• by Dave Morgan , Featured Contributor, December 18, 2008

Over the past couple of months, I've had a bunch of conversations with folks in the media business, both digital and traditional, about potential strategies to get through this recession -- "getting to the other side" of what may be the longest and severest recession in many decades. As we all know, the media and advertising industry will be hit especially hard by it, given that our industry tends to track so closely to the performance of the economy as a whole.

So, I have been spending a lot of time thinking and talking about what "getting to the other side" of the recession likely means for media companies. However, the more time that I've spent on this question, the more I've become convinced that there is a critical truth here that is largely inescapable. The most important factor for most media companies in surviving recession will be the condition in which a particular company enters the recession, and the conditions of its particular market segment. For some, even the greatest strategies won't be able to overcome horrific conditions. Here are some examples of elements I think are critical for surviving and thriving during this time:

· Another side to get to. This recession will kill off a number of media companies that don't have long-term markets to serve profitably. Too many companies think that just surviving means a future. It does not. Capital and people follow opportunity. Those that may have stayed in a company when it was "any port in a storm" will flee quickly once the storm subsides. Nothing is more important for media companies to do at this time than reevaluate the basic assumptions of their long-term business plans, and change them if they are contrary to empirical evidence. For example, media companies that depend on automotive advertising had better be prepared for a future with fewer manufacturers, fewer deals, more digital focus and, most importantly for U.S. companies, fewer vehicles sold.

· Vision and strategy. Having a market to get to on the other side is a start, but if you don't have a vision and strategy for getting there, which is achievable -- forget it. Once again, surviving won't be enough. In this market, it will be important to know where you going, since you're likely to have to change directions a few times on the way before you get there.

· Cash. Not much to say here. Companies with it have the best chance to make it. Companies that don't, won't.

· Lack of leverage. When I write about leverage here, I mean debt. Companies that are levered with a lot of debt are going to have a lot of trouble, even if they have great cash flow. Just look at Nortel. You can look at Bernie Madoff in that light, too. Ponzi schemes are pure leverage. Running one when times are great and everything is growing is one thing, doing it when things turn down in impossible. Of course, some heavy asset-centric industries like airlines and steel companies seem to be able to move in and out of bankruptcy without killing off their businesses, but I doubt that it will work as well for media companies.

· Loyal, focused employees. Media companies require talent to run. When they are loyal and focused they can do great things. When they're not, business performance suffers immediately. This factor could be a real game-changer for many in the business. Since success for many media companies will mean doing some things differently, and also doing some different things, having folks that can be refocused and made productive quickly will be key.

Finally, given the dire predictions that we're hearing these days, I thought about adding "luck" to the list as well. But, since I am a big believer that you make your own luck, or as Branch Rickey is famous for saying, "luck is the residue of design," I decided not to. Those companies with the right underlying conditions, which pursue the right strategies and execute well, will most likely get to "the other side" in good shape. People may call them lucky, but I would call them good. What do you think?