(Re-read, Re-) Focus

FM radios on cell phones - how to increase usage of them, streaming numbers, up from a year ago, are experiencing the annual summer dip, the impending Cumulus-Citadel buyout deal, among several others rumored to be on the radio business horizon and, meanwhile, Congress seems bent on ignoring the hurting economy in pursuit of political aims in the wake of a soft second quarter for advertising and retail.

And, that's just the start of worrisome headlines that not only create heartburn, but tend to get us all spending time on the wrong things.

Which is why I just went to my bookshelf and reread my copy of the 1996 book "Focus" by Al Ries (Harper Business - 800 331-3761), before tackling their new book on how to be an effective marketing person today.

Here are some highlights from the co-author of "The 22 Immutable Laws of Marketing," "Positioning: The Battle for Your Mind," "Marketing Warfare," "Horse Sense: The Key to Success is Finding a Horse to Ride," and "Bottom Up Marketing:"

Ries' daughter Laura did the research for "Focus," which is filled with fascinating facts, precise prognostications and thought-provoking case histories, beginning with Peter Drucker.

In 1954 Drucker said: "Any business enterprise has two and only two basic functions - marketing and innovation. Marketing is the distinguishing, the unique function of the business. Any organization in which marketing is either absent or incidental is not a business and should never be run as one."

As you read "Focus," you begin to realize how lucky we in radio were that re-regulation of our industry allowing consolidation and crossownership, creating the current need to grow by expansion and acquisition did not start to occur until the mid-1990's. Due to lucky timing, we had plenty of examples to learn from as other industries followed the fast growth path. Ries warns that loss of focus causes business failure. He cites numerous short-term growth strategies over the past two decades that didn't live up to their promise and hypothesizes what went wrong.

Sadly, most of us ignored them and have made them all over again in the last 15 years. He observes that it takes about six years for the typical company to go from optimistic predictions of incredible growth due to potential synchronicity to dour admissions of declining profitability due to loss of focus. Just as radio companies are beginning to search for synergies and expansion, Ries cautions us "whether you call this process 'line extension,' diversification,' or 'synergy,' it's the process itself, the urge to grow, that causes companies to become unfocused.

"When annual sales get in the neighborhood of $10 million a year (give or take a few million) a small company often hits the wall and becomes unfocused," he claims. "Ten million is about the time the founder decides the company is getting too big and delegates operating responsibility to three or four key people. Result: Each person...runs in a different direction. The more products, the more markets, the more alliances and company names, the less money it makes. 'Full speed ahead in all directions' seems to be the call from the corporate bridge. When will companies learn the lesson that line extension ultimately leads to disaster?

"If you want to be successful today, you have to narrow the focus in order to stand for something in the prospect's mind." Ries points to lemming-like trends that businesses often fall prey to. "In the seventies, it was diversification. In the eighties it was synergy. The fad of the 90's was convergence, the notion that digital technologies were all coming together. So naturally companies have to merge or set up alliances in order to take advantage of this powerful trend.

"This isn't just about cable and telephone hopping into bed together. It's about cultures and corporations combining into one mega-industry..."

Ries states: "Convergence is against the laws of nature. In biology, the law of evolution holds that new species are created by the division of a single species. Convergence, on the other hand, would have you believe that species are constantly combining, yielding such curiosities as the catdog."

In "Focus," Ries returns to the theories of Drucker, who maintained "concentration is the key to economic results (which) require that managers concentrate their efforts on the smallest number of activities that will produce the largest amount of revenue.

"What drives success," he feels, "is owning a piece of the prospect's mind" -- one word that is the essence of what you do.

"No brand, no company, no corporation can achieve 100 percent share of a market in the face of competition. Once you accept this reality, finding a word you own in the mind is greatly similified. You don't have to face those demons who keep telling you 'let's not give up any part of the market.'

"The question is, what kind of a niche do you want to own? The quality niche? The price niche? The safety niche? The driving niche?"

And, in case you don't think Ries is talking about our business in the year 2011:

"Vertical convergence is best illustrated by the Walt Disney deal to buy Capital Cities/ABC for $19 billion in stock and cash. It's a merge of content and distribution. 'One plus one equals four,' said Michael Eisner, Disney CEO. His thinking is as faulty as his math. Competition is the driving force in improving the breed, not sweetheart distribution deals. From ABC's point of view, they should be searching for the best content. They should not be forced to take the Disney output." Ries characterizes the Disney deal as follows: "One plus one equals maybe one and a half."

It took my breath away as I read those words written in 1996 as those same "Disney" radio assets are just a month away from being consolidated yet again, with promises of even more "value" being unleashed.

Whether you own, run or work for one of today's fast-growing radio super-duopolies, I'd suggest a RE-read of "Focus" by Al Ries. Then, click on that link in the previous sentence to a presentation of radio consolidation strategy from the 1998 RAB convention and ask yourself how well we did then, and what we need to do differently this time.

Big business, the brokers and the bankers are doing what they always do, but for the majority of us who exert no control over any of that - and often feel like we're just along for the ride - our focus is still best placed on innovating great content that drives listening and sells products.