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Out of the Box

How strong “core” muscles deal with change fatigue

23 April 2012 · By Kylie Davis

To survive in the digital age, newspapers must continue to invest in their core competencies — story generation and storytelling — even as the delivery models for journalism change.

Change fatigue is common in companies and industries in the process of major restructuring, or a downright fight for survival. The energy needed to survive wave after wave of new instructions from head office, changes in CEOs, instructions to restructure, reform, remove, and recreate is utterly exhausting — especially when in every action you are looking to “keep” doing something you’ve always done, to protect something you believe is vitally important.

It is human nature to want things to remain familiar and comfortable. Routine can be a calming panacea, and many are prepared to dig in their heels to protect it, commenting that “they’re happy to change but ....” Or: “I agree totally with this new strategy, however ....” They go into the change-management meetings nodding, smiling, and making enthusiastic noises. And then return to their desks for business as usual.

Resistance to change is a normal part of any change-management process. But for the newspaper industry, now is not a time of peace. It has not been business as usual for the past 20 years. No wonder so many newspaper executives are looking so pale.

James L. McQuivey, a vice president and principal analyst at Forrester Research who is speaking at this year’s INMA World Congress next month, is an expert in “digital disruption” and how legacy businesses, like newspapers, struggle to deal with it.

“Everyone wants to create the next big thing,” McQuivey writes in his blog post, Why the next big thing will come from small innovations. “In the tech world, that desire has been translated as ‘How can I invent the next iPad?’ But the question, no matter how it’s asked, is the wrong one.”

McQuivey argues that when people ask about the next big thing, they see innovation as a linear progression toward some brand new, revolutionary technology. Innovation, most believe, involves large research budgets and years of development.

So much innovation today no longer features “a public launch date over which the press drools” and “years to generate millions of dollars.” And that fact causes consternation for most businesses. How can you prepare and protect yourself against something that you can’t see coming?

McQuivey calls it “adjacent innovation — in effect combining the best innovations of others to create a completely new and singular experience.” This is the core of the success of the iPad and iPod and, when you think about it, how Facebook and Twitter have redefined news.

One of the reasons newspaper companies now find themselves at a loss is because we have been slow to change our systems and structures to allow for “adjacent innovation.” And when trying to plan for our survival, we’ve been looking for a linear path and asking the wrong questions.

So what shape is change and what questions should we ask?

As part of my MBA studies, I’ve been reading a Harvard Business Review piece by C.K Prahalad and Gary Hamel (May-June 1990) called “The Core Competence of the Corporation.” Although the report was written 20 years ago, time has only proven its hypothesis more conclusively, as companies like Google and Apple — and our own industry struggles — can attest.

Prahalad and Hamel argue that successful companies that are adept at inventing new markets and shifting customer choice, focus themselves not around products, but around “core competencies.”

“Competencies are the glue that binds existing businesses,” they argue. “They are also the engine for new business development.”

“In the long run, competitiveness derives from an ability to build ... the core competencies that spawn unanticipated products. The real sources of advantage are to be found in management’s ability to consolidate corporate-wide technologies and production skills into competencies that empower individual businesses to adapt quickly to changing opportunities.”

The pair offer three rules to identifying core competencies:

  1. A core competence provides potential access to a wide variety of markets.

  2. A core competence should make a significant contribution to the perceived customer benefits of the end product.

  3. A core competence should be difficult for competitors to imitate.

Interpreted for the newspaper industry, future success will come from rallying our businesses around the core competencies of journalism and allowing the story generation, storytelling, communication, and development to determine our products — not the other way around. And in their hearts, this is what most of the change resisters want; they just believe the only way to protect quality journalism is to keep our existing structures and build them bigger.

But insisting on aligning our businesses around siloed business units aligned to individual products is a death knell that executives in other industries have been aware of for the past 22 years. In fact, Prahalad and Hamel have an entire section devoted to “The Tyranny of the SBU” (and it is eye-opening reading).

“Senior executives who claim that they cannot build core competencies either because they feel the autonomy of their business units is sacrosanct or because their feet are held to the quarterly budget fire, should think again,” they write, going on to say that companies that fail to invest in core competencies find it difficult to compete in emerging markets and eventually kill the businesses they are trying to protect.

But the positives that I take out of Prahalad and Hamel are that newspaper companies, despite all the changes, have fought hard to keep investing in our journalism. And journalism is indeed our core competency and will be even after traditional newsrooms and production schedules have been dismantled.

Aligning our businesses structures around the core competencies of journalism in new guises should not be perceived as a threat, but as a life raft. The change fatigue of many of those fighting the change is a good sign, as it is the exhaustion of swimming against the tide.

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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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