Thursday, February 02, 2006

Managing creative destruction

From a note to McClatchy editors, October 2005:

This morning I listened to a long piece on NPR about the movie business, a fascinating examination of how it’s being fundamentally reshaped to reflect changing markets and technologies. The same story often is told about the music business, where I’ve watched with interest as first Napster and then Steve Jobs turned Sony and Disney on their heads.

It’s easy to see (and even kind of fun to watch) this process of “creative destruction” as it reshapes those businesses. My life got better when I could download songs from iTunes at midnight; that’s probably not so true for the guy who runs CD marketing for Sony Music.

Here’s something you already know as we approach the end of the 2006 budget season: it’s neither fun nor easy when this kind of change arrives at the newspaper. But arrive it has.

One of those ubiquitous Death Of Newspapers stories (this one at Business 2.0) described it this way: “With readers increasingly heading online to get their daily news, newspapers no longer generate the cash they need to reinvent their business models and retain their fleeing younger readers.”

Lucky for us that’s wrong.

In fact, it’s just about 180-degrees off true. We’re in a good position to “reinvent our business models” – and, more importantly, to preserve our mission – precisely because we are acting now, when we still have large audiences, powerful content, strong cash flow and the financial stability to do so deliberately. If we stick with business-as-usual on a path to the nightmare scenario at the S.F. Chronicle, that opportunity will continually erode. Playing this game from a position of weakness will be infinitely harder and less fun than what we’re doing now.

This is true because while we are still strong and financially healthy, our net resources are no longer growing faster than expenses, which makes choices imperative. We will be judged by how well we make the choices we are now forced to address.

That’s why we need your focus, intensity and execution now more than ever before.

Change is hard for everybody, everywhere, but it is particularly challenging to change a successful operation. We do indeed have a strong legacy worth preserving, and we’re not about to abandon the franchise newspapers that have always been our central focus. That makes sense in terms of our mission and our business plan.
But when coupled with the imperative for innovation and extension – as you are all discovering – that legacy frames hard choices. It’s easy enough to sit here and say, “We’ll have to give up some of what we’ve traditionally done.” It’s way different to figure out what to lose.

In Rock Hill, for example, editors have decided they can rely more extensively on art and graphics from non-staff sources (including the new McClatchy NewsDesk). They have devoted what was an editing position to ensuring that the newsroom extends its presence online. Sacramento has already done that. In Minneapolis, a number of assignments that formerly employed two staffers now have one, allowing them to reallocate and staff adequately for new tasks arising from the redesign. Raleigh has extended zoned coverage without additional staff. Many of you will discover that using wire or other non-staff coverage on certain topics frees up people you can devote to more strategic priorities.

None of those decisions would arise from our traditional way of thinking. All of them, and more like them, will be necessary as we learn how best to serve tomorrow’s readers.

There are no bromides, no pat solutions. We’ll have to work through this case-by-case and paper-by-paper. I have no higher priority than helping you do that, and I’m available any time.

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