“So, what is the bottom line?” You’ve heard the question a hundred times. Or more.
At the end of that sentence, it is clear that the speaker is interested in one thing. Only one thing. How much money did it make (or lose)? This is the ultimate triumph of the bean counters, the accountants who use that single yardstick to measure everything.
A lot of this can be traced to the economic ideas of Milton Friedman, who reduced a business’s needs to one. Profits to shareholders. If that is your only goal, the next step every time will be to turn your business over to the bean counters.
When only the bottom line matters, at least two things happen. Concern for the future vanishes. Instead of operating like an orchardist who nurtures young trees for seven years before the apples come, the bean counters buy someone else’s trees and sell the fruit right away for a profit.
Second, the business’s side benefits vanish. If a company, such as MBNA, the credit-card pioneer, does good things for its community, the bean counters question the cost of lining the hallways with original and local art. Or the cost of giving grants to local libraries and other socially useful organizations. Their finding is always, “too much.” So MBNA sold the art and quit offering grants. And fired the CEO who thought public service mattered. And then it got absorbed by Bank of America. So much for goodwill.
The trend has been fed by the speedier pace of things these days, too. Some folks noted that only one company that had been among the 100 largest in 1900 made the list in 2000. General Electric. The others dropped out at the rate of about one a year. All except GE.
I read recently that when a company makes it to the Fortune 500 today, it can expect to stay no longer than 20 years. So, among the 500, they drop out at the rate of 25 a year.
Remember AskJeeves and AltaVista, two early search engines? Both went to the happy hunting cloud in the sky. AskJeeves reinvented itself. AltaVista disappeared. My late wife used to say, “Evolve or die” when we talked about our business. Jeeves must have heard her as he changed mission from search engine to answer-man in his new turn as ask.com. AltaVista faded into obscurity, selling out to Overture for $140 million, when it had earlier been valued at $2.3 billion.
Railroads and newspapers are two of my favorite things. Both face existential challenges. Railways used to compete to offer passengers the most luxurious sleeping, dining and service accommodations. Large rooms, five-course dinners, barbers and nurses on board. The folks who ran railroads found value in the prestige of offering the best service. And they figured that some passengers who got those services were so impressed that they gave other business to that railway.
But, faced with flying machines, the “railroad mind,” as my father called management’s outlook, dived headfirst into the sand. It killed its own business, cutting trains, changing schedules, making passengers change trains at inconvenient times. Railroads could not compete on speed. A flight from Boston to Chicago takes six to eight hours, including the TSA drama and getting to and from airports. A Boston-Chicago train takes 21 hours.
But, railroads offered a more comfortable way to travel, and for trips shorter than 500 miles they could compete in timeliness. Instead, railroads threw up their hands. Federal subsidies to airlines helped kill the passenger train. The feds build most airports, pay for air traffic control and subsidize aircraft builders with profit-heavy military contracts.
Only when the feds took over in 1971 — government takeover is my least favorite way to save a business — did passenger rail find a new niche. Amtrak features short-to-mid-length runs. It runs 39 trains a day between Boston and D.C., 10 a day between Seattle and the wrong Portland, 24 between LA and San Diego. It has increased riders to 30 million a year from 20 million a decade ago. The passenger train has survived, though only just, by focusing on what it does better than anyone else. Short hops, frequent trips.
Newspapers, I used to tell classes, are the only omnibus news medium, the only one trying to serve all the people all the time with all the news. No longer.
If they are to survive, whether only online or as a combination of online for people wanting a quickie and newsprint for people wanting the rest of the story, newspapers will have to follow the example of other industries that survived in altered form. They need to be like AskJeeves, not like AltaVista. Movies and radio adjusted to television and are still here. General Electric survived too, becoming a conglomerate rather than just a maker of appliances. All focused on what they can do better than anyone else.
Trolls and other posters will not cover the Lewiston City Council. The Sun Journal will. And, like nearly all newspapers, it will do so from an independent perspective, from the point of view of its readers, actual and potential. Few political sites on the web will post reflective columns by Rich Lowry, Leonard Pitts, Marc Theissen and Robert Samuelson. The Sun Journal will. No one online will tell the story of the Basilica of Sts. Peter and Paul. The Sun Journal did. No one else will tell the story of a prisoner who says she was mistreated while being brought to Maine from Florida to face a hearing. The Sun Journal did.
As my wife and I evolved our turkey farm, we constantly adjusted. The whole time, we sold turkeys and turkey products at two to five times the price of conventional turkeys and products. We found customers who wanted better than they could get at the store, and we served them. We evolved rather than dying.
At 78, I won’t live to see whether Amtrak or newspapers can survive by doing what they do better than anyone else can. I hope both evolve rather than die. Stay tuned.
Bob Neal’s father wanted him to work for the Boston & Maine Railroad. That didn’t happen, but he did work for 20 years in newspapers. He still loves the feel of newsprint.
Bob Neal
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