April 17, 2014

New Post on Forbes.com

3 Worst “Best” Lists

New Post On Forbes.com

Aereo Makes Strange Bedfellows

New Post on Forbes.com

Celebrating Celebrities Celebrating Celebrities

New Post on Forbes.com

Comcast-TWC Merger Butt Slaps Content Kings

New Post on Forbes.com

Charles Warner on Forbes.com.

New Post On Forbes.com

http://www.forbes.com/sites/charleswarner/

If Aereo Wins, Here Come the Seven Dirty Words

Please go to Forbes.com to read the full post.

Media Curmudgeon Moves to Forbes.com

My Media Curmudgeon blog will be published initially on Forbes.com.  So I would love it if all of my loyal followers would go to Forbes.com and follow my blog posts there.

I was honored to be asked to blog on Forbes.com, which ranks fourth among Web business sites, with 34.5 million unique visitors a month, ahead of the Wall Street Journal with 32 million uniques.

Please follow the new media curmudgeon on Forbes.com.

Turkish Delight – A Confection, Not a Strategy

My wife and I returned to New York in July from a three-week trip to Jordan and Turkey.

So much about the trip was memorable: Petra, Istanbul, the boat traffic on the Bosphorus, a sunrise balloon ride in Cappadocia, dondurma (Turkish ice cream), and, of course, Turkish Delight – a chewy confection.

But because I’m a media salesaholic (and it is an addiction), I paid particular attention to the way people tried to sell me stuff, especially in Istanbul.

Turkey has between 30 and 32 million tourists a year, most of whom wind up in Istanbul and most of whom are buyers of stuff – rugs, trinkets, clothes, or meals. With 32 million potential buyers wandering around, you’d expect a lot of sellers.

And a lot of sellers there are, and their focus is entirely on meeting their own needs – parting you from your money. It’s me-first selling. The concept of delighting customers by anticipating their every want and need hasn’t yet migrated to Turkey or the Middle East. In America, we even have apps, such as Google Now, that delight customers by anticipating their wants and needs.

Apple for a while became the most valuable company in the world by delighting customers with gorgeous design and gee-whiz functionality. Amazon became the biggest online retailer in the world by delighting customers with relevant recommendations and ease of use.

The strategy of many leading-edge corporations has shifted from maximizing shareholder value, which management icon Jack Welsh called the “dumbest idea in the world,” (See Steve Denning’s column on Forbes.com) to delighting customers first, then worrying about profits.

Selling, too, has been transformed in this era in which the knowledgeable customer is in charge. Such books as Daniel Pink’s To Sell Is Human: The Surprising Truth About Moving Others and Lisa Earle McLeod’s Selling With Noble Purpose: Drive Revenue and Do Work That Makes You Proud emphasize that selling is serving others, helping others get what they want.

Turkish Delight may be a delicious confection, but it isn’t a sales strategy in Turkey or in too many U.S. media sales organizations, especially TV networks when they sell in the upfront market. Gouging buyers and allocating inventory based on increasing share of budgets is a greedy, me-first, street-hawker strategy that’s guaranteed not only not to delight customers but also to drive them to programmatic buying, which will eliminate me-first salespeople.

Media sales organizations had better start thinking about delighting customers not as a nice add on – a confection – but as a strategy.

Beancounters, Not Creatives, Now Run Don Draper’s Ad Business

Don Draper must be spinning in his grave, or he would be if he had read Business Insider’s May 13 post by Jim Edwards titled “The 37 Richest People in Advertising, Ranked By Income.”

Of the 37 people on the list, only one was on the creative side of the advertising agency business. The rest were white male finance, legal, and management types – suits – with one exception: Mercedes Erra, board member of Havas and founder of BETC Euro RSCG, was the only woman on the list. She was #17 at $2.2 million.

The list was dominated by CEOs (11 of the 37) and CFOs, treasurers, chief accounting officers, and controllers – beancounters (ten of the 37) – and the list had only one Don-Draper-type chief creative officer, Jacques Séguéla, of Havas. He was #28 at $1.2 million.

If there were any agency conglomerate sDon Draper would want to work for, it wouldn’t be, WPP, Publicis, or Omnicom, because the big three in terms of total billing were tied for sixth in terms of the number of executives on the list of the 37 richest people in advertising. Draper would have wanted to be employed by little old conglomerate Havas; it had 11 of the 37 (27%).

In Don Draper’s Sterling Cooper Draper Pryce (SCDP) the creative people are the stars, as they were in real-life Madison Avenue of 1970: Bill Bernbach, David Ogilvy, Rosser Reeves, Leo Burnett, and George Lois were all creative superstars who founded (or co-founded), ran, and skyrocketed their agencies to fame, glory, and riches.

However, in the 1980s and 90s, the agency business founders got a little greedy and their agencies started to go public in order for them to get big paydays. Then, large agency holding companies, mostly from Britain and Europe, started gobbling up the stock or just outright bought most of the creative-driven agencies. Finance types like Martin Sorrell and the Saatchi brothers took over and started making decisions based on making money, not on making great advertising.

The beancounters began controlling the ad agency business and started price wars — cutting commissions to earn business – and this trend plus cost-conscious advertisers led by procurement-officer mentalities have driven profits steadily downhill ever since. Instead of delighting customers with great ads, agencies began to delight top executives and board members with big bonuses. The agency business began taking on the greed, ethics, and inequitable compensation of Wall Street and left behind the creativity focus of Draper’s Madison Avenue.

So, instead of paying creative people to make great ads, WPP pays its CEO, Martin Sorrell, $27 million a year, its Finance Director, Paul Richardson, $12.4 million, and its CEO of WPP Digital, Mark Read, $3.4 million – the only three WPP execs on the list of 37. WPP pays Sorrell so much it’s no wonder it can’t afford to pay creative people a lot, and that really would set Draper off on another rage-filled binge.

TV Upfronts: Fingers in the Digital Dyke

The broadcast and cable TV networks have wrapped up their spring narcissistic extravaganzas that try to seduce TV buyers to invest their ad dollars in programming that will appear next fall.

The upfronts are a buggy-whip-technology-like annual ritual that each year are variously predicted: 1) To be the last upfront we’ll ever see, 2) to be more over the top next year, 3) to have lower CPMs, 4) to have higher CPMs, 5) to include online media, and 6) to feature mud wrestling. But when William Goldman wrote about Hollywood that “no one knows anything,” he could have been writing about the critics and pundits who write about the TV upfronts.

Logical, rational thinking based on current industry trends would clearly indicate that the upfront buying season can’t last much longer, because CPMs can’t continue to increase as broadcast and cable TV network audiences continue to decline – it’s an impossible situation that defies the economic laws of supply and demand.

Furthermore, as digital trading and real-time bidding (RTB) increases, it surely will be just a matter of several years until all broadcast (radio and TV) and cable TV inventory will be digitally traded. It’s logical to believe that advertisers will demand a digital trading model in order to bring the CPMs of TV down to the level of online and mobile CPMs. Certainly the digital flood of algorithmic trading is coming.

But not so fast, the TV networks are successfully keeping a finger in the digital dyke with the unspoken, shadowy, tacit support of the big agency conglomerates and massive advertisers who all want to keep TV network CPMs and prices high.

Here how the conspiracy works:

  1. The TV networks require that the big agency buyers submit their advertisers’ budgets before the upfront season starts.
  2. The TV networks then allocate how much inventory each advertiser will get and how much they will pay based on last year’s expenditures.
  3. The agencies want to spend more because their compensation depends, in part, on how much they spend, not necessarily how well they spend it, and agencies want to spend as much as they can so they can gain bragging rights (“WPP spends 33% of all network TV dollars, so we have more clout than anyone,” e.g.).
  4. The huge advertisers like ATT, P&G, Ford, etc. want to keep prices high and the upfront allocations of desirable inventory in tact because it blocks out poorer competitors. It’s the American Way – the rich get richer by keeping the poor in their place.

So, with these three powerful players in the media advertising cabal serving all of their self-interests, don’t expect the TV networks to pull their fingers out of the dyke and allow their inventory to be traded digitally at an auctioned CPM. That would be too democratic, too reasonable, and too catastrophic.

We’ll see how long the networks can keep their fingers in the digital dyke and keep their inventory away from algorithmic trading and RTB. But you have to look at how long it took other industries to address disruptive innovations – storage discs, newspapers, steel mills, auto companies (or ask Clayton Christensen) — even to have an opaque, cloudy look at the answer.

“Stop Koch” – How Dumb Can You Be?

The liberal advocacy organization Free Press is promoting a “Stop the Koch Brothers” campaign that pleads for its members to sign the following online petition:

Dear Tribune Company:

We need journalism that serves communities, not existing agendas. We need media owners who will encourage their reporters to expose corporate and government wrongdoing. Charles and David Koch are more interested in serving their own interests than in providing the news and reporting that people need.

Don’t sell your papers to the Koch brothers.

Really? Then why didn’t Free Press put on its battle armor and try to stop Warren Buffett from buying 88 newspapers, including The Eagle of Bryan/College Station, Texas, or all of Media General’s newspapers, or the Omaha World-Herald, or the Buffalo News?

The answer is probably that the Free Press and other liberals prefer Buffett’s raise-taxes-on-the-rich politics to the avowed right-wing, lower-taxes-on-the-rich and small-government politics of the Koch brothers. Also, liberals assume that the Koch brothers would buy the Tribune Company newspapers (Los Angels Times, Chicago Tribune, and the Baltimore Sun, among others) for ideological reasons in order to promote their conservative agenda.

The conviction that the Kochs are up to their right-wing tricks also seems to be held by reporters in the target papers’ newsrooms, as reported on Harvard’s Nieman Journalism Lab This Week In Review:

The Washington Post’s Harold Meyerson said a straw poll of L.A. Times journalists revealed many of them planned to leave if the Kochs took over. (The Post’s Steve Pearlstein urged them to do just that.) Meyerson cautioned the Tribune Co.’s board not to see a sale to the Kochs as a purely financial move, but as a political move with potentially disastrous implications.

The Tribune Company has just come out of bankruptcy, and the final decision on a sale will undoubtedly be made on the basis of fiduciary responsibility by the current owners of stock, as it should be in a free-market economy, and not decided by whom the employees think is the most politically correct buyer.

For the reporters to quit if the Kochs buy the LA Times is like curators at the Metropolitan Museum of Art quitting in protest because the Kochs have been huge contributors to the great museum, or nurses quitting in protest because the Kochs gave a new wing to their hospital. Do upset journalists believe the Kochs told curators at the Met what paintings to buy or doctors at hospitals they funded how to treat patients?

And in the case of drowning newspapers such as the LA Times, employees shouldn’t care if whoever rescues them is liberal or conservative, just as long as it’s not Sam Zell, who bought the Tribune Company just to waterboard it. It’s virtually inconceivable that the Kochs could be worse than Sam Zell and Randy Michaels.

Furthermore, as pointed out in the Nieman Lab’s This Week In Review:

Forbes’ Tim Worstall argued that the potential political influence of Koch-owned newspapers was being overstated, however, because newspapers’ political views are inevitably determined by those of their audience. “Proprietors do not mould the views of the readers. They chase them instead,” he wrote. The Atlantic’s Garance Franke-Ruta made a similar point, saying that big cities make their papers liberal, not the other way around. Meanwhile, Slate’s Matthew Yglesias (a liberal himself) saw Koch-owned major papers as a possible boon for the country, as a way to improve the anemic state of conservative journalism.

Also, changing ownership of a newspaper won’t necessarily turn around its decline in readership and revenue. As Clay Shirky brilliantly points out in this interview with The European about post-industrial journalism:

The easiest way to get people in institutions to do interesting new things is for that institution to go bankrupt and for those people to change jobs. It’s often more trouble to try and modify existing institutions than it is to start new ones.

In addition, Shirky makes the point that what must change is the culture of the newspaper business, not just the ownership, business model, or procedures. Shirky implies that combining digital and traditional newsrooms is also a bad idea. I think combined newsrooms tend not to work because digital and print are two entirely different mediums with different languages, cultures, ethics, standards, ways of thinking, ways of writing, and ways of organizing.

Not only can you not combine newsrooms, but also you can’t combine sales forces. You can’t teach old-dog print salespeople to sell digital advertising – those dogs won’t hunt. I’ve seen newspaper companies make this mistake over and over because combining sales forces is a decision made by beancounters – it’s cheaper to have one ineffective sales force than to have two effective ones.

Most newspaper companies, though not all, have made one dumb decision after another for the last 15 years, and the Tribune Company is now being encouraged by liberal ideologues to make another dumb decision by not selling to the Kochs.

Don’t Tred On My Profits, Aereo

Broadcast TV networks and stations are really pissed at everyone’s favorite boss, Barry Diller, and Aereo, the TV-signal-grabbing startup Diller is backing.

The TV networks and stations are furious at Aereo because the company uses small, dime-sized antennas to pick up over-the-air TV signals and route them over the Internet to people who pay Aereo a monthly fee of $12 so they can watch broadcast TV on devices such as PCs, smartphones, iPads and other devices connected to a screen and the Internet. Currently the Aereo service is only available in New York City, but the company has raised money to expand to 22 cities in the near future.

Aereo doesn’t pay TV broadcasters for access to their signals and programming, which caused the broadcasters to sue Aereo. But the courts have sided with Aereo (so far), which pissed off the networks so much that News Corp. COO, Chase Carey, speaking for Fox TV, and Haim Saban, speaking for Univision, threatened to move their networks’ programming to cable.

Nice going, guys. That’s like the captain of the Titanic ordering the crew to blow gaping holes in the sides of the sinking ship to let more water in.

The TV networks and their owned stations are probably bluffing, as Jeff Bercovici writes in Forbes:

Skeptics say Fox and Univision must be bluffing, for a variety of reasons: the antenna-using share of their audiences is still significant (about 10% for Fox, maybe 20% for Univision); they’re hemmed in by affiliate agreements and sports rights deals that require them to broadcast; the government might step in as voters freaked out about the disappearance of free television.

While these things are all true, none of them are obstacles so much as speed bumps. “The reality is there’s a very real potential that broadcasters could convert to cable networks,” says BTIG analyst Rich Greenfield, who has been following the networks’ legal tussle with Aereo. “The challenge is over what timeframe.”

So, who are the TV networks and stations threatening? Why are they bluffing?

All you have to do to understand what’s going on is to look at a picture of Chase Carey, COO of News Corp (Fox Television Network and Fox Television Stations).

Chase Carey

Chase Carey

He looks like Colonel Blimp from the Victorian age, and that’s just about the era the TV networks and stations are living in – a privileged, completely out-of-touch, Downton-Abbey-like aristocracy.

In the 1950s through the 1990s, it was virtually impossible lose money with a television station. The TV networks covered a TV station’s overhead with affiliate compensation fees, so all the revenue from local news programming and syndicated programming was profit. Not rocket science.

And TV stations, like greedy Wall Streeters, weren’t satisfied with outsized profits; they wanted what all money grabbers want – more. Therefore, in the 1990s when cable surpassed terrestrial TV in total viewership and the Internet started stealing advertising dollars, how did TV stations in general react? Did they increase their commitment to serving the “public interest, convenience, and necessity,” for which they were given free licenses to use the public’s airwaves?

Of course not. TV stations stopped editorializing, stopped hiring community affairs directors, and reduced public affairs programming in an attempt to keep profit margins up. TV station owners thought they were entitled to their overblown profits as a birthright. They bought into the notion that the purpose of a business was to maximize shareholder value, a mantra that was developed by leading MBA programs, such as those at the Harvard Business School.

While TV station owners were comfortably asleep at the wheel (as fast asleep as owners of newspapers were) and maximizing revenue and profits, Internet entrepreneurs started businesses whose primary purpose was to delight customers, or to organize the world’s information, or to connect people socially – profits didn’t come first.

Can you imagine a TV station corporate owner such as Fox or Univision or CBS pronouncing that their primary purpose was to delight their communities or create shared value for the cities and towns they serve?

No. Corporately owned TV stations cared about maximizing profits, not about serving their communities or delighting their customers. So, should we feel sorry for Fox, ABC, CBS, or NBC that Aereo is grabbing their signals from the airwaves that the public owns? Aren’t the stations getting and ironic dose of their own profit-seeking medicine?

The TV station profit ship is sinking, and Barry Diller is helping. Even though he started the Fox TV network in 1986 and owned a string of TV stations in 1997 (Silver King Broadcasting), Diller was prescient and saw the Internet juggernaut coming in 1993. He is now head of IAC, a leading Internet company, and is worth about $1.8 billion.

But he probably feels $1.8 billion isn’t enough. My guess is that Diller is investing in Aereo not to stick it to cable, though some media pundits believe he is going after cable bundling because he wants a la carte pricing, but because something else is going on. My guess is that he hopes that the major TV station owners will see that Aereo could disintermediate them and will buy Aereo at an outrageous multiple in order to put off the inevitable for another ten years.

What could foil Diller’s plan, if selling to TV stations is his plan, is that the government will take away the valuable electronic spectrum space from TV stations and auction it off under pressure from lobbies more powerful than the National Association of Broadcasters (NAB), such as the telecommunication lobby (ATT and Verizon, et al), the Internet and wireless lobby (Google, Facebook, Microsoft, et al), and the video entertainment lobby (Netflix, Hulu, YouTube, Amazon et al).

The pressure to take away TV spectrum and auction it off to wireless carriers will come from the public, too, because people, especially young people, are abandoning local TV for watching video on their tablets and smartphones, and they don’t see local TV stations doing a lot to make their communities better.

By emphasizing profits over public service, TV stations have not endeared themselves to the people who live in the communities the stations are supposed to serve. Therefore, TV stations’ licenses to use the spectrum are vulnerable, and station owners are terrified. You’d think they might try to turn the situation around by increasing their public service and serving their communities better. However, does Chase Carey look like a guy who puts the common good first, who wants to serve his community, who wants to give Downton Abbey to the servants?

I think he looks like a man who’s saying, “Don’t tred on my profits, Aereo … even if I don’t deserve them.”

The Ten Most Hated Jobs – Why?

Of the blogs I read regularly, Steve Denning on Forbes.com consistently writes the most thoughtful ones about management. Recently he posted about the ten happiest and the ten most hated jobs in America. I think there are some lessons in the lists for managing media organizations and media salespeople.

Ten Happiest Jobs

  1. Clergy: The least worldly are reported to be the happiest of all.
  2. Firefighters: Eighty percent of firefighters are “very satisfied” with their jobs, which involve helping people.
  3. Physical therapists: Social interaction and helping people apparently make this job one of the happiest.
  4. Authors: For most authors, the pay is ridiculously low or non-existent, but the autonomy of writing down the contents of your own mind apparently leads to happiness.
  5. Special education teachers: If you don’t care about money, a job as special education teacher might be a happy profession. The annual salary averages just under $50,000.
  6. Teachers:Teachers in general report being happy with their jobs, despite the current issues with education funding and classroom conditions. The profession continues to attract young idealists, although fifty percent of new teachers are gone within five years.
  7. Artists: Sculptors and painters report high job satisfaction, despite the great difficulty in making a living from it.
  8. Psychologists: Psychologists may or may not be able to solve other people’s problems, but it seems that they have managed to solve their own.
  9. Financial services sales agents:Sixty-five percent of financial services sales agents are reported to be happy with their jobs. That could be because some of them are clearing more than $90,000 dollars a year on average for a 40-hour work week in a comfortable office environment.
  10. Operating engineers: Playing with giant toys like bulldozers, front-end loaders, backhoes, scrapers, motor graders, shovels, derricks, large pumps, and air compressors can be fun. With more jobs for operating engineers than qualified applicants, operating engineers report being happy.

No big surprises here. People who help other people, find intrinsic motivation in their work, and have autonomy seem to be happy. There is much more focus on the meaning of their work and of their lives rather than on money.

The Ten Most Hated Jobs

  1. Director of Information Technology: Information technology directors hold almost as much sway over the fate of some companies as a chief executive, but they reported the highest level of dissatisfaction with their jobs. Why? “Nepotism, cronyism, disrespect for workers.”
  2. Director of Sales and Marketing: A director of sales and marketing plans reported the second-highest level of job dissatisfaction, “a lack of direction from upper management and an absence of room for growth.”
  3. Product Manager: Product managers complained of restricted career growth, and boring clerical work even at this level.
  4. Senior Web Developer: Senior web developers reported a high degree of unhappiness in their jobs, because employers are unable to communicate coherently, and lack an understanding of the technology.
  5. Technical Specialist: A technical specialist reported that for all their expertise, they were treated with a palpable disrespect. Their input was not taken seriously by senior management.
  6. Electronics Technician: Electronics technicians complain of having too little control, work schedule, lack of accomplishment, no real opportunity for growth, no motivation to work hard, no say in how things are done, and mutual hostility among peers.
  7. Law Clerk: Clerkships are among the most highly sought-after positions in the legal profession and the job beefs up a resume. Yet law clerks still report high levels of dissatisfaction. The hours are long and grueling, and the clerk is subject to the whims of sometimes mercurial personalities.
  8. Technical Support Analyst: Technical support analysts help people with their computer issues. This typically amounts to calmly communicating technical advice to panicked individuals, often over the phone, and then going on site only to find the client simply hadn’t turned the printer on. They may be required to travel at a moment’s notice, sometimes on holidays or weekends.
  9. CNC Machinist: CNC machinists operate computer numerical control machines. For the uninitiated, this is a machine that operates a lathe or a mill. Now that the CNC operator has had most of the physical hazards of manufacturing replaced by a machine, there’s not a lot to do but push buttons and maintenance. Since it’s a specialized skill, the job offers no room for advancement.
  10. Marketing Manager: Marketing managers often cited a lack of direction as the primary reason for job dissatisfaction.

Some surprises here. If people don’t feel like they are helping others, don’t have room for growth, or have a job focused on extrinsic rewards (money and profits), it appears that they hate their jobs.

But why do sales and marketing directors and product managers say there is no room for growth, when the odds are the CEOs of a majority of companies come out of these jobs. There must be something else going on. I think that in many of the hated jobs there is focus on money and profits and not on meaning, not on helping others.

So what can media companies and media sales management do to make the people who work in their organizations happier (assuming they care about their people being happy)?

One adjustment media managers can make is to emphasize meaning instead of money, emphasize helping and serving others instead of maximizing revenue, increasing shareholder value, or garnering ratings. If salespeople were told their number-one goal is to delight their customers by getting results for them (results as their customers define them) and their number-two goal is to educate customers and give them insights on how they can grow and be more successful, then salespeople more than likely would be happier; they might say to themselves, “I helped someone today.”

And instead of compensating media salespeople wholly or partially on commission, why not pay them based on delighting customers by giving them superb service as measured by customer satisfaction surveys?

Emphasizing the purpose and meaning of media sales jobs, providing an intrinsically motivating work environment, and encouraging salespeople to delight customers might well make salespeople happier than paying them more money, and, by the way, it might well increase profits by increasing revenues and reducing expenses. It might be worth a try, especially in attracting younger people who are often looking for work that gives them a sense of meaning.

Innovative Move by Marissa Mayer

The blogsphere, newspapers, and magazines have been full of opinions about Yahoo CEO Marissa Mayer’s decision last month to have everyone who telecommutes at Yahoo come into the office. Most of the opinions I read were complimentary of Mayer’s decision for a variety of reasons.

Michael Schrage wrote on the HBR Blog Network that “Marissa Mayer Is No Fool” and Greg Satell’s headline in a Forbes blog was “One More Reason to Applaud Marissa Mayer.” Max Nison wrote in the typically curmudgeonly Business Insider that “Marissa Mayer Got It Right – You Can’t Fix a Broken Culture When People Aren’t In the Office,” and in the more august Atlantic, Ann-Marie Slaughter (a professor at Princeton) opines that “Marissa Mayer’s Job Is to Be CEO—Not to Make Life Easier for Working Moms.”

Admittedly, it might well be confirmation bias that I read items that were positive about Mayer’s decision, but there are two reasons (among many) that I thought were particularly important about her decision to bring telecommuters in out of the cold, so to speak.

One reason, mentioned in several blog posts and articles, was that Mayer’s decision was not based on the notion that “this is the way it’s always been done” or gut feel, which is typical thinking in most legacy media companies, but was based on hard data.

Apparently, Mayer looked at data that indicated telecommuters were not logging into the Yahoo VPN and recognized that a large number of the WFH (Work From Home) people were not fully engaged or not productive.

Another reason I believe Mayer’s decision was right is not one that was indicated (certainly not stressed) in the blog posts and articles I read, and that reason is Yahoo’s desperate need for innovation. And, as pointed out in many books, articles, and research studies, innovation occurs when people mix with other people.

Steven Johnson, in his brilliant book, Where Good Ideas Come From, writes about the vital importance of “the adjacent possible” and liquid networks for innovation to occur, and gives the example of MIT’s famous Building 20:

…the temporary structure build during World War II somehow managed to last fifty-five years, in part because it had an extraordinary track record for cultivating both breakthrough ideas and organizations like Noam Chomsky’s linguistics department, Bose Acoustics, and the Digital Equipment Corporation.

Breakthrough ideas usually don’t come from people working alone at home. Innovation comes from people bumping into each other, from water-cooler discussions, from open-space areas between cubicles, and from buildings like Pixar’s that in his book Steve Jobs Walter Isaacson writes Jobs designed with typical obsessiveness so that people couldn’t avoid random encounters – sort of like Google’s offices, where Marissa Mayer famously worked before she became CEO of Yahoo.

Google and Steve Jobs’s Apple are companies where sustaining and disruptive innovations come by the truckloads. Yahoo has been stuck in the past and hasn’t innovated much, so Mayer had to change the company’s culture and kick-start its innovation engine. She had to kick people out of the isolation in their homes and bring them back to company offices where they could collaborate and innovate.

I have not been in Yahoo’s offices, but I have been in the New York offices of Google and Facebook. The walls in the halls of most of Google’s NY offices are floor-to-wall whiteboards full of ideas and formulas (no pictures allowed), and Facebook’s NY offices are open spaces with rows of tables with people sitting side by side working on their computers.

Google’s and Facebook’s offices are nothing like those of Viacom, CBS, Hearst, or Time-Warner, whose fancy offices more often reflect the overblown sense of self-importance of their executives rather than reflecting the importance of openness and collaboration for innovation.

As legacy media executives struggle to deal with the disruptive innovation of the Internet, and as they lose their distribution advantage to the Web, they should take a page from Marissa Mayer’s playbook, get out of their plush offices, and make a move for innovation.