An interesting story from the financial pages recently involves one of the companies we talk about a lot in this blog - Starbucks. It seems that CEO Howard Schultz is experiencing some feelings of remorse about the rampant growth of his massively successful corporation. On the one hand, Starbucks is now sitting at 13,000 stores, and is poised for wider expansion. On the other, Schultz laments the loss of that intimate feeling his coffee shops once had, as hand-grinding the coffee has been replaced by automatic espresso machines. Schultz points out that the hominess of his stores is being threatened by that chain store effect - and yet, the company's growth plans are moving along unabated.
Clearly, you can't have it both ways. But Schultz's apparent angst reminded me a lot of what radio has experienced in the 10+ years since consolidation became the accepted architecture for our business. What has been lost in radio as voicetracking first became the substitute for overnights, and then 7-midnight shows and weekends? How much of that local feel is missing when the morning show is beamed in from a city a thousand miles away, heard on 75 stations nationally? And how can a general manager overseeing six stations possibly nurture them all, much less create important, meaningful relationships in her community?
A lot has been lost as rampant growth has become the highest priority. And yet, in the past couple of years, even radio's one-time high margins ran out of favor with Wall Street. Today, companies are struggling for modest growth, while new technology that surrounds radio is blossoming. When expansion eclipses everything else in the business model, a company (or an entire industry) can easily lose sight of its original goals.
And that's what Howard Schultz is worried about today. And yet he continues to grow his coffee empire, content to worry about these cultural issues at a later date. Clearly, the positive state of his business is intoxicating, so why stop with 13,000 stores?
You have to wonder what radio's CEOs would tell Schultz about bigger being not necessarily better a decade past that go-go consolidation period.