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Identify, Compensate Success

By Marc Morgan

Ratings, revenue, and profit. The Big 3. Thats all that matters when youre defining success, right? Well, the fact is those things do matter, and in a big way, especially in businesses and industries where debt, Wall Street, and investment companies loom large like radio. Thats why its still smart business to compensate and reward key employees based largely on these three metrics. People focus on things they get rewarded for doing. (And not achieving your goals in these three areas doesnt bode well for a positive career experience, for sure.)

But there are other things that matter, especially to you and your management team. There are several things that, if they are either nonexistent or poorly executed, will make the prospect of achieving your goals for the Big 3 nothing more than a crapshoot.

How about hiring the right people and then developing the highest-potential talent into superstars? How about reducing the hidden virus in your expense budget: turnover in your sales department? Do you have a formal plan, and systems to make sure these things are done well? Do your managers have financial incentives and penalties based on the success or failure of those initiatives? Are there still goals for digital revenue and new business, with rewards and penalties attached? Ive seen examples recently where those categories, while measured, are lumped into the total revenue line, and theres no incentive to focus on these growth areas. Yes, dj vu all over again!

How about other fundamental areas of your operation, like programming systems that ensure that the strategic plan is being executed? These are easy things to let slip through the cracks, so attaching financial rewards and penalties to their execution is important. Not doing these things puts your ratings back into the crapshoot zone. All you are really asking for here is assurance that your programming people are actually listening to your stations.

How about having some of your goals and rewards include a broader part of your staff, like spiffing the whole business department for collections? You could also connect the Big 3 metrics to the entire staff by developing a big metric that, if attained, will earn everybody a reward. It can be a small sum, actually; youd be amazed at how much this means to people even if its only a few bucks. It makes people feel like theyre contributing to the overall goal, and that sends a great message about you as a leader. And these suggestions only scratch the surface of this issue.

What do I have to do in my compensation system to accommodate these new metrics? you ask. I think most compensation systems in place today already have the ability to provide incentives for both quantitative goals (the Big 3) and qualitative goals (people goals, collections, programming systems, etc.). The problem lies in whether that capability is being used, and whether everyone at the management level buys in to the need to compensate this way.

Dont worry about making a list of qualitative goals a mile long. That doesnt make sense. In fact, the beauty of this concept is that you can custom-design the extra metrics to reflect the individual needs of your operation and your people.

Running a successful business begins at the bottom: Build a great foundation of best practices and people, and the end metrics become easier to achieve. Unfortunately, in times like these, its convenient to skip some steps because everyone is so preoccupied by the Big 3. The fact is, though, in times like these its even more important to build a strong foundation for your business. Ive seen time and time again, both over the years and recently, that even the best operators can miss the boat on this.

Take a look at how you define success within your operation and whether you compensate for the whole range of metrics and performance important to your success. I guarantee youll find some areas to tweak, and they will help you succeed going forward.

Marc Morgan is the former SVP and chief revenue officer for Cox Media Group; he retired in 2011. He can be reached at

(10/24/2013 9:50:37 PM)
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- NY

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