Medium: How to successfully manage a dying-industry. Facing the reality and destiny of the newspaper business opens new perspectives and opportunities.
San Francisco and the Silicon Valley are the hot spots in terms of innovation and starting up new companies, which might disrupt whole industries worldwide. I had the opportunity to stay in the city for some weeks. I dipped a little bit deeper in the daily life of the city and its inhabitants, and used the Bart and the Caltrain, which connects the City with the hot spots of innovation, frequently. I also loved to spend some time in Coffee Shops . By doing so I recognized what the Bart, the Caltrain, and Coffee Shops have in common. All three can be very crowded, you will find almost everybody using a smartphone, laptop or iPhone and hardly anyone is reading a printed newspaper.
The printed newspaper has disappeared from (the) public space. Smartphones, iPads and laptops are dominating the public scenery, they are ubiquitous, just 7 years after the launch of the first iPhone and 4 years after the launch of the iPad.
Nothing better illustrates , that the printed newspaper is sailing through troubled water. The readers are shifting to new platforms, advertising customers have more and more choices. There is an oversupply of ad space, which will increase. And last but not least hundreds of startups try to innovate on a daily basis, designing and launching new products and services, based on the nearly almost infinite opportunities the internet and new technologies, like cloud services, are providing them. They all compete with the traditional business model of the daily newspaper and offer readers, users and advertisers new products and opportunities.
Facing these developments, you do not have to be a visionary , to realize that the best days of the printed newspaper are over. More than that, in the next 10 to 15 years the printed paper will disappear not only from public spaces, it will disappear from our daily breakfast table and our daily life.
Which leads me to the main question.
How can a dying industry be successfully managed?
How can a business from which you known that it will not be sustainable over the next 15 to 20 years be managed? How can talented people be kept on board?
What can be seen in today’s newspaper companies is mainly calculated optimism. Managers deny the facts, hope that times will get better again and the storm will cool down. Business plans are made which are based on wishful thinking rather than facts and figures. This approach is humane, but it does not help to control the situation. I fear it makes the situation even worse.
So what can be done in such a situation?
# 1 Face the reality and destiny of the newspaper business
The first and most important step is to face reality. When the fact is accepted by the responsible management that the best days of the printed newspaper are over and that the business model of the printed daily paper will not last longer than for the next 10 to 15 years, then a decent plan, how to down scale the business year by year, can be elaborated. A concept can be developed how to deal with the employees. A program can be set up to help them find other job opportunities. Employees can be trained to start their own business and so on.
The moment the management accepts the reality of limitedness of the business model of the printed newspaper, it will start to become creative in how to handle the situation in a proactive way. They will probably find new ways they haven’t thought of before. They stop to be defensive, because they stop to fight against reality. The measures will not be driven by calculated optimism. And the people they are responsible for will realize that the management team sees what’s going on around them. The management will reclaim control over the situation by having a reasonable plan for a controlled soft landing.
A second option is to sell the business and to hand over the problem to somebody else. It’s not a bad option for the owner of the news paper at all. The probability to find somebody, who is willing to buy is high, newspapers are still strong brands. Decisions are not always based on a pure economical assessment. There will be a Jeff Bezos out there for at least the strong brands among the newspapers. But this is no solution for the newspaper itself and the underlying problems of the business model.
The weakest option is to neglect reality and base all energy on calculated optimism and wishful thinking.
# 2 Setup a separate business unit for new business and innovation
Facing reality and scaling down the business may sound solely defensive. As described above, it is the opposite of a defensive approach. The management is proactively handling the situation, it is in drivers seat and not just reacting. The second important step is to setup a separate business unit for new business and innovation. This business unit has to be completely independent from the legacy business organization. To scale down a business and grow a new business are different tasks. Very often these tasks are mixed, and the same management team and the same organizational unit are responsible to scale down and to build up. Different people are needed, different skills and tools to manage a startup than legacy business. The focus of the one organization is to scale down the focus of the other to build new business. If these tasks are mixed, failure is unavoidable. Neither the company will be successful in scaling down the legacy business nor it will successful in building a new business from scratch. People who can do both are a very rare species. To be successful in both areas, focus and dedicated resources are needed.
# 3 Hire the right people for both tasks
Last but not least, the right people have to be hired to manage both tasks, scaling down the legacy business and building new business opportunities, both in a professional and responsible manner. One has to keep in mind, that this process will occupy the company the next 5, 10 maybe 15 years.
Following these three steps
– facing the reality and destiny of the newspaper business
– setup a separate business unit for new business
– hire the right people for both tasks
the newspaper company will have a good probability to transform the legacy part of the business and to safeguard the brand and brand value. Furthermore the employees of the company are treated in a fair and open manner, new perspectives can be elaborated.
It is always better to be prepared and in drivers seat, than just a victim of unpredictable market forces and developments!
It is a tricky way, but worth to go. What is the alternative?!
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