Telegraaf Media Group (TMG) has hired Bain & Co to assist in developing a strategy. It should be presented early 2012.
So what is that, is the 100+ years old TMG hiring an outside firm to tell them how to run their company?
In fact, it is really quite commendable. TMG is a more or less diversified consumer-oriented local media firm, that is being squeezed on all sides: dwindling circulation, adverse advertising markets, Internet substitution and competition from global (i.e. US-based) Internet services. Hiring a few experts isn't such a bad idea. The point is: there are two very different skill sets involved.
When I started as a financial analyst at an investment management firm, I knew nothing of telecoms, but was appointed 'telecoms analyst' nonetheless. That's how it works in finance. My chief said: "In five years time, you will start to understand how the business works". Sometimes this model works, sometimes it doesn't. Analysts are usually very young and don't get the chance to develop some industry insight before moving on to a different job. Still, there is not much wrong with the model: the job requires two very different skill sets, finance and telecoms, and its fine if you more or less control either one of them. The other you will grow on the job. And importantly: arriving at an investment firm, there is lot's of infrastructure: not just financial models and decision making systems, but access to the best research there is out there. It's a perfect playground for any devoted analyst to learn a new trick.
The same model is applied to politics. Our current government consists of politicians. They have learnt the skill of politics. And one would wish that they would draw on experts for making sound policies. Alas, that appears not to be happening. Time and again, expert advice is completely ignored, as the stupidest of all, Halbe Zijlstra, is not ashamed of to share with the world.
Back to TMG. TMG know all about traditional media, and Bain & Co will tell them to integrate the firm, increase synergies, reduce costs and find new revenue streams. They have six months and will claim expenses to the order of millions of euros.
All that can of course be thought of by the TMG management. Hiring Bain & Co is only done for one obvious reason: drastic measures. Watch out for TMG to announce something big, early 2012 - justified by the Bain & Co suits.