Publix Opinion (May 9, 1930)

-PUBLIX OPINION, WEEK OF MAY 9th, 1930 ey DISTRICT MANAGERS SESSION NEWS! SEE OVERHEAD|Promotion Policy\WELFARE AND BARRY OUTLINES ECONOMIES AND BENEFITS OF SYSTEM TO GROUP OF FIELD EXECUTIVES One of the most impressive of the current sessions of district managers in the Home Office was devoted to a discussion of “‘The Economies and Benefits of .Circuit Operation’”’ by John F. Barry. “In order for you to fully appreciate how much more profitable a theatre operated by circuit management should be than the same thea tre operated independently, I shall, show you just what the independent management would have to do if deprived of the_ services made available for him by circuit operation. “The statement has been made that circuit operation limits the individual manager’s initiative, ingenuity, and originality. Some kind of ‘mysterious redtape’ is supposed to tie his ‘| hands and stop his. thinking. H] The fact of the matter is that countless details and worries are taken from his shoulders so that he can really give more time to the important essentials that make a theatre profitable than he could give if he operated independently. The points I want to emphasize are how much more time is made available for the real essentials of operation because of the assistance given and also, that the services -available should be utilized to the fullest, if the advantages of circuit operation are to apply.’ Expert Knowledge a Mr. Barry then took up in turn the functions of each Home Office and District department, indicating how they save the manager’s time by clearing details for him, He then took up each of the services available for, the circuit manager, indicating how many specialized experts give the manager access toa information which no one man unaided could be expected to know. If a particular theatre is not profitable with all the added service that a circuit makes available, then test the individual manager. “The circuit can not be expected to think for the individual manager—it can not be expected to do his work! It takes countless details off the shoulders and makes available for him countless services—after that, the results depend on him. Can he think out the problems of that particular theatre—does he know his community so that its preferences are applied to decisions on programs and other details of operation— ~ can he analyze product and sell it to that community effectively because he knows that community and he knows that product—can he apply sound business sense in determining upon expenditures— does he call for each of the services which I have mentioned and use them to best advantage at his theatre? Initiative Encouraged “Tf not—the fault lies with himself. With all the encouragement given by this circuit for individual initiative by the manager and with all the latitude accorded him, any restriction placed on what might be termed the ‘‘showmanship of the particular theatre’ is a restriction due to the manager’s own limitations. Point this out to your managers. Some of them may be kidding themselves that someone else is supposed to do their thinking for them.’’ ; Mr. Barry then asked for opinions to the contrary. There were none. It was unanimously agreed that every theatre in the territories represented should be more John F. Barry profitable under circuit operation than under independent operation. Mr. Barry then qualified his proposition as it applied to some very small theatres in towns of 2,000 or 3,000 where an independent operator, employing the members of his family in the box office and in the booth, and operating two or three days a week, presented conditions which would not apply to the general discussion. “Why then are some theatres not profitable? ‘The circuit manager may not be driven by the sheer necessity of eating regularly to apply that intensity of effort which has been responsible for devising many of the novelties in advertising and program building with which you are familiar. He may be lulled by some false security that his salary check will appear regularly no matter what he does. This false security kills the incentive that makes a _ theatre profitable. Such men don’t belong. . Incentive Offered “Tf the individual manager in circuit operation doesn’t want to put the same effort into his work that an independent operator would, plenty of men can be gotten who will. With the company’s record of .advancements andpromotions, there is plenty of incentive for any manager to exert an effort and to acquire a knowledge of the essentials of the business that will make his operation profitable. “Tt remains for you District Managers to see that that effort and that, knowledge exists—to see that all the advantages of circuit operation as indicated are applied —that your managers use all the time that is made available for them as it should be used — to think out their own particular problems and not sit back in false security or kid themselves that circuit operation limits © their thought, their advertising, their ingenuity, or their showmanship,” BARRY COVERS COMMUNITY ANALYSIS Community analysis was the topic for discussion by John F. Barry at one of the district managers’ meetings last week. No one man can analyze the changing conditions which affect a thousand different theatres,’”’ Barry said. ‘‘The job must be accomplished for each individual theatre by a man who is on the ground assisted by the advice of his district manager. “It is imperative that a theatre manager know his community, because its factors affect his theatre policy, admission prices, advertising media, advertising appeal, program and program arrangement, and countless other details of operation. “Merchandisers of some \com-| modities have to do with a universal appetite for their product. The grocer in selling sugar caters to the same taste everywhere. “Tn selling entertainment, however we encounter localized preferences and localized sales resistances. “One way to gain this knowledge of a community is long residence, but we cannot wait five years or more for a manager to develop the knowledge of his community which he should have. chasing, porate expense. AS. SERVICE, SAYS HEAD |) M. F. Gowthorpe occupied the chair at a meeting of the Second District Managers’ Session which delved into what constitutes overhead, and the method of its allocation. “Think of overhead in the light of services rendered to your operations,’ Mr, Gowthorpe told the district managers. ‘Overhead is made up of the salaries and expenses of all persons who are not on a theatre payroll, together with certain costs incidental to their function of servicing the theatres. “Departments which contribute to the overhead are Management, Film Buying and Booking, and Advertising. Expenses of the auxiliary departments, including Accounting, Maintenance and PurReal Estate, Legal, Candy Sales and Music Sales also enter into the overhead. It does not include expenses of the Music and Production Department, which are charged directly to theatres playing unit shows, nor of the Construction Department. It includes no part of Paramount administrative costs, and not one cent of profit.’’ Gowthorpe went on to explain the. breakdown of the total overhead by items and by departments. He urged that full use be made of everything and every service that Home Office ‘‘overhead”’ pays for. “Allocation of overhead to individual theatres,’ Gowthorpe continued, ‘‘takes four considerations into account. These are the percentage of admissions, seating capacity, actual service rendered, and relation to profits. by actual service rendered is the ideal method, but cannot be entirely accomplished in actual practice. This method is pursued as far as possible, and the remaining costs absorbed by applying a combination of the other measurements. Accounting Reduction In the discussion which followed, Mr. Barry pointed out the fact that managers who are dissatisfied with the amount of overhead charged to their operations should be sure that they are doing everything possible to help keep these charges at a minimum. As a specific instance, he cited the accounting department, whose overhead, he said, could probably be cut down by one-half if theatre managers adhered strictly to accounting routine as prescribed in their manuals, and exercised care to avoid costly errors. “Other expenses to the circuit can be kept down in the same manner,’ Mr. Barry said. ‘‘For instance, if managers knew as much about sound as they should, it would result in a tremendous saving to the company. Some defects could be remedied locally, instead of sending for a technical man, who may find on arrival that the trouble is caused by nothing more than a dirty aperture.” Session proceeded to take up fixed charges, and Gowthorpe explained that these are costs applicable to a single operation, and continue whether the theatre is open or closed. “Included in fixed charges,’ he said, ‘‘are rent, insurance, taxes, depreciation, interest and _ cor Rent Charges “Under rent we charge the actual amount paid under a theatre’s lease. This item does not include leasehold bonuses. Insurance of all kinds is charged under the second heading. Taxes include licenses and permits, and except only the Federal income tax. “Under depreciation we charge off wear and tear, and obsolescence, Amortization of leaseholds is included here, bonuses Allocation: — Acts as Good Stimulus District managers in New York to learn about Paramount Publix organization were made conversant with the activities of the Personnel Department by John F, Barry, Director of Personnel, who is also chairman of the series of district managers’ sessions. Function of the department, Mr. Barry said, is to aid in the selection, training and assignment of manpower. He asked the men present to re-read the story in Publix Opinion for April 25th on the preparatory training of men, and to file it for guidance in supervising the . developement of men assigned to their theatres for this training. Mr. Barry spoke of the contribution of the Managers’ Training School to our manpower, the qualifications sought in men engaged by the company, and gave the district managers a detailed list of the points he would like to have covered in the personnel portion of their weekly letters. Dwelling on the constant stimulus which Publix’ policy of promotion from within exerts on the men in the field, Mr. Barry outlined a number of other reasons for the very slight turnover in Publix personnel. Among these was the thousand dollar insurance policy which the company carries for each manager after he has served for six months in that capacity. being charged off at a rate dependent upon the length of, the lease. Depreciation of sound equipment is charged off in accordance with a schedule arrived at by our technical men and Electrical Research engineers. Under this schedule, equipment costing 12 per cent of the total] has a life of one year, 28 per cent has two years life, and 60 per cent is charged off over a period of five years. ; “Interest includes that on bonds, notes and mortgages, but not on investment.”’ Mr. Barry pointed out one means of helping to keep fixed charges at a minimum, in the matter of insurance costs. 4 “Insurance is listed among fixed charges. The charge is not fixed in the sense that proper supervision cannot reduce it. Experience record determines insurance costs,” he said, ‘‘and the contribution of your managers to this record has much to do with determining insurance costs. A good company record with the insurance companies this year means lower rates next year. Maintenance Details “This involves details of maintenance. ‘Mr. Anderson in his discussion of the different forms of insurance carried for your theatres will make clear that for every form, your supervision will have much to do with determining what the company pays for insurance. So even if insurance is called one of the ‘fixed charges,’ realize how the charge depends on you.”’ Meeting concluded with a brief exposition by Gowthorpe of purposes of the Cost Control Committee. He explained that its function was not an indiscriminate slashing of costs, but the encouragement of intelligent spending. Among means of assisting the committee in its work Gowthorpe included supervision of petty cash disbursements, reduction of uniform cleaning costs, regular seat inspections to avoid torn clothing claims, and regulation of telephone and telegraph tolls and electricity expenditures. ‘accompanied by a lecture, FIRST AID” DISCUSSED District managers attending the © current session at the home office emerged from a meeting with Dr Emanuel Stern last week prime with information concerning the — Welfare Department, which Dr, — Stern heads. . 2 The lengthy ~ conference was aid which have been sent to © each theatre to assure themselves that advantage was being — taken of their usefulness. “If each © of these cabinets is used only twice © in treating minor injuries to em— ployees,’’ he said, ‘‘they will hav paid for themselves in avoiding — physicians’ bills.’”’ Supplies for — replenishing the cabinets should — be obtained locally when needed, — he said. B . Dr. Emanuel Stern Report at Once “In connection with accidents to — employees,” Dr. Stern said, “there — is one thing which is imperative. — They must be reported immediate— ly, on the forms provided, to my office and to the insurance com— pany. We must do this not only © to assure maximum protection © from our insurance, but also be— cause in many states there are © laws which set a penalty for fail— ure to report such accidents. “Since insurance and medical costs are a direct charge to your theatres, there is only one thing — for your managers to do to keep ~ them at a minimum, and that is © to preach safety first.’’ a ‘“‘When it is necessary to call in a physician, retain only licensed ~ physicians from the approved list ~ which each theatre has. I want — to emphasize the fact that we have no official house physician any— where on the circuit. There is, however, an approved list of local — physicians in each theatre.”’ a Dr. Stern differentiated between — compensable accidents to em— ployees and public liability cases. — Discussion of welfare cases and the routine to be followed by dis— trict managers completed the con— ference. 3 “If you men will give these © things a small part of your atten— tion when you return to the field,” ~ Dr. Stern concluded, “it will be of — immense assistance to me. In re© turn, if at any time any doubt con— cerning any of the points.upon which we have touched arises in — your mind, have no hesitation in — writing me about your problem.” — Beauty Treatments for _ Women Theatre Patrons Helena Rubinstein tie-up effected by Eddie Hitchcock, publicity director of the New York Paramount, has a beauty operator giving a.complete beauty treat— ment to a woman patron daily, ~ Lucky — numbers in powder samples distributed have $100 and $50 courses of treatments as prizes. Rubinstein’s arranged tie ups with department stores, distributed class pamphlets in stores handling their products all over Greater New York, and give the Paramount space in their ads for two weeks, Plan extends over an entire week.