What a Declining Business Media Means to CEOs
As cost cutting narrows the field of business journalism, it has become more difficult to put out a corporate story — or take one in.(originally published by Booz & Company)
The business media, which expanded greatly during the Internet bubble, is now mired in deep economic crisis. Condé Nast folded Portfolio in August 2009 and McGraw-Hill is said to be close to a sale — or closure — of Business Week. The surviving business magazines, including Forbes and Fortune, are much thinner after the collapse of advertising in 2009. Newspapers around the country, even in major metropolitan areas, are suspending publication of stand-alone business sections and downgrading their coverage. “Many of them have downsized their staffs and reduced the space allocated to business news; in the process, they are losing some of their most experienced business and financial reporters and columnists,” says Myron Kandel, founding financial editor of CNN.
To be sure, the Wall Street Journal, the Economist, and the Financial Times remain active, and Bloomberg News and ThomsonReuters are strong and growing. But even at these (and other) relatively healthy business news outlets, there is a decline in the quality of business coverage. Older, more experienced journalists are being pushed out to cut costs and are being replaced by younger, less experienced reporters. Those journalists who remain on the payroll are often trapped behind their desks, obliged to feed information to the publication’s website and provide video versions of their stories, rather than cultivating sources and delving into the reasons why a merger has taken place or a company is shedding a business. Online sites that cover business are often superficial; they react to rumors or chase the headline of the day. They very rarely offer insightful business coverage.
One might argue that the weakened state of business media doesn’t matter much; it’s simply an overabundant commodity in a tightening market. And many people believe that journalism, by its nature, has an antibusiness bias; why mourn its loss? But the consequences for business decision makers are three-fold, and grave.
First, it means that business coverage could become more negative toward profit and enterprise than it is today. “Young journalists may be too inexperienced to ask the tough questions,” says Alex Jones, a Pulitzer Prize–winning journalist who runs the Joan Shorenstein Center on the Press, Politics and Public Policy at Harvard and is the author of Losing the News: The Future of the News That Feeds Democracy (Oxford University Press, 2009). “But they are equally vulnerable to being manipulated by people who are bad-mouthing the corporations.” Criticism of corporations will be less nuanced, less aware of context, and less insightful. Competent, complacent, and craven companies — or divisions within companies — will all be tarred with the same brush.
Second, the decline in business journalism gives corporate decision makers less of a platform to display and test their own company’s strategy. “It means that there are fewer opportunities for a CEO to get his or her story into the media,” says CNN’s Kandel. “Where are the stories about companies that are innovating and doing good things? They’re not being covered the way they have [been] in the past.”
But perhaps the worst effect is the most subtle: Corporate leaders now have fewer opportunities to learn from one another’s experience, or even to know what’s going on in their regions and industries. Business news increasingly appears on websites and blogs — a far more fragmented, fast-changing, narrowly focused, and unpredictable media environment. The kind of judgment, insight, and broad perspective (even on narrow how-to topics or gossip) that routinely informed a business article is invaluable — but much harder to come by now.
What specifically should a corporate leader do differently in this environment? The first priority is to maintain the visible public presence of his or her own company — to build its reputation as a reliable entity, in a time when the integrity of many companies has come under scrutiny. This means applying the tenets of honest business practice, not just talking about them. Internal communications departments should start to assess how the changes in the media landscape affect their company and industry. Then figure out which news outlets have the most experienced, credible reporters and editors and reach out to them directly, before a major story breaks, to simply sit down and talk through the state of the industry. Or go even further. “If I were a CEO, I would seek out the smartest and most experienced journalists I could find and allow them to do serious and in-depth reporting about my company,” says Harvard’s Jones.
With younger, less experienced business reporters, it falls to PR professionals to spend more time explaining how a company fits into a broader social or economic trend — articulating their company’s stories in a way that the reporters can understand and appreciate. News organizations formerly provided this perspective for themselves, but that capability has eroded. “It used to be easy to put the onus of telling your story on the media because they knew how to do it,” says William E. Collins, Ford Motor Company’s New York–based public relations representative. “But now we have to work harder.”
Meanwhile, it’s more important than ever for CEOs to develop core communications messages that go beyond the issue of profitability and stock price. General Electric Company’s Jeffrey Immelt has been very effective with his company’s Ecomagination campaign, for example. Companies must define the way they appear in the world at large (right down to the policies they choose that may affect their image). Otherwise, they will allow the ad hoc winds of viral media and blogs to shape the way they are seen.
The broader and still unanswerable question is whether the decline in the quality of business journalism will have an impact on the critical business issues of the day: Are trade and globalization positive forces? What constraints should governments and regulators place on corporations? Who is more responsible for innovation and job creation — business or government?
If the shrinking business media loses its ability to raise these questions and provide in-depth news about them, then the workforce and the voting population will be more poorly informed. They’ll lack the perspective, know-how, and appreciation for business that they otherwise would have had. And CEOs whose corporations suffer a damaged reputation will have themselves in part to blame.
- William J. Holstein is a veteran business journalist and author of Managing the Media (Don’t Let the Media Manage You) (Harvard Business School Press, 2008). For more of his work, see www.williamjholstein.com.