To: All Staff
From: Steve Korn
Date: January 23, 2012
Re: The First Six Months- Where We Have Been and Where We Are Going
On January 11, I passed the six month anniversary of my tenure at RFE/RL. I think it might be helpful to review what we have accomplished during these first months and to set out where we plan to go in the near and intermediate term. As you know, the BBG has voted to merge RFE/RL, RFA AND MBN. If the merger takes place it may impact some of our plans. On the whole I do not think the merger will have a material adverse impact on our core mission. To the contrary, if executed properly, the merger should enhance our effectiveness and supplement our resources. In this memo I have assumed a steady state – no grantee merger or other major structural changes.
The organization I joined on July 11, 2011 had a proud record of accomplishment over 60 years and a significant impact on history during that period. I was excited to find that there is a lot of great journalism being practiced every day at RFE/RL. The impactful stories we celebrated at the Story of the Year Awards in November are by no means atypical of the work we do day in and day out. We can, however, do more by using our scarce funding more strategically and changing our view of what is possible.
After six months without a CEO RFE/RL was in need of leadership and a clear direction. What I found was an organizational structure that was confusing to both the organization’s leaders and its rank and file. There was a pervasive attitude at all levels of the company that there was “no money to do anything” and that the future held no hope of there ever being enough money to do anything. Indeed, many of you had become so used to new rounds of cuts, that you assumed that the company was dying a death by a thousand cuts.
I recount this history to help contextualize what I have done during these six months and why I have done it. Indeed, learning all this history (and much more) became my first order of business. While it was important that I read as much about the company as possible when I started, that effort could not and did not give me the intuitive feel for and understanding of the company’s DNA that I knew I needed to provide effective leadership.
You may recall that I was unable to move to Prague until almost two months after I started with the company. During those two months I spent most of my time working out of our Washington office. It is through the Washington lens that I first saw the company. When I moved to Prague, however, I realized almost immediately that the view from Connecticut Avenue did not provide a complete portrait of the company.
As a consequence, I decided to talk with as many of the 500 people in Prague as I could. During September and October I talked at length with the people in all of our language services and with everyone else in all of the departments that provide support to the language services (finance, HR, technology, etc.). What I discovered was an incredibly impressive mission driven group of professionals who often risked everything for that mission.
FROM PRAGUE: LOOK EAST
Providing first class independent news and information to audiences in our region is our raison d’etre. Everything else is secondary. Many in the company have heard me say on numerous occasions that if we have to choose between “looking east or looking west, we will look east” toward our region. It became apparent to me quickly that the locus of our organization should be in Prague and the bureaus, closer to our target time zones and on-the-ground presence. I have repeatedly emphasized, and you will continue to hear me emphasize that we must foster greater understanding and connection with our local audiences.
As part of the shift towards our local presence, we moved the center of gravity of communications and outreach to Prague. (This is not to say that our DC communications team is not important. To the contrary, they are an essential part of our communications and outreach operations.) We have enhanced our relations with U.S. Embassy Prague. I have participated in and organized local community events, from keynote speeches and moderation at conferences, to the development and unveiling of the Hagibor monument commemorating the significant history of our building site. The latter transpired in close coordination with the U.S. Embassy and the Prague Jewish Community, paving the way for further positive interaction with our host country. At my initiative, we are beginning a partnership with Czech Radio (which emerged from our now defunct Czechoslovak service) to design and implement a campaign to eliminate Prague’s graffiti problem.
SENIOR MANAGEMENT REDUCTION AND REORGANIZATION
I also found that the organizational changes I wanted to make were shared by many of our folks. I was surprised by the degree to which people were direct and explicit about how we should reorganize. With every meeting I felt increasingly certain of the changes we needed to make and the people we needed to promote. The management changes we made at the end of October have become the springboard for most everything we are doing.
We reduced management overhead by streamlining duplicative senior staff and consolidating functions into more rational groupings under five divisions: Chief of Staff, Technology, Administration, Finance and Content, Distribution and Marketing (“CDM”). The most significant of these has been the realignment of the Broadcast division into CDM, which is headed by one Vice President, instead of the prior triumvirate management.
In total we have not replaced eight top management positions that were vacated in the past year. When Michael Marchetti retires on March 31, and John Giambalvo assumes the position of Vice President and CFO, the list will grow to nine. While I promoted some internal staff to carry out the functions assigned to the departed staff, they maintained many of their previous responsibilities at a lower overall cost to the company. For example, Christine Fetzko was promoted to add communications to her portfolio, but she has also retained her duties as Deputy Chief of Staff.
The new senior management team is smaller and more cohesive. Each member understands his or her role and how they fit together. Each manager has been given a mandate to apply strategic and budgetary discipline and focus. This applies not only to senior management, but to all of our managers, especially including the Director of the Central Newsroom, the three Regional Directors and all of our language service directors. The approach we are implementing is to distribute responsibility, authority and accountability to managers throughout the organization. Each manager knows what his or her budget provides, is empowered to manage tradeoffs within that budget during the year and is expected to stay within budget by year end. While this approach is standard at most companies, it is an evolutionary culture change at RFE/RL.
ALIGNING THE BUDGET WITH THE MISSION
As noted above, in my first few months on the job I was told by people at every level of the company that we had “no money for anything”. I was told that the budget was as tight as a tick, and that I should not expect that to change. On one level this is completely true. By most any measure $92 million is an extremely paltry sum with which to cover and broadcast to 21 countries, in 28 languages, while maintaining 21 different locations. Nevertheless, I also know from prior experience that money can be cut or reallocated from most budgets, if one is willing to question assumptions and make difficult choices between competing interests and values.
With this in mind, when we built our 2012 budget I invited our budget officer, Stephanie Schmidt, to come to Prague from Washington. Stephanie, Beth Portale and I spent two weeks going through the budget line by line. We met with every division and department in the company and questioned every expenditure in the budget. The goal was not to cut the total amount of our budget, but to redeploy funds from less important uses to more important uses. Our philosophy is to put as much money as we can into the execution of our mission. This process yielded $1.2 million, while keeping every language service intact. This $1.2 million fund gives us the operational flexibility to do things like providing smart phones for our reporters in Russia, whose ability to cover the protests in Moscow was hampered by the fact that we did not have those devices; increasing travel to the sites of important stories; increasing our ability to hire freelancers in remote locations in our broadcast region; setting aside a fund to aid our journalists who are threatened, harassed and jailed because of the work they do for us; and on Friday I authorized $14,000 to purchase 21 Kevlar vests to protect our staff in Pakistan. In the past we had no mechanism or funds to do any of these things. Now we do.
IDENTIFYING OUR CORE AUDIENCES
Now that we have restructured management, our top priority is to learn more about who our audiences are in each of our services, who we want to reach (if different from who they are), what programming is best for our target audiences and which platforms are best to reach our target audiences. RFE/RL is a collection of niche services (with the possible exception of our Afghan and Kyrgyz services, which have wide in-country distribution). We cannot be all things to all people in each of our territories. We simply do not have the distribution to provide anything but targeted services to key audiences. In November I asked Julia Ragona to lead the process of analyzing and setting target audiences for each of our markets. With the help of our Regional Directors, language services directors (and their staffs), the audience research department and several other people, we completed this analysis in December. Each language service now has a clear target audience. These are the “universes” against which we will measure our ratings and audience shares.
MATCHING OUR PROGRAMMING TO THOSE CORE AUDIENCES
The next step is to undertake a comprehensive review of the programming of each of the language services to assure that the programming content and presentation is designed to optimize its appeal to the target audience. We will have to align not only our content, but our resources, training, support services and research program to the needs of our audiences. Additionally, we need to be sure that we are using and emphasizing the distribution platforms to which our target audiences have access and a preference to use. Obviously, it does not advance our mission if we have excellent programming targeted for a specific audience if, for example, we are distributing it via short wave when the target audience does not use short wave. Our goal is to assure that we are reaching who we say we want to reach on the platforms those people use and where there is potential for audience growth.
Once implemented, we can judge success or failure when it comes to measuring our audiences as a share of the market we define, rather than relying upon the nationally based number we have been using traditionally. I envisage good work with our new research contractor, Gallup, on the subject of niche measurement going forward. I also look forward to sharing results with you as we implement changes within the language services to better align content and resource allocations of staff and funds to support their target audiences on their primary platforms.
This effort will require a sea change in our language services and corporate culture. In the past we have relied on pushing content to audiences without a rigorous understanding of audience demographics, psychographics, needs, or media platform usage. Language services and management will be accountable for executing this new approach.
RE-COMMITTING OUR SUPPORT SERVICES TO THE MISSION
It is also essential that all of our departments and services that are not directly involved in the day to day coverage of news and the creation of programming support and are fully committed to the changes that we are implementing. Groups like our technology, finance, human resources, research, program review, communications and other support units must be in sync with the content, mission, and target audience needs of the language services. All RFE/RL employees fall into one of two groups, those in the language services and those supporting the language services.
Jeremy Bransten has begun the process of reinventing CNR. His view is that there have been too many silos in CNR and too much of what it was doing was not driven by news. As Jeremy explained at Friday’s editorial meeting, he has simplified the newsroom structure so that we can be faster and more flexible. Additionally, in February we will conduct a review of CNR products and usage rates by the language services. The end result will be a CNR that is more responsive to the needs of the language services.
Our English language web site falls under the jurisdiction of CNR and it will also be reviewed over the next few months. The challenge is how to improve the site with the limited resources that we can allocate to it. This has been the topic of a few meetings I have held. Luke Allnutt will lead our effort to improve the site in the coming months.
The size of our editorial staff in Washington is another issue that we have addressed. My view is that the current robust staffing in D.C. is a luxury which we cannot afford. As noted above, when choosing between looking east or looking west, our resource allocation requires that we look east. This is not to say that I believe that we should have no reporters in Washington. I do believe, however, that we have about twice as many as we need. The difference between what we have and what we need in Washington will be reinvested in Prague.
WORKING WITH VOA
Since July, David Ensor and I have discussed a variety of ways by which VOA can help us with our Washington coverage. Our conversations have evolved over time as each of us has become more knowledgeable about the needs and capabilities of our respective entities. It now appears that we will move 5 of our Washington based reporters to VOA to be physically housed in the Cohen building with and among VOA editorial staff. These people will remain as RFE/RL staff and will continue to take direction from Prague. This is a good first step toward the type of full-fledged cooperation and integration which we both feel is the ultimate goal for Washington coverage. This decision is consistent with my view that we must look east. Washington coverage is important for us, but it is not our greatest area of need. We must take full advantage of our expertise in the countries and cultures that comprise our service area.
ENHANCING BUREAU MANAGEMENT
Up to this point I have spent all of my time in either Prague or Washington. I see Prague as the heart of this organization and I thought it vital that I understand our heart prior to venturing to our extremities. The time has now come for me to visit some of our bureaus. I plan to start with Moscow. I will visit our operation there for four days next week. I will start in Moscow for three reasons. First, it is our largest bureau. Second, the Russian service is our most expensive service. Third, there is a new Russian media law that has been enacted and is scheduled to take effect in November, 2012 which may threaten our ability to transmit our programming over Russian licensed broadcast facilities.
I do not plan on a grand tour of all of our bureaus. I do not think that is necessarily a good use of my time or the company’s money. As of now, I am planning on going to Tbilisi in March for the opening of a new school of journalism with which we are involved. While in the “neighborhood” I may also go to Baku and Yerevan. I would like to go to Minsk, as a show of support to our folks there who labor in the midst of a brutal dictatorship, but the prospect of getting a visa is apparently far from likely. In addition, I will visit Sarajevo. At some point in the future I may go to Bishkek and/or Almaty. If the need arises at any point in the future for me to visit any of our other bureaus, I will of course do so.
It appears that our headquarters building in Prague is about to be sold by its current owner, Orco, to an American group, L88. We believe this transaction will be a very good thing for us. If the transaction is completed in the form in which it has been presented to us, we anticipate that several million dollars of “punch list” items that require repair will be fixed and, in addition, we may have additional funds to make other needed capital improvements in the building.
There is another real estate matter that presents an opportunity for us to save money as well. When I first visited our Washington offices this past summer it was impossible not to notice that many offices were empty, as were vast areas of open “bullpen” space. We currently lease two full floors on Connecticut Avenue (the 4th and 11th floors). Clearly, we have much more space than we need. I am advised that the landlord will take back the 11th floor (it is preferable to a prospective tenant because it is above the tree line) and lease the space to a third party. We are planning to start this process in the near future. Our real estate advisor has told us that he thinks the landlord will not have much trouble renting the 11th floor. Let’s hope so because the money we save on rent can be used to enhance our mission.
THERE WILL BE BUMPS IN THE ROAD
Few things in life worth doing are easy. In my short tenure at RFE/RL I have come to realize that this is very true with respect to U.S. International Broadcasting. We are in the unique and odd position of being an independent corporation that is funded by Congress and overseen by a U.S. Government agency. This arrangement has its own special challenges. The good news is that everyone, both on the federal side and private side, shares a common belief in our mission of bringing a free press to people in countries where the indigenous press is not free.
You all know that the poor condition of the global economy puts great pressure on our funding. We do not control, or have very much influence upon, our funding levels. Ultimately, we labor under a budget submitted by the President and enacted, amended or rejected by the Congress. We, together with the BBG, do the best we can to obtain the funding we need, but the final decision is not ours.
What this means is that we are unlikely to have the funding that we think we need. So I cannot make any promises about what the future will bring. Almost certainly, there will be bumps in the road. We will have to adapt creatively to make the best of the resources we are given. We are in good shape for the current fiscal year, but I do not know what the future holds. As soon as I have information I can share, I will.
As we move forward, I see my job as one in which I must serve you, as well as lead you. I will continue to articulate our priorities, and to modify them from time to time as the need may arise. I believe that a business that is not in a constant state of evolution is a business that will not stand the test of time. Accordingly, I will continue to support and create the conditions for innovation and aggressive and enterprising journalism. The changes we are implementing need to be managed in morale enhancing ways. I need your ideas and help in maintaining our morale and momentum.
There are many courageous and dedicated people at RFE/RL and I am honored and humbled to have you as colleagues. You have made the last six months among the most rewarding and exhilarating months of my professional life. The warmth with which you have welcomed me into the RFE/RL family is more than I had any reasonable right to expect. For that, I will always be in your debt. I believe that we can make a real difference in the world and I will make every effort to obtain the resources and support that our mission requires.