Quality Key to Highest City Zone Penetration in U.S.

Newspaper Research Journal, Fall 2004 by Pardue, Mary Jane

The majority of top editors at newspapers today have MBOs or management by objective, a theory developed in the 1950s by Peter F. Drucker. "The idea is this: By setting goals and attaching rewards to their achievement, a company can get the most out of its managers and coordinate their efforts at the same time," Overholser says, citing an editors' survey that found 71 percent said their companies use MBOs. A majority reported "that more than half their bonus is tied to their paper's financial performance."49 At the Democrat-Gazette, there are no MBOs, and pay-based incentives are not limited to management.50

While many corporations have thick employee handbooks, the DemocratGazette doesn't. "We don't have a lot of red tape and a lot of meaningless work requirements," Hamilton said. "At most places our size you'll see a book of 30 to 40 pages. Our book is four." Salaries are based on industry averages, and turnover is low. Hamilton said he hasn't hired a new employee in pre-press, where 31 people work, in four years.51

Hussman prides himself on being a "low cost operator." When managers go to trade shows, they look for the best products-not the most expensive ones.52 Money is spent as needed-determined by the management of the newspaper, not corporate officials hundreds of miles away. Despite the economic downturn, a $2 million expansion was recently completed in the printing plant. "We did that because it was time to do it," Hamilton said. "Because we don't have stockholders to please and the price [of stock] to worry about, we're able to make decisions based on what needs to be done right now." The newspaper wars taught the Democrat-Gazette to be flexible. "When we saw something that wasn't working, we dropped it," Hamilton said. "We do a budget, but if in January we realize we need to spend more money than we projected, we spend it."53

Priorities

Hussman's priorities are readers first, advertisers second, employees third and stockholders last.54 "My dad always taught me that the newspaper comes first," he said. Hussman said the advantages of being independently owned are that the newspaper can focus on long-term results and keep strong ties to the community. He also said an owner who lives in the community will take a real interest in it and try to improve it.

Someone in the community can pick up the phone and call and say I want to come see you about something .... You're neighbors and you have the same community interests.55

Meyer pointed to a study indicating "that a newspaper's perceived ties to its community are a factor in its credibility, and by implication its influence."56

Hussman's approach is in stark contrast to what Laventhol called daily newspapers today.

...less distinctive institutions, less connected to their communities, more homogenized, often led by people whose only instinct seemed to be to increase shareholder wealth.57

Hays said he believes "a newspaper ought to be owned by the people in the community it serves."58

At publicly owned newspapers, the reward structure for managers is moving to a larger market. A publisher for a corporate conglomerate in Little Rock, for instance, might have his sights on Louisville, Ky. "That keeps people from having long-term strategies," Smith said. "You do something that's expensive today, and you don't get a return on it for three years. That's liable to cost you your job or at least your promotion." Most of the top officials at the Democrat-Gazette have been with Hussman for 25 years or more-Smith, Hamilton, advertising director John Mobbs, circulation director Larry Graham, treasurer Alien W. Berry-and they indicate they plan to retire from the Democrat-Gazette.59