When a tiny post appeared on Gigaom Monday night, noting that the company had ceased operations and was now controlled by its creditors, every push notification I allow on my phone started buzzing, flashing, and beeping. Tweets, texts, and emails flooded in from everyone I was connected to from my years on staff there.
There was an outpouring of online praise for the writers and editors, who seemed to be as in the dark as their community of readers, judging by the various social media posts by the editorial team. (I’ve seen similar Facebook posts from those on the sales staff, as well, though a few have now been removed.) A freelance writer friend says she’d just signed a new contract with the company as a columnist when the news dropped — even the editors managing freelance budgets must not have known this was coming.
This enormous surprise hints at a larger problem, both at Gigaom and its peers in the media space.
Gigaom, like most private media companies, didn’t share much detail about its finances with employees. Editorial teams, in particular, are often left out of any open discussions on such matters. Few journalists that I’ve met know much about the state of their company’s finances, except maybe the freelance and travel budgets — and that’s about as far as the knowledge runs.
This lack of financial transparency is pervasive throughout the industry — and it’s a problem that media companies would be wise to fix. Doing so can help support the kinds of innovation and transformation that we need.
In 2007, I worked for a small media company in Portland, Oregon. We had several different products — a sustainable business magazine (for which I was the managing editor), a green consumer guide and coupon book business, a custom publishing business, and some marketing consulting work that the founders had started in their early days. The company was expanding into new cities, and we had recently moved into a new downtown office in Portland.
But growth wasn’t without pains. It’s a classic inflection point for many small businesses: Non-revenue generating staff — administrative, production, and support staff, management roles, and the like — become an increasingly necessary part of doing business, while sales and revenue haven’t necessarily caught up with the staff expansion. We could see the stress among the company’s leaders.
At the same time, the media landscape was changing. Having an online relationship with our customers was becoming a critical part of all of the company’s business lines, and the advertising market was in the early stages of its now widely recognized free fall. Daily deal sites were beginning to emerge, and a boom in the green media space had brought in several new competitors to all of our divisions.
“We publish a business magazine,” I remember him telling me then, “and business journalists should get used to seeing what the numbers look like.”
It was a revelation. Sure, as a business journalist, I was used to asking companies about their numbers, looking at earnings statements and SEC filings every now and then. But companies are usually doing whatever they can to put their best foot forward, even in their published numbers. A front-row seat on the finances of my own employer was a different matter entirely.
The transparency made me both a better reporter and a better employee. I could see more clearly the real costs of running the business: how the cashflow cycles worked, how the different business units were related, and what was working — and what wasn’t — for our own products. That enabled me to ask better questions about why decisions were made — and sometimes to understand why big changes needed to happen, even if I didn’t like them.
Financial transparency also made us a better company. An open dialogue about the company’s finances created an opportunity for us to understand the complexity of making decisions in a rapidly changing business environment. We also had more tools for thinking about how to improve our own business unit — and we actually thought about those things. Shortly after the first quarterly financial meeting, I remember developing a custom publishing project with my colleagues on the business team. We all knew that the company needed to find new revenue streams for the magazine business, and we were able to work together to preserve the editorial team’s independence while also looking for ways to create a sustainable model for future projects like this.
Having a shared knowledge about the company’s finances was critical to the success of that project and encouraged collaboration, openness with my colleagues, and we built a process that we could (and did) repeat successfully in the future.
It’s a lesson that I took with me in future roles, including my time at Gigaom, where I started as a copyeditor and ended as the director of product for Gigaom Research. My experience with the inner workings of a media budget had created a sense of urgency for and interest in the business model of my company. I was eager to embrace change that could support the things I love about doing good, serious journalism.
Providing the whole company with a robust picture of where your revenues come from, where the expenses go, and how the two fit together can empower your employees to think creatively about their jobs now, and in the future. This can build a sense of interdependence and collaboration among your teams, which can support your innovation efforts in ways you might never expect.
“Sometimes the most difficult challenges you have in the business are interdisciplinary ones,” Blosser told me when we spoke this week about why he’s still sharing financial information with his staff. “You need people in different parts of the business to work on it.”
Our industry is undergoing incredible changes, and finding a way to thrive amid the new economic and technology context is critical to the success and transformation of traditional companies and startups alike. Managers with direct budget responsibility tend to focus on meeting goals and targets in the short term. But when other employees have access to this information, they can contribute to the conversation in different ways, supporting and critiquing strategic efforts.
It’s too late to know how that sort of openness might have helped Gigaom — but across the industry, editorial teams need to be considered equal partners in its transformation.
Celeste LeCompte is a 2014-15 Nieman Fellow. Previously, she was the managing editor and director of product for Gigaom Research, one of the first subscription products offered by a major blog network.