Gradually then suddenly

Jeff Jarvis overhears press poohbahs bemoaning the state of their industry and brainstorming: “Various ideas were raised by respondents that made my spine shake: taxing ads to support publications with fewer ads, giving postal subsidies only to publications below a circulation threshold, government search engines.” As Jeff put it: “Arrrrrgh.”

They sound desparate, don’t they? Recently, Jeff made ten reasonable sounding suggestions for saving journalism in this post. I offered some additional suggestions, which I’ll repatriate now to my own blog…

Suggestion #11: read Andy Grove’s Only the Paranoid Survive. Paraphrasing Hemingway, industries go bankrupt two ways, first gradually and then suddenly. By the time “suddenly” comes, it is years too late. After a four hundred year run of steady growth, the newspaper industry is a lot closer to suddenly than anyone thinks. (How many other large-scale industries have survived four centuries with their basic DNA intact? I’m sure there must be a few, but I can’t think of them. Shipbuilding? Government?)

Yes, the newspaper industry has been around for 396 years. (I’m using the word “industry” to categorize a single owner organizing a group of people, dividing labor, pooling resources and coordinating across time and space.) The machinery has improved light-years, but the industry’s core organizational DNA has been in place since 1609. Though substantial, changes since then have been quantitative, not qualitative.

Suggestion #12: read Clayton Christensen’s Innovator’s Dilemma. A business is a complex organism with myriad interdependent parts coordinated via a command-and-control hierarchies. And industries are, in turn, complex intermeshed ecosystems built of multitudes of these individual organisms.

There are too many moving parts for massive change to be successfully be planned and executed. Imagine one commuter trying to change-out the engine block on his moving vehicle … in the middle of an LA freeway without killing himself and many others. When the operating environment shifts radically, de novo evolution from small, low-overhead organisms is the only route to inventing a new industry.

Beyond urging business executives to remember that everyone is trying to eat their lunch, Grove’s message is that business in the midst of fundamental environmental transitions need to listen hard, experiment daily and view everyone as a peer/partner and/or poacher. The key piece is listening hard. Institutions are built to cruise forward like aircraft carriers. But sometimes conditions fundamentally change, and survival requires the maneuverability of a one man kayak on a Class IV rapid.

Business is one half turning your own noise into signal and the other half distinguashing the environment’s core signal/trajectory from myriad noises. Grove offers a recipe for managing a business that has worked really well for 3 or 30 or 300 years when, suddenly, a bigger than average cloud of little things start going wrong. Just a rough month or the beginning of the end? The life of a business is full of three steps back followed by four steps forward & lost battles that win wars. You get used to taking the bad with the good. Sometimes, though, there’s a deeper message in the lost battle. In hindsight the tide’s turn is obvious, but lived in the moment, inflection points are invisible to almost everyone.

I’d urge everyone in the news business to reread Grove’s book. It’ll make your gut wrench.

Finally, to be clear, I don’t think publishers are in crisis because anyone does journalism better. Publishers are in crisis because someone does their business better. Their ad revenues are being vaccumed up by lower-cost non-publishing competitors. Worse,eBay, Google Adwords, CraigsList, Monster and even little Blogads are doing advertising cheaper/faster/better and along new axes. I too will rue the day the NYT stops publishing, but, sadly, I won’t be willing to pay $1500 a year for a subscription when advertisers have deserted it.

Publishers are also in crisis because they are losing the contest to engage readers. Which brings us back to paranoia. Publishers DO need to be paranoid. Their own customers, the readers, are competing with them in this game. Readers, whether as bloggers or commenters or list-serve correspondents or IMers or Amazon critics, are collaborating in a massive hive to process galaxies of information unimaginable just 5 years ago. This collaborative mode is a brilliant advance over corporate publisher’s proprietary/hierarchical/linear approach of processing information. It is faster, more cost-efficient and produces readership engagement that surpasses anything newspapers can imagine.