Over a 40 year career, if you keep your eyes open and don’t get too comfortable with where you find yourself, you can learn an awful lot about people and about the nature of leadership. And an awful lot about yourself too.
For much of that time I watched from a privileged vantage point as newspapers grappled with the challenge of digital media. But this blog is not another self-important exposition from the end-of-newspapers meme. They’re gone and it’s over and I’m over that. To me what’s interesting is not that newspapers are dead men walking but why they surrendered so abjectly to digital when they had all the leverage in the world. Their capitulation offers timeless insights into the tricky business of managing risk and dealing with change, and the evident danger of hubris and greed when they take root in company culture.
The other big question that interests me is what is replacing newspapers in the digital age. Where is the business of news headed? Who is leading the charge? What digital news companies are likely to win? Where will you get your news from? Why?
From the time the Internet first blew up their monopoly, newspapers had to compete for audience and attention with revolutionary digital products that promised new ways to find things, buy things, do things and interact. Their broad content offering was cherry picked – the classifieds were an irresistible economic target and they went first, but everything was up for grabs and it wasn’t long before the stock tables were seized, and the sports scores, the weather forecast, political coverage, restaurant reviews, even the comics. The product offering was hollowed out, readers and advertisers seduced away.
But newspapers were trapped in the prism of print. They could not imagine their own extinction. In the Internet all they saw was a chance to throw away the ink and paper, and sell the trucks, the same product delivered at considerably less cost. They put their newspapers online – and that’s all they did. No search, no social, no new relationship with users, not a trace of digital sensibility, no original engineering – just a continuing belief that news could be bottled up in one place forever and that local news made a defining difference. It didn’t. It never did.
To a publisher, squashing the newspaper down a coaxial cable was the answer to a bottom-line prayer. To a user, it was practically useless.
The newspaper audience had been declining for 25 years when the Internet arrived – digital distribution did nothing to solve that product problem. Their failure to build new digital products for new audiences eventually left newspapers with little choice but managed decline until the very last nickel was extracted. It will be an ignoble end, it is inevitable and it will come soon.
The rise of Vox, Vice, Buzzfeed, Reddit and other digital news companies is the last straw. For members of the Millennial generation, each with a supercomputer in their hand, digital news is not disruption. It’s the norm. They grew up without any historic attachment with newspapers and now have forever turned their backs on them. With that, newspaper companies have lost their last shot at recovery – and survival.
Doesn’t matter if you’re an incumbent or an insurgent, big or small, public or private, if you’re not vigilant, success can be fatal. It can breed complacency and aversion to risk and change. What happened to the New York Times also happened to Yahoo! When a business model is tuned to drive recurrent profit, the dividend soon becomes the only thing that matters and management will go to any lengths to protect it. Innovation becomes a game of incremental process improvement rather than anything that might seriously challenge the status quo, until process after process is tuned and re-tuned and accreted like concrete – and that’s just the way we do things around here.
So you see, it’s no accident that the Fortune 100 today bears little resemblance to the Fortune 100 just 25 years ago. Value comes in 25-year cycles. If the source of it goes unrefreshed, companies falter. Just ask anyone at Kodak. This is why the thesis of disruption has fallen into disrepute. Of course newspapers were “disrupted,” any Tea Party member of the flat-earth society could tell you that. The issue is why they didn’t do anything about it.
Why do some companies endlessly regenerate when most others have their moment in the sun, then sooner or later buckle under new competition and wither away? What is the elixir of business reinvention that some companies seem to have ready access to and others struggle to find? Can you bottle it? Does it take the natural-born leadership of a rare and especially forceful character to drive it through an organization – like media greats Rupert Murdoch and the much less well known Koos Bekker – or can it be acquired and sustained through management practice?
I think it can be acquired through management practice, but only when a leader shows the way. I’ve seen it happen. Reinvention isn’t a magic formula, it can be bred into a company’s culture to bring new energy and new thinking to a company nostalgic for the past or seduced by present success. The extinction of newspapers is a big deal, they played a central role in the civic, cultural and commercial life of our country for more than 200 years. But this blog is as much about the human failings of leaders in challenging times as it is about the newspaper business itself.
Any leader worried about the future must first build a culture that welcomes it. Risk-taking characters like Murdoch and Bekker each started with a single newspaper in small cities in far-away places. They could not have built their media empires on their own. To do that they had to surround themselves with people who shared their natural instinct for directness and urgency, who were curious, even restless, who questioned standard practice and loathed bureaucratic process, who wanted their careers to matter, who remained passionately committed to a sense of the commonweal, who were always open to a new idea and who would never, ever let their own sense of self-importance get in the way of listening to it. People, in other words, just like them.
It is these cultural qualities that might have saved newspapers from digital surrender and collapse. It is these cultural assets – not technology – that give little digital start-ups an edge against the big guys over and over again. The start-ups are on an adventure. They’re hell bent on complete re-invention and conquest, not on preserving the past in amber.
This was never, you see, about the future of newspapers themselves. It was always about the search to discover assets within them that might prove useful for digital adventuring. The outcome of that search would depend entirely on a willingness to re-think everything about the business. But a search like that can be fruitful only when the right culture is in place.
How do you create a culture like this? How do you sustain it? How do you get managers at every level of the enterprise to commit to it? How do you find the right balance between stewardship and innovation, between short-term results and long-term positioning? How do you encourage risk-taking? How should a new business be positioned relative to the core business? What techniques can be used to efficiently test new ideas? Where do you find innovators, how do you interview and recruit them, how do you reward and keep them?
None of these questions are new. But many of my answers are.
“There is nothing new in the world except the history you do not know.” Harry Truman
Here at BlastofWinter I’m giving you the dubious benefit of my experience from inside the media revolution in the hope that it will encourage you to think fearlessly and independently as you make your way through your own career. And then maybe one day, when you find yourself in charge, you’ll know how to build a culture that is fearless and strong, a culture that stands above any one individual, a culture that regenerates and wins, over and over again.