The Consequences of Budget-cutting

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The Toronto Star’s March 28 story about budget cuts threatening to end publication of the respected Ryerson Review of Journalism has me questioning Ryerson University’s brand strategy (Murray Whyte, “Ryerson Review of Journalism faces the axe: University may eliminate funding as early as this fall: Twenty-year-old magazine offers in-depth analysis”).
However unfair, Ryerson remains dogged by the perception it is more “Ry-High” than university. So it seems strange that administrators would silence one of the voices giving it intellectual credibility and stature as a forward-thinking university.

I wasn’t surprised to learn the Review isn’t a cash cow, but I wouldn’t have measured its value against the bottom line. Murray Whyte’s article notes that the student-produced magazine has, during its 20-year existence, been a top voice in media criticism in Canada and is reputedly among the Canadian media community’s most enthusiastic watchdogs. In fact, Whyte quotes Paul Schneidereit, vice president of the Canadian Association of Journalists, who calls the Review “a voice of sober reflection on journalism” that keeps public discussion about the industry alive.

The Review‘s real value lies in its own brand as a differentiated, high quality knowledge product that captures and promotes Ryerson’s expertise in the field of journalism. Sponsoring the Review gives Ryerson cachet among Canada’s journalism schools, which undoubtedly serves the school well in attracting top students, faculty, and employment recruiters to its program.

Ryerson administrators must feel the school is sufficiently differentiated and doesn’t require products like the Review to bring intellectual distinction to the school. On the other hand, if the Ryerson management team is receptive to ideas about vision and brand development it might reconsider its decision in light of two articles I read last week about marketing in a downturn.

In the April 2003 Business 2.0, Erick Schonfeld and Gary Hamel (“Why It’s Time to Take a Risk Resources are cheap. The competition is paralyzed. The last thing you should do right now is play it safe”) acknowledge the resurgent influence of tight-wad accountants, but they advise managers against undermining corporate futures by slashing budgets. For most companies, Schonfeld and Hamel believe the risk in innovating too little is at least as great as the risk of too much spending. Oversized cuts deprive organizations of their facility to understand what they want to be bold about – they lose sight of their identity and their mission gets off track – which leads to entrenched uncertainty and corporate weakness.

A white paper released by Interbrand deals with similar themes “Branding in a Recession: Managing Value in a Downturn,” March 2003. Authors Tom Blackett, Jeffrey Swystun, and Nick Liddell make predictable initial remarks about branding in a recession: they’re strategic assets that sustain organizations during difficult times, and organizations that do not know the value of their brand (what drives that value, and what skills are required to manage them) will miss opportunities to succeed.

Every so often, however, it is good to be told – and they do, bluntly – that most companies don’t know how to build resilient brands. Even though there is growing appreciation of branding as a source of competitive strength, organizations have been slow to acknowledge that preserving long-term, trend-setting projects gives them a better competitive position. The mistakes they continue to make are simply two sides of the same coin: viewing branding as a cost, not a matter of sustained investment, and regarding research and the promotion of research results as expendable.

Where the Interbrand article shines is when it tells companies what it takes to build a strong brand. For simplicity I’ve reduced their more extensive list to a single, imperative point: good branders never stop communicating. Instead they take advantage of the general decrease in marketing spending to grab a larger share of voice and define themselves in a less cluttered marketplace.

The Review offers Ryerson a chance to possess, at least in this narrow realm, an intellectual brand and escape its Ry-High handcuffs. The school should think carefully about the consequences of cutting its budget.

A side note: I have no complaints with Murray Whyte’s reporting – and cudos to the Star for at least covering the story – but I’m wondering who made the decision that this was an entertainment story better suited for the Life section and not the business pages.
(Originally posted in Knowledge Marketing Watch, March 31, 2003)

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