paying-attention

In yesterday's "Media Equation" column, The New York Times' David Carr shares some recent history:

In March 2007, Circuit City came up with a plan to confront softening sales and competition from online and offline retailers: fire the most talented, experienced employees.

Of course, those workers were the retail chain’s single most important point of difference from the legion of Internet retailers and general merchandisers, but in a single stroke, Philip J. Schoonover, the chief executive of Circuit City, wiped out that future.

As a pal of mine used to say when I described a particularly boneheaded course of action I had pursued, “How’d that work out for you, buddy?”

For Circuit City, not so great. The “wage management initiative” erased morale, both for employees and the folks who shopped there. Sales sank after the one-time gain from the layoffs. And last week, the company sought bankruptcy protection.....

....In the digital age, we’re told, the critical difference between success and failure is human capital — those heartbeats and fast hands that can make a good business great. So are newspapers reacting to their downturn as Circuit City did?

My question for Mr. Carr is, Where have you been for the last thirty years? Many of the grizzled fonts of wisdom who are leaving the business in these current rough times got their start during the seventies and eighties. They were the bright-eyed young interns and low-paid recent graduates who were hired to replace the previous generation of highly-paid experts.

Journalism pioneered the strategy of hiring cheaper help to keep overhead down. Of course, in those days the substitutions were engineered through buyouts and attractive early retirement packages, not straightforward layoffs. As a result there were still a few veterans around to show the newbies how it is done. What newspapers are doing now is partly cyclical. There are fewer jobs in traditional newsrooms for the current crop of young guns, but many nowadays are bypassing the traditional outlets.

Carr is exactly right about Circuit City, and that company's fate is a cautionary tale for any business or agency that thinks workers are interchangeable pegs to be plugged into any opening. But what is really needed in a healthy enterprise is a combination -- of employees who have been around long enough to know what they're doing and those who are open to new ideas.

Labels: Circuit City, employee expertise, newspaper business