Yesterday we announced that our company, Network Communications, Inc. , had opened conversations with its creditors in order to restructure its balance sheet. The development was reported in Business Week and has appeared in numerous news outlets across the web.
The Business Week reporter did a balanced job in describing the situation. I think one quote sums it up pretty well.
“It’s not a company with a fundamentally broken business model,” McCarthy said. “It’s a company that’s gone through a radical adjustment in size.”
I’m not going to comment on the restructuring process. A lot of media companies, such as Reader’s Digest and Freedom Communications, have gone through restructurings the last two years, emerging successfully as viable businesses with manageable capital structures.
Right now we’re focusing on communicating clearly with our core constituents about what the announcement means for our business. The short answer is, It’s business as usual. NCI is in the enviable position of generating more than enough cash to fund its day-to-day operations.
To help spread that message, we sent out copies of our press release and a detailed Q&A to our employees and business partners. I’ve held a series of webinars to review the materials and address any specific questions. We’re also reaching out to our key vendors and customers.
I’ve also focused on another message: Our future is what we make of it.
The difficult market conditions of the past two years have driven us to be more disciplined, more resourceful and more innovative. This approach has borne tangible business results: We have expanded our customer relationships, we have built new products, we have strengthened existing products and we have managed in such a way that we’ve been able to sustain our business model. We’ve been able to do this because of the remarkable focus and commitment of the people who make a difference every day: The employees and independent distributors associated with the company.
Right now we are facing two basic facts. Unquestionably, an economic recovery is underway. Unquestionably, our customers have been shocked by the changes in their business and are reluctant to increase their marketing spend.
To rebuild our business, we need to help resolve the contradiction between those two facts. We can do this three ways:
- We have to be in front of our customers and help them see that market has improved enough for them to feel confident that they will get a return on increasing their marketing spend;
- We have to be fluent in explaining why our traditional businesses continue to provide value to our customers, in terms of visibility, leads and business results.
- And we have to be energized in showing our customers how our innovative new services, particularly in Internet and social media marketing, can give them powerful ways to expand their brand footprint and build their business.
Executing on these three activities is the most important thing that we can do right now. That is how we will make our future.
A note: I have closed comments on this post because of the sensitive nature of this dialog. If you have any questions you can e-mail me at dmccarthy@nci.com.
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The four images to the right are snapshots of the screens on my iPhone.
