Article: Pay People to Be Healthy

How to reform healthcare? This article reminds me of how the city of Ashville, NC, succeeded at reining in its expenses by retraining its employees to live more healthy in the first place, before dealing with catastrophic illnesses and expenses.

http://knowledge.wharton.upenn.edu/article.cfm?articleid=2266

John Miall worked many years for Ashville – a city I happen to love. Among his responsibilities was managing the self-funded healthcare program for city employees. One day he woke up and realized they needed to do this differently. Where he ended up was using money to motivate people with chronic illnesses, first diabetes, to take care of themselves. Employees would get their supplies for free as long as they visited a doctor or pharmacist regularly/frequently, and their progress was tracked.

This approach more than paid for itself in lower costs for the city and for employees. Now John works for a company that helps other organizations implement similar programs. He travels the country, speaking to groups about the amazing results he witnessed in Ashville and encouraging others to adopt wellness- and health-first programs.

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What’s a healthy level of car sales?

Examples abound of unsustainable excesses at home and at work. Easy money on credit was a massive culprit. Just ask Charles Prince, former CEO of Citi. He infamously explained why Citi kept making wacky loans: If the music is playing, you keep dancing. Who cares if you’re dancing off a cliff?

The massive volume of car sales is a quintessential example. Americans used to keep cars longer, but marketers convinced us to buy the latest whiz-bang features. Along came 9/11 and W told us to be patriotic and buy cars. Crazy-low interest rates made it very accessible. Hard to resist.

At the same time, Americans developed zero savings rates, which turned into negative savings by borrowing against our homes – especially when their values fell and foreclosures shot through the roof. It was dangerous, foolish and predatory. I’m not perfect. Did I really need to eat out so much or go to each of the Broadway shows we saw?

Interestingly, I just heard on NPR that it was Alfred Sloan at GM who initiated the concept of planned obsolescence. Every year the car models would get sexier, faster. With the prospect of Mitt Romney getting the top job there, I can only hope that his management-consulting days will pay off with developing an awesome strategy and focusing the best people to design the new GM.

Such a new company has to be profitable with 20% share of 10 million cars a year in the US. That’s down from the bloated 17 million in 2007 (pretty sure that’s the year). Shedding a few brands will help, but I am weary of the marketers and government pushing for sales to return to 15 million+ level. It’s clear we can’t afford, nor should we feel it’s necessary. Maybe we need Suzy Orman to check everyone at the dealer’s door, calculating if the shopper can afford a new car based on income, savings and expenses.

http://www.nytimes.com/2009/05/31/business/31car.html

Is the media industry too insular for its own good?

“The auto companies are historically insular, which is a big part of the reason they’ve stumbled so badly,” wrote Joe Nocera in the 5/23/09 New York Times, pg. 5. “Bill Ford, the previous CEO had spent his life in the family business; he new some of these things needed to be done, but he could never bring himself to pull the trigger.”

http://www.nytimes.com/2009/05/23/business/23nocera.html?_r=1&scp=1&sq=ford’s%20cheerleader&st=cse

I’ve been thinking this exact concept about the media/publishing industry for a few years. We are at crucial juncture of enormous change in consumer demand and the advertising-supported business model. Business-school basics tell us that today’s giants literally can’t change gears to tear themselves apart and build models for new realities.

Part of this reality in media, I believe, is due to not bringing in enough new talent from other industries. We think this industry so different from others that we shun the idea altogether. Instead, we could learn so much from how other industries approach and solve similar problems.

What are some examples that you think fit?

Also, media companies historically are not big recruiters at MBA programs. In the late 1990s I applied to and visited three top-ranked MBA programs at universities with top-ranked j-schools: Northwestern, NYU and Columbia. Each time I asked about media companies that recruit, and each responded with a blank stare. This was particularly dumbfounding at NYU, where Condé Nast’s then-CEO, Steven Florio, got his MBA.

That’s because companies tend to put too much focus on having experience in the industry. Not that we want everyone in the company to have zero industry experience, but a healthy balance is needed to avoid groupthink.

Here is a review of execs from select media/news companies, based on the companies’ websites. It’s a work in progress that I will continue to update. The evidence so far suggests minimal outside experience.

New York Times Company (5/26/2009)
* Chairman/Publisher: Arthur Sulzberger – No outside experience listed; Poly sci undergrad, Management program-Harvard
* President/CEO: Janet Robinson – School teacher before 1983; English undergrad, Management program-Dartmouth
* Vice Chairman/President/COO: No outside experience listed; Undergrad major unknown, MA in English-Lehigh, MA in journalism-Missouri, MBA-Emory
* Sr VP/CFO: James Follo – CPA firm before 1994; Accounting undergrad, CPA
* Sr VP Corp Dev: James Lessersohn – No outside experience listed; Government undergrad, MBA-Harvard
* Sr VP Corp Communications: Catherine Mathis – Shipholding and paper companies before 1997; Business undergrad, MBA-Minnesota
* Sr VP Digital Ops: Martin Nisenholtz – Content and advertising roles for telecom and advertising before 1995; Psych undergrad, MA in communication-UPenn

Gannett

Tribune (6/1/2009)
* Chairman, President, CEO: Sam Zell – Real estate scion; Undergrad major unknown, JD-Michigan
* COO: Randy Michaels – Broadcast TV and Radio prior to 2007; Undergrad major unknown
* Exec VP, Chief Admin Office: Gerald Spector – Real estate prior to 2007; Business undergrad
* SVP, Chief Innovation Office: Lee Abrams – Radio prior to 2008; Undergrad unknown
* CFO: Chandler Bigelow – Investor relations prior to 1998; Undergrad major unknown; MBA-Wisconsin
* Pres/Tribune Interactive: Marc Chase – Gov’t, eBay and radio prior to 2008;Undergrad unknown
* EVP, General Counsel: Don Liebentritt – Real estate prior to 2008; Undergrad unknown, JD-Chicago
* SVP Corp Relations: Gary Weitman – PR and broadcast journalism prior to 2008; History undergrad, MA in journalism-Northwestern
* Pres/Tribune Broadcasting: Ed Wilson – No outside experience listed; Undergrad major unknown

McClatchy

Dow Jones

Time Inc.

Hearst

Meredith

Penton

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Our issue with issues

Deep in the psyche of media/publishing veterans is an assumption that is not discussed often: Our issue with issues. There’s a lot of talk about the failing advertising-reliant business model for magazines and newspapers, and about the transition away from print to all sorts of digital distribution.

With print, we’re literally bound to packaging, distributing and marketing content in editions. You don’t see single articles – or hourly updates – from Sports Illustrated or the Kansas City Star on the newsstand, unlike their Web counterparts.

Issues have a special place in readers’ minds. Think about the annual fashion, swimsuit and “list” issues. Edit and sales teams alike love this because it helps to organize their work, at least making it seem easier.

This concept of issues is also paramount to the circulation-auditing business and to advertising. Each audit statement is based on the publication’s “analyzed” issue for that time period. Also, the adds and drops for each issue are presented, hanging out to dry the circulator’s dirty laundry.

On the ad front, marketers buy display space in issues and get discounts on frequency. In magazines we even talk about shelf life of an ad because people save their copies and supposedly look at old issues. (This one even I have trouble with since it’s hard enough sometimes to get through current issues.)

Issues are nice because they provide a tidy way for editors to package the day’s, week’s or month’s stories. Looking ahead, though, I won’t care so much about the March issue of blah-blah magazine. If new packaging, distribution and marketing paradigms are more exciting, convenient and efficient, I’ll forget all about my issues. This is one reason I see replica, digital issues of magazines and newspapers as a transition point.

I still want an organized package of what to read that does replicate the value currently handled by editors – especially the goal of showing me what to read/understand so I’m a well-rounded member of society. But our future with (non-print) newspapers and magazines will be sans issue.

If the Kindle or similar has any chance of lasting into the news-reading future, it will have to accommodate a Web-like fluid, self-updating presentation of articles and data, plus more (and more) social interaction.

Instead of reading articles from a specified time period, we could have our cake and eat it, too. Online, articles are just sitting in a database, tagged and waiting to be sorted/filtered to your heart’s content. Show me not only the editor’s top articles for right now, but also (1) by date so I can catch up from previous days; (2) by reader popularity; and (3) by my social networks’ popularity.

Losing or lost your job?

Losing your job is probably not on your wish list, especially in 2009, when finding a replacement is relatively tough. Make the best of the situation, find the silver lining. Based on my experience – my position was eliminated in September 2008, and I started my new job in February 2009 – here is an approach for handling the situation. Stay tuned for updates.

1. Most likely it’s not your fault – or the fault of your spouse, child, parent, etc. who lost the job. Don’t blame yourself or that person for the situation you’re facing. I know (of) people at every kind of organization getting notice: public, private, for-profit, non-profit, big, small. Focus on what you can control and what’s good in your life.

2. Send an email to everyone you know, telling them what happened and what you’re looking to do. You might need a few days for gathering your thoughts. The most unexpected contacts can be helpful, and don’t discount anything. My realtor pointed me to her son-in-law, a recruiter who told me some truth about working with recruiters in different industries. Invaluable and totally unexpected.

3. Brace for impact. This could be a long haul. Talk with your spouse, etc. about significant life changes you might need to make. You should be optimistic but also realistic and pragmatic about the number of months you could be out of work. My wife had been on maternity leave for the school year but suggested returning early, and luckily she could. Consider pulling young kids out of daycare or at least cutting back the hours significantly. This saves tons of money and provides (hopefully) a once-in-a-lifetime opportunity for most working parents to be with little ones more than breakfast and/or dinner. I loved getting to know my kids’ friends’ parents and teachers; providing my wife extra freedom around her job as long as I was home; and participating in daytime programs I never would have attended while working.

4. Get your network in order and keep it going. LinkedIn is amazing for research. You need to learn as much about the industries and organizations where you want to work. Focus your attention.

5. Plan for major reset of salary and title expectations. A college friend told me not to get hung up about a possible pay cut. She presciently said every company would or should be looking to cut salaries 10%. Focus on feeling good about your contribution to your employer, your growth and, if you have one, your family.

6. Spend your time wisely. Spending eight hours a day online will not get you a job right now. Focus on 1-3 industries where your background is highly or obviously transferrable. Network like crazy into companies that post openings or where you want to work. Join industry associations, and attend events during the day and at night. It’s still all about who knows whom. Don’t know how to do this? Then ask one of those people who keeps offering to help. Get out of the house to see and meet people in person – but at more than “networking” and career events.

7. Spend your time wisely, part two. I regret not volunteering right away, figuring I’d find a job within a few weeks. Other than pitching in a bit at my son’s school, I was a louse. Volunteering is a way not only to feel good by helping organizations and people (including others who are in transition), but also to meet people who could have valuable insights or job leads for you. Maybe find one place that seems like a natural fit for your interests and background, and one that would expand your horizons. Focus on a strength and an unknown.

8. Spend your time wisely, part three. You might not ever have this much time again to work on you. The library offers a treasure chest of freebies to catch up on classic books, new hobbies and movies. On that note, though, for a few bucks a month, it’s worth joining Blockbuster or Netflix to watch even one movie a week. I blew this one. Focus on the inner you.

9. Spend your time wisely, part four. Since not having the time is no longer a remotely valid excuse, exercise more or start exercising. I suggest going in the morning. You feel better all day and only have to shower once.

10. Look at non-traditional employment: contract, temporary and part-time. Hiring companies find these arrangements less risky and good avenues to test potential permanent candidates. Some pay as much as you might have made full-time but without any benefits or so-called security/perks. Many firms in this space are focused on job functions or vertical industries so pick a few that match your background.

11. Print business cards, as suggested by a fellow Missouri alum when we had lunch shortly after I was out of work. These are cheap way to market yourself and feel good about presenting yourself in print. Vistaprint.com is an excellent source; I suggest paying the small fee to avoid having their logo on the back of each card.

12. Create a website that is just about your career, also suggested by the Mizzou colleague. This is an opportunity to learn a new skill and to tell potential employers a deeper story – about what you offer – than your resume or LinkedIn profile. See mine as an example.

13. Subscribe to TheLadders.com if you’re qualified for $100k+ jobs. In addition to searching for high-quality opportunities, you’ll be accessible to recruiters and hiring managers. Also, the daily emails have among the most useful job-hunting info available anywhere. There’s a monthly option, but consider saving some dough with the three-month subscription (or longer). Do not pay to join employmentcrossings.com or any of its affiliates; the job postings are redundant from many other places and therefore not worth the cost.

NY Times: Revenue Loss Putting Cities in Fiscal Vise

“If there’s any light that comes out of this deep national recession, it’s that people have to take realistic views of things they would not otherwise consider at other times,” said NJ Governor Jon Corzine.

New Jersey is infamous for the overwhelming number of local governments and their attachment to home rule. Common sense says we have too many chiefs and high salaries running all these towns, police and fire departments and school districts. When life was much more simple in the 1700s and 1800s, such a landscape was probably ideal. These days I doubt anyone would build a new state that way — it’s inefficient and unsustainable.

“The dire fiscal prospects have sparked a renewed interest in consolidation among New Jersey’s 566 local governments. Princeton Borough and Princeton Township held a meeting last Monday to discuss for the third time the prospect of merging their local governments. Mr. Corzine, who has long said the state has too many governing bodies, welcomed talk of mergers.”

The rallying call is to lower property taxes in NJ – which has the highest average property taxes in the US – by sharing services across municipalities. What’s the best ratio of governing bodies, chiefs and bottle washers? I think a good starting place are ratios of critical municipal employees and public-safety employees per citizen.

But how do you think we should determine these ratios?

http://www.nytimes.com/2009/05/03/nyregion/new-jersey/03citiesnj.html?pagewanted=2&_r=1&ref=new-jersey

Consumer demand for news journalism

There’s a lot of talk about how news journalism will be created, distributed and paid for. However, I’m concerned that we’re not addressing the consumer’s changing appetite for quality news and interest in being a well-rounded, well-informed citizen. With scarcity of time and money a growing reality for an increasing number of people, news journalism may get a smaller share of wallet. If consumers care less and less, then revenue from neither advertising nor subscriptions will be strong enough to support “the collection or dissemination of news itself.” In other words, when demand drops, supply drops to reach equilibrium.

So what are we doing about the demand? Let’s assume aggregate demand for news journalism really is decreasing significantly and will not recover on its own. Industries that go through massive shifts in demand experience consolidation because the market just won’t support so many companies. The weaker players – measured by quality of product, value to customers and economic strength, all relative to the competitive landscape in the present – will not survive at all or as they had been.

To create or stimulate demand, we have to drive awareness, interest and desire among consumers. Both private and public entities can apply marketing basics: Brand marketing, direct marketing and public relations. I am not seeing this on a broad scale to encourage the general public.

Who should take the lead to stimulate demand? In France, the government supports a program providing free subscriptions to 18-year-olds and discounted subscriptions to everyone – to the newspaper of their choice.

With fewer news organizations and people having more ways to spend time, the time and money required to consume news journalism might become so scarce that only a fast-shrinking segment of Americans can afford it: Affluent and/or retired individuals. This will lead to news journalism, as we know it, becoming a boutique product/service instead of the inexpensive, mass-market stuff we have today.