Newspapers aren’t just delivered, they’re placed on the welcome mat with the headlines facing the door.

Community festivals aren’t just sponsored, they’re created and nurtured until they stand on their own.

Teamwork isn’t just encouraged, it’s taught.

Readers aren’t just customers, they’re neighbors.

Failure in the pursuit of excellence isn’t just tolerated, it’s something people laugh about with a hint of pride.

And The Sacramento Bee isn’t just a newspaper, it’s the largest daily newspaper in America with growing household penetration.

For the community, The Bee is like a person who can be touched and talked to by anyone. For the staff, it’s like a child who deserves the best of everything. For the rest of the newspaper industry, it’s a model of how to be a Pulitzer Prize-winning metro but stay close to your roots.

A RICH HISTORY BUILT ON CHANGE

The Bee’s history in Sacramento goes back 140 proud years. But this story starts 15 years ago with Gregory and Frank --two first-name sort of guys who lead by example.

Gregory Favre, an editor with a big reputation back East, startled a few people in the business when he accepted the editorship of The Bee. Soon after, Frank Whittaker became general manger, and together the two forged a partnership whose spirit now sets the standard in every corner of the organization.

In the tradition of the McClatchy family, Gregory and Frank nurtured a close relationship between The Bee, its readers and their community. Today that commitment is honored in a rich assortment of ways, from major corporate gifts to simple little touches in print. For example:

• Festival de la Familia -- The Bee wanted to do something for its Hispanic community. So it started a festival built not around tamales or mariaches, but around the core of Hispanic culture: the family. The festival got to be so big, it paralyzed the marketing department for a month. Some careful community-building and a gentle handoff resulted in a festival board that stands on its own. The Bee remains a prime sponsor.

• The Bee Book Club -- Gregory Favre says The Bee had this idea before Oprah Winfrey did, but Oprah executed it a few months sooner. The Bee selects a book each month, every major bookstore in the area discounts it 30 percent, and the author comes in for a Bee-sponsored reading and book signing.

• Neighbors -- The Bee has made a strong commitment to micro-local news through its Neighbors publications, which operate independently of, but in cooperation with, the mother ship. Neighbors General Manger Vern Ingraham measures reader response to Neighbors in advertising terms: "The response to even 1x2 ads is absolutely startling."

• Contributions -- Bee executives say the McClatchy family and The Bee made about $600,000 in contributions to the Sacramento community in 1997.

• The Dancing Cowboy -- Although The Bee is respected in its community for that kind of giving and is respected in American journalism for outstanding investigative and enterprise reporting, another side of The Bee caught our eye when the NAA/ASNE task force visited in early 1998: A cornball serial, written with reader participation, called "The Dancing Cowboy." "Just another way to connect with readers," says Favre.

• Dr. Risk -- Afternoon news meetings work the same everywhere: Editors around the room list the highlights of what they’re offering to the next day’s edition, then the group discusses what page one should look like. The first person to offer an opinion about page one takes the greatest risk of sounding silly, but also has the greatest opportunity to shape the discussion. Every week, The Bee invites a member of the community to occupy that position in a week of news meetings -- to be "Dr. Risk," as the program is called.

BUILDING RISK INTO MANAGEMENT

At The Bee, taking risks is an honorable pursuit, a cultural trait that feeds a strong entrepreneurial spirit in an organization that’s big enough to be a bureaucracy. Some 6 percent of The Bee’s 1997 revenue came from non-traditional sources, including on-line "zines." There have been plenty of failures along the way to these successes. In fact, 40 percent of new ventures fail at The Bee.

That’s probably why Transportation Manager Scott Nielsen didn’t worry about making a fool of himself when he decided it might be a good idea to use Bee delivery trucks for commercial short-haul work between editions. He gave it a try, and pretty soon his trucks were contributing new dollars to the revenue stream -- dollars that give The Bee more resources for building readership.

Some of those dollars are spent on cutting-edge customer service. Gregory Favre and Frank Whittaker have nurtured a spirit of quality that is so fussy and particular, it sometimes surprises even the staff. Neighbors General Manager Ingraham shook his head in amazement when he told the case-study team that carriers try to place The Bee on the welcome mat with the top headlines facing the reader’s door.

The folks in the circulation department aren’t amazed, though. They’ve worked hard at porch delivery in their core area, and at the time of our visit they believed it was 90 percent successful so far. Bee circulators say their ability to get a newspaper on the reader’s doormat by 6:30 every morning has been a critical factor in The Bee’s growth. If they can find a way, Bee executives would like to promise delivery by 5:30 a.m. -- a time that would be even more popular with readers.

The same spirit of giving customers what they want infuses The Bee’s single-copy efforts. If a store or fast-food operation has a favorite charity, The Bee works out a partnership to donate part of single-copy sales. Multiple rolling racks inside stores are making it easier for store managers to use newspapers as a lure to help sell higher-profit items such as coffee. The Bee bills stores on whatever cycle they want to be billed.

Like most newspapers, The Bee uses telemarketing and discounting to generate subscriptions. But its newest circulation investments are in retention, not in sales pressure. Readers are given a chance to lock in the old rate before a price increases. Favre is proud of the 10-year subscriptions he got in response to one such offer.

Experiments with matched control groups of new subscribers have found that communication with new customers -- writing thank-you letters and sending a pamphlet explaining the newspaper’s sections and regular features -- holds readers more effectively than discounts.

BECOMING CUSTOMER-FOCUSED

The Sacramento Bee wants to be the Nordstrom’s of newspapers. When Gregory and Frank set that goal, they knew the Nordstrom’s department store chain achieved its legendary customer service not because the top bosses ordered it, but because the top bosses won the support of every sales clerk, buyer, tailor and telephone operator.

At The Bee, the teamwork that makes outstanding customer service possible starts at the top and is nurtured by almost daily communication among the senior people in each department.

Teamwork moves down through the organization with the help of Leadership Bee, a year-long training program modeled on the civic leadership programs that operate in more than 300 American communities.

The 1997 Leadership Bee class had 16 members, with employees from every corner of The Bee. They put in 104 "official" hours and probably that many personal hours as well, learning about all The Bee’s operations and working on a special project: building circulation.

The group’s recommendations to senior management ranged from longer-term discount programs to new edition boundaries to improved pay scales in the customer service department. Some of their proposals were implemented within weeks. Others, management said, will take a little while longer.

The eighth Leadership Bee class is at work now, creating a new team that will break across departmental lines and build career-long friendships and alliances.

Around the corner and up the escalator from Leadership Bee’s usual meeting room, McClatchy CEO Gary Pruitt is transforming what had been one of the country’s smaller newspaper groups into a major player. Pruitt says he will do that by holding McClatchy to its number-one strategic priority: building circulation market share.

Pruitt speaks with quiet confidence -- and why wouldn’t he? Gregory and Frank are now corporate vice presidents, having brought up a new generation of leaders who will assure that their CEO always has The Sacramento Bee on his side.

SIDEBAR: LEADERSHIP BEE TAKES THE STING OUT OF TAKING RISKS

What do you get when you put a dozen or more people in a room and tell them to solve a business problem they only partly understand?

A really great idea.

The idea has worked for eight years at The Sacramento Bee, so much so that it has become an institution called Leadership Bee.

Each year the newspaper puts together a group of people and asks them to solve a particular business problem while they learn about the total operation. In 1997, the problem was how to build circulation by 3 percent or more.

The 16-person group had five circulation staffers. The rest came from computer systems, editorial, post-press and other departments. They weren’t told how to do it or given any further guidelines. They had only eight months to complete the task.

Like other classes before them, their first problem was defining the task and focusing on possible solutions, according to Karen Nice, the human resources staffer who oversees the program. "It’s a combination of creative research and data gathering," Nice says.

HANDS-ON EXPERIENCE

Each group starts out learning as much as it can about the newspaper. Participants spend time in each department, learning how that group works. Team members may go out on sales calls with advertising representatives or make deliveries with carriers.

Once it has the education, the team often splits into subcommittees to gather data and attack individual elements of the problem. Participants come back together to share what they have learned and plan their next steps.

All this is done in addition to their regular responsibilities. Supervisors try to be understanding about team members’ new responsibilities, but they can’t interfere with other work.

The group also gets a modest budget of $500. It can get more, but it must justify it first. Nice says the 1998 group, whose task is to address customer satisfaction and loyalty, wants to visit nearby newspapers to see what works there. To they get the travel money, the group will have to demonstrate what it expects to learn.

The 1977 Leadership Bee group narrowed its focus to three subcommittees: retention, editorial and marketing/promotion.

For retention, the group came up with four ideas: an 18-month graduated discount offer to reduce churn; a sampling program for 143,902 mainstream family households not taking The Bee; an increase in pay for customer service representatives to reduce turnover and improve quality; and a separate retention department to focus on keeping readers.

Editorially, Leadership Bee recommended expanding coverage of an adjacent county and expanding the zone along with several specific editorial enhancements. The group also recommended that an ad-hoc committee be continued to further investigate how to editorially improve the newspaper in its core area.

When it came to advertising and promotion, Leadership Bee suggested consistent advertising campaigns, offering Monday-Friday subscriptions for businesses, seven ways to make The Bee’s business operations more user-friendly, creating a user guide for new readers, educating current readers about what the newspaper offers, and hiring a volunteer-service activities coordinator.

At this writing the recommendations were only a few months old and had not been tested, but initial results were very good, Nice said.

GETTING TO KNOW OTHER DEPARTMENTS HELPS SOLVE PROBLEMS

Regardless of whether Leadership Bee projects work, a group of talented staff members becomes a group of promising new leaders each year.

Nice says the program helps class members understand the problems of other departments more clearly and develop new communications pathways to solve problems.

"From a results perspective, there is a quicker resolution to problems," Nice says.

Despite eight years of success, Nice says there are still things that can be done to improve the program.

Currently the Leadership Bee class make presentations to a handful of top management people. While that is expanding, she believes the presentation should be made to a larger slice of management.

"The more we can expose our key management group to the recommendations, the better the flow of information will be," Nice says, and adds that management is already moving in that direction.

Implementation is another problem area, she says. While the classes do a thorough job, there often isn’t enough long-term follow up to make use of the recommendations, especially those that might take years to implement.

More help is also needed in measurement, she says. While the committees’ work is successful, she acknowledges that better efforts need to be made to measure the programs and chart their progress.

Leadership Bee, like the problems it addresses, is constantly evolving. The better the newspaper becomes at using this tool, the more it can see to do.

"There are so many eye-opening experiences ... we get a bird’s-eye view of what some of the issues are," Nice says.