Rupert Murdoch is a controversial figure, to say the least. But his success is impossible to deny. Veteran economist, Sunday Times columnist and Murdoch adviser Irwin Stelzer reveals how he did it.
As I reflect on my several decades working with Rupert Murdoch, it occurred to me that business managers might profit from some of the lessons contained in what I call ‘The Murdoch Method.’
Let me summarise just a few.
Have a mission
Every successful business should have some mission, something it wants to accomplish that will motivate its workforce and maintain dynamism as it grows - like Google’s desire to make the world’s knowledge available to all. This is not in lieu of concentration on the bottom line, but as a means of maximising long-run shareholder value.
In Murdoch’s case this goal was to discomfit the establishment. He made his companies the ‘us’ and entrenched competitors the ‘them’.
The ‘them’ also included comfortable monopolies and oligopolies - the BBC and the US broadcast networks - to be attacked by Sky and Fox News respectively. It still includes an elite that attempts to impose its cultural preferences on masses of people who prefer football to opera, and who chuckle at the rage induced in elites by The Sun.
Avoid Organisational Neatness
Rigid organisation charts provide neatness; Murdoch’s insistence on the right to temper any such structures with his personal intervention provides fire, fun*, and an on-the-toes attitude amongst even his highest-placed managers - no editor is surprised when Murdoch communicates pleasure or displeasure at a story by communicating directly with the reporter.
Respect the rules – and those setting them
Unlike many corporate leaders, Murdoch treats regulators with respect and courtesy. Regulators hate reading about things that fall within their jurisdiction only after the fact. With occasional exceptions, Murdoch tries to keep them informed of any plans the execution of which falls in their area of responsibility.
Hands on management
When there is a crisis, deal with it personally and promptly, admit error, and convert a problem into opportunity. When there is a deal to be done, hear what advisers have to say, but conduct the negotiations in person, including not only ‘the big picture’ but details that can matter a great deal in the end.
Financing the development of Sky with short-term debt almost brought the media empire down, a disaster avoided because the bankers took Murdoch’s word that he would be more cost-conscious in the future. Lesson learned: ignore the siren call of bankers offering loans.
Pushing the envelope in pursuit of scoops contributed to the damaging hacking scandal, but provided a long-sought opportunity to close the News of the World and introduce a Sunday Sun.
Clearly it hasn’t always worked out – the Murdoch method didn’t avoid the tragic lost opportunity of Myspace, the world’s largest social media platform before anyone had heard of Facebook. An enterprise worth billions was sold at fire-sale prices because Murdoch’s hands-on management style resulted in the destruction of the Myspace culture, an error he himself acknowledges and, like all such errors, regards as a learning experience.
But add up the gains and losses, the advantages and disadvantages of Murdoch’s approach, and you have one that took him from the ownership of a small, struggling newspaper in Adelaide, Australia to the top of a media empire with global reach, now valued in the tens of billions of dollars - even as Murdoch begins to dispose of those parts that cannot match the financial clout of Netflix and Silicon Valley competitors to buy content and performing talent.
There’s more to this story, as the Murdoch method is defined by many other traits: the managerial consequences of two classes of stock, the use of the political power that control of a media empire conveys and handling pressure to ignore principles when markets beckon in non-democratic states.
Not all would be appropriate to all enterprises, but many are, and even those that are not should stimulate managers to ask, ‘why not?’
Irwin Stelzer is the author of The Murdoch Method: Notes on Running a Media Empire (Atlantic Books).
*MT isn’t entirely convinced that Murdoch’s managers and reporters would always see these interventions as ‘fun’, but one imagines they would certainly keep you on your toes – ed.
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