Volume 7, #4, June 2009
The End of the World As We Know It
Are You Becoming Irrelevant?
"It's the end of the world as we know it and I feel fine." -- Song by R.E.M.
"We [thought] we knew what was best for customers, as opposed to listening in an unfiltered and unemotional way to what customers were telling us." -- Gregory Q. Brown, Co-Chief Executive, Motorola, quoted in BusinessWeek.
You can hardly open a newspaper these days without reading about -- the death of the newspaper. But what, exactly, is dead? Most people agree it's the paper, not the news. Consumers remain hungry for information of all kinds. The Huffington Post, taglined The Internet Newspaper, "was a runaway success in 2008; with 8 million readers during the US election campaign, it is now the most 'linked-to' blog on the Web and is valued at up to $200 million," according to an article in Editorsweblog.
Schemes to monetize consumer demand for information abound. Online marketer Amazon believes that its new, larger Kindle e-reader, announced in May alongside content deals with the New York Times, Boston Globe, and Washington Post could rescue the newspaper from oblivion. ("How the Next Kindle Could Save the Newspaper Business," Wired, May 6, 2009). Another idea for shoring up newspapers' sagging balance sheets is to extract tiny payments from online readers ("Can Micropayments Save Newspapers?" New York Times, February 6, 2009). And Maryland Senator Benjamin Cardin proposed extending non-profit status to news organizations as a way to save them. Any or all of these ideas might work, but they seem to fall in the "wrong question, too late" category. How could the newspapers have avoided ending up in this situation in the first place?
Ten years ago, newspapers ought to have been tackling some very basic questions: What is our mission? Is our strategy still relevant? How does our strategy relate to what readers value and will pay for?
Questions about mission and strategy are always challenging, perhaps more so for established businesses. But, like any industry in crisis because of a looming discontinuity, the news business needs to completely re-evaluate its reason for being. Too often, denial is the first refuge of companies in this position (just look at a mini-computer companies at the dawn of the PC age, or floppy disk manufacturers as storage media were transformed). Instead of asking the hard questions, many papers spent a precious decade in denial, churning out newsprint as they had always done while phenomena like blogs and social networking sites took hold and even began making money.
Now that news organizations are moving beyond denial, they must give themselves permission to pause for long enough to conduct in-depth customer research. Naturally, as it faces a crisis, the news business feels a sense of urgency about solving its problems, and no doubt also feels a familiarity with its customers that seems to obviate the need for research. But the only way to know whether a fundamental shift in strategy will pay off is to understand what creates value for customers. Motorola's co-chief executive recently came right out and said that his company's assumption that it knew what was best for its customers led to its fall from grace (see the recent BusinessWeek article.)
Maybe you're heaving a sigh of relief right now that you're not in the news business or the auto industry. Maybe you feel immune because yours is one of a few industries currently doing well (for example, the firearms industry). But no matter how successful you are today, you need to make sure that formal conversations with your customers are part of the fabric of how you do business. As Motorola's Gregory Brown said in the BusinessWeek article, "Success is one of the biggest impediments to growth. It can reinforce a traditional way of doing things."
The way to avoid becoming a victim of your industry's next discontinuity is to constantly ask the hard questions and to put in place a formal program for gathering market input, not just about specific products but about the world in which your customers -- and potential customers -- live.
For newspapers, it may be too late. The days of dad disappearing after dinner behind his broadsheet or suburban commuters snapping open their afternoon papers on the train ride home are long gone. Like those of the newspaper business, your industry's bedrock traditions will one day vanish. The only way to anticipate what's next is to start with a crystal-clear picture of what customers will value. Whenever an industry experiences discontinuities -- whether life-threatening or merely unsettling -- listening to your customers and evaluating how new technologies can address their unsolved problems will be your path across the proverbial chasm.
LINKS
Newspapers and micropayments -
http://opinionator.blogs.nytimes.com/2009/02/05/can-micropayments-save-n...
LA Times story on Kindle - http://www.latimes.com/business/la-fi-kindle7-2009may07,0,978335.story
Time Magazine Article - http://www.time.com/time/business/article/0,8599,1877191-1,00.html -
Wired article on the Kindle - http://www.wired.com/epicenter/2009/05/how-the-next-kindle-actually-coul... -
Money article on Google's desire to rescue newspapers - http://money.cnn.com/2009/01/07/technology/lashinsky_google.fortune/
On the Media radio piece about newspapers - http://www.onthemedia.org/transcripts/2009/05/08/0
