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Why Bigger Isn’t Always Better

Why Bigger Isn’t Always Better

Lessons from consolidation

Have you read “Guns, Germs, And Steel“? It won the Pulitzer Prize in 1998.

It’s in my Top 10 list. Not the easiest read, but if you love history and want to understand why our world is as it is in 2011, it is worth the effort. It’s a fascinating story.

To greatly simplify, the author, Jared Diamond, a professor of geography and physiology at UCLA, presents scientific evidence to explain the disparity of wealth and power found today in Eurasian societies. He explains why Europe colonized much of Africa and Asia instead of that happening the other way, why America has dominated the world, especially since the 20th Century, and why China may yet stumble in the 21st.

And at the very end of the book, he shows how the lessons he learned from studying these cultural, geographical, and historical examples apply to our modern world, and even to industries and specific businesses within individual countries.

Which made me wonder if what he learned could be applied to consolidated Radio in America in 2011.

Here’s what Diamond has to say about how to optimize your chances for growth and innovation:

We may be able to extract a general principle about group organizations. If your goal is innovation and competitive ability, you don’t want either excessive unity or excessive fragmentation. Instead, you want your country, industry, industrial belt, or company to be broken up into groups that compete with one another while maintaining relatively free communication…

Then, he went even further. His book so impressed the leadership of McKinsey & Company, one of the largest business and management consulting firms in the world, that they handed out over 700 copies to senior executives in their firm.

McKinsey Global Institute “carries out competitive studies of the economies of countries and industries all over the world. They, too, detected a key role of competition and group size in spurring innovation.” And its not bigger is better, nor top down dictates from management.

If you’re serious about innovating in your radio company, and growing as a business — not by cutting employees every quarter, but by increasing the value of your product — you really should read this book.

And then look at how you’ve structured things within your own station, and your own group.

Do you think Clear Channel, CBS, Cumulus, and other big consolidated radio companies fit the optimized description quoted above?

If so, can you share specifics on how their size and/or organizational structure has improved individual station performance as measured by ratings and/or revenue?

Can you point out any great, young, new talent they’ve discovered, or formats they’ve created, that have increased interest in radio?

Finally, if you work for CBS or one of these other huge consolidated radio companies, would you be willing to try to implement a less top-down hierarchical system in one or two of your markets, just to see if there is, indeed, a better way?

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