© THE SEATTLE TIMES COMPANY

THE INTEGRITY OF A VALUES-BASED COMPANY

Financially speaking, the 1990s was a landmark decade. During those years The Seattle Times experienced incredible growth in asset base, cash flow and all-around financial strength.

Cash flow vs. net income. | Our operating cash flow margin is from 1/3 to 1/2 lower than that of a typical publicly held newspaper company. Cash flow, not net income, is our standard of efficiency.

As a private company, we have more freedom than public companies that are pressed by shareholders to post gains each quarter. For instance, we have the luxury of being able to reinvest profits back into the company for continued long-term asset growth.

But as General Manager Carolyn Kelly put it, "This is not about getting rich. It's beyond money. This is about telling the truth and being fair."

Doing the right thing. | Our decisions are guided not only by financial concerns, but also by the code of conduct that arises from our core values. However, doing the right thing is not always a simple matter.

For instance, in 1993 we announced we would no longer accept tobacco advertising. At the time, Publisher Frank Blethen noted the overwhelming evidence that smoking was the country's major health problem and said, "In good conscience, we can no longer provide a forum for promoting sales of these products."

But banning advertising is a loaded topic. We have always been in the forefront of the effort to stop government attempts to regulate or ban advertising since it runs squarely against the First Amendment. We refuse advertising for handguns, escort services, X-rated movies and tobacco even though they are legal products. At the same time we resist the efforts of federal and state regulators to restrict any flow of commercial information so that the public can make up its own mind.

As Frank summed up our position at the time, "In our decision [to ban tobacco advertising], we are exercising the independent judgment that is our responsibility as a newspaper. We continue to believe strongly that government should not be involved in these kinds of decisions."

Advertising dollars vs. serving the community. | Executive Editor Mike Fancher gave another example of how our code of conduct guides our actions in potentially difficult situations.

"Suppose a major advertiser calls with a complaint about coverage they feel puts them in a bad light. In some newspapers the advertising department might say, 'I'll get the publisher to lean on them.'

"When that happens at The Seattle Times, our representative gives them my phone number. The first thing I ask is, 'Are there inaccuracies in the story?' If not, I remind them that we never report on problems that don't exist. We hope they figure out that it's a lot easier to fix the problem than to influence the press."

But, hypothetically speaking, what would happen if we pulled a story to avoid losing advertising dollars? In essence, we would be betraying our public trust. We would lose credibility and, along with it, our readers. Preserving advertising income might seem like a good financial move at first, but it would certainly destroy our integrity and have severe fiduciary repercussions in the long run.

Becoming a model company. | To succeed as a values-based company, it was imperative that we be professionally managed.

We made it a practice to nurture growth by offering personal development opportunities such as the seminars created from Stephen R. Covey's "The 7 Habits of Highly Successful People." Attendance at these seminars is required for managers. Other employees are welcome to attend, on company time, free of charge.

We instituted a "Built to Last" initiative to study and apply "successful habits" outlined in the Collins and Porras book. We found that we were doing many things right.

The effectiveness of our professional management practices has been repeatedly validated by outside experts including well-respected business attorneys and financial institutions. We are always given hearty endorsements. Even so, we constantly check on our management techniques and look for ways to improve them even further.