Sunday, May 18, 2008

The Way Ahead: On the continuation of a painful but rewarding journey

As early as 1993, long before academics had focused on disruptive technologies or "The Innovator's Dilemma" – even before the first web browser made its public debut – one dominant company 's chief technology officer warned how its industry and many others "would be flattened by the build-out of digital networks." In 1995 the company's CEO added his voice, in a manifesto called "The Internet Tidal Wave" that mandated redirection.

Since that redirection, the company's stock price has fallen by half, the portion of its revenue derived online has stagnated at about 5% (it's 11% at McClatchy today), and its online division has been losing money since 2005.

If you read Randall Stross in the Sunday New York Times, you recognize that company as Microsoft.

I wrote here earlier about Kodak's transformation from an analog (film) to digital company, a process similar in many respects to what we're going through. The Microsoft story isn't a perfect analogy for us, but it likewise holds lessons and guidance for our future.

Perhaps the most important one is this: there are some things we just may not be able to do a damned thing about.

It's tempting to blame The Present Troubles on mistakes. How come newspapers didn't invent Google? Why weren't we ready to compete with free classifieds? Why didn't we get into video earlier?

But Microsoft, despite global dominance in computer operating systems and desktop software – and all its astonishing profits – also didn't invent Google. (Hell, Sergey Brin and Larry Page didn't know what they had when the Google search engine was launched, and it might have died in the crib if Yahoo hadn't licensed it for years). It's hardly surprising that newspapers were ill-equipped to compete with a small non-profit that doesn't care about charging for classified ads, or that we didn't get into video back before people had broadband capable of displaying it.

Let's say this again: it's not raining on us; it's just raining.

Of course we made mistakes, including some big ones. As newsrooms, we were slow to recognize our loss of control and to embrace the need for greater co-creation and interaction with our audiences. Newspaper companies were often timid and clumsy in learning how to sell online, and in building systems that encouraged migration from the outrageously profitable old monopoly to the fiercely more competitive new digital arena. Too many people on both sides of our house had their heads in the sand far too long.

But while those missteps and others are haunting us today, they are by no means the primary cause of our discomfort.

We used to live in a world where almost nobody could compete with us, and now nearly anybody can. That changes everything – but it doesn't decide everything.

Alan Kay famously said, "The best way to predict the future is to invent it," and the future of local news and information – our franchise and our mission – has yet to be determined. We are proving every day that people want and will use the content we create and organize for them, in print and online. We are the last mass media in most of our communities, reaching more than 70% of the adults in these growing markets. We are the most vigorous guardians of the First Amendment, the most vocal champions of free expession, and the undisputed bulwark of fearless investigative journalism.

Now we have to prove that we can transform our legacy businesses into efficient, competitive modern enterprises. We have to find stability and security in a rapidly shifting economic landscape. That means employing technology to capture cost savings (yes, outsourcing and centralization) and refocusing a smaller number of employees to ensure mission-critical jobs are done right.

This cannot be done painlessly, but it can be done successfully – and it must be. While our continued existence depends on success in the marketplace,
the reason for existence remains our public service mission. Put it another way: economic success is essential, but it is not sufficient. We perform a vital role for self-governing people.

Our future will be determined by those who choose to play an active role in inventing (and reinventing) it. There are painful miles to go before we see the precise terrain of that new world, but it will be a journey of discovery and reward for those who navigate it successfully.


UPDATE: After I posted this morning, AP moved this story about Microsoft reopening its talks with Yahoo. They're in transition, too.

No comments:

Post a Comment