10
Jul
08

Newspapers and Disruptive Innovation

A few years back a well known internet guru stopped at my newspaper. During conversation he mentioned he was on his way back from a third trip to Harvard University where he had been interviewed for a developing study on the future of newspapers. I’m not going to name names for fear of getting anyone — including myself — in trouble.

The study was being done, I believe, by the business school. One professor there, Clayton Christensen, has made his reputation on theories and practices involving disruptive innovation, the type of invention (social or individual) that slips in under the radar and eventually changes entire industries. The Harvard group had applied their methodologies backwards to railroads, passenger shipping, and mainframe computers. Now they were trying to apply them forward with newspapers.

In our conversation this new media guru said the Harvard guys believed the crossroads for newspapers would come in 3-5 years. By crossroads, he explained, they meant the place where declining readership and revenue intersected with rising costs, essentially making the business of printing a newspaper both unprofitable and unsustainable. He said they believed newspapers were approaching a table-top threshold, where their slightly declining revenue streams and readership rolls would suddenly go off the edge into steep and unstoppable falls.

That conversation occurred in 2006.

Various groups at Harvard have been looking at newspapers for years. In 2002, Professor Clark Gilbert did his doctoral research on how newspapers had failed to meet the challenge of disruptive technology presented by the internet and as a result had already lost the web war.

Gilbert noted that unlike previous industries destroyed by disruptive innovation, newspapers were fully aware the internet posed a challenge or threat. Yet recognizing and responding to the threat didn’t help.

“Threat had motivated action, but it was resulting in an aggressive replication of the newspaper business. Newspapers had spent a ton of money, with little to show for it. In an effort to defend their core market from attack, newspaper companies were missing the new emerging market altogether,” Gilbert said.

“This paradox can be summarized: absent a sense of threat, response to disruptive opportunities is inadequate; but with threat, the fully funded response is too rigid.”

Christensen, the guru of disruptive innovation thinking, explained In his seminal work, “The Innovator’s Dilemma,” why big companies and industries are regularly blindsided by circumstances and competitors that they often don’t deem worthy of their attention until those innovators are eating their stodgy, old counterparts’ lunch.

It wasn’t a happy book. One reviewer said of it: “Ultimately, though, Dilemma concludes there’s not much established companies can do to change their fate. Big-company executives are trapped in a doom cycle. For them, reading Dilemma is as comforting as learning the physics propelling a giant asteroid that’s heading for Earth.”

A few years ago Christensen wrote a follow-up called “The Innovator’s Solution.” He saw it as a kind of penance for the negativity of the first book. He hoped to find the lessons that could be applied to business practices from the entrepreneurs who had made their fortunes off of disruptive innovation.

The crux of the book? The reviewer writes:

One conclusion is that a huge part of innovation comes from looking at a problem the right way. Customers don’t really buy a product, Christensen and Raynor write — they hire a product to do something for them. The authors cite a classic example from a fellow Harvard prof: People don’t want to buy a quarter-inch drill. They want a quarter-inch hole.

From there, the authors write, the key is to innovate around “circumstances” — why someone buys something — not around products or customers.

This all comes up because of the ongoing bruhaha over Jessica DaSilva and her blogging about plans to blow up the Tampa Trib newsroom. She has been hit with a shit-storm of criticism about being naive, unintelligent or unsuited for work as a journalist. Much of the noise is the same type I heard a few years ago when discussing things like the Harvard study mentioned above. The circumstances are the problem, so rather than innovate around them, lets figure out how can we eliminate them.  And if we can’t eliminate the circumstances, let’s kill those who are a) talking about them or b) suggesting that we embrace and innovate around them.

I was encouraged in the last week or so to see real conversation on multiple fronts regarding how newspapers and journalism will survive within the emerging circumstances. Besides Buzzmachine, good conversations were occurring at Mindy McAdams blog, and many others (like Nick Eaton’s where he is giving readers a first-hand look at the process for change at The Spokesman-Review). It seemed to show that finally newspaper execs are starting to act like they understand that radical change must happen. To me it seems a little late, but there are apparently still lots of journos who want to adopt a wait-and-see stance or believe that our industry can somehow turn back the clock on the rest of the world (and not get steamrolled to oblivion in the process).

Those Harvard business types, the ones who predicted not only what would happen to our industry but when, they say those voices insisting on the status quo are the biggest problem for established industries facing disruptive innovation. The circumstances may be bad (really bad), but it is the curmudgeons who will insure they kill us.

So here we stand (or perhaps we are already falling and don’t even know it yet). The newspaper industry (and its millions of employees) are either tripping on the brink or already over the edge. There is no point complaining about the cliff. There is no help in not looking over. We won’t be saved by denying the inevitable. What we need now is to invent wings.

Blogged with the Flock Browser

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