Anton Savage: 2FM is facing catastrophe; it should look to the history of IBM for inspiration

When the US tech company faced an existential crisis, it brought in a CEO who went back to basics - it’s time for RTE to do something similar.

27th Jun 2024
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Originally published in the Business Post.

2FM has much to learn from IBM. In 1992, the tech company lost more money than any company in American history - $8.2billion, in twelve months. At the time, the received wisdom was that the best course of action might be to torch the place and claim the insurance.

Instead, the IBM board brought in a man with zero tech experience as CEO: the former boss of American Express (a credit card company) and Nabisco (a cracker company). When his appointment was announced, the received wisdom was that it was definitely time to get the matches and petrol.

The received wisdom was wrong. The new CEO led the most remarkable corporate turnaround the world has ever seen - last year, IBM had made enough profit to be able to sink $5 billion into acquisitions and $7 billion into R&D, while still paying out $6 billion in dividends.

In his book on the turnaround, Who says Elephants Can’t Dance?, the credit card cracker man Louis Gerstner attributes the reversal of fortune to many things, prime amongst them clarity of direction and a return to the core values that originally made the company successful.

He said IBM needed to change its culture, re-commit to innovation, listen to clients and start taking the competition seriously. And most of all, it needed clarity on where it was going, because, to quote Gerstner, “if you don’t know where you’re going, any road will take you there”.

Now, 2FM has a once-in-a-lifetime chance to undertake the same kind of soul-searching. The departure of an entire station’s core presentation staff is the radio equivalent of posting an $8.2 billion loss. It is the kind of catastrophe that would have the less resolute reaching for the firelighters and the zippo.

In radio terms, it is the opening of all seven seals. It is death, destroyer of worlds. It is Krakatoa, Nagasaki and Chernobyl all rolled into one. Radio audiences are like oil tankers; defined by inertia, they change direction very, very slowly, so when they head in the wrong direction it can take years to haul them back.

In 2FM’s case, its problems were masked by how long they took to come to fruition. Two body blows hit the station from which it never recovered; Ian Dempsey left, then Gerry Ryan died. Since the former departed, the station sent nearly a dozen champions to take him on. None has overtaken his market dominance.

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