The Maven: The Peter (Kann) Principle

Coverage of Dow Jones' management shakeup missed the point: Journalists aren't CEO-types.
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Editor's Note: Welcome to 'The Business Press Maven,' the alter ego of Marek Fuchs. With humor and a unique eye for the interplay between Wall Street and the press, The Business Press Maven's column seeks to help investors make money (or avoid losing it) by better understanding what they read, hear and watch.

Mental health professionals this week told

The Business Press Maven

to handle nothing sharper than a butter knife. The recommendation came about after he fell into a psychological tailspin over the coverage of Richard F. Zannino's appointment to succeed Peter Kann as CEO of

Dow Jones

(DJ)

.

Only through the magic of psychotropic drugs was

The Business Press Maven

restored to reason. He is now able to write about it all -- so move over Dora and Freud.

Move over too, reporters who covered this issue. As far as investors go, most of you missed the point. Sure, sure, you got the just-the-facts-ma'am part. Dow Jones, the publisher of

The Wall Street Journal

, hailed Zannino as their new king. And Dow Jones, through

The Wall Street Journal

, embodies the traditional media outlet in this day and age. It is challenged on several fronts and not sure how to save readers or margins. And Zannino is the first non-journalist to take the company's reigns since 1933.

Whoa!

Somebody has to say it, so

The Business Maven

will: what in the wide, wide world of multi-billion dollar businesses is going on here? Do you know how blessedly strange it is that, from Dow Jones on, so many journalists have risen to high levels of management in their companies? This cannot be reported as simple fact. Investors -- or anyone else -- cannot understand the current and future states of Dow Jones or others without fully grasping this.

Why was Peter "Khan," the old king, running Dow Jones anyway? Because he won a Pulitzer? And his wife, Karen Elliott House? She had been in line for the throne -- and for what? Make no mistake about it: House won a Pulitzer too, for Middle East coverage, and has a list of journalistic awards that

The Business Press Maven

must genuflect in front of.

But that prepared her to help run a business -- let alone one teeming with challenges? Does covering a portion of the world springing with problems in every direction qualify you to be a leader in an eroding industry?

If you take just one gem of genius from

The Business Press Maven

this week, please let it be this: being a journalist and running a business are two

very

different things. It's a little like water and wine, though few have natural faith you can turn one into the other.

Most journalists don't have the same mindset as CEO types, which is why one group wants to save the world -- or at least expose the seedy underbelly of society and government -- and the other goes for the MBA and stock option city. Interestingly enough, the journalist-managers do seem to warm up quite readily to the stock option part of the equation, but we are talking about the broader picture.

Like automakers

Ford

(F) - Get Report

and

General Motors

(GM) - Get Report

, who did not envision a world when smaller cars would ever be in demand, these media companies got broadsided by watermelon-sized changes they should have seen coming, such as cable television and this whole Internet thing.

Heaven knows -- and so does

The Business Press Maven

-- that not all non-journalist upper management is visionary. Pu-lease, far from it. But can you name a journalist-manager who adapted to his changed industry with foresight that makes shareholders proud -- or, at least, not quite as unhappy? Email me your thoughts; I'm all e-ears.

Just a few years ago, many of these managers were still talking about a cyclical pickup in advertising revenue, unaware or unwilling to see that they were far from the only game in town when it came to classifieds and such, their bread and butter.

Why? Other than being totally different from birth, why can't a Peter Kann emerge as a Steve Jobs?

The Kann types cut their teeth in the working world by spending decades perfecting a very containable 800 words of copy.

But running a media conglomerate is not as containable. Jobs types are dreamers, who can imagine a different future or at least fail trying. A more professional manager, one less emotionally attached to ink, might have let himself see that newspapers were going to get their clocks cleaned on classifieds

et al

, and that this dip wasn't as simple as a down cycle.

Which brings us to something Kann and House were never guilty of: thin coverage.

The Business Press Maven

, however, declares the current crop of reporters guilty of thinness and, worse, in the one area where they themselves are experts: the people who tell them to "jump!" and make them answer: "How high?"

Reporters did not use the appointment of this first non-journalist in 73 years as a springboard to examine who holds the scepter in journalism. Look how

The Wall Street Journal

itself handled the situation and you'll know why

The Business Press Maven

had his grand mal.

The paper noted soberly in its lead on the subject that there was a break "with a tradition of journalists presiding over the company..." Way, way down in the story the issue was examined with a grand total of two skin-deep paragraphs.

The Business Press Maven

can only give you the first, because he'll fall asleep if he has to type both. Parenthetical inserts are my own, to ward off narcolepsy.

"While acknowledging his lack of journalism experience, Mr. Zannino said he was sensitive to the integrity of The Wall Street Journal (YAWN), which he has read since high school (HUH? NERD ALERT.) "I know what will happen if we screw up the Journal," he said (WILL HE ACCEPT FEWER STOCK OPTIONS?). "Having a healthy respect for journalism is important." (WHAT A DRONE.)

That's it for this week.

The Business Press Maven

has to lay down with a cold compress on his head.

A journalist with a background on Wall Street, Marek Fuchs has written the County Lines column for The New York Times for the past five years. He also contributes regular breaking news and feature stories to many of the paper's other sections, including Metro, National and Sports. Fuchs was the editor-in-chief of Fertilemind.net, a financial website twice named "Best of the Web" by Forbes Magazine. He was also a stockbroker with Shearson Lehman Brothers in Manhattan and a money manager. He is currently writing a chapter for a book coming out in early 2007 on a really embarrassing subject. He lives in a loud house with three children.