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Well, I sure hope someone picks up PWW, and I also hope the reorg will allow F+W to divest or break up a lot of their magazines so the buyers will have someone actually interested in the content they buy.
Businesses do dumb things sometimes. The VP of Engineering (long since retired) at my company once said, "The process is the most important thing!" Not it's not. The PRODUCT is the most important thing. Nobody buys your stuff because you have a great, internationally recognized process. They buy your stuff because they like your STUFF! Bean counters are important, because they help you pay your bills and make sure you're not overspending, but bean counters don't sell your stuff and bean counters don't create product. They just manage finances. (No offense to bean counters, but Thomas Edison, Henry Ford, Steve Jobs, and Bill Gates were not bean counters. Nor were Nakashima, Krenov, or Maloof.) And sometimes the bean counters believe that cutting costs is more important than retaining the quality of your product. If that were true, the likes of Lie-Nielsen, Veritas (Lee Valley), Blue Spruce, SawStop, Powermatic, Festool, and Snap-On would never be successful.
Maybe not entirely relevant, but it feels better to vent.
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Allan Hill
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03-13-2019, 01:01 PM
(This post was last modified: 03-13-2019, 01:02 PM by Handplanesandmore.)
(03-13-2019, 12:31 PM)AHill Wrote: They just manage finances. (No offense to bean counters, but Thomas Edison, Henry Ford, Steve Jobs, and Bill Gates were not bean counters. Nor were Nakashima, Krenov, or Maloof.) And sometimes the bean counters believe that cutting costs is more important than retaining the quality of your product.
Here's a widespread misconception: Bean counters cut costs. They don't; they cut costs at the direction of the owners or those who have the authority. Maloof himself would not cut costs, but someone (I think his wife was the bean counter) could tell him the financial situation and advise him whether costs should be cut. Bean counters' role is to provide the information and advice; the decision rests with the owners. Bean counters can cut costs, but only the costs that are under their direct control. To cut costs in sales, for example, the CEO, not the bean counter (unless he or she acts with the delegated authority), would be the one via the Sales Director calling the shot.
Simon
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(03-13-2019, 10:47 AM)Bob Lang Wrote: . . . . In the 10 years I was there they added layer upon layer of upper level staff who spent their days making up numbers to make the company look good to potential buyers, sucking up to those above them and bullying those below. . . .
In the M&A trade, that's called "putting lipstick on the pig."
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(03-13-2019, 01:01 PM)Handplanesandmore Wrote: Here's a widespread misconception: Bean counters cut costs. They don't; they cut costs at the direction of the owners or those who have the authority. Maloof himself would not cut costs, but someone (I think his wife was the bean counter) could tell him the financial situation and advise him whether costs should be cut. Bean counters' role is to provide the information and advice; the decision rests with the owners. Bean counters can cut costs, but only the costs that are under their direct control. To cut costs in sales, for example, the CEO, not the bean counter (unless he or she acts with the delegated authority), would be the one via the Sales Director calling the shot.
Simon
But when bean counters are hired to be the management, many think their job is to cut costs. Not saying they are all bad. There are plenty of good ones out there. But when your focus is all about cost and not about the product, bad things are going to happen.
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03-13-2019, 03:42 PM
(This post was last modified: 03-13-2019, 07:21 PM by Handplanesandmore.)
Some of them may be qualified accountants but most put in charge of cost cutting are actually consultants...change agents as they say. Again, they advise and owners decide.
When expensive consultants are hired, the owner (or board of directors) already has an agenda to cut costs. He or she just wants to know where or how to cut costs, and justify the cost-cutting moves with an external recommendation. Management consultants fill the latter role well -- for a price.
Simon
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(03-12-2019, 10:50 AM)Phil Thien Wrote: The "problem" isn't bankers, it is the progress (a.k.a. "the Internet").
25 years ago I subscribed to several magazines, purchased magazines at news stands as well.
Today I subscribe to zero magazines, and cannot remember the last time I purchased a magazine at a newsstand. Nor can I tell you where there are any newsstands any longer.
The family that sold F+W saw the writing on the wall, and got out.
The people that purchased the organization thought they'd be able to leverage the print magazines into online revenue generation. Turns out, that doesn't work, either.
There is an abundance of content available for free or nearly free consumption out there, some (much) of it exceeding the quality of the content for which we once paid.
IMHO, this was inevitable.
There is plenty for which we can blame greedy businessmen and banks, I don't think this is one of them. Sorry to say I disagree. The internet is getting the blame for a lot of things going out of business, but the reality is, it's not the internet, but the poor quality product or service businesses provide (or fail to provide). In the case of magazines and newpapers, paper is merely the medium to transmit the information. It could be transmitted over the internet as well. If the quality is good, people will pay for it. If the quality isn't, then people won't. In the case of many of the magazines I've subscribed to over the years, the amount and quality of content has constantly gone downhill since the late 90s. Style and format replaced quality writing. Articles went from several pages of multiple columns of words describing each step, with illustrations, to bullet points surrounded by a lot of white space and photos, that while pretty as a photo, didn't illustrate the steps to be accomplished.
Our local newspaper just announced a cutback, also blaming the internet. But the fact is, they just don't have any content to read. I don't care if I get a piece of paper or if I read it on my tablet; there just isn't any content to read.
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That's a which came first question. Readers are merely the fodder sold to the advertisers. There in I think lies the answer.
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(03-13-2019, 03:42 PM)Handplanesandmore Wrote: When expensive consultants are hired, the owner (or board of directors) already has an agenda to cut costs. He or she just wants to know where or how to cut costs, and justify the cost-cutting moves with an external recommendation. Management consultants fill the latter role well -- for a price.
Simon
The problem with these high priced consultants is that when they recommend cuts, they are not truly familiar with the business, especially in high tech industries, and they fail to properly identify the consequences of the cuts, especially in headcount. I work for a large multinational going through "cost optimization" and those people being "optimized" are doing things essential to the business and when they are gone, there are consequences, generally unintended by the consultants. Loss of institutional memory is also a big hurt to the company.
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When Chrysler did their latest Hemi, they brought back engineers from the 426 hemi days.
Those last years at work were a daily live performance of Monty Python's Flying Circus .
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(03-13-2019, 10:47 AM)Bob Lang Wrote: I can't say that this is a surprise, it's a big enough enterprise that momentum carried it quite a while. When the pirate equity people took over they hired management that was pretty good at flipping companies. The trouble was that the executives that were good at flipping had no clue what business they were in and no idea of how to manage a business for long term success. In the 10 years I was there they added layer upon layer of upper level staff who spent their days making up numbers to make the company look good to potential buyers, sucking up to those above them and bullying those below. The company was always for sale, but they needed to find a buyer who knew less than they did about publishing. Obviously that was not an easy task.
A longer version of the above has been posted on my website.
https://readwatchdo.com/2019/03/popular-...ankruptcy/
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