Battling the Fear Economy

Folio: The Magazine for Magazine Management, Nov, 2001 by Joe Hagan, Jillian Ambroz

Not only did the attacks not deter Gillin from launching, he believes they may stimulate advertisers. "Many companies seen as niche players prior to this event-companies involved in backup, disaster recovery planning, insurance--these are all suddenly seeing their inquiries go off the chart. And these become much more interesting, attractive advertising prospects for us."

READY, SET, BUDGET

HOW DO YOU PROJECT 12 MONTHS OUT WHEN BUSINESS CONDITIONS CHANGE MINUTE-BY-MINUTE? WE ASKED 17 TOP EXECUTIVES FOR THEIR ADVICE.

MICHAEL WOOD, CEO, HANLEY-WOOD There's an old rule in military circles: After a crisis, 50 percent of the information you get is incorrect. It's inflamed by emotion; it's just wrong. A leader's job is to sort out the good information from the bad, and act only on the good. So after September 11, I started getting a Friday report that tells me how many [trade show] booths were canceled; what happened to registration; how many registered on our Web site compared to the week before; how call volume has been; how many insertion orders there were, and our accounts receivable [versus] last week.

Going into 2001, we're going to have two budgets. One is the regular budget based on regular assumptions, that we are headed into a recession. Another is based on 10 to 15 percent worse than that. Hopefully, we'll never have to bring the second one out of the drawer.

MIKE REILLY, PRESIDENT, RANDALL PUBLISHING CO. We're building a budget from the bottom up. We're going to each sales person and asking them to [put customers [into] three categories: people who will absolutely run, people who we are pretty sure will run, and people who: might run. We take the first and multiply that by go percent. Then we multiply the category that's almost sure to run by 50 percent, and then the last by 10 percent-and we come up with a number.

Unfortunately, during these times you have to feed the winners and starve the losers-properties, processes and personnel. Cut back where needed and invest in those that are producing. The sales people who are doing well will make more, and the ones doing less will make less.

MARY BERNER, CEO, FAIRCHILD PUBLICATIONS We're approaching budgeting with a pragmatic view. You have to be realistic. If you get the right business model, right products and right people, then, hopefully, you can outperform the market-which is what we're trying to do. You attack the expense side, totally promote the quality and talent side. You get those three right, then you're well positioned. Don't make short-term decisions, take a long-term point of view. What you do today to save money will screw you up in the long haul. For example: We do Fairchild First Day every year, a state of the union sort of event where employees come in from all over the country. [You would think] that would be the first thing we would cut, but it's the last thing we will cut because it's integral to our decision to value our employees.

TEDD SWORMSTEDT, PRESIDENT AND CEO, ST MEDIA GROUP We revise our forecasts monthly now, if not more often. Basically, they are revised down; we try to adjust pretty quickly. And we communicate that to all of our employees-here's where we are with our plan and here's what that means. You have to keep looking at the future. You have to invest in the right salespeople and then you have to get those people on the road. You have to proceed as if it were still business as usual- but watch your critical cost factors and your cashflow like a hawk. There's not a whole lot that you can really do-you can go crazy and start laying off people, but that's a short-term fix. We'll all weather this-although when it's over, some of the lower-tier publications may not be around.