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Out of the Box

Are newspapers just too good to change?

15 December 2010 · By Kylie Davis

Is the reason why newspaper companies find change so damned difficult because we are just so damned good at what we do?

Click here for a larger view of this chart Is the reason why newspaper companies find change so damned difficult because we are just so damned good at what we do?

I'll explain.

Capability theory argues that there is a tipping point in the life of every company and industry when the skills, values and processes that make a company talented and successful actually start to become rigidities that prevent future success.

Capabilities are found in the resources that we have as newspaper companies in money and people — the processes and procedures we use and the common values we hold. Capabilities are different to plain old resources because a capability is the ability to turn something into something else — it's our ability to take action. Newspapers can turn random facts, events and goings on in the world into a cohesive, contextual assessment that explains the world each day to billions of readers and sets agendas globally every day (or even now, each hour) and we have processes and procedures that allow this to happen. That's one hell of a capability. Those processes have, in turn, become values which now underpin our cultures.

Yet rigidities are where those capabilities that have calcified. Companies often stick to current capabilities beyond their useful life because of tradition, complacency or an inability to learn.

You know you've got a rigidity issue in your company if:

  • The focus is always on doing things better rather than doing better things.

  • Your newspaper is too internally focused and worried about short-term objectives while big-picture issues are strategically unaddressed.

  • To achieve change, managers find themselves fighting with the underpinnings of the very things that made the firm successful (and usually lose the battle).

  • The change to new business models is seen as risky and too far off to worry about so the decision is made to “stick with what we know.”

Capabilities come under five main headings. They are:

Business technologies: the capability to understand, command and control our businesses through technology, especially the gathering and understanding of financial data and control of operational activities (i.e., producing newspapers, running presses, online technology).

Marketing and selling: our ability to assess, relate and respond to an external environment by identifying the needs of customers and sell to them.

Performance management: the setting of organisational goals and measuring, monitoring and resourcing our companies and establishing reward systems.

Engagement: the capability of involving members of our company actively and coherently in new chosen directions. It is decided by our ability to manage such activities as creating commitment, motivating staff across the board, enthusing and integrating parts of the business to work together, communication and finding new paths.

Development: our ability to invest in the future by taking the action of instituting systems, processes and procedures that result in efficient and effective work. Being good at the development capability lays the foundations for improving and developing future business.

Chances are when you read this list and thought about your own company, you decided that your newspaper is really great at the first two, probably OK at the third, but it's the last two where the problems start.

The really interesting thing (well, interesting if you're a management geek like me) is that the first two capabilities are operational capabilities while the last two are re-shaping capabilities — the capabilities that decide how good you are at managing your future as a company. And the third, performance management, is in the middle — and the key that joins the two. In fact, you can chart the demise of many global newspaper companies by looking how, one by one, they ceded these capabilities until the only thing left was their ability to produce a paper and sell it to some (but not all) the market they once did.

In “Meeting the Challenge of Disruptive Change,” published in the Harvard Business Review in 2000, Clayton Christensen and Michael Overdorf wrote that the reason that innovation often seems to be so difficult for established companies is because we become strangled by processes that once made us highly successful.

The pair argue that processes are set up “so employees perform tasks in a consistent way, time after time. They are meant not to change, or if they must change, to change through tightly controlled procedures,” they write.

“When people use a process to do the task it was designed for, it is likely to perform efficiently. But when the same process is sued to tackle a very different task, it is likely to perform sluggishly.”

In newspapers, we're at a tipping point. Our siloed and monolithic structures have spawned processes that have, in turn, determined our values. Initially, these processes were designed to protect what we stood for and ensure we could deliver quality news to enthusiastic audiences day after day. But it's just not working any more.

If we truly love news journalism, if we truly love the printed word, the thrill of a deadline, the power of print and online to generate real change in the world around us, we need to unshackle our values from our processes in print. We need to let our values stand alone, and have them be the driving force for the future as we tackle mobile, iPads and online wholeheartedly.

The skills we learn in this great unshackling will prove to be one hell of a capability.

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About this blog

Kylie Davis is the head of real estate solutions, Australia and New Zealand, at CoreLogic, the world’s largest provider of property data. She was previously the network editor of real estate at News Corp Australia, managing editor of business development at Fairfax, and founder of The Village Voice group of newspapers. Follow her @kyliecdavis.


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