The Dim-Post

May 4, 2016

Exit Weldon pursued by a bear

Filed under: Uncategorized — danylmc @ 11:08 am

Ha-Joon Chang uses the term ‘Private Sector Bureaucrat’ to describe executives like Mark Weldon. Who is obviously a smart guy. He did graduate work at Columbia, worked for McKinsey, was successful at the NZX. But he’s not an inventor or an engineer or industrialist or innovator; he hasn’t created his own company. He runs organisations other people have built, delivering products or services other people thought up – just like senior civil servants do in the public sector. And that isn’t to denigrate civil servants or executives in public companies;  running big, complex organisations in either the public or private sector is hard!

!But there’s this weird culture around executives in the private sector. It’s not enough for them to think of themselves as very senior bureaucrats. Bureaucrats suck! So they’re thought leaders! Wealth creators! Visionaries! And, sure, a tiny number of them are; guys like Rod Drury and can accurately be described in those terms. But mostly they’re Weldons. Smart people who can manage organisations but have never had a visionary thought in their lives, which is why his plan for TV3 consisted of sacking all the expensive news staff and focusing on celebrity gossip and reality TV. Any random person you picked off the street could have come up with the exact same idea, and if they’d executed it with less destructive hubris than Weldon it could have worked. The executive as visionary wealth creator is a mentality that leads to guys like Weldon running around their companies firing everyone and destroying shareholder value because in their eyes, they are the value.

17 Comments »

  1. > Weldons… smart people who can manage organisations but have never had a visionary thought in their lives

    I don’t think it’s fair to say Weldon has no vision. He probably has a vision that you disagree profoundly with, but that’s different.

    For instance, Weldon co authored this report setting out a plan to manage the effects of the GFC on NZ:
    http://img.scoop.co.nz/media/pdfs/0810/Fulldocument101008.pdf

    Here he is setting out his plans for the NZX in 2007:
    http://www.nzherald.co.nz/business/news/article.cfm?c_id=3&objectid=10460841

    And trying to develop a carbon trading platform (which was later sold for a substantial sum):
    http://www.mondovisione.com/news/nzx-tz1-carbon-market-to-the-global-stage/

    > guys like Weldon running around their companies firing everyone and destroying shareholder value

    Actually, the shareholder value of NZX increased substantially over his tenure there.

    I agree he loused up at Mediaworks.

    A.

    Comment by Antoine — May 5, 2016 @ 11:14 am

  2. I loved the photo of Hilary Barry lugging in a box of Champagne for the work celebrations.

    The myth of the hero-CEO really needs to be buried, along with the outsized remuneration packages that it leads to.

    Comment by Conrad — May 5, 2016 @ 2:13 pm

  3. Antoine: “I don’t think it’s fair to say Weldon has no vision. He probably has a vision that you disagree profoundly with, but that’s different.”

    Tunnel vision still counts.

    Comment by Kumara Republic (@kumararepublic) — May 5, 2016 @ 3:42 pm

  4. The digital straw that broke the camels back, seemed to be when he wanted to move his desk into the “newshub’. He seemed to think he was a kiwi bezos with his desk amongst the’assocaites’ along with the heartbreak that goes with working at Amazon.

    gawker.com/inside-amazons-bizarre-corporate-culture-1570412337
    Snip.
    “You literally must re-interview for your position, while in that position, constantly. It comes up at least every three months.”

    Comment by dukeofurl — May 5, 2016 @ 5:36 pm

  5. I git the opportunity to compare notes with on restructuring with a friend who fell foul of Welfon.

    Very similar in many ways but the main one being the changes were being made by someone who didn’t understand the business and the changes were obviously counter productive to anyone who did.

    And in both cases those responsible will walk away with a bit of cash and won’t be held responsible.

    On the brightside, being a NatRad listener, Campbell might get to go back to TV3.

    Comment by NeilM — May 5, 2016 @ 6:16 pm

  6. I blame Danyl for the recent lack of practice with speling.

    Comment by NeilM — May 5, 2016 @ 6:17 pm

  7. The reaction to Barrys resignation has been bizarre, so far I’ve seen
    “Mate of the nation”
    Icon
    Legend
    “Mother of the nation”
    and my personal favourite “The Beyonce of the news”
    Stuff spent the weekend posting story after story about someone who hasn’t died but rather quit a highly paid job reading from an auto cue.

    Back to Weldon I’d be interested to see if tv3 has become more profitable under his watch, never mind if you personally like the pap they are screening Story has started to outrate 7 sharp which Campbell failed to do after the execrable Hosking took it over.

    Comment by Cliff Clavin — May 5, 2016 @ 9:39 pm

  8. Back to Weldon I’d be interested to see if tv3 has become more profitable under his watch

    I’d probably be more informative to know if advertising revenues have increased given that’s their business.
    We can be pretty sure costs were cut but that doesn’t necessarily lead to sustained profits.

    Comment by Gregor W — May 5, 2016 @ 10:35 pm

  9. @Gregor and Cliff

    Yes! The Mediaworks TV brands have been much more profitable since Weldon started running the show. Driven by increased revenues. See eg http://www.mediaworks.co.nz/MEDIAWORKS-TV-WINS-MEDIA-BRAND-OF-THE-YEAR/tabid/1532/articleID/2127/Default.aspx, http://www.newshub.co.nz/business/mediaworks-returns-to-profit-2015022319. (Those are slightly dicey references but there’ll be more authoritative sources out there.)

    OK, there have been downsides – ‘dumbing down’ of content, inflicting The Block on the nation, pissing off staff and driving star turns like Campbell and Barry away – so the changes have not been what you’d call 100% satisfactory or sustainable. But the guy delivered on the bottom line, like he was hired to do. Many leaders might have done a lot worse.

    A.

    Comment by Antoine — May 6, 2016 @ 3:18 am

  10. Thanks for that. They lost a couple of shows that were probably quite important for them along the way too. I’m not convinced losing “star turns” like Campbell and Barry will hurt them that much , Campbells show was never as good as his supporters made out and he was still getting complaints upheld even when it went off the air and despite the over the top coverage this weekend I suspect that there are plenty out there like me who reacted with the same amount of emotion as they would if they heard MacDonalds had taken their ninth favourite hamburger off the menu as they did when they heard she resigned. The last one of their newsreaders I actually liked to any degree turned out to be a raging p addict., it’d be great to see him back.

    Comment by Cliff Clavin — May 6, 2016 @ 5:52 am

  11. Some of the comments here are very accurate about the job Weldon was appointed to do. This is heartening to see given the prevailing schadenfreude mixed with solidarity for MW staff going on elsewhere. As Danyl says, most CEOs are mere technocrats who understand microeconomics and are skilled at high-level decision making in respect of people, contracts and business inputs.

    The big errors Weldon made were in the execution of the strategy insofar as it involved people. He would probably be fine running a financial company, just not one where lots of management of people and egos is involved. Weldon has zero EQ (I used to work for him). Oaktree are financial investors (who specialise in buying distressed assets – reminder, MW was in a bad spot when Weldon was appointed). They tasked him with making the company profitable in a period when all media companies are being turned upside down by changes in consumer behaviour (with netflix etc who will actually watch broadcast TV anymore?). His strategy was pretty much economics 101: reduce costs and increase revenues. He did this by cutting the most obvious cost (the news programmes) and going for the easiest revenues (cheap reality TV programming).

    Where he failed was on two fronts: 1. underestimating the personal cost he was inflicting on journalistic staff which in turn became a business cost when it provoked the vast majority of fellow journalists at other media (who are currently feeling very threatened for the future of their own jobs). When those same journalists are the ones shaping public opinion, its an uphill battle to win. 2. Underestimating the nostalgia viewers have for quality broadcast news, even though the data (ratings, viewing patterns) shows that people are consuming their news in other formats. He probably should have left the news programmes as a “loss leader”, albeit with less of a loss, for the sake of preserving the rest of the business.

    I don’t disagree with Danyl’s point that technocrats such as Weldon are massively overpaid for the value they actually add to a company. Other technocratic CEOs would have (should have) done a better job in managing the “people cost” of the transition to a different MW company.

    Comment by Upton Sinclair — May 6, 2016 @ 9:03 am

  12. Good post, Upton. The first three quarters of “The Jungle” was one of my favourite novels at University

    Comment by Tinakori — May 6, 2016 @ 12:39 pm

  13. Upton Sinclair, MW was in ok shape, what killed it was the financial engineering which loaded up with debt that was impossible to payoff. The end game was to improve the numbers and then SELL it. Creating a big bun fight with employees was never going to make it possible to wrap a big ribbon around and get suckers to buy into an IPO.
    Some things make sense like CH4 to a full reality channel, but as many point out a CEO just has the right staff to do the hard work and hes the one to make a choice. The backroom staff joined the onscreen talent and thats when his days were numbered.

    Comment by ghostwhowalksnz — May 6, 2016 @ 5:28 pm

  14. …technocrats such as Weldon…

    Social engineer of the Daddy State.

    Comment by Joe W — May 6, 2016 @ 9:03 pm

  15. Lotta people here riffing on how CEOs are overpaid.

    Genuine question – what would you do in this hypothetical situation?

    You own a substantial share of a major company with 500 employees. You need a new CEO. Do you:
    (a) Hire an experienced CEO with a good track record for $700K a year, or
    (b) Hire just anyone, as how hard can it be anyway, pay them $200K a year and give each employee a $1K payrise?

    A,

    Comment by Antoine — May 6, 2016 @ 10:25 pm

  16. You’re in a desert walking along in the sand when all of the sudden you look down, and you see a tortoise …

    Comment by Sacha — May 6, 2016 @ 11:35 pm

  17. What kind of tortoise??

    Comment by Antoine — May 7, 2016 @ 4:19 am


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