a business we should be in," he says, outlining the company's plan to change. For Hunter, all transformation efforts start with a proclamation from the top. "In the Tribune Tower, I said: 'We are a media and business services company that happens to publish a daily newspaper'. The walls shook."

Hunter's plan included consolidating manufacture and distribution in Chicago - delivering and printing rival newspaper The Chicago Sun-Times; a decision, he asserts, that brought in "tens of millions" in revenue.

"We also knew consumers needed to pay more because advertisers were leaving us in droves. The whole industry was cutting content and charging a little more."

The Chicago Tribune, however, went the opposite way, adding content and value while raising the price to consumers by 30%. "Guess what?" he said. "They paid."

Engage employees

Hunter said this was the hardest stage, with hundreds of employees in declining revenue channels already having lost their jobs. The former CEO insisted although cuts were made, investment took place in other areas. He mentioned digital, with the company hiring a chief digital officer. "We invested in the tech necessary to sell our advertising inventory programmatically. We were the first publishing company to use html.

"Then we created a kick-ass consumer product and rolled out a digital subscription plan."

Hunter also invested in business development. "I knew someone had to manage the innovation pipeline, to make sure we had a balance of short-, mid- and long-term ideas, to make sure someone shepherded the big idea to concept, to test and to implementation. So, we put a team together."

Communication is key when a company is undergoing such upheaval, Hunter maintained. Employees were "afraid", he said, since there had already been layoffs. "We did town halls. I think I did 33 a year – every shift, every employee. We shared the plan, the results, the wins, the losses, what was coming.

"Everybody knew how they were going to help us win, great ideas came from that and we exponentially improved our communication. You can never communicate enough, especially in times in change."

The group measured employee engagement to find if they were "hitting the mark or not" and also to identify ineffective leaders in order to either develop or replace them.

Competing alternatives

"We were not ready for innovation at this point," Hunter stressed to the Trend Hunter attendees. "So, I forced the discussion of competing alternatives. Everybody quickly learned that I would never accept an incremental idea. I always asked 'what's the competing alternative?', and I would push them for more risk" - and a bigger reward.

The approach was extended through the organisation, forcing the group to come up with bigger ideas. "It pushed us beyond incremental, to take bigger, bolder moves because we couldn't win with incremental."

Only then is a company ready for innovation, Hunter argued, with every employee engaged to improve on what they are doing. Hunter's definition of innovation is: 'Injecting continuous improvement into everything you do and never, ever being satisfied'. He also set up a safe space for feedback, telling his leadership team to "grow big ears and thick skin".

Hunter believes these six steps transformed The Chicago Tribune "from a newspaper company to a media and business services company. And one that could thrive".

In terms of results, in the four years of bankruptcy, the group "had best-in-class results, employee engagement scores improved, our management team stayed, our talented people stayed and we built a model for sustainability".