The Times is confused this morning about the battle being fought around paid and free content. Dan Sabbagh points out that some papers are trying to make a go of it with FREE – The Evening Standard, Stylist and Shortlist amongst others. Meanwhile, other organisations, (News Corp included) are going down the route of PAID – through Pay Walls and Paid for one off content – the most obvious and visible example this week being the meaningless England Ukraine World Cup Qualifier. Apart from the absurdity of the notion of England’s Football Fans gathering in pubs to watch on their lap tops, this argument, like many around this subject, seems to assume that you can only be one or another. Why we think this is confused thinking.

Conventional wisdom has CFOs down as a fairly dour bunch of individuals (although I have a sales and marketing background…) so I am always refreshed to be reminded what a sparky bunch of them I am lucky enough to know. This was our fourth BDO CFO Breakfast Brainstorm conversation flowed to how CFOs could influence culture across their organisation – often in interesting times.

How can a CFO motivate people to focus on the right things across a business? What metrics can be shared across an organisation in order to achieve organisational goals?

I was surprised at what came out of the discussion at first. Clearly it is hard, in fact many people said, ‘dangerous’ to share information too widely across an organisation. This can be for competitive reasons – if your numbers are spread too widely, they are more likely to be found by your competitors. It can also be because some metrics are motivational for some people and downright disturbing to others. As an example, a venture backed CFO told of letting their employees know that they had 18 months cash in the bank. For one particular employee with an academic background and used to longer term funding cycles, this was simply terrifying.

So if you cannot share your management metrics, what can you do? Having a proper mission for a business becomes critical. Not something woolly, wafty, aspirational or jargon based. But one that everyone can understand.

The best example of a powerful mission comes from a great book by Chip Heath & Dan Heath, Made to Stick.

“Herb Kelleher [the longest-serving CEO of Southwest Airlines] once told someone, “I can teach you the secret to running this airline in thirty seconds. This is it: We are THE low-cost airline. Once you understand that fact, you can make any decision about this company’s future as well as I can.

““Here’s an example,” he said. “Tracy from marketing comes into your office. She says her surveys indicate that the passengers might enjoy a light entree on the Houston to Las Vegas flight. All we offer is peanuts, and she thinks a nice chicken Caesar salad would be popular. What do you say?”

“The person stammered for a moment, so Kelleher responded: “You say, ‘Tracy, will adding that chicken Caesar salad make us THE low-fare airline from Houston to Las Vegas? Because if it doesn’t help us become the unchallenged low-fare airline, we’re not serving any damn chicken salad.’”

“Kelleher’s Commander’s Intent is “We are THE low-fare airline.” This is a simple idea, but it is sufficiently useful that it has guided the actions of Southwest’s employees for more than thirty years.”

Chip Heath & Dan Heath, Made to Stick.

But of course to have this type of mission, you need to be really clear about what you are doing as an organisation. You need to have a clear strategy to be able to articulate it clearly.

This was where things got really interesting. In a show of hands, less than half the CFOs in our group felt that they were clear what strategy the CEO had set and therefore could hardly be expected to articulate it clearly across the organisation.

This got us thinking. Of course, in an ideal world:

“The best CFOs have a close, mutually respectful, but not subservient relationship with the chief executive. Those who never disagree and do not stand up to their boss on key matters are not worth having. While every CFO should be a partner to the CEO, they should always believe they report to the board and owners of a corporation.

“As with every senior role, an ability to manage people and a sense of humour are critical.”

Luke Johnson, Numbers guys you can count on. FT

In reality, both the CEO and CFO roles end up spending huge amounts of time doing things other than discussing strategy and culture. How can the CFO, as chief belayer in the business, best support the CEO in their pioneering mountain climbing, if the CEO hasn’t told the CFO where they are trying to go?

More important, how can CFOs broach the notion that their CEO has not set a clear strategy with their CEO?

Now this is a trickier one. Rather than confronting your CEO, or suggesting that they may be remiss in not making things clear, one of the subtlest approaches I heard about this morning was to take some time with your CEO and ask them, “How can I help support your strategy in the business?” This has the advantage of enabling the CFO to engage in a conversation

that could either, demonstrate the unarticulated strategy that the CEO has or, let the CEO realise that their strategy is unclear and their CFO could be just the person to help them define it. Even if this makes for more work in the short term, the future benefits are obvious.

Thank you to all of our CFO participants including: BioCair UK, Biowisdom, E-Stack, ITM Power, nCipher, Plastic Logic, Polysolar, Red Gate Software, The BLN, TTP, Ubisense, Xaar, Zeus, Zinwave.

Thanks to Red Gate Software for the excellent breakfast and for hosting and of course to BDO LLP who have been instrumental in supporting our CFO Breakfast Brainstorm from the outset.

“San Fransisco based Flurry offers cutting-edge analytics, deployment and monetization tools for mobile application developers. Its services platform is offered free to application developers allowing them to better save money, increase revenues and improve their products. Flurry’s platform is built by developers for developers, based on its pioneering experience as one the first developers to build, deploy and market direct-to-consumer applications.” Flurry Website

While Flurry isn’t doing a great job of actually saying what it does, it has done a very interesting analysis of what stuff people use and don’t on their phones. Having looked at 2,000 apps and 200,000 million user downloads across multiple platforms they have a reasonable insight.

While not making reference to the price paid to purchase or use the apps, it is very obvious that fact-based apps are used most frequently and for the longest. This is good for developers of news and real time information.

App loyalty by category

You can see Flurry’s analysis here.

So has anyone invented the, ‘killer app‘? An app so important and useful that no-one can do without it?

Not according to these figures. Even the most important categories of app, based on metric of retention over time, are being used by less than 50% of users after 3 months.

News International launches Times+ as a paid for (£50 per year) loyalty card for readers. A trial Culture+ card has gained 90,000 members in the first year. Katie Vanneck-Smith, MD of News International’s Customer Direct said, “We are moving away from the traditional model of volume in favour of developing more direct relationships with our customers based on their interests and passions.”

More evidence that publishers understand their businesses a lot more than some commentators might think. http://bit.ly/ES0BgDl

I am quite excited about Micro Men for lots of reasons: it is set in my home town; I know a few of the people portrayed; it is about tech entrepreneurs; I was at College with Xander Armstrong who plays Sir Clive Sinclair and he is one of the funniest people I know; I like watching telly and terrible puns. The potential for poor punning is high – it is billed as a ROM -com for example. There is also an important lesson for Cambridge and other technology clusters around the world.

This is the official trailer:

But this programme is more about rampaging egos than computers which is what I hope will make it entertaining.

“One of those who found himself at the business end of Sinclair’s ire was Chris Curry, who’d worked with him at Sinclair Radionics (site of the aforementioned ashtray scenario) since 1966. Portrayed in Micro Men by Martin Freeman, Curry’s unshakable belief in home computing would precipitate one of the most curious chapters in modern British history, his vision ushering in an era when every playground in the country buzzed with exciting talk of ROM, bits, bytes and motherboards.” (From Guardian Preview).

This is a story that is an integral part of the story of the Cambridge Technology Cluster. Never mind the business, this is a story of personal rivalry, petty jealousy, vindictive backstabbing and geek macho posturing that we just don’t get in this town any more – and the town is worse off because of it. If you believe the people who were there that I talk to now, many of the principle players in this particular story were as driven by personal rivalry as by inner drive. Someone once drew a map of the relationships that existed between some of the characters and their respective partners at the time. I wouldn’t spill the beans online but it does make Hollyoaks look quite dull.

To a repeatable story of the time.

Set in the Baron of Beef, whose landlord was a military man like the landlord of the Cumbrian pub in Withnail. This was where the entrepreneurs of the early 80s hung out and showed off. Of course the rivalry between Chris Curry and Clive Sinclair was huge and they were never able to stop themselves when it came to demonstrating their own personal success.

Sometimes the Baron of Beef rivalry boiled over and fights broke out. At the height of the BBC/Spectrum bubble, in the autumn – the conker season – Clive and Chris challenged each other to a conker fight outside the Baron of Beef. As neither of them had conkers on them, they made do with their Rolexes.

Respect.

Jed Christiansen, an excellent fellow, recently compared Cambridge to Ann Arbor and concluded that Ann Arbor could teach Cambridge a lot about DOING. I agree with him but would add that Cambridge should get a bit more antsy and a bit more honest. There are lots of people who disagree with each other, and who don’t like each other who kiss, hug, drink, dine and walk away – then bitch people up behind their backs. Lets just say what we think. Lets find a pub where people can hang out, share ideas and show off.

If clusters want to become the new Silicon Valley of XXXX, they need to be able to disagree with each other publicly and be strong enough to take the knocks. Dave McClure‘s powerful Interant about Jason Fried’s comments on the role of VCs in the sale of Mint.com is a good example of the kind of thing that would never happen in my home town. But it stirred up a very thoughtful debate. Perhaps if we were a little less English, and a little more confident of ourselves, we would have a stronger identity and bigger ambitions.

We don’t have to be rude, and we don’t have to swear, but we should be able to disagree with one another without the fabric of society falling apart. There should be a place for people to hang out in the town. The closest place to this at the moment seems to be The Punter Pub. Shame it doesn’t have WiFi.

You got to be pretty confident that your content is actually worth paying or if you are going to charge for it. How will a newspaper differenetiate between something that is worth paying for and something that is just another recycled press release?

The Evening Standard announced today that it would be moving to FREE circulation thus becoming the,

“the first leading quality paper to go free.” Alexander Lebedev

This is not such a radical move as some have made out and certainly does not herald the collapse of the newspaper industry as we know it. Rather, it represents one response among the many being tried out as publishers move towards more diversified business models.

With a circulation of 250,000 and a cover price of 50 pence (although it has also been sold at the promotional price of 10 pence recently), it is not hard to work out the potential revenue from sales. The Standard must be calculating that by increasing circulation significantly (to 600,000), it can increase revenue from other commercial activities to more than compensate.

The Evening Standard, like most newspapers is far more than just an advertising and newsstand funded publication. You only need look at their commercial website www.esadvertising.co.uk/ to get a feel for how they are making money. Advertising is a small part of the complete solution they offer marketing people – from website visibility, inserts and onserts in the paper, sponsorship, events, on-street ‘solutions’ and sampling, alongside revenue-sharing partnerships and the list goes on. The price a consumer pays on the newsstand should be a small part of the overall revenue that a well run organisation can extract from a reader.

But, as Peter Wienand, IP Partner at Farrer & Co noted, it is a step that goes in completely the opposite direction of News International‘s The London Paper, which closed last month with heavy losses. It could be interesting to see what policy The Evening Standard adopts on-line, given the plethora of publishers announcing plans to start charging for content on-line.

Andy Viner, Head of Media at BDO, notes that the primary advantage the Evening Standard has over the London Paper is that it has a strong brand which give it better chance of succeeding. The key question is whether it can achieve the higher circulation it needs to bring increased profits? Will consumers be turned off by greater advertising if that is what occurs?

At our Future of Publishing Discussion Dinner, held in partnership with BDO, Farrer & Co and Merrill Lynch, this week,  it was noticeable how upbeat the attendees were. With CEO level attendees from businesses including UBM, Incisive, DMGT, Associated Northcliffe, Dennis Publishing, Archant, Newsquest and others, the mood was combative. Held under the Chatham House Rule, one of the key points made was that one publisher talked about the seven ways that they have of monetising a user who visits their website.

Whilst many individuals in the blogosphere have talked about the imminent collapse of the newspaper industry, it is too easy to write ‘the old ways’ off. IBM was widely ridiculed in the late 1990s by the dot com generation for being an industrial behemoth in the computer industry that was on the brink of collapse. Meanwhile it was reinventing itself as a giant of the computer services industry. Of course, other businesses did not make the shift and withered on the vine. The same will be true in publishing.

It is exciting to see innovation in the industry.

Giving publications away for free is not a new idea – business-to-business publications do it on the basis of what they call ‘controlled, free’ circulation. This means that you are asked for some information about yourself and if they feel you are useful enough to them , they send you their publication at no charge.

The Evening Standard’s move is really just a logical extension of this concept into consumer publishing. They have calculated that their money-making marketing solutions machine is powerful enough to generate higher profits by increasing the reach of their consumer base. This is actually a very exciting time to be a publisher.

Great to see this at the top of the trending topics at the BBC website. I was lucky enough to meet William Kamkwamba and hear him talk at the awesome TED Global this year. An incredibly unassuming individual who has, and will continue to, change the world.

This man and this book will inspire you.

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