This Iowa newspaper's maintenance manager led the creation of its latest product — an escape room

TLDR

• The Challenge: The Dubuque, Iowa-based Telegraph Herald was looking to diversify its revenue streams. The paper’s unique ownership structure allowed it to tap into an unexpected source for an idea.

• The Strategy: Dan Bellows, the paper’s building maintenance manager pitched an idea to the company CEO: The Telegraph Herald should open an escape room. It got the go-ahead and opened last fall.

• The Numbers: Bellows worked “60-70-80 hour weeks” leading up to the launch, but about 3,000 people visited the escape room in its first three months of operation.

• The Lessons: Good ideas can come from anywhere, and leaders have to cultivate an organization’s culture to facilitate input from anyone.

• The Future: Woodward Communications, the paper’s parent, is looking to encourage more participation from the rank-and-file.

Now, let’s dig in a little deeper:

The Challenge

The Dubuque, Iowa Telegraph Herald is confronting many of the same challenges that legacy publishers around the world are facing: Print advertising is decreasing, its subscriber base is shrinking, and readers are moving online and to their phones.

Like all publishers, it’s looking to diversify its revenue sources by introducing digital subscriptions, events, and more.

“Free speech is not cheap,” Steve Fisher, publisher of TH Media, which includes the Telegraph Herald and a handful of other local publications, told me.

He continued: “When people ask us why we have a paywall on our website and those sorts of things, it’s because we have to pay journalists. And when you pay journalists you have to pay their healthcare, all the benefits, and everything that comes with that. Events and a number of things we have done over the years have been a result of years and years of culture building.”

And one of the key factors that makes the culture unique is how Woodward Communications, TH Media’s parent is organized.

The company is employee-owned. Its more than 500 employees participate in an Employee Stock Ownership Plan, which owns nearly the entire company. That means qualifying employees get a stake in the company.

As part of the employee ownership, the company practices open-book management, which informs employees about their division’s finances and the overall state of the organization.

“Merely just doing an ESOP transaction doesn’t automatically translate into success. The real lift for ESOPs, in addition to the financial piece of it, is wrapping the culture of engaging employees and truly educating them what it means to be an employee-owner,” Woodward Communications CEO Tom Woodward told me. Woodward’s family has led the company since 1917.

It’s within this context, that Telegraph Herald building maintenance manager Dan Bellows came up with an idea.

The Strategy

The Numbers

In the lead up to the escape room’s opening, Bellows said he ended up working “a lot of 60-70-80 hour weeks.”

When it opened in November, the escape room had two distinct rooms — Casino Heist and Motel Mystery. A third room, Archaeology Adventure, opened in January.

The company invested more than $20,000 to launch Escape Room Dubuque. Already revenue is covering operating expenses, and TH Media expects the venture to reach break-even this month.

About 3,000 people participated in the escape room during its first three months of operation.

In addition to the manager who oversees Escape Room Dubuque, it also hired four part-time employees to help run the games.

Even though there are people overseeing the escape room, Bellows is still involved in the project, and he said it can sometimes be a challenge to balance his responsibilities at the escape room along with his day job and his personal life.

“If it breaks, and you’re in the middle of the day on Saturday, which is your biggest day for time and room rentals, you have to have another means to keep it going,” he said. “You can’t just stop because you’re losing money then.”

The Lessons

• Passion and perception prevail: Bellows felt comfortable emailing his company’s CEO with an idea because he knew it’d be considered seriously. Woodward Communications employees were given a business book, “Ideas are free” to read, Bellows said.

The book encourages managers to listen to front-line employees since they have a unique perspective on how the company works.

“This speaks, frankly, directly to our culture in terms of transparency and humility up and down the line with management and line-level employees,” Tom Woodward said.

Beyond the cultural aspect, employee-owners, as Woodward Communications calls staffers that are part of the ESOP, also have the tools to propose relevant ideas. By practicing open-book management, everyone understands how the overall business works and what the company needs to do to succeed.

“Our open-book management and financial literacy strategies are laying the groundwork for people to understand what is a successful business,” Fisher said. “The guy who used to be our maintenance manager is now an expert on cash flow and unearned revenue and those types of terms that help him understand what it takes to make a business successful…We’re doing things to educate our key personnel so when something does come around the turn, they’re going to know what exactly to look for.”

Still, even with those factors, the company had to move quickly to take advantage of the idea. It didn’t mire the process in bureaucratic decision making.

And Bob Woodward, said Bellows’ passion for the initiative, along with a team effort to get it going, helped it thrive.

“Dan’s passion and enthusiasm helped us get going and keep going. Finding someone who can be the champion and who can have that passion and enthusiasm, and often time it’s the person who comes up with the idea in the first place…Ideas can come from anywhere.”

• Ideas big and small: Not every idea needs to be a whole new line of business. The methodology Woodward Communications and TH Media use can be applied to projects of all sizes.

Here’s an example of a relatively small idea that was simple to execute. After the Cubs won the World Series in 2016, the Telegraph Herald created a spread celebrating the historic victory in the next day’s paper. The staffer who designed it suggested selling it as a poster. The paper ultimately had to run two printings of the poster due to excess demand. It made “five figures worth of profit,” Bob Woodward said.

For TH Media, that project — and others such as books on local sports teams and local history — was relatively straightforward because it’s within its publishing wheelhouse.

“The criteria and vetting process becomes a bit more steepened when it’s unfamiliar versus something that we already understand,” Tom Woodward said.

An example of a less familiar idea is a B-to-B advertising agency that the company launched last September. A former employee brought the idea to Woodward, and they worked with the company’s head of agency services to develop a plan for the niche agency. And they made a point to invest the proper resources to make sure it succeeds.

“That’s one of these things where you make a commitment to fully fund it for at least two years, and we said we’ll sit back and keep track of progress along the way, but we figure it will take us at least 18 months to two years to build the relationships and related business to make that business happen,” Tom Woodward said.

• Take advantage of your expertise: Even though the escape room was a new business for the company, it built on areas where it already excelled and where its employees had strong skill sets.

TH Media has been putting on events for years. It organizes everything from a spelling bee to a series of golf tournaments every summer. So when it came to the escape room, they thought of it as one continuous event.

And the process of launching the escape room, the company took advantage of the abilities it had in-house. One of its marketing agencies created the branding materials, and Bellows and his maintenance team were able to handle much of the construction.

“You have to come up with different ideas to diversify and utilize the skill sets of people who are already employed there,” Bellows said. “To keep the lights on you have to. That’s what we’re doing.”

• Not every idea is going to work: When you ask for contributions or ideas, some of them won’t work out. That’s okay. What’s important is how you move forward once you decided that a project doesn’t make sense.

This is how Bob Woodward approaches pitches from employees:

“The first thing I think is important is to thank them for the idea, even if your initial reaction is that it may be a nonstarter,” he explained. “You have to at least thank them for the idea because you need to give people some positive reinforcement for going through that effort alone and coming up with ideas and wanting to contribute.”

He also said it’s critical not to dismiss anything out of hand right away. He said he tries to examine every proposal seriously and assess whether it’s feasible. He’ll often ask for more details or even do more research himself.

Still, he looks at every idea he actively pursues as if it has a green light until it’s proven otherwise.

And once a decision is made, he said it’s imperative to move quickly and not waste a lot of time.

“If it’s a go, great. Pursue it,” Bob Woodward said. “But I think you need to have that champion and that passion and someone to lead the charge…or you say, ‘You know what, unfortunately, this doesn’t look like it’s going to work, but thank you for the idea and let me know if you have more.’ So that even if something doesn’t pan out, at least people don’t feel like the time was wasted or that they shouldn’t share their ideas again in the future.”

The Future