Newspaper Next: Blueprint for Transformation Report
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From the Newspaper Next Symposium: A serious and encouraging look at ways to bring in non-consumers and build newspaper models around them.
API urges newspaper executives to consider jobs to be done, not products to be offered.
WASHINGTON, DC -- The American Press Institute’s Newspaper Next project challenged 90 top newspaper executives at a symposium last week to change the way they view their business.
Instead of looking through a product-focused lens (how do we get more people to read the paper or visit the Web site?), API and Newspaper Next (N2) are encouraging the industry to look through a customer-focused lens. The key questions: What information-based jobs are customers trying to get done, and how can newspaper companies introduce great solutions to help them?
The day-and-a-half Newspaper Next Symposium, sponsored by API, was aimed at helping newspaper executives understand how disruptive innovations are affecting their industry, and at equipping them to find ways to develop their own disruptive ideas. The meeting was part of a year-long, $2.25 million N2 project, initiated by API to research and test new business models for newspapers.
Clayton Christensen, Harvard Business School professor and co-founder of Innosight, a consulting firm engaged by API for the year-long project, offered examples of established industries, including department stores, airlines, automakers and steel mills, that have suffered similar disruptions. In each case, the leading companies lost market share to competitors that entered the lower end of the market or created new market segments by providing products that were lower in quality in some dimensions but more effective in others – and often more affordable or easier to use.
Jobs to be done
"Customers hire products or services to get jobs done," said Christensen. The key is to figure out what jobs people are trying to get done, and how newspaper companies could develop solutions far better than those currently available.
For instance, customers might hire a newspaper to keep them company while they while they are eating alone or waiting at the airport. Or a customer might hire a newspaper to get information about the local community. But, in each of these cases, the newspaper is competing against other media, as well as rivals from different product categories such as a BlackBerry, iPod, or cell phone.
When companies segment their market by jobs to be done instead of products to be offered, Christensen said, they find:
Newspapers also need to look at jobs to be done for advertisers. "Newspapers aren't doing a great job of doing jobs for advertisers, and competitors are stepping in," said Clark Gilbert, assistant professor of Harvard Business School and a director of Innosight. Advertisers want a single point of contact and uniform ad sizes across newspapers, better service and the ability to measure the reach of their ads. Many of newspapers' competitors are increasingly providing these services and data.
Don't ignore non-consumers
Gilbert also stressed that, rather than focusing only on current customers, newspapers also must consider the needs of non-consumers. "Much of the disruption in the newspaper industry is outside the core business," said Gilbert. Competitors are finding new business opportunities among customers who don't advertise with newspapers and don't read newspapers.
"There is nothing more critical than the link between non-consuming customers and the business model," said Gilbert, and he suggested that newspapers bring in non-consuming customers and build business models around them.
Doing more of the same business model won't fix anything, said Gilbert. For instance, upselling ads online doesn't change a newspaper's business model or find new revenue. But developing a product that attracts online ad brokers who typically don’t spend advertise on newspaper Web sites does change the business model.
Invest a little, learn a lot
Understanding the job to be done is not enough, cautioned Scott Anthony, a managing partner at Innosight. "You need to have a solution for it," he said. "Can you do the job better than anyone and make money on it?"
Rather than newspapers spending all the company's resources developing a specific new product, Anthony suggests they "invest a little, learn a lot and change as you go." Newspapers with multiple properties, he suggested, can use their smaller papers as learning laboratories. "Be patient for growth and impatient for profits," he said.
Newspapers need to be more willing to test market prototypes, said API Executive Director and President Andrew B. Davis.
Success creates barriers
Christensen and Anthony also stressed the organizational pitfalls that prevent established businesses from succeeding at innovation. Every successful company is built certain around key resources, processes and values that have made them successful, they said. But these patterns frequently blind companies to the very different approaches required to launch and develop truly innovative new products.
Anthony reviewed many of the patterns that stymie innovation and pointed out the counter-intuitive approaches needed instead, such as creating separate business units and staffing them with proven innovators who do not feel protective of the core business.
The Disruptive Innovation Advisory Program
To help newspapers refine and launch innovative ideas, API has introduced the Newspaper Next Disruptive Innovation Advisory Program, which will provide innovation guidance to disruptive ideas from three to five U.S. newspaper companies. Newspapers selected for this program will receive advice and consultation from the N2 project team over a four-month period, including two daylong sessions with the N2 project team and weekly conference calls to review progress.
Industry executives who think they have a good “jobs-to-be-done” idea are invited to submit it to be considered for API's Newspaper Next Disruptive Innovation Advisory Program, which was announced at the N2 Symposium.
For more information about the Disruptive Innovation Advisory Program and to download an application is available here. The deadline for applying is March 1.
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