Newspaper Next: Blueprint for Transformation

Blueprint for Transformation

The American Press Institute’s groundbreaking research into new business models for the newspaper industry: New ways to see opportunities, produce sustainable growth and reshape organizations for consistent innovation “A powerful wave of disruption is sweeping the newspaper industry, but it doesn’t have to be a disaster. There are at least as many growth opportunities as threats, and companies that learn to think and act like disruptors can not only survive but prosper. The Newspaper Next approach gives them the tools they need.”

Dr. Clayton Christensen, Harvard Business School Author, The Innovator’s Dilemma and The Innovator’s Solution

CONTENTS:

A TIME OF THREAT – OR OPPORTUNITY ...... 1 SECTION IV: NEWSPAPER NEXT DEMONSTRATION PROJECTS ...... 65 Introduction: The Disruptive Innovation Advisory Program ...... 66 INTRODUCTION ...... 2 1. The Boston Globe: Small advertisers ...... 67 SECTION I: SITUATION ANALYSIS ...... 5 2. The Dallas Morning News: MasterMom ...... 69 A. Upheaval in the media landscape ...... 6 3. GateHouse Media New England: WickedLocal.com ...... 71 B. Understanding the patterns of disruption ...... 9 4. Gannett/The Desert Sun: Structures for innovation ...... 73 C. The implications for newspaper companies ...... 12 5. Media General/Richmond Times-Dispatch: Non-advertisers ...... 76 6. North Jersey Media Group: Rethinking the online strategy ...... 78 SECTION II: THE NEWSPAPER NEXT (N2) INNOVATION METHOD ...... 18 7. The Oregonian: Targeting ‘young creatives’ ...... 80 Introduction: A practical innovation process ...... 19 Step 1: Spot opportunities...... 20 SECTION V: INDUSTRY COLLABORATION: WHAT DOES IT TAKE? ...... 82 Step 2: Develop potential solutions ...... 23 The N2 collaboration survey ...... 83 Step 3: Assess ideas ...... 26 Key success factors for collaborations ...... 87 Step 4: Test, learn and adjust ...... 29 Appendix ...... 90 Appendix ...... 31 ABOUT THE NEWSPAPER NEXT TEAM ...... 92 SECTION III: THE NEWSPAPER NEXT GAME PLAN ...... 36 Introduction: A strategic framework ...... 37 The Newspaper Next project and this report were a collaborative effort by the Area 1: Maximize the core ...... 38 American Press Institute and Innosight LLC. Area 2: Build audiences by fulﬁ lling jobs beyond news ...... 43 www.newspapernext.org. Area 3: Use new models to fulﬁ ll jobs of current and new advertisers ...... 49 Area 4: Create innovation structures and enablers ...... 57 Measuring progress: the N2 Dashboard ...... 63 A TIME OF THREAT – OR OPPORTUNITY?

For years, newspaper companies could see trouble on the horizon. “Newspaper Next has helped me to see that Few thought its arrival would be so dramatic. we do have a future ... Newspaper circulation and readership keep sinking, and Internet gains are not and that it is more in our enough to offset them. Print advertising revenues are weakening, and Internet control than the popular sales, though growing, are still too small to have much impact. Margins are being squeezed, and investor pressure now has caused the all but unthinkable: the wisdom would have us sale of Knight Ridder, one of the industry’s most respected companies. Other believe.” companies, public and private, are also under heavy stress. – Peter Bhatia, Executive Editor, Many believe this is the beginning of a long-term decline. Or worse. The Oregonian, Portland But outside this industry’s perceived boundaries, huge opportunities are opening all around. Customer behaviors are changing fast as individuals and businesses fi nd new solutions for their news, information and advertising needs. Successful new business models are emerging, providing new ways to get and give information, buy and sell, create and maintain relationships, and convene communities. Many of these offerings supplant traditional newspaper functions, adding new dimensions of value, convenience and interactivity. Consumers and advertisers are eagerly adopting these new solutions to get key jobs done in their lives. The innovators creating these solutions are seeing dizzying growth rates. Why can’t newspaper companies do the same? Newspaper Next’s conclusion: They can – but not without dramatic changes in the way they think, the strategies they adopt and the innovation processes they use. Like a devoted parent with a child heading off to college, the industry has reached a moment of self-examination. The public is migrating away from us, happily discovering new freedoms, opportunities and choices in a new world of infi nite information. Will we cling to our old perceived roles and sink into ir- relevance? Or will we commit to fi nding new roles that the public will welcome in their lives, even if these are unfamiliar and challenging to us? Newspaper companies that make this commitment will discover broad new horizons of civic service and business opportunity. They will succeed in engaging large new segments of customers, both among the public and among businesses, and they will discover ways to serve them more effectively than ever before. The purpose of Newspaper Next (N2) is to provide newspaper companies with the strategic framework, tools and processes they need to move into these new roles.

1 WHAT IS NEWSPAPER NEXT?

In mid-2005, seeing the seismic changes that lay ahead, the American Press Institute’s leadership took action. President and Executive Director Andrew B. Davis proposed a yearlong project to develop the innovation tools and processes newspaper companies would need to reverse course from decline to growth— a practical method that API could teach. The API board of directors approved.

“N2 moves your thinking from The effort, christened “Newspaper Next: Transformation in the newspaper industry The Transformation Project,” was launched in demands an ambitious agenda: the doom and gloom of the September 2005, and charged to deliver its • A better understanding of the forces refi ndings in September 2006. collapse of the newspaper shaping the entire media environment and industry to an opportunity The Newspaper Next (N2) challenge: Find a disrupting the newspaper industry. way to help newspaper companies migrate • A better way to see where new opportunities of a bright new future if you from a fi xed and monolithic business model are emerging. make the right choices. N2 to a diverse and growing portfolio of business lets you know there is life models, products and services that engage • A clear, practical process to shape the throngs of new consumers and advertisers. products that will unlock these opportunities after ‘newspaper only’.” while minimizing cost and risk. A portfolio solution is necessary because a – Lonnie Peppler, newspaper alone, or a newspaper and a news • A strategic game plan outlining what news- Publisher, Web site, are no longer enough. These are paper companies should strive to become The Monroe (Mich.) solutions for a mass audience, but the mass and some of the most promising opportuni- Evening News audience is dispersing in many directions, ties they could pursue. never to return. These are the major elements of the Newspa- In this fast-changing environment, how can per Next innovation method and strategies, an industry built on a centuries-old model be and they are detailed in this report. transformed? There is no silver bullet. Op- Much of the Newspaper Next innovation portunities abound, but method is adapted from the work of Harvard they are hard to see and Business School Professor Clayton Chris- FIGURE 1: THE NEWSPAPER NEXT GAME PLAN even harder to capitalize tensen. His consulting fi rm, Innosight LLC, on when you are wearing (SECTION III) was an integral participant at every stage of the blinders imposed by this year-long project. 100 years of success. Create innovation Dr. Christensen’s seminal studies reveal that Much of the industry structures & enablers successful companies across more than 60 would agree with the industries have repeated the same patterns manager who said in a Build audiences by of failure when hit with waves of disruptive Newspaper Next survey, fulfi lling “jobs” beyond news innovation. These patterns are profoundly ap- “I don’t know what to do, parent in the newspaper industry today. but I am ready to do it.” Maximize However, Dr. Christensen’s work also identi- core business fi es certain counter intuitive strategies and model tactics that can break these patterns of failure. These have enabled far-sighted companies to develop breakthrough innovations and Use new models to fulfi ll “jobs” of current / new achieve new growth. advertisers The Newspaper Next project set out to adapt and modify the Christensen approach specifi - cally for use in the newspaper industry.

2 NEWSPAPER NEXT: BLUEPRINT FOR TRANSFORMATION © 2006 AMERICAN PRESS INSTITUTE The N2 team spent a year researching the patterns of disruption in the industry, developing FIGURE 2: THE NEWSPAPER NEXT INNOVATION METHOD (SECTION II) a practical innovation process and strategic game plan for newspaper companies, and fi eld-testing these approaches. The team also recruited a task force of 26 individuals in key roles at newspaper or online companies SPOT DEVELOP ASSESS TEST, whose input helped to shape the project opportunities potential LAUNCH risks learn and adjust work and the fi ndings in this report. solutions In the last fi ve months of the project, the Newspaper Next innovation process was applied in seven demonstration projects at U.S. newspaper companies. In each case, the Phase I: Initial product Phase II: Evaluation and N2 Method showed its ability to stimulate development improvement cycle innovative thinking, reveal new opportunities, drive development of new products and business models, and reshape organizations for Newspaper Next does not duplicate these more consistent innovation. (See Section IV) efforts; it aims to complement and support A fi nal phase of the project explored the pos- them. Indeed, the future of journalism and the sibilities of collaboration among newspaper civic mission of newspaper companies will be companies to achieve new growth on the much easier to maintain if newspaper com- Internet. The results revealed a strong con- panies can develop profi table new business sensus among leading newspaper executives models to support them. on the high potential of collaborative efforts However, this report does give attention to to sell national advertising across newspaper the important question of how to sustain and Web sites. (See Section V) maintain the newspaper industry’s core prod- To help newspaper companies learn and ucts: print newspapers and news Web sites. apply this unique innovation method, The These will continue to be the foundation on Newspaper Next Method and Game Plan will which newspaper companies build for years become integral components of the Ameri- to come, and the Newspaper Next innova- can Press Institute’s programs and services tion process provides tools to improve their for the industry. effectiveness.

‘AND’ – NOT ‘OR’ WHAT ABOUT THE ‘CIVIC MISSION’? Newspaper Next’s primary focus – expanding and diversifying the newspaper business Many people in the newspaper industry see model – is just one of many challenges facing grave danger ahead for newspapers in fulfi ll- newspaper companies. Meanwhile, other ing their traditional civic mission as enabler organizations, including the Readership of an informed citizenry, facilitator of civic Institute, Newspaper Association of America, dialogue and watchdog on institutions. World Association of Newspapers, Poynter Under the triple whammy of shrinking news- Institute, Learning Newsroom, iFOCOS and paper readership, declining profi t margins others too numerous to name, are addressing and reductions in staffi ng, the signs are alarm- other tough newspaper issues. These range ing. With less than half of the public regularly from how to increase print and online news using newspapers, a large question looms: readership to how to assure the future of How will society function if the quality, quan- journalism and a healthy society. tity and public impact of meaningful journalism are not sustained? NEWSPAPER NEXT: BLUEPRINT FOR TRANSFORMATION © 2006 AMERICAN PRESS INSTITUTE 3 Newspaper Next takes a pragmatic view. For The complex challenge of transforming newspaper companies to keep fulfi lling their newspaper companies has no simple answer, important civic roles, we see two prerequisites: but we see great cause for encouragement in these and dozens of other experiments taking • The regular attention of a large majority of place in the industry. Most importantly, we the public have seen the recognition dawning that there • A strong and sustainable fi nancial base are many new opportunities and many ways to go forward. Both are endangered under the traditional newspaper business model. For both, News- There is much to do, and there is no time to paper Next aims to provide the necessary lose. We believe that the right actions taken innovation process, tools and strategies to today can drive the transformation that this achieve new growth. industry so urgently needs.

Companies adopting the N2 approach quickly will discover new frontiers of opportunity, ABOUT THIS REPORT both in audiences and in advertising. They The major sections of the Newspaper Next will ﬁ nd themselves serving broader con- report provide: stituencies with the larger and more diverse portfolio of products and services that they Section I: Situation Analysis launch. How fundamental changes are reshaping At the same time, through these new channels, the entire media environment; how these they will discover new dimensions for fulﬁ lling changes are sending waves of disruption their civic mission. They will discover they can through the newspaper industry; the implica- assist and enable a broader spectrum of indi- tions for newspaper companies. viduals, communities and businesses in a wider range of ways than ever before. Section II: The Newspaper Next Method

ENCOURAGING SIGNS Strategies, tools and processes to spot op- OF TRANSFORMATION portunities, shape new products and iterate The Newspaper Next team has crisscrossed to success. the country in the last six months, using the Section III: The Newspaper Next methods described in this report to help news- Game Plan paper companies ﬁ nd new paths to innovation. Everywhere we have been, we have seen Overall strategies and objectives for news- the very real challenges they face, including paper companies, plus some of the most institutional structures and mindsets and major promising avenues for growth. constraints of money, workforce and time. Section IV: Lessons from the trenches And yet we have seen dramatic shifts within these companies as they use the N2 approach. How the Newspaper Next concepts, tools We have seen them reframe their markets and and methods energized and reshaped the discover major opportunities for growth. We innovation process at seven newspaper have seen them race ahead in developing and companies. testing new products and business models Section V: Collaboration in the while reducing the risks and costs of innova- Newspaper Industry tion. We have seen them discover important improvements to be made in their existing What are the most promising opportunities products. Some have made dramatic prog- for joint action by newspaper companies? ress in reshaping their companies to make What are the most promising structures for innovation a continuous process. collaboration? 4 NEWSPAPER NEXT: BLUEPRINT FOR TRANSFORMATION © 2006 AMERICAN PRESS INSTITUTE SECTION I SITUATION ANALYSIS What’s happening — and why? A. Upheaval in the media landscape B. Understanding the patterns of disruption C. The implications for newspaper companies

5 A. UPHEAVAL IN THE MEDIA LANDSCAPE

Driven by shifting customer behaviors, the media landscape is changing at an unprecedented pace. Virtually every aspect of the environment is in fl ux, sending media companies scrambling for new services and strategies, alliances and acquisitions. In the newspaper industry, it often feels like a thousand cuts infl icted by a thousand enemies. The game is changing before our eyes, and new competitors are scoring successes even before we see them coming. In this chaos, it is diffi cult for a newspaper publisher, editor or group executive to set a strategic course and hold it. To move intelligently, we need to review and understand why these things are happening. What are the driving forces? What are the implications for newspaper companies? Most importantly, what can we do about them?

A FUNDAMENTAL CHANGE People will want many things that do not exist IN HUMAN LIFE yet — new kinds of information, new tools and services, new experiences, new ways to get In a search for answers, the Newspaper Next things done. The Internet is alive with experi- 2 (N ) project team spent a year studying the mentation as innovators try to guess at these media landscape and the forces reshaping it. new solutions. But these have only scratched In one segment of the project, we conducted the surface of the possibilities, and the pace scores of interviews, studied bushels of of change will only quicken. reports and scanned thousands of stories in the media. While the implications and possibilities for both society and business are immense, We fi nd the evidence overwhelming: This is among the fi rst to feel the impact — as both change on the grand scale, driven by a fun- threat and opportunity — have been the damental transformation in the connection traditional media. For them, this long-term between humans and information. The social revolution in human behavior creates an impact is likely to rival the advent of movable intense near-term crisis. type and mass literacy. The change is advancing quickly toward a new SEEING THE FUTURE THROUGH reality in which people can get any informa- OLD-MEDIA BLINDERS tion, any time and any place, and publish their own content at will. As custodians of the old and limited information pipelines, newspapers, magazines, radio In this century, vast reserves of human intel- and television are seeing their dominance ligence, creativity and productivity will be erode as consumers and advertisers slip away unlocked as billions of individuals around the to new sources of information, news and globe use this new access to knowledge to entertainment. maximize their potential. The impact on human freedoms and quality of life is sure to be For these companies, comprehending the immense. scope of this change is both crucial and diffi cult. The trigger is technological, but the impact is behavioral. As individuals respond to the in- For newspaper companies, the very newspa- fi nite range of choices available to them, this per itself — its form, function, history, role will reshape the media landscape and, over in society and demanding production pro- time, society itself. cesses — creates blinders that make it hard

6 NEWSPAPER NEXT: BLUEPRINT FOR TRANSFORMATION © 2006 AMERICAN PRESS INSTITUTE mar-school student can create a Web site. No Some implications longer do relatively few owners control the of an inﬁ nite pipe: ﬂ ow of information.

The result is a dazzling proliferation of sources • Everything is available and voices available to any Internet user, and a all the time history-making democratization of media. • Free content becomes all but universal What will the changes from a tiny pipe to an • Individuals’ choices become

MONROE EVENING NEWS PHOTO infi nite pipe mean for individuals and their be- virtually infi nite haviors? The answer holds tremendous import The entire student body of the Havekost School, pictured in the Monroe (Mich.) Evening News in the early 1930s. for content providers. • Users expect information The reason: It was one of 24 local “100-percent schools” on demand in which every student’s family subscribed to the news- To fi nd their way amid these bewildering paper. How many 100-percent schools exist today? • Search becomes a basic changes, media companies must shift their behavior and skill to comprehend the fundamental changes focus from products and services to the lives • Users — not just editors or of customers. As the landscape keeps shifting, happening around them. experts — make choices the central question is, “What indispensable Less than a lifetime ago, the newspaper was roles can we play in the lives of consumers and • Users create content at will the state-of-the-art information pipeline, the businesses?” • “What matters to me” drives only comprehensive information feed to tide most user choices people over from yesterday to tomorrow. To see the vast array of new opportunities, it is imperative to look through their eyes and un- • Personally relevant content There was no substitute. eclipses generic content derstand the jobs they are trying to get done. This near-monopoly ended decades ago, but This fundamental shift of perspective is one of • Audiences splinter in many a sense of indispensability still colors the the central principles of the Newspaper Next directions industry’s consciousness. Innovation Method and Game Plan. • Virtual communities form without limits of time or distance In most households today, however, newspapers are just one option among millions. Going NEW TOOLS AND • Breaking world and national from limited to infi nite choices, consumers are NEW SOLUTIONS news are commoditized eagerly substituting faster, cheaper, fresher, • Users time-shift all media The unfolding revolution introduces a growing simpler (or more exhaustive) solutions to do at will number of technologies that supercharge information jobs once fi lled through newspa- • Forms and uses of content traditional behaviors and enable new ones. pers and other traditional media. become fungible High-speed Internet access makes technolo- This has fueled massive increases in time spent • Lines dividing media blur gies such as search, databases, mapping, with media, now reaching an average of about e-commerce, audio and video streaming, user seven and a half hours a day1 for U.S. adults. authoring, blogging, discussion forums and As channels proliferate — print, broadcast TV, instant messaging easy and powerful, and in- radio, cable TV, satellite radio, Internet, cell creases the amount of time people are willing phones, DVDs, music players, gaming boxes, to spend using them. These and other online and more to come — media use saturates technologies are giving rise to new online more and more of our waking hours. behaviors and business models. With more sources and channels, the domi- The Internet is fast becoming a preferred nance of any one source tends to dissipate. channel for individuals to get and give infor- As a result, many observers have opined that mation, create and sustain relationships, be we are now witnessing the end of the mass part of a community, buy and sell things, fi nd audience. and compare choices, and be entertained. In many situations, it is now the best possible Meanwhile, the Internet has also drastically tool for getting key information-based jobs reduced the barriers to publishing. Without done, displacing solutions and business mod- a press or years of training, even a gram- els with long and successful histories. NEWSPAPER NEXT: BLUEPRINT FOR TRANSFORMATION © 2006 AMERICAN PRESS INSTITUTE 7 UPHEAVALS IN ADVERTISING PATTERNS IN THE WHIRLWIND The infi nite pipe and its related technologies The disruptive forces buffeting traditional also are driving revolutionary changes in the media are massive and far-reaching, but they advertising landscape. are not random. They track exactly with classic patterns in other industries. The splintering audience makes it increasingly diffi cult and costly for advertisers to reach These patterns emerge when new technolo- broad swaths of the population. The increas- gies undermine existing companies, and Dr. ing media clutter makes it diffi cult to be seen, Clayton Christensen has identifi ed them in so advertisers are embedding themselves in more than 60 industries. His work, published movies, games, online video and other new in the best-sellers The Innovator’s Dilemma3 channels. and The Innovator’s Solution4, reveals how disruption happens, why established compa- At the same time, new interactive technolo- nies almost always lose when it does, and how gies such as search and behaviorally targeted they can break the patterns of failure. advertising make it possible to reach precise target groups as never before. The two-way The critical fi rst step is to understand how and multi-media capabilities of new media disruptive innovation works. are enabling advertisers to engage their target customers in entirely new ways. Old media — both print and electronic — cannot match the targeting and engagement capabilities of the Internet and other interactive media. Nor can they deliver the direct evidence of effectiveness — ROI, or return on investment — that advertisers want and interactive advertising can provide. The traditional advertising media still com- mand massive market shares, but virtually every day brings reports of major advertisers switching dollars from traditional to interactive advertising, usually at the expense of print or broadcast. Traditional advertising agencies, like traditional media, are swamped in profound change. Anthony J. Hopp, chairman of the Association of American Advertising Agen- cies, said recently, “The agencies that will succeed are the ones … that can fi nd the new ways to engage and connect with consumers. If you’re not doing that, you’re not going to be in business.”2

The agencies are not alone. The traditional media face exactly the same mandate, as individuals and advertisers stampede toward new solutions for information, entertainment and news.

Innovation happens routinely in every industry. Established companies usu- FIGURE 1: SUSTAINING INNOVATIONS ally lead the way, improving existing products in response to the demands Incumbents nearly always win Pace of of their best customers. This is the nt normal path of growth and health for product improveme successful companies.

The following graphs from Dr. Christensen’s Sustaining work illustrate how this process happens. innovations

Performance Performance that Figure 1 shows how the performance of a customers can hypothetical product changes over time. use The dotted red line refl ects the pace at which the average customer can absorb improvements in the product. Typically, the wants of customers change only gradually. But customer Time desires actually span a wide-performance Source: Clayton Christensen, The Innovator’s Solution range, as indicated by the red bracket on the right — from those using only a few of the beat back outside competition based on their product’s benefi ts to those who will never be resources, established customer relationships satisfi ed no matter how good the product gets. and technological skills. Managers are trained to respond to the wants of their most demanding (and usually A DRAMATICALLY DIFFERENT most profi table) customers. So, in industry KIND OF INNOVATION after industry, the pace of product improvement follows the blue line, rising faster than Every so often, however, a very different the average customer’s wants or needs. type of innovation occurs — what Dr. Chris- tensen calls a “disruptive innovation.” Often The microprocessor chips powering PCs are triggered by a new technology, it does not a good example. At fi rst, performance was so offer just another incremental improvement. slow that speedy typists could outrun them. Instead, it fundamentally changes the game. Many iterations later, they are so fast that The new product provides lower performance most users never tax them. Most customers along some traditional dimensions, but it no longer care about more speed gains, but offsets those factors with new benefi ts such as high-end users like gamers and video editors simplicity, convenience, ease of use, ease of are still eager for faster chips. access or low price. Improvements on the blue line are known As fi gure 2 shows, a disruptive innovation as “sustaining innovations.” Large or small, doesn’t extend the blue line. Instead, it cre- they typically appeal to customers already ates a new line below the performance level using the product. Newspaper examples of the established product. And it appeals include adding special sections, redesigning to different customers — typically those who the newspaper, building a new press to meet cannot afford the existing product, or lack advertisers’ color demands and adding video the skills, access, time or knowledge to use it. or audio to a news Web site. It takes root among these nonconsumers of When it comes to sustaining improvements, the existing product, who are overshot by its established companies usually win. They performance, complexity or price.

NEWSPAPER NEXT: BLUEPRINT FOR TRANSFORMATION © 2006 AMERICAN PRESS INSTITUTE 9 Suddenly the blue-line managers realize this FIGURE 2: DISRUPTIVE INNOVATION newer, simpler product is draining away business. Often they are unwilling or unable to compete, so they sharpen their focus on high- Incumbents nearly always win Pace of end customers, only to see the disruptive product product rise into that space, too. Their sales improvement and profi ts erode or, in some cases, collapse. Disruptive innovation can happen in every Sustaining type of industry. Examples, past and present, innovations abound in manufacturing, retailing, services, Performance that distribution, telecommunications and else- customers can use where. Dr. Christensen’s books are rich with Performance vivid case studies, but a few brief examples will suffi ce here: New competitors nearly always win Disruptive • Henry Ford realizing the middle class want- Innovations ed motor-driven travel, too, and inventing a simpler car and a new manufacturing model to provide it. Source: Clayton Christensen, The Innovator’s Solution • PCs beginning as toys for hobbyists, but improving until they swept the business Blue-line managers often fail to see the threat world and displaced the minicomputer because the new product falls short of their industry. quality standards, does not appeal to their customers and often operates on different • Japanese automakers winning the low-end business models with lower margins. So they of the U.S. auto market with small, cheap ignore it or respond ineffectively. cars, then improving quality and gaining power in every market segment. Meanwhile, on the green line, managers face the same product-improvement pressures as • Southwest Airlines creating a business managers on the blue line. Their best cus- model to make air travel affordable for bus tomers demand better performance, so they travelers, and then eating into the main- improve the product over time. The green line stream markets of the major carriers. keeps moving upward. • Wal-Mart and other discounters creating Over time, performance often becomes good low-price models for low-end consumers enough to attract customers of the estab- and driving department stores into fi nan- lished product. This is disruption in earnest. cial trouble and consolidation.

FIGURE 3: HOW DISRUPTIVE PRODUCTS ARE DIFFERENT

Disruptive Innovations … “Sustaining” ➞ “Disruptive” … start with “good enough” performance along traditional dimensions Better ➞ Different … offer new beneﬁ ts such as simplicity, convenience or low prices Premium price ➞ Low price … appeal to “overshot” customers or “nonconsumers” New & improved ➞ Good enough … often utilize “low cost” or “start small” business models Leap forward ➞ Leap down … take advantage of competitive weaknesses and blind spots Complicated ➞ Simple

Dr. Christensen was intrigued by the pattern. “R” “P” “V” Why, in industry after industry, do the established companies — even respected fi rms Resources Processes Values (priorities) with brilliant leaders — fail to see disruptions • People • Production The criteria by which priori- until too late? • Technology • Hiring & training tization decisions His research revealed that it wasn’t stupidity • Products • Product development are made or stubbornness. Rather, they were the vic- • Equipment • Manufacturing • Cost structure/ business model tims of the very habits and behaviors that had • Information • Planning & budgeting made them successful. The right strategies • Size of opportunity • Cash • Market research and behaviors for sustaining innovation are • Customer demands • Brand • Resource allocation the wrong ones for responding to disruptive • Culture innovation. • Distribution In mature industries, the blinders created The resources, processes and values that make an organization successful by the resources, processes and values (or are the same ones that can inhibit response to disruptive innovation. priorities) required for their existing products Source: Innosight LLC caused them to make two common mistakes: 1) failing to allocate resources to explore the new possibilities, or 2) force-fi tting those resources into products too much like their established models. In a classic example, AT&T — source of most But a few people, such as doctors and stock telecom advances for decades — spotted traders, needed to be in touch at all times, so cell phones early on as a possible new busi- the early phones did sell. And, inevitably, the ness opportunity. In the early 1980s, it hired technology improved. Today, it takes only McKinsey & Co. — one of the world’s leading about 10 hours to sell 900,000 cell phones.5 consulting fi rms — to predict the future size Again and again, disruptive innovations fi t this of the cell-phone market. pattern. The early version of the product is Using the best available methods, the con- inferior to the accepted product in important sultants concluded that total cell-phone sales ways, but it also appeals to a certain slice of the by 2000 would be about 900,000 units. That public that values the tradeoffs. Established was too small for AT&T, so it pulled out of the companies turn away, repelled by the quality market. levels, small market sizes, low profi t margins or other factors. But the innovators keep going In hindsight, this looks absurd. But looking until, gradually, the product eats into the center at the best cell phones of the early 1980s, of the market. any reasonable person might have done the same. They were the size of a small suitcase, The challenges pummeling the newspaper weighed many pounds, and had miserable industry show all the classic signs of disruptive battery life, bad call quality and almost no innovation. signal coverage.

How are newspaper companies being disrupted? The product’s history tells the story. Newspapers were created to fi ll a great vacuum, providing the world’s fi rst regular information pipeline to homes and individuals. To achieve this, they had to be manufactured and delivered in the space of a few hours. They had to be affordable and portable. They had to compress a wide range of urgent information into limited space. They had to focus on the shared interests of the entire population because everyone “drank” from the same pipe. The newspaper was the information equivalent of a Swiss army knife — a rich value proposition that helped readers in many dimensions of their lives. Newspaper people called it “the daily miracle,” and given the technologies, they were right. It was a great success formula — nearly 100% readership, large volumes of advertising and impressive profi t margins.

“[Dr. Christensen’s work] TRENDS AMONG READERS no cost), fresher information, and anytime-ac- explains how shoppers and cess with a few keystrokes. They can focus on Today, however, most households are con- niche subjects to depths that general-interest trader publications were nected 24/7 to vastly greater information newspapers cannot match. pipes — broadcast media, cable TV and the able to blindside us a Internet. One by one, the newspaper’s infor- Free dailies, growing in the U.S. and abroad, generation ago. It points to mation jobs are leaking away through these are a good example. They offer much less channels to new providers. depth and scope than their paid competitors. fresh opportunities among They are designed, in format and content, for our least loyal and least In classic disruptive fashion, these new solu- an easy, entertaining read in a short snippet tions often provide lower quality in some attractive customers today.” of time, to appeal to people who are not likely ways (depth and comprehensiveness), but of- to buy a daily anyway. – O. Reid Ashe, fer attractive tradeoffs such as lower cost (or Executive Vice President & COO, Media General Inc. Richmond, Va. FIGURE 5: DISRUPTERS ERODING THE NEWSPAPER VALUE PROPOSITION

PRINT/BROADCAST ERA ONLINE ERA

Local news Unclear Radio

World, US TV Cable Aggregators, cable, espn.com, cnn.com Broadcast TV Opinion Blogs, discussion sites, aggregators

Retail sales Retail & comparison sites, craigslist, eBay DM

Autos serviceFull daily newspaper Auto Web sites, craigslist, eBay

Real estate Agency Web sites, MLS sites, craigslist Shoppers, ‘traders’ Careers Job sites, craigslist, recruitment agencies

12 NEWSPAPER NEXT: BLUEPRINT FOR TRANSFORMATION © 2006 AMERICAN PRESS INSTITUTE Craigslist.com does not offer sophisticated design and there is no staff to help people FIGURE 6: THE NEWSPAPER HABIT IN DECLINE create their classifi ed ads. But it is incredibly easy to place an ad anytime day or night and Newspaper readership by generation to add photos. You can say whatever you Percent of respondents who ‘read a paper yesterday’ want and it is free to most users. Consequent- 80% ly, people use it to sell things they would For a person never bother to advertise in a paid daily. born: Before 1932 Other factors are conspiring to depress 60% newspaper readership as well. Americans are 1932-1941 working more hours, spending more time on entertainment and less time engaged with 40% 1942-1951 their communities, as documented in Robert 1952-1961 Putman’s Bowling Alone.6 1962-1971 A strong trend away from newspapers and 20% 1972-1981 news consumption among younger generations has been documented in numerous Source: Pew Research Center Biennial News Consumption Survey studies. 0% 1990 1995 2000 2005 When half of the adult population no longer uses newspapers and shows high resistance to our best marketing efforts, it is apparent businesses are gradually recognizing online that newspaper companies must look beyond advertising’s ability to target qualifi ed pros- their traditional boundaries to fi nd audience pects, build new forms of customer participa- growth. tion and engagement, and deliver precise metrics to show effectiveness. TRENDS AMONG ADVERTISERS So far, most newspapers have felt the pressure of online competition only in a few On the advertising front, disruption is taking categories — most notably classifi ed and several forms, and the aggregate effect is a employment — and metro papers have been fl attening of newspaper ad revenues. more affected than smaller markets. Much of the softness in traditional ad spend- Small daily newspaper markets may have seen ing comes from disruption in advertisers’ less disruption than large ones so far, but even own industries rather than disruption among in small towns, high-speed Internet access is media. These include department stores changing customer behaviors. At best, it ap- disrupted by discounters, U.S. auto manufac- pears small newspapers may have a little more turers disrupted by Asian manufacturers and time than large ones to discover the new prod- real estate brokers disrupted by discount and ucts and services their communities will use. online players. In markets of all sizes, Internet advertising will Meanwhile, Internet disruption of newspa- grow strongly in the coming months and years. pers is beginning, but it appears to be in a With online audiences growing fast, Web very early phase. Internet use by advertisers advertising tools and strategies maturing, and and agencies is accelerating, but it is lag- local businesses becoming more Web savvy, ging well behind the pace of online audience the pull on advertisers will increase dramati- growth. cally. Traditional newspaper revenues will be Most newspapers have little national adver- affected much more strongly than they are tising to lose, and local advertisers have been today. moving only slowly to the Internet. But local

NEWSPAPER NEXT: BLUEPRINT FOR TRANSFORMATION © 2006 AMERICAN PRESS INSTITUTE 13 NEWSPAPER WEB SITES — applications — now gives them the power GOOD NEWS, BUT … to unlock huge amounts of information that people will want, will use and often will pay for. To their credit, newspapers saw the disruptive potential of the Internet early and moved to establish news Web sites. Many have been NEW FRONTIER OF successful in winning both readers and adver- OPPORTUNITY: LOCAL tisers, and recent revenue growth has been INFORMATION strong. For most people, news is a problem solved However, the online strategy chosen by long ago. There is plenty of it, and they know most newspapers — essentially reproducing how to get what they want. Most people the newspaper online — falls into a com- aren’t looking for new ways to get news. mon disruption trap. Dr. Christensen calls it But local information is a different story. Peo- “cramming:” attempting to reproduce the old ple need many kinds of information besides product in the new technology, and thereby news every day, depending on their interests, missing many of the best new opportunities. their needs, and what’s going on in their lives. Others have done it many times before. A large share of the information they need is Kodak saw digital imaging coming in the local, and it’s often difﬁ cult to get. 1970s and responded — at a huge research The Internet and its capabilities, such as search, and development cost — by developing a databases, community forums, user authoring professional-grade digital camera with a and mapping, provide the tools to unlock this $30,000 price tag. Needless to say, it failed in local information as never before, fulﬁ lling new the marketplace. When digital imaging took needs and creating new channels. off, it happened at the opposite end of the market, with simple point-and-shoot cameras For newspaper companies, this is a huge that traded image resolution for new kinds well of new opportunities. They are better of convenience. Seeing the market direction, positioned than any other players to gather Kodak then introduced its successful line of this local information and make it usable for EasyShare™ products. local residents and businesses. If they move quickly, they can establish themselves as the By reproducing their print business model pre-eminent sources of many highly valued online, newspaper companies have produced types of local information. some gains. But they have been slow to spot and adopt new revenue models such Opportunities abound: databases such as lead generation, targeting and direct as parks, medical facilities and restaurant marketing — major revenue sources for pure- menus; hyperlocal information like youth play Web sites. And they have been slow to league news or local school happenings; cus- see the huge user and advertiser potential tomer knowledge about mechanics, contrac- of new online offerings such as local search, tors and restaurants; community discussion hyper-local content, niche audience develop- groups on niche topics from parenting to ment, blogs, community forums and user- recreation to entertainment; and shopping generated content. tools to show what stores sell a desired item at what price. At the same time, their focus on news content has mostly ignored half of the public audi- But others are moving in on these opportuni- ence — the people who don’t regularly pur- ties. Some competitors — like craigslist.com sue news. And most newspaper companies and angieslist.com — have a head start in have not yet acted on the realization that the some categories and some cities. Even in small Internet — through tools like search, data- towns, big players are jockeying for advantage. bases, community forums and user-publishing A local.yahoo.com search for pizza in Colum- bus, Ind. (pop. 40,000), yields 19 restaurants

14 NEWSPAPER NEXT: BLUEPRINT FOR TRANSFORMATION © 2006 AMERICAN PRESS INSTITUTE within fi ve miles, a map, some user reviews and A new Newspaper Next survey shows strong contact information for each one. agreement on this point among the top 25 newspaper companies and top 25 newspa- The land rush to meet local information pers. (Section V) needs has barely begun. If newspapers see the opportunities and commit the necessary Across the entire advertising front, newspa- resources, they can become the preferred per companies face a strong challenge in the providers of a wide range of community, con- emerging media landscape. They can drive sumer, civic, recreation, entertainment and aggressively to become the providers of high- other information. This will enable them to performance Internet advertising solutions serve their communities in new ways, attract- for local, regional and national advertisers, or ing new audiences and serving new business they can watch as competitors win these huge customers — a natural fi t with their time-hon- opportunities. ored civic mission of helping communities lead better lives through information. Rx FOR NEWSPAPER COMPANIES: ‘THE COLLABORATION PORTFOLIO SOLUTION’ OPPORTUNITIES As disruptions erode the traditional news- On another front — national advertising — paper business model, many in the industry the shifting media landscape could be a are recognizing that a newspaper alone, or huge benefi t to newspapers, but only if a newspaper and a news Web site, are not they can overcome steep internal barriers enough. The public and advertisers are splin- to collaboration. tering in too many directions. As national advertisers go online, they seek In the search for new models, terms like “port- high-quality environments and audiences for folio,” “audience aggregation” and “plat- their advertising. Newspaper Web sites offer form-agnostic” are coming into the industry both and, in the aggregate, could compete lexicon. The realization is dawning that it’s with the major portals now winning most of imperative to provide a broader range of the business. information to a broader range of audiences. But making a national advertising buy across The “portfolio solution,” as visualized by multiple newspapers has always been notori- many, consists of creating a suite of products ously diffi cult. In print, newspapers never and services in addition to the newspaper, succeeded in standardizing formats, rates intersecting the population on a variety of and policies to create a “one-order, one-bill” planes. The goal is to create new audiences of solution. Consequently, they continue to be individuals who are not necessarily interested bypassed for millions of dollars in national in the newspaper’s contents, and to attract advertising spending in favor of broadcast, advertisers for whom the newspaper isn’t cable and magazines. necessarily a suitable way to reach their target audiences. Today, a national buy on newspaper Web sites is no easier than in print. But some online These new products may be print or online, executives say the Web should be an easier daily or nondaily, paid or free — or mobile, problem to solve because printing presses or e-mail, or virtually any other form — are not an issue. Creating a joint one-order, depending on the target user and his or her one-bill solution would be diffi cult, but some circumstances. Some companies are vaulting say it would enable newspaper companies to ahead in these directions, while others have compete for a large new stream of national barely begun. online advertising dollars.

NEWSPAPER NEXT: BLUEPRINT FOR TRANSFORMATION © 2006 AMERICAN PRESS INSTITUTE 15 What about A MATTER OF SURVIVAL sion that newspapers view as central. On the profi t margins? contrary, if companies succeed in engaging After deep study of the media landscape for ever-larger shares of the local audience, they 2 As disruptions buffet the newspa- the past year, the N project concludes that create the opportunity to incorporate news per industry, its historically high the portfolio strategy for newspaper compa- in forms these audiences will use and value. If profi t margins are being squeezed. nies is not merely an option for newspaper they do not succeed, they will reach ever- High margins resulted from the companies. It is THE option — a necessity for smaller minorities of the population, making it product’s near-monopoly status survival. harder and harder to achieve civic impact. in the past and persisted despite competition from broadcast Most signs indicate that the newspaper itself Turning a traditional newspaper company into and cable media. Many people is likely to shrink into a boutique product, a portfolio company is a tall order. The port- believe the Internet is a structural serving an ever-smaller audience and adver- folio concept alone will not do it, nor will the change that will keep driving them tiser base. How long a newspaper will remain industry’s traditional approaches to innova- downward. a viable product is unknown, but the pace of tion, because sustaining improvements and Under heavy investor pressure, shrinkage appears to be accelerating. old business models will not be enough. public companies (and many pri- Already, a growing majority of the local popu- vate ones) are fi ghting to maintain Caught in a massive wave of disruption, news- lation is looking elsewhere for local informa- profi ts by cost-cutting and other paper companies must learn to think and means. tion they want and need. Newspaper compa- behave like disruptors themselves. They need nies can either become disruptive innovators to see and understand customers’ lives and Newspaper companies face a dif- themselves by creating new solutions to meet fi cult dual imperative: to maintain business needs in completely new ways, and these needs, or they can watch competitors the value and viability of declining they must create products that get these jobs core products while also investing do it — and see their local information fran- done better than any other solutions. They in new initiatives that can drive chise ebb away. need an approach that can move fast, reduce future growth. Some fear that the portfolio solution means risk and maximize the likelihood of success. Other disrupted industries teach abandoning news or deserting the civic mis- an important lesson: New winners often start small. Don’t reject new ideas just because they can’t match traditional margins in the short term. Rather, fi nd ventures that can be profi table in the short FIGURE 7: HOW READY FOR INNOVATION ARE NEWSPAPER COMPANIES? run, even if margins are modest, (RATINGS BY N2 TASK FORCE IN JANUARY 2006) and give them the chance to grow. In the midst of disruption, there are Report Card: N2 perspective no magic formulas, but it is crucial Evaluation for: The Newspaper Industry to balance a newspaper company’s investment “portfolio” between the core and new ventures, consis- Recognize the need to change A- tently funding enough smart new Allocate resources to new growth C experiments to discover the new winners the company will need. Design solutions users consider great because they get their jobs done better than any alternative C In the midst of structural change, Expand the market by fi nding nonconsumers and nonconsuming occasions C- that’s the best plan for survival, Unlock maximum revenue potential by looking beyond the traditional revenue model D+ and an important strategy for investors to understand. Minimize costs by avoiding needless overhead and wasteful investment in overshot dimensions B- Assemble the necessary capabilities to deliver innovative solutions C Possess the necessary capabilities for repeated innovation and growth C Communicate the change agenda internally C+ Communicate the growth story externally C

16 NEWSPAPER NEXT: BLUEPRINT FOR TRANSFORMATION © 2006 AMERICAN PRESS INSTITUTE THE NEWSPAPER NEXT The Newspaper Next team emerges from its SOLUTION year of study with high hopes for the industry. We have seen the N2 concepts and processes That is what Newspaper Next is intended to energize teams of newspaper people as they provide. It gives newspaper companies the realized vast realms of new opportunities, and strategies, processes and tools they need we have seen them successfully adopt dra- to innovate in new directions, developing matically different approaches to innovation. growth-oriented portfolios of products We believe the industry can break out of the and services for their communities and their old molds and rise to the challenge. markets. These are outlined in the next two sections of this report. Time is short. The landscape is changing fast, and new products take time to grow. It is im- The Newspaper Next Innovation Method (Sec. perative for newspaper companies to commit II) sets out a clear process for identifying high- themselves to action, and to do it now. growth opportunities, conceiving products to capitalize on them, and shaping them for success while minimizing cost and risk. 1 Veronis Suhler Stevenson: Investment Consider- The Newspaper Next Game Plan (Sec. III) ations for the Communications Industry sets out a practical strategic framework for 2 Winterberry Group survey, 2006 becoming a portfolio company by identifying 3 Clayton M. Christensen, The Innovator’s Dilemma: the four key components of success and out- When New Technologies Cause Great Firms to Fail lining the most promising kinds of opportuni- (Boston: Harvard Business School Press, 1997). ties in each of the four. 4 Clayton M. Christensen and Michael E. Raynor, The Innovator’s Solution: Using Good Theory to These are learnable, practical solutions for Solve the Dilemmas of Growth (Boston: Harvard newspaper companies committed to creating Business School Press, 2003). a new future for themselves, their customers 5 IDC report, January 26, 2006 and their communities. 6 Simon & Schuster, 2001

SUMMATION: AS MANY OPPORTUNITIES AS THREATS The situation analysis for newspaper companies can be summarized in just a few words: Huge threats and huge opportunities. In brainstorming sessions with groups of newspaper people around the industry, the Newspaper Next team found a fascinating pattern. Challenged to identify the industry’s threats and opportunities, these groups repeatedly discovered that virtually every threat they named could also be a growth opportunity for their companies. The deciding factors, it turns out, are the industry’s own willingness and ability to innovate.

NEWSPAPER NEXT: BLUEPRINT FOR TRANSFORMATION © 2006 AMERICAN PRESS INSTITUTE 17 SECTION II THE NEWSPAPER NEXT INNOVATION METHOD Introduction: A practical innovation process Step 1: Spot opportunities Step 2: Develop potential solutions Step 3: Assess ideas Step 4: Test, learn and adjust INTRODUCTION: A PRACTICAL INNOVATION PROCESS

Newspaper companies need a practical approach to guide their diversifi cation efforts. Without the right approach, companies risk squandering precious resources on low-potential solutions while missing better opportunities. This section introduces the Newspaper Next (N2) Innovation Method. The N2 Method is based on the academic research of Clayton Christensen and Clark Gilbert and applied work by Innosight at dozens of operating companies, augmented by the N2 team’s newspaper-specifi c fi eld work over the past year.

The N2 Method described in the following rulebook. It is rare that the exact steps for any “If you want to know that pages is a practical approach to innovation, given project will be the same. Indeed, each you’re on the right track; if designed to help project teams create boom- of the seven newspaper companies in the N2 ing new growth offerings. It can help innova- demonstration projects (see Section IV) you want to really test the tors quickly move an idea from the sketchpad applied the method in different ways, assumptions that are driving to the market in a way that increases its long- depending on their goals and company term chances of success. circumstances. your decisions; if you want

The N2 Game Plan, described in Section III, Underlying the N2 Method’s four steps is an to take the guesswork out of shows where to apply the N2 Method in a important concept called “emergent strat- your strategic development, strategic framework for growth. egy.” The concept, described in Chapter 8 use the N2 process.” of The Innovator’s Solution,1 suggests that More than just a “how-to” guide for product innovators in highly uncertain circumstances – Bob Kempf, VP/Interactive, development, the N2 Method introduces usually start with the wrong strategy. The goal GateHouse Media several profoundly different concepts and is to discover quickly how the strategy New England processes. Teams using this method fi nd that is wrong and fi nd the right path. it changes the way they think, opening their eyes to broad realms of new opportunity. And Therefore, the process is an iterative ap- they discover that these same concepts and proach designed to quickly identify critical processes help them see how to make their assumptions, run low-cost experiments and existing products and services more effective re-vector towards success. for readers and advertisers. The following discusses each step of the Although specifi c steps are outlined below, process in more depth. the N2 Method is more of a guide than a

FIGURE 1: THE N2 INNOVATION METHOD

DEVELOP SPOT ASSESS TEST, potential LAUNCH opportunities approach learn and adjust solutions

“Nonconsumers” “Good enough” “Jobs to be done” “Business model innovation” “Invest a little, learn a lot” “Do what others won’t” “Fail fast, fail cheap”

The ﬁ rst stage of the process is spotting opportunities in a market to SPOT DEVELOP ASSESS TEST LAUNCH launch a new growth business. The key is to look for opportunities to help a group of customers2 solve a problem that isn’t adequately ad- Output: Identiﬁ ed high-potential opportunities dressed by existing solutions.

Looking for “nonconsumers” and zeroing in These nonconsumers may not advertise on “jobs” that customers cannot adequately because Media General’s products are too get done points the way to high-potential expensive, reach too large an area or do not opportunities. reach their target customers, or they may feel advertising is too complicated or diffi cult. SPOTTING NONCONSUMERS Finding ways to serve those nonconsumers could open large opportunities for growth. It might seem strange that the fi rst place Similarly, The Richmond (Va.) Times-Dispatch to start when you think about creating new reaches about 370,000 readers each day, growth is with nonconsumers, or people leaving about 435,000 nonconsumers – who don’t consume your product. Across the another large pool for potential growth. They sweep of history, however, many great growth might not consume because the newspaper businesses resulted from making it possible contains more information than they want, for people to do things that historically were takes more time than they have, costs more diffi cult for them to do. than they want to pay or does not adequately Start the quest for growth by asking, “What address the topics that interest them most. Examples of nonconsuming keeps people from consuming?” consumer groups Zeroing in on important, • Time-starved working mothers Sometimes it is skills (people who lack the unsatisfi ed ‘jobs’ ability to “do it themselves”). Sometimes it is • Busy professionals money (existing solutions are too expensive). The next critical step in spotting opportuni- 3 • Recent immigrants Sometimes it is access (solutions may be diffi - ties is discovering where there are key “jobs” • Young adults cult to use or obtain when people want them). that customers cannot adequately address with current solutions. Examples of nonconsuming And sometimes it is time. 3 consumer occasions Almost always, when a company begins to The concept of jobs to be done is described • Commute think about nonconsumers, the total potential eloquently in Chapter 3 of The Innovator’s Solution.4 The concept is surprisingly simple. • Waiting times market begins to look signifi cantly larger, and the company’s market share looks signifi cantly It holds that customers do not really buy • On the road smaller. products, they hire them to get jobs done. Examples of nonconsuming For example, Intuit’s QuickBooks software advertisers Consider how thinking about nonconsumption led Reid Ashe, executive vice president made it easy for small business owners to • Ultra-local businesses and COO of Media General, to rethink the accomplish an important job: Make sure • Service businesses Richmond, Virginia market. That market has my business doesn’t run out of cash. Some alternatives, such as pen and paper and • National advertisers about 16,000 public-facing businesses that might want to advertise in one of Media Excel spreadsheets, were not good enough. General’s products. However, Media General Professional accounting software packages serves only about 3,500 of those businesses, were too good — confusing and fi lled with leaving 12,500 as nonconsumers. unnecessary features. QuickBooks did the job better than any alternative and quickly took over the category.

20 NEWSPAPER NEXT: BLUEPRINT FOR TRANSFORMATION © 2006 AMERICAN PRESS INSTITUTE Think about the job an advertiser is trying the performance provided by existing solu- “‘Jobs to be done’ is simple to get done. Most of the time, the job is not tions. These help wanted signs are clear op- in statement but transfor- really to advertise. Rather, he wants to let portunities for new-product innovations. customers know about a special promotion. mational in concept. It takes The concept of jobs to be done is straightfor- Or she is attempting to build her brand so ward, but it can dramatically change the way a newspaper from looking she can drive repeat purchases. As one of the you think about new opportunities. It forces Newspaper Next Task Force members put it, straight ahead at its readers you to see the world from the customer’s “Advertising is a compensating behavior.” perspective, and to understand not just what (or non-readers) and walks Using the jobs-to-be-done concept requires they are doing, but why they are doing it. around behind and looks ﬁ rst understanding the problems a customer through the eyes of the faces in life or business. The most promising How to identify customer jobs problems are those that people do often and Identifying unmet jobs to be done is not a reader.” consider important and where current solu- trivial task. It requires acting like an investiga- – Peter Bhatia, tions leave them frustrated. tive reporter, using a variety of techniques to Executive Editor, Next, it is important to understand the unearth and synthesize clues. For example: The Oregonian, Portland precise “hiring criteria” a customer applies • Internal brainstorming. Many managers in choosing the solution to get the job done. and front-line workers have deep insights For example, a teenager trying to engage into the needs of the people they serve. with other teens might want a solution that is Arming them with the nonconsumer and free, uses the latest technology, and is highly jobs-to-be-done concepts can unleash interactive. strong creative forces. It is particularly help- Then look at the “candidates” who are ap- ful to bring together people from different plying for the job. The teenager could use parts of the organization that might ap- her cell phone to send a text message to her proach problems differently. friends or read a teen magazine – but increas- • In-depth customer interviews. Discussing ingly, she logs on to MySpace or another the things customers try to get done in their social networking site. lives, how they do them today, and where Once you know a customer job and the hiring they are frustrated can uncover important criteria, you can use this knowledge to spot jobs to be done (this section’s Appendix the “help wanted” signs, or gaps between contains suggested interview questions). what the customer is trying to get done and

FIGURE 2: SAMPLE CONSUMER AND ADVERTISER JOBS

Consumer Jobs Advertiser Jobs • Enlighten me: Help me stay informed on issues that are • Get a customer to visit my store tomorrow relevant to me • Provide information on the products, prices, and • Educate me: Help me make better decisions to increase promotions I offer my value as a parent, employee, student etc. • Help me build a deeper connection with my customer • Enrich me: Give me information that will give me a base material benefi t, i.e., make/save money or time • Make my phone ring with a high-potential customer • Entertain me: Give me enjoyment, amusement, or keep • Help me do the things I don’t like to do so I can do the me from boredom things I do like to do • Engage me: Connect me with people who share my • Help me fi nd the right people e.g., employees, suppliers, interests or views partners • Empower me: Help me get action on things that matter • Make my marketing program more effective to me NEWSPAPER NEXT: BLUEPRINT FOR TRANSFORMATION © 2006 AMERICAN PRESS INSTITUTE 21 • Customer observations. Sometimes Tips and tricks customers cannot properly articulate the • Ted Levitt, the guru of marketing at the problems they face in their lives. Observing Harvard Business School a generation ago, customers in natural environments, followed was famous for reminding his students that by probing questions about why the custom- customers do not really want quarter-inch er did this and not that, can lead to surprising drills. They want quarter-inch holes. Focus fi ndings. on the holes, not the drills. These approaches can create a long list of • It is often helpful to focus jobs research on a potential jobs and usually are suffi cient to predefi ned customer segment (e.g., working tease out promising opportunity spaces. moms). However, there also are many high- Quantitative research, of course, can provide potential jobs that cut across demographic deeper insight into rank ordering of jobs and boundaries. segmenting or clustering of customer groups. • Start simply: Gather a group of people The techniques described above are not and try brainstorming to identify desirable new. But the jobs-to-be-done approach groups of nonconsumers and some impor- changes the questions you ask, focusing on tant and frustrating jobs to be done in your the customer’s problem instead of her view market. Then try some external interviews. of existing solutions. Applying this approach Consider activities like inviting nonconsum- with nonconsumers rather than current read- ing advertisers for a lunchtime discussion. ers or advertisers will yield previously invisible opportunities. • Train customer-facing employees in the jobs concepts and set up mechanisms to gather At the end of this step, you should have their feedback and ideas. identifi ed a high-potential opportunity space, characterized by an important problem that a • When looking for nonconsumers, remember target customer cannot adequately address to look for nonconsuming occasions as with today’s solutions. well.

Most managers believe creating growth through innovation is risky SPOT DEVELOP ASSESS TEST LAUNCH and random. A fog seems to hide high-potential opportunities and make success elusive. Yet a closer look shows that success- Output: “Idea Resumé” on new opportunity ful innovations conform to a pattern. The best way to crack a new market is to follow the principles of disruptive innovation. Principle 1: Perfection is the enemy of “The ‘good enough’ concept “good enough” gave us freedom to do new After pinpointing important, unsatisfi ed jobs Quality is truly in the eyes of the beholder. things and to do different to be done, the second step is to conceptual- Sometimes “good enough” can be great. The ize potential solutions that would get the job essence of disruption is about making trade- things ... the real test is not done better than existing alternatives. Es- offs. The customer “gives up” performance what our standards are but sentially, this step involves creating a fi rst-cut along some traditional dimensions and “gets” business plan to seize the identifi ed market improved performance along some much-ap- what are the standards of opportunity. preciated new dimensions. consumers ... What do they This does not require a 30-page document, This does not mean dumbing down existing want? What do they think is detailed exhibits and complicated fi nancial products. Nor are new, disruptive products bad good enough?” analysis. Rather, the fi rst version should pro- products; for any product to succeed, custom- vide basic answers to the following questions: ers must consider it better than any alternatives. – Steve Silberman, A disruptive product is a different product that Executive Editor, • What is our idea? does a particular job better than any competitor. The Desert Sun, • Who is our fi rst target customer? Palm Springs, Calif. Free daily papers are a good example. The • What job do those customers need to get Boston Metro cannot compete with the depth done? and breadth of The Boston Globe. When a reader has a solid chunk of time and wants • How do customers currently get the job done? to dig into the day’s events, the Metro is an • What will customers “give up” compared to inferior product. But when that same customer other offerings by choosing the solution? wants to kill 15 minutes on a train, and the only alternative is boredom, the Metro is a near-per- • What advantages will they get? fect solution. • How will we make money? Newspaper companies show strong perfec- • How will we keep costs low? tionist tendencies, but there are important reasons to fi ght this urge. First, it can result • With whom will we need to partner? in products that are overly complicated or • How will we beat competitors? expensive. The customer may prefer a simpler, cheaper solution with less performance. Embedded in these straightforward questions (summarized in a simple tool called Second, perfection is costly to achieve. Be- the “Newspaper Next Idea Resumé” in this cause so many initial product strategies are section’s Appendix) are three important wrong, the worst thing to do is spend a lot of principles to keep in mind when attempting money early. The heavy investment makes to craft a winning solution. it diffi cult to adapt when you learn what you need to do instead.

Minor repackaging of exist- Looking for low-cost sources Wholesale use of wire/other Hiring a professional to Content ing content, e.g. rewriting, of original content, e.g., existing content ➜ ➜ ➜ create new content shortening, adding briefs blogs, freelancers

Launching a self-service Hiring some low-cost “good Hiring a full-time Ad Sales advertising model enough” sales staff, e.g., in- ➜ ➜ professional sales force terns, telemarketers, temps

Rely on pick-ups through Hire “hawkers” to push the Distribution centrally-located drop-off Offer home delivery ➜ product at key locations ➜ boxes

Production Broadsheet, heavy color, Newsprint tab, minimal color Full color, heatset, bound Quality ➜ multiple sections ➜

The key to disruptive innovation is “dialing up” performance only along dimensions where necessary. This example shows the choices facing a company launching a niche/free publication. The simplest choices create the lowest-cost model. Depending on the competition, the company may need to increase performance in some dimensions.

Rather, think about what would be a “good enough” fi rst solution that gets the most FIGURE 3: EXAMPLES OF REVENUE STREAMS important job done better than anything else. Think about how to minimize fi xed costs in the Available online Available offl ine fi rst version, creating a fl exible base that makes revenue streams revenue streams adaptation easy. • CPM display advertising • CPM display advertising To keep fi xed costs low, consider such things • Classifi ed ads • Classifi ed ads as using interns, temps or consultants to fi ll • Subscriptions • Subscriptions out staff in early days, using user-contributed • Do-it-yourself • Single copy sales content instead of relying on proprietary advertising /upsells content and leveraging off-the-shelf solutions • Cost per action • Cost per action (phone call) instead of building proprietary solutions; do (per click/lead/call) only what is necessary for Version 1.0. As we • Licensing fees will explain later, the goal is to “invest a little, • Licensing fees • Sponsorship learn a lot.” • Sponsorship • Direct mail marketing • E-mail marketing Principle 2: Think creatively about the • Fee-for-service business model • Paid search (e.g., market research) • Lead capture • Inserts/wraparounds An innovation lever that companies often overlook is the business model. Often true • Video/audio • Event production/ disruption stems from a new business model advertising promotions that makes money in new ways. Consider Google. While Google’s search algorithms are unquestionably innovative, the key to its growth are its AdSense and AdWords offerings that make it simple, affordable and

24 NEWSPAPER NEXT: BLUEPRINT FOR TRANSFORMATION © 2006 AMERICAN PRESS INSTITUTE profi table for small businesses to place ads Ways to limit competitive response without costly human assistance – a very dif- • Target a nonconsumer. If you reach a true nonconsumer, ferent model from newspaper advertising. no incumbent feels pain. Historically, the newspaper industry has re- • Target a customer the competitor considers undesirable. lied on three basic revenue streams —display Finding profi table ways to serve seemingly unattractive advertising, classifi ed advertising and sub- customers can be a key to disruptive growth. scription revenues. There are other revenue • Use a different distribution channel. Companies often streams worth considering for any innovation, hesitate to anger critical channel partners. For example, some of which are discussed in more detail in computer retailer Compaq had to shut down its direct- Section III. to-consumer Internet arm because owners of the stores that sold its computers protested. Principle 3: Do what the competitor • Create a business model that succeeds without a won’t or can’t revenue stream that is vital to incumbents. By not charging late fees, Netfl ix made its business seem less Disruptive innovation is all about changing structurally attractive to Blockbuster, whose business the game. If you follow a strategy that looks model historically relied on late fees. attractive to market leaders, you can bet they will respond. Incumbents often have advantages that are diffi cult to overcome. Tips and Tricks The way entrants win battles of disruptive innovation is by turning an incumbent’s • Approach the solution from the perspective strength into a weakness. of an entrepreneur. If you had none of the baggage or habits of a newspaper company, Consider free classifi ed provider craigslist. what strategy would you use to create and Classifi ed advertisements are an important capture this space? driver of industry profi tability, constituting 2 a large share of company profi ts. Craigslist • Use simple templates like the N Idea allows consumers to post classifi ed ads for Resumé to help frame out a strategy. free (it charges for some job listings in some • Do not obsessively focus on gross margin markets). How excited would most publishers percentages. You can create very profi table be about giving away classifi ed ads? Not very. businesses with different margins from those Generally, disruptors follow an approach that of your core business. established market leaders consider unat- • Consider strategies that other newspaper tractive or uninteresting. companies, media companies, competitors The goal is to think critically about how to or companies outside the industry have used maximize the time before a competitor is on a similar problem. These might give you motivated to respond and to minimize a ideas that can be adapted to target your competitor’s response options. identifi ed opportunity. At the end of this step, you should have completed an N2 Idea Resumé (or several Idea Resumés) describing your proposed solution to seize an identifi ed opportunity.

The next two steps in the N2 Method are closely related and may be SPOT DEVELOP ASSESS TEST LAUNCH repeated frequently in developing a new product or service.

Step 3 involves assessing the concept de- Output: Prioritized list of assumptions and risks scribed in the N2 Idea Resumé. The goal is to make a comprehensive list of the strategy’s strengths, weaknesses and unknowns, and to identify those areas that need to be tested in Qualitative assessment: Does it fi t the more depth in Step 4. pattern of success? More broadly, Steps 3 and 4 force innova- Successful innovations conform to a pattern. tors to rethink how they approach strategy. The disruptive pattern5 in particular has six Often, when managers create strategies, their key elements: process involves developing assumptions, 1. Customer: Target an important job that using those assumptions to build a detailed customers (consumers/advertisers) cannot business plan with extensive fi nancial projec- adequately get done tions and then acting to implement that plan. However, because your fi rst strategy is likely 2. Solution: Offers a disruptive solution that to be wrong, that approach is likely to lead gets the job done better than existing you in the wrong direction. alternatives Steps 3 and 4 fl ip that approach on its head. In 3. Business model: Features an attractive Step 3, you begin by assessing what your idea business model that starts with low fi xed would need to look like to be successful, both costs and creative revenue streams in qualitative characteristics and quantitative 4. Competition: Creates or includes a com- metrics. Then you work backwards, asking petitive advantage that will make competi- yourself what assumptions would have to tive response diffi cult come true and what risks would need to be overcome to reach that level of success. 5. Strategic fi t: Addresses a growth area that is strategically important to the company This approach teases out the most critical assumptions and risks that need to be ad- 6. Execution: Uses capabilities that the com- dressed in Step 4. pany has, or can build or buy

Using those six categories, the N2 team created a tool providing 16 qualitative success factors (see the Newspaper Next Oppor- FIGURE 4: FLIPPING STRATEGY ON ITS HEAD tunity Assessment System in this section’s Appendix). The ﬁ rst stage of Step 3 is to use Typical Process Suggested Process these 16 factors to assess the strategy. For each factor, consider the degree to which Assume Project your approach conforms to the identiﬁ ed factor, and the amount of evidence or certainty you have backing up your answer. Focus Project Assume

Act Test

Source: Innosight LLC

26 NEWSPAPER NEXT: BLUEPRINT FOR TRANSFORMATION © 2006 AMERICAN PRESS INSTITUTE In the early stages of innovation, there will be Quantitative assessment: Reverse- many areas where your assessment is nothing engineer fi nancial fi gures more than an educated guess. That’s okay. Many seasoned innovators might be asking What is critical is separating the things you themselves, “Why didn’t you start with the know to be true from the things you assume numbers?” Numbers are a critical part of the to be true. innovation process, but we suggest approach- It is also unlikely that your strategy will fi t the ing the quantitative part of the assessment pattern perfectly. That’s okay, too. The goal process in a very different way. of the assessment is to isolate core strengths Experience shows that most companies force of the idea, known risks that need to be ad- teams to develop detailed fi nancial estimates dressed, and uncertain areas that need to be (e.g., 10-year profi t-and-loss statements) way explored in more depth. too early, when their accuracy will necessarily While assessing 16 distinct factors might be low. When you have low certainty about seem daunting, the comprehensive list is a almost all of the inputs into a fi nancial model, useful way to smoke out assumptions you the output is likely to be wrong. may not realize you are making. In fact, the Consider Intuit founder Scott Cook’s com- assessment process itself is often more valu- ment about some of the duds launched by his able than the “answer.” The discussions and company: “For every one of our failures, we debates provoked by the assessment inevita- had spreadsheets that looked awesome.” bly point out ideas for improving the strategy in meaningful ways, and they ensure that the Furthermore, companies that prioritize proj- right assumptions and risks get addressed at ects using metrics like net present value (NPV) the right time. or return on investment (ROI) will not end up selecting ones aimed at the seemingly small, diffi cult-to-measure markets that are so often the footholds for powerful growth strategies.

FIGURE 5: REVERSE-ENGINEERING FINANCIAL FIGURES

Back-of-the-envelope market sizing Top-down estimate: required proﬁ ts of $1.5 million

RED = CALCULATION GREEN = ASSUMPTION 15,000 small Discoverable fact ➜ businesses in our Necessary Proﬁ t Margin: 20% market Implied Revenues: $7.5M Allowable Costs: $6M

Market research to validate ➜ 10% penetration Revenues Customers 1,500 Churn: 30% 1,500 customers Users/Year: 2,150 Penetration of Tgt Mkt: 14%

Rev./customer/year $5,000 margins50% Market research/analogies ➜ $5,000/customer Rev/customer/month $416.67 Costs Feasible? $7.5 million market COGS/customer/month: $213.33 Total Costs: $3.75M G&A: $0.5M Allowable Marketing: $1.75M

NEWSPAPER NEXT: BLUEPRINT FOR TRANSFORMATION © 2006 AMERICAN PRESS INSTITUTE 27 Instead, they will likely pursue projects in 2) Areas of high uncertainty. A customer’s large, measurable markets — the ones that willingness to pay, repeat purchase and are usually hardest to enter. Or they will focus acceptance of a new product are all often on low-risk opportunities that have little educated guesses in the early stages of chance of driving meaningful growth. product development. Instead of building up to an NPV or ROI fi gure, 3) Areas that heavily infl uence other parts determine what the key elements of the of the strategy. The cost of producing a answer must be. What kind of revenues must product, for example, impacts price, which an opportunity generate on an ongoing basis impacts the target customer, the channel, to be attractive? What kind of profi ts should it and viable promotion strategies. These produce? How soon must it produce positive path-dependent items should be tested cash fl ows? early and tested often. Then calculate backward from those fi gures When you complete this step, you should to determine what has to come true to reach have a prioritized list of assumptions and risks those projections, as in Fig. 5. We call this that you will address in Step 4. “reverse-engineering” the fi nancial fi gures, working backward to determine what would Tips and tricks have to be true to reach critical fi nancial • Have a small team do the assessment. The milestones. discussion and debate almost always leads One key “sanity check” is to make sure there to an improved strategy. is a plausible story that leads you to the de- • Be conservative when assessing your level sired revenue fi gure. What must you assume of certainty about an assumption. Ask how about the total number of customers, the much of your salary – a day, a week, a year? penetration rate and the revenue per cus- – you would be willing to give up if you are tomer to reach the fi gure? If that “back-of-the- wrong. envelope” calculation has assumptions that seem far-fetched, it might be time to rethink • Keep focusing on assumptions. Keep a run- the approach. ning list of the critical assumptions you are making. Do not stop until you have at least 25. Prioritizing assumptions • Look for opportunities during the assess- The assessment work described above should ment process to reshape the strategy to have generated a long list of assumptions maximize its chances of success. (what must go right) and risks (what could • Do not use numbers as the sole arbiter in a go wrong). The fi nal step in the assessment decision-making process. They can provide phase is to prioritize that list to identify the useful input in prioritizing opportunities, but greatest risks and most crucial assumptions. intuition and judgment are also critically These will be addressed in Step 4. important. These tend to fi t one of three categories: • Do not get bogged down on developing 1) Deal killers. A deal killer occurs when be- fi nancial estimates too early. Remember, ing wrong about an assumption or right markets that do not yet exist cannot be mea- about a risk means the strategy will fail. For sured and analyzed. example, technology (will it work) and part- nerships (will they work with us) can often be deal killers.

The fi nal stage of the process is to design and execute tests and other SPOT DEVELOP ASSESS TEST LAUNCH knowledge-building activities to learn more about your key assumptions and reduce your key risks. There are two parts of this process. Output: Decision about next steps The fi rst is designing and executing simple, cheap ways to test identifi ed assumptions. The second is deciding One key testing mechanism is fast-cycle pro- Knowledge-building exercises totyping. Show users an existing product that what to do with the learning. • Prototype tests approximates the envisioned product or cre- • Focus groups ate simple, cheap prototypes that are “good • Business modeling ‘Invest a little to learn a lot’ enough” to demonstrate the concepts. Ask questions such as: “Could you see yourself • Role-playing (customers, Smart experiments and risk-mitigation strate- using a solution like this? Under what circum- competitors) gies are at the heart of the ability to innovate stances would you use this? What features • Test marketing successfully. Instead of risking big invest- would you use or not use? What features are • Secondary research ments on uncertain strategies, companies missing?” can “invest a little to learn a lot” about the • Market research Companies often have lower-cost trial op- key uncertainties in their approach. • Internal best practice tions than they realize. Localizing a launch to assessment Minimizing fi xed investment in the early a particular geography or using employees • Technology assessment stages of innovation is critical because you to beta-test products can be quick and easy don’t want to plow money into a strategy with ways to test key assumptions. • Concept/prototype tests fatal fl aws. The goal is to fi nd and address • Thought leader roundtable Working from your prioritized list of as- points of failure early and inexpensively. sumptions and risks from Step 3, design and • External benchmarking Experiments can range from simple activities conduct low-cost, fast-cycle tests to reduce such as small focus groups to more compli- risk and replace assumptions with greater cated activities such as launching a localized knowledge. Some assumptions and risks are test market. Contingent contracts, employ- easier to test than others; if there are several ing consultants before making full-time hiring high-risk issues, test the easiest ones fi rst. decisions and creating patent protection can “By embracing the idea of be sensible ways to reduce key risks. Refl ect and adjust beginning with custom- It is important to keep these knowledge- The fi nal stage of the process is to apply the building activities as simple and inexpensive learning from the knowledge-building exer- ers’ ‘jobs to be done,’ and as possible. Find a colleague who addressed cises by adapting the strategy. by evaluating product and a similar problem to see if there is something Redirecting a strategy can be emotionally service ideas through the useful to glean from her experience. Build wrenching. Managers who have dedicated models, mockups and simulations before you additional lens of disruptive time and energy to a particular path can cling design fi nal products. Look for outside analo- to it even in the face of countervailing evi- innovation, we are better gies that provide additional evidence about dence. Success requires a mix of humility (to whether you are headed in the right direction. positioned to launch suc- recognize that despite your best efforts your For example, one project team at a consumer initial approach was wrong) and confi dence (to cessful, and perhaps market- health care company had a critical assump- persevere in the face of disappointing results). changing, initiatives.” tion about how often a consumer would use a planned new product during the course of a This step often trips up well-intentioned com- – Owen Youngman, year. The team looked for comparable fi gures panies. Consider one newspaper editor’s re- VP/Development for similar products to see if their assumption fl ections on his organization’s early forays onto Chicago Tribune made sense. NEWSPAPER NEXT: BLUEPRINT FOR TRANSFORMATION © 2006 AMERICAN PRESS INSTITUTE 29 the Internet: “Given the pace of our expansion, Tips and Tricks I don’t think we made mistakes fast enough • Continue to think like an entrepreneur, and we didn’t learn from them often enough. asking what you would do if you had only The problem wasn’t just turning [the experi- 60 days and a limited budget. ments] on, sometimes it was turning them off.” The company did not use the knowledge from • Keep a master list of assumptions that gets the experiments to shelve strategies that updated on a regular basis. emerged as duds and redirect stumbling strat- • Look for analogies in other industries to gain egies that still had potential. confi dence in assumptions or to fi nd creative Force yourself and your team to reassess your ways to test assumptions. approach at regular milestones and carefully • Celebrate failures as well as successes, be- consider the implications of your increased cause they often result in useful learning. knowledge.

Be willing to shelve projects if you cannot fi x SUMMARY a deal killer or if learning suggests that the opportunity is less exciting than you thought. Properly following the four steps of the N2 Celebrate these “failures.” It is far better to fail Innovation Method can greatly increase the fast and fail cheap than to waste more money chances of creating successful new growth on a doomed strategy. offerings. It can greatly reduce initial costs, reduce risks and increase the probability of The output of this step is a decision about next creating a hit with target customers. steps for the project. There are three options: 1) shelve the idea as unlikely to succeed or still Finally, a few words about timing. too risky, 2) proceed to launch the fi rst market Generally, the search for new opportunities version of the idea or 3) revise the idea and test and the creation of potential products should again. Often the best choice is the third — to be continual. If you are just starting out, give a keep iterating through Steps 3 and 4 until your small group 30-60 days to identify a handful of experiments show more clearly that it is time to potential jobs and design potential solutions. shelve it or launch it. We suggest running Steps 3 and 4 in 60-90 Identifying infl ection points requires intuition day chunks. At the end of step 4, if signs sug- and judgment. Generally, you should have gest the strategy still has merit, repeat step largely addressed your most critical assump- 3, map out your new activities, and move for- tions and risks and have market-based informa- ward. If the strategy has problems, skip back tion supporting critical fi nancial assumptions. to an earlier stage or stop altogether. Launching a solution does not end the process Innovation will not become perfectly predict- of assessing and testing. Keep a close eye on able any time soon. However, following the customer response — one of the best possible process described in this section can help tests — and keep looking for ways to modify bring clarity and discipline to the messy the strategy to increase its long-term potential. process of innovation, helping newspaper companies to move toward the more diversifi ed portfolios that are vital to the industry’s future. The report’s next section describes how to apply the N2 process as part of an overall strategic “Game Plan” for growth and points out promising areas of opportunity.

FOOTNOTES Reference material

1 Clayton M. Christensen and Michael E. Raynor, Clayton M. Christensen, The Innovator’s The Innovator’s Solution: Using Good Theory to Solve the Dilemmas of Growth (Boston: Harvard Dilemma: When New Technologies Cause Business School Press, 2003). Great Firms to Fail (Boston: Harvard Business School Press, 1997). 2 Generally when we say customer we mean a consumer, a business or both. Clayton M. Christensen and Michael E. 3 The jobs to be done concept bears some similari- Raynor, The Innovator’s Solution: Using Good ties to the Readership Institute’s (RI) concept of Theory to Solve the Dilemmas of Growth (Bos- “experiences,” and the concepts are compatible. ton: Harvard Business School Press, 2003). RI’s valuable research cites 26 “motivators” that drive newspaper readership, such as “give me Clayton M. Christensen, Scott D. Anthony something to talk about” and “make me smarter.” and Erik A. Roth, Seeing What’s Next: Using Many of these could also be described as “jobs to be done.” Many “jobs,” however, are more the Theories of Innovation to Predict Industry granular and functional than “experiences.” Change (Boston: Harvard Business School While the RI research focuses on newspapers and Press, 2004). news Web sites, jobs to be done casts a broader net, giving innovators a way to discover speciﬁ c Scott D. Anthony, Matthew Eyring and Lib opportunities beyond those traditionally met by Gibson. “Mapping Your Innovation Strategy,” newspapers and news Web sites. Harvard Business Review, May 2006. 4 Christensen and Raynor, 2003. Innosight’s Strategy & Innovation newsletter 5 The elements of the pattern change depending regularly provides updates on core conceptual on the type of innovation you are trying to introduce. Disruptive innovations have the highest material. Visit www.strategyandinnovation.com chance of creating new growth, so we focus on for more information. disruptive elements here. TOOLS AND TEMPLATES

Jobs-to-be-done questions

The following questions can help guide jobs- to-be-done discussions with consumers, market-facing employees, or advertisers:

Consumers Employees Advertisers/Businesses • What are some things (for example, related to • What are some things that customers • How do you make money? local information) that you have most trouble have asked us to do in the past that we • What are the things that keep you up at night? trying to do at the moment? could not do? • What are some things (“jobs”) that you are • Why and when do you typically seek to do this? • Why couldn’t we deliver what they wanted? having problems getting done? • Where did you look for help? Describe the • What alternatives did they use instead? • Under what circumstances do you usually try process you followed. • How well did these alternatives meet their to do these things? • What frustrated you most? needs? • What do you currently use to help you? • Describe a perfect solution. What will it do? • What would the perfect solution for them • What other options have you considered? Why • What are the emotions that the perfect solu- look like? did you use or reject these? tion would make you feel (“emotional hiring • What would be the most important character- • How would you describe the perfect solution? criteria”)? istics (“hiring criteria”) of this solution? • What are the most important characteristics • What common characteristics do these of this solution? consumers share?

The N2 Idea Resumé

The N2 Idea Resumé is a simple way to summarize an idea to create a new growth business. The “Resumé” hardwires many of the core disruptive concepts, such as “jobs to be done,” “good-enough solutions,” and starting simple and cheap. It is designed to be completed in 30 minutes or less, and does not require complex ﬁ nancial models or detailed market sizing. Exploratory analysis is almost always useful, but seeking precision too soon is almost always a mistake. The Newspaper Next Idea Resumé

Our idea is …

Our ﬁ rst target customers will be …

The jobs these customers need to get done are …

Customers currently get these jobs done by …

Relative to competitive offerings, consumers will “get”…

They will “give up”…

We’ll make money by …

We’ll keep costs initially low by …

We’ll need to partner with …

We’ll beat competitors because …

Critical assumptions Our plan to test assumptions

THE N2 OPPORTUNITY THE N2 OPPORTUNITY ASSESSMENT SYSTEM ASSESSMENT WORKSHEET The N2 team created a simulation tool that A simplifi ed version of the Newspaper Next builds on a proprietary Innosight approach Opportunity Assessment System (N2-OASYS) designed to bring more rigor to the qualita- appears on the following two pages. The tive analysis of ideas. Called the Newspaper purpose of this worksheet is to help you fi nd Next Opportunity Assessment System (N2- the most crucial things to test. You’re looking OASYS), the tool asks the user to complete a for the success factors where your scores for form assessing the strategy’s fi t with each fac- both Certainty and Risk are low. These are the tor and state the evidence behind the answer. possible deal-killers – the factors you should Based on these inputs, the tool immediately consider testing in Step 4 of the N2 Innovation fl ags factors that are strengths, weaknesses, Method. unknowns and potential “deal killers.” It then uses a statistical technique known as Monte- Directions Carlo simulation modeling to provide a more For each success factor, rate how strong your detailed analysis of the strategy. The tool is evidence is. Then rate the level of risk if you’re typically deployed as part of a facilitated con- wrong. For the factors where both the scores for sulting engagement. For more information, Certainty and Risk both are low (1 or 2), list your contact the American Press Institute at info@ ideas for simple, inexpensive tests or experi- americanpressinsitute.org. ments you could use to test your assumptions. Filling out the N2-OASYS in a group discussion can be a very potent way to reveal deal- killer assumptions and risks.

NEWSPAPER NEXT: BLUEPRINT FOR TRANSFORMATION © 2006 AMERICAN PRESS INSTITUTE 33 # Category Success factors Certainty: How sure Risk: What if we’re Ideas for testing these assumptions are we that our product wrong? meets this standard? 4 - Little or no impact 4 - Solid evidence (bet a week’s pay) 3 - Reduced success 3 - Some evidence (bet a day’s pay) 2 - Success doubtful 2 - Educated guess (no bets) 1 - Failure likely 1 - Hunch (don’t even ask!)

Targets a frequent job Consumer/ that is important to 1. Advertiser the target consumer/ advertiser

The consumer/advertiser is frustrated over the inability to get the job Consumer/ done because existing 2. Advertiser solutions are expensive, difﬁ cult to use, inconve- nient or not customized

The consumer is willing Consumer/ to accept a “good 3. Advertiser enough” ﬁ rst-generation solution

It will take no more than 12 months for the company to solve the Solution 4. required technological hurdles to introduce version 1.0 of the solution

The solution “gets the job done” by offering the right levels of Solution 5. performance, neither overshooting nor under- shooting customer needs

The foothold market can Business be reached with rela- 6. model tively low investment

Attractive returns can be made in the foothold market, with a path to Business create a large market 7. model (“adequate in the short term, superior in the long term”)

The opportunity can be extended beyond the Business 9. foothold to create a model substantial long-term business

Powerful competitors will not be motivated to Competitor 10. respond immediately response (unattractive margins and/or size)

Opportunity ﬁ ts company’s general strategy 11. Strategic ﬁ t and does not violate a stated or unstated boundary condition

The approach leverages 12. Strategic ﬁ t existing capabilities or builds new ones

The company has, or can access, the right 13. Execution resources (e.g., content, technology, etc.) to tackle this opportunity

The company will 14. Execution approve and support this strategy

What your scores mean:

Among the 14 factors, look for those where the Certainty and Risk scores are both low (1 or 2). These are the factors you may want to test in Step 4.

NEWSPAPER NEXT: BLUEPRINT FOR TRANSFORMATION © 2006 AMERICAN PRESS INSTITUTE 35 SECTION III THE NEWSPAPER NEXT GAME PLAN Introduction: A strategic framework Area 1: Maximize the core Area 2: Build audiences by fulﬁ lling jobs beyond news Area 3: Use new models to fulﬁ ll jobs of current and new advertisers Area 4: Create innovation structures and enablers Measuring progress: the N2 Dashboard

FIGURE 1: THE NEWSPAPER NEXT GAME PLAN

Create innovation structures & enablers

Build audiences by fulﬁ lling “jobs” beyond news

Maximize core business model

Use new models to fulﬁ ll “jobs” of current / new advertisers INTRODUCTION: A STRATEGIC FRAMEWORK

Newspaper executives can see and feel it — the media landscape is shifting, and the traditional newspaper business model is eroding. In the aggregate, newspapers are reaching a smaller share of the public audience every year as individuals migrate away to faster, cheaper, fresher, simpler or more exhaustive solutions for information jobs the newspaper once owned. As the mass audience splinters, businesses are trying new strategies to reach target customers. However, almost every threat to newspapers also can be an opportunity for newspaper companies, if they expand their horizons to embrace new audiences, new types of business customers and new business models.

A consensus appears to be emerging in the Within each of its four target areas, the N2 industry: To achieve new growth, newspaper Game Plan identifi es several of the most companies need to innovate and diversify. promising opportunities for growth. Even They need to create broadening “portfolios” this short list — although far from compre- of products and services that get key jobs hensive — exceeds the project capacity of done for a wider range of customers. most newspaper companies. One of the most important decisions each organization must But the portfolio strategy raises as many make is which ideas to pursue immediately questions as it answers. Which are the best and which to defer. These choices will hinge opportunities? What are the right approach- on the company’s capacities and the nature of es? What are the right goals? the market. To help newspaper companies answer these Each of the N2 Game Plan’s four areas questions, The Newspaper Next (N2) Game provides a short list of recommended basic Plan offers a strategic framework — a road metrics. These, together with several overall map — for diversifi cation. It organizes the measures, constitute the N2 Dashboard, which challenge into four clear areas of opportunity, is covered in the fi nal part of this section. The points out some of the most promising strate- N2 Dashboard is a powerful tool for assessing gies in each, and offers practical pointers for an organization’s current status, determining setting goals and benchmarking progress. goals and monitoring progress in developing Newspaper executives at organizations of all an expanded product portfolio. sizes can use the N2 Game Plan to manage The N2 Game Plan is not a formula to be fol- their diversifi cation efforts. The N2 Game lowed by rote. Every newspaper has unique Plan can help companies to plan their growth internal circumstances and unique market initiatives, assure that they allocate resources characteristics, and no fi xed formula could to new growth and monitor progress. address them all. Rather, the N2 Game Plan Within the N2 Game Plan, the N2 Innovation provides a fl exible plan of attack that can be Method — detailed in the previous section shaped to suit each company and community. of this report — provides a practical process Turning a newspaper company into a “port- for improving core products and develop- folio” company is no small challenge, but the ing new ones. The N2 Game Plan provides opportunities in each market are immense. The the strategic framework for planning and N2 Game Plan and N2 Innovation Method are managing diversifi cation, and the N2 Innova- practical tools to speed the transformation. tion Method provides the toolkit to execute it. Examples from Newspaper Next demonstration projects are cited to show how this can be done. NEWSPAPER NEXT: BLUEPRINT FOR TRANSFORMATION © 2006 AMERICAN PRESS INSTITUTE 37 AREA 1: MAXIMIZE THE CORE

Many newspaper companies, to Maximize core their credit, are efﬁ cient engines business model producing a ﬂ agship product A. Strengthen the core by using jobs-to-be-done (daily and weekly newspapers) thinking and numerous ancillary products B. Grow the core by creat- including content-based publications ing niche jobs-based (e.g., entertainment guides), products suited to your ad-based publications (e.g., real- market estate books) and news Web sites.

Their most urgent challenge lies beyond this advertisers, and that use traditional produc- familiar territory, in the need to diversify the tion and distribution methods. Specifi cally, product portfolio and embrace new audi- this includes: ences, new functions, new types of business • Print dailies and weeklies needs and new business models. The N2 Game Plan addresses these in Areas 2-4. • Niche publications, either content-focused or advertising-focused At the same time, companies must do what they can to maximize the health and effective- • News Web sites relying mainly on cost per ness of their existing core products, and to thousand CPM (display) advertising and add promising core products they may have classifi ed missed. In many cases, these products are Noncore products (covered in Areas 2 and 3 proven winners that make money in familiar of the N2 Game Plan) include: ways, using existing business models, content, sales, and production and distribution • Niche Web sites targeted at user jobs to be resources. done (such as community bulletin boards like craigslist.com, social networking portals The good news is that adding and improving like MySpace.com and user-ratings engines core products is easier than creating dramati- like TripAdvisor.com) cally different new growth opportunities, and these products tend to produce good profi t • Products that rely on new revenue streams margins. For companies that have not already (such as paid search, lead generation and exhausted the potential niches and verticals consumer direct marketing) in their markets, these can add revenue while • Products sold through nontraditional sales reaching new consumers and advertisers. channels (such as self-serve advertising, e.g. Spotrunner.com, Google’s AdWords and WHAT’S ‘CORE’ AND AdSense). WHAT’S NOT? There are two specifi c actions newspaper The “core products” of the newspaper indus- companies can use to maximize their core try can be defi ned in various ways. In this re- business model: port, the term is used to mean the traditional A. Strengthen the core by using “jobs-to-be- product — paid daily or weekly newspapers done” thinking — and all other products based on a similar business model. B. Grow the core by creating niche jobs- based products suited to your market. Generally, these are products that rely primarily on display, classifi ed or insert advertising sold by sales representatives to traditional

38 NEWSPAPER NEXT: BLUEPRINT FOR TRANSFORMATION © 2006 AMERICAN PRESS INSTITUTE A. STRENGTHEN THE CORE In their existing core products, newspaper About new technologies BY USING ‘JOBS-TO-BE-DONE’ companies need to update and improve Online audio, video, podcasts, THINKING content for readers and effectiveness for ad- user-generated content, blogs vertisers to track the changing needs of their and hyperlocal content are hot Traditionally, core newspaper products customers. The N2 jobs-to-be-done approach topics in many newsrooms. They have fulfi lled a wide range of customer jobs. is a powerful tool in this process. look innovative, but they take Some typical information jobs are identifi ed time and effort, raising concerns in fi gure 2. The newspaper offered a rich The “jobs” research methods described in about whether, when and how to value proposition addressing jobs from “help Section II, ranging from interviews to focus do them. me stay well-informed” to “help me get a groups and formal research, can easily be ap- It is important to remember that a discount on my dry cleaning.” plied to target groups of newspaper readers technology typically can be used in and nonreaders, advertisers and nonadvertis- one of three ways: The proliferation of media and the explosion ers, to identify jobs a newspaper or other core 1) To increase the satisfaction of of alternatives on the Web are changing the product could fi ll more effectively today. game. Consumers are substituting faster, a company’s most committed cheaper, fresher, simpler or more exhaustive For example, many papers conclude that customers. Podcast versions of news stories or columns largely solutions to do information jobs they once stocks pages are unnecessary in an age when investors can get fresh quotes on the Internet. appeal to newspaper company’s accomplished through the newspaper. As a core customers. result, the newspaper value proposition is As old jobs fade, newspapers need to look declining for many consumers. through the eyes of their customers, including 2) To deepen the engagement of marginal customers, to discover new jobs their an important group of current Similarly, businesses are now choosing from core products can do for them. customers. For example, video an ever-growing array of solutions to reach home tours in online ads might target customers, often in addition to or appeal to a housing developer. instead of newspaper advertising. 3) To attract nonconsumers — people or businesses who don’t consume current products FIGURE 2: COMMON INFORMATION JOBS IN CONSUMERS’ LIVES — by enabling them to get important jobs done. For example, the “spotted” photo-sharing areas on many newspaper Web • Help me stay informed on issues that are relevant to me Enlighten me sites engage large segments • Help me feel smart by stimulating my thinking of the community who aren’t attracted by news alone. • Help me make better decisions to increase my value as Companies instinctively tend to Educate me a parent, employee, student, etc. pursue the fi rst option, aiming • Help me be more secure or healthy to provide better products to their best customers. If those • Give me information that will give me a material benefi t, customers already are committed, Enrich me i.e. make/save money or time however, large investments of time or money may not be warranted. If, on the other hand, a new • Keep me from boredom technology can be used to create Entertain me • Give me enjoyment or amusement a product or solution that engages • Help me to relax many new customers or opens attractive new business models, • Connect me with people who share my interests or views signifi cant investment may be a Engage me • Make me feel part of a community good idea. Always ask the question: “What • Help me get action on things that matter to me important job would this new Empower me offering get done better than • Provide me with information that is necessary to keep others, and for whom?” our democracy running

NEWSPAPER NEXT: BLUEPRINT FOR TRANSFORMATION © 2006 AMERICAN PRESS INSTITUTE 39 As described more fully in Section II, the “jobs- B. GROW THE CORE BY to-be-done” process focuses on understand- CREATING NICHE JOBS-BASED ing the customer’s objectives and choices: PRODUCTS SUITED TO YOUR • What jobs do they hire the product to do? MARKET • What hiring criteria do they apply in deciding Some newspaper companies have been to use it? doing “alternative publications” for years, launching product after product to diversify • What compensating behaviors do they use the core business. For example, The Spec- to make up for its defi ciencies? trum in St. George, Utah, a 23,000- circulation • What would an ideal solution look like? daily, has more than 40 revenue-generating products and activities aside from the paper, • What other jobs are they trying to do that and most are publications. they cannot get done today? Other companies have barely begun this type 2 In its N demonstration project, The Desert of diversifi cation. In markets where there is Sun team in Palm Springs, Calif., applied the room and opportunity for strong additional “jobs-to-be-done” approach to their core niche offerings, this is a relatively painless products and quickly spotted improvements way to strengthen the core. Not easy by any they could make for their target audiences. means, but far easier than creating unfamiliar They realized that readers of their monthly and new offerings outside the core business. business journal had a vital need — to Because they make money in familiar ways, increase the markets shares of their busi- they often require minimal research and nesses. They adjusted its contents to focus development and can draw on existing re- more sharply on business-improving ideas. sources, from content to ad sales, to produc- They also realized the publication’s advertis- tion to distribution. Examples are plentiful at ers were trying to reach other businesses, not other newspapers, whose managers often are the public, so they switched from in-paper eager to explain how they work. distribution of 55,000 copies to direct-mail Variations on the niche theme are almost infi - delivery to 11,000 businesses. With less nite, and many of them are based on charac- distribution, the product now achieves more teristics of the local market, such as NASCAR effective targeting. mania, a popular college team, tourism, an In the newsroom, editor Steve Silberman as- outdoors culture, and so on. signed a simple jobs-based task to reporters These products can be an important part of a and editors — read the paper as you normally company’s strategy for increasing its aggre- do, and mark where you stop. Result: Even in gate audience because they attract nonread- the newsroom, only 6 percent of the readers ers as well as readers. read the jumps from Page 1, and even fewer read the jumps from section fronts. Conclu- sion: Time to cut back on jumps. The jobs-to-be-done approach can be applied simply with the intended users of any core product.

40 NEWSPAPER NEXT: BLUEPRINT FOR TRANSFORMATION © 2006 AMERICAN PRESS INSTITUTE In creating these offerings, the “jobs-to-be- Creating new core products is less risky than Niche opportunities done” approach in Section II helps to ensure creating entirely new models outside the core, A few of the many possible publi- that they succeed with users and advertis- so the research phase often can be as short cations based on the core business ers. When considering potential new target as a few weeks. Typically it consists primarily model: audiences — both consumers and advertisers of: 1) determining whether a suffi ciently large • “Lite” versions of daily papers — three questions are important: and interested audience exists, and what jobs for commuters (potentially they would want the publication to do, and 2) • What important jobs are nonconsumers distributed free) determining whether a suffi ciently large and looking to get done? • Entertainment-focused publica- interested advertiser base exists, and what tions distributed on racks and • What frustrates them the most as they seek jobs they would want the product to do. countertops to fulfi ll their particular jobs? A word of caution: Maximizing the core by • Niche publications for tourists, • What do the target customers most want, strengthening existing core products and young adults, parents, senior which might be the key ingredients of a adding new ones can pay handsome benefi ts. citizens, hobbies, high school “good enough” solution? However, it should be only part of a newspa- sports, etc. per company’s plan for transformation. • Publications for non-English Some niche products deviate signifi cantly speakers from the core business model and may even Like a wise market investor, a newspaper com- border on disruptive innovation. A successful pany must think carefully about balancing its • High-demographic publications on fashion, homes, investing free daily, for example, requires signifi cantly “portfolio” between low-risk opportunities in lower costs of production and distribution to the core and new, higher-risk growth oppor- • Paid or free nondailies serving offset the lack of circulation revenue. This can tunities that may grow into big success stories smaller communities or neigh- be accomplished by streamlining distribution, in the coming years. borhoods layout, marketing and content generation • Niche advertiser publications, Newspaper companies that focus too hard while targeting nonconsuming advertisers e.g. cars, homes, coupons on the core — as most do — will miss many with low rates. fast-emerging growth opportunities. If they In its N2 demonstration project, The Orego- over-invest in the core and under-invest in nian in Portland applied the N2 Method and growth opportunities like those outlined in jobs to be done to meet a company mandate the N2 Game Plan’s Areas 2 and 3, they risk to expand its portfolio of core products. As losing their status as the leading information a result, they created a committee charged providers in their communities. The time to with exploring opportunities for niche prod- move on these new ventures is now, before ucts and new special sections. Now they see local or national players gain the advantage. enough opportunities that they are considering a new department to develop and produce them.

NEWSPAPER NEXT: BLUEPRINT FOR TRANSFORMATION © 2006 AMERICAN PRESS INSTITUTE 41 METRICS POINTERS AND SUGGESTIONS Precise audience measurements are diffi cult • Teach the “jobs-to-be-done” and “noncon- where products overlap. It is important to de- sumer” concepts to a newsroom team and termine an estimation method for each metric invite them to scan a week of newspapers to and use it consistently from period to period. see which consumer content jobs now are being met more effectively by other providers. For maximizing the core business model, the following measures can be used to track • Similarly, scan all existing core products from progress: the user’s perspective, asking what jobs they are not doing or could do better. • Total combined audience reached by core products. As newspaper penetrations in • Use the jobs-to-be-done interview ques- most markets continue to decrease, it is tions from Section II Appendix to conduct a important to strive for gains across the entire number of interviews with current readers suite of core products. (For companies lack- and nonreaders of any core product. Look ing the data needed to determine undupli- for new content ideas to enable the product cated audience, a simple total of audiences to get more high-value jobs done for its will be enough to refl ect growth.) readers. • Number of core-product users and non- • Use the jobs-to-be-done interview questions users interviewed, surveyed or contacted with current and former advertisers to dis- to learn about their “jobs to be done.” For cover urgent jobs your core products could effective core products, it is essential to get do more effectively, or services you might continuous input from the target customers. add to help them accomplish those jobs. • Number of niche and targeted products. In • Assemble a group familiar with your market most markets, the law of diminishing returns area and brainstorm about signifi cant eventually will set in. Companies starting audience segments and local niche inter- at a low number will have more room to ests that might hold potential for new core add products than those that have already products. tapped the most promising opportunities.

As the tiny pipe gives way to the Build audiences by fulfi lling infi nite pipe, the mass audience is jobs beyond news disintegrating. The explosion of me- A. Master key building blocks: dia options is splintering audiences • Assembling relevant and dissipating the dominance of databases any one source, as newspaper pen- • Unlocking local “collective wisdom” etration fi gures show. • Providing platforms for communities to form B. Use building blocks to craft solutions targeting specifi c People are becoming conditioned to using unmet jobs multiple channels or sources to fi nd the best available solutions to get important jobs done.

Nonconsumption of newspapers has become news, that content needs to be augmented, a popular choice among all age groups. Even shaped, developed and packaged. among baby boomers, a strong newspaper Even more broadly, newspaper companies audience, nearly half do not regularly read must recognize that content goes beyond writ- a newspaper, and nonconsumption rises in ten words and professional photos to include younger generations. user ratings, snapshots from mobile phones, If newspaper companies are serious about opening hours, maps and countless other reclaiming audiences, the focus needs to types of information. Getting some jobs done shift from products and services to the lives requires relinquishing control of content to out- of consumers. The central question is, “What siders, letting them build and shape content as indispensable roles can we play in the lives of they see fi t. the consumers we want to serve?” The good news for newspaper companies is The reality is that consuming news is only one that many of these jobs are local. The new tools of the information-related tasks most people of the Internet can unlock vast amounts of local do in a day. The countless other jobs may information that consumers want and need. For include: “Help me connect to others in the most consumers, getting news is relatively easy, community who share similar interests,” “Keep but getting reliable and varied local informa- me entertained during small snippets of time,” tion to deal with the needs that arise in their “Help me make smart lifestyle choices,” and lives is diffi cult. “Help me save money or make money.” The bad news is that these local information In the era of the tiny pipe, newspapers fulfi lled opportunities are not a secret. Many competi- those jobs alongside the main job of “Help me tors, including giants like Google and Yahoo!, keep up-to-date on breaking news.” As new are moving to capitalize on them. As local targeted solutions emerge to address these information providers, newspaper companies jobs, they will inevitably draw audiences away have a natural brand advantage. But they must from newspapers. be willing to expand the range of local information needs they meet, or others will race ahead These trends, together with the rapid com- of them. moditization of all but local news, show that newspaper companies must look beyond To begin building new audiences, here are two news to build audiences by fulfi lling other steps newspapers can take: important jobs. A. Use “jobs to be done” to discover unsatis- Going beyond news requires real innovation. fi ed consumer jobs beyond news Although many newspapers have some of the B. Master key online building blocks to create content they need to address jobs beyond compelling solutions.

NEWSPAPER NEXT: BLUEPRINT FOR TRANSFORMATION © 2006 AMERICAN PRESS INSTITUTE 43 BUILD AUDIENCES BY FULFILL- tion projects developed solutions to reach ING JOBS BEYOND NEWS out to new audience groups by addressing non-news jobs. A. Use “jobs to be done” to discover unsatisfi ed consumer jobs Dallas Morning News: Helping busy mothers get kid-related jobs done The N2 Method (Section II) is the way to discover high-potential consumer jobs in your Drawing on their personal experiences, market. Begin by identifying a promising and members of the Dallas Morning News team desirable group of nonconsumers, conduct realized that busy mothers in the Dallas/Fort jobs-to-be-done research to determine the Worth area had problems fi nding trusted key jobs they want to get done and develop recommendations on things to do with their an idea for a good solution. young children. This “user knowledge” exist- ed mainly in the minds of other mothers who In most cases, you will fi nd that the solution had faced the same problems before, and it requires one or more of the three building could be accessed only by word-of-mouth blocks described in Part B: one or more within a mom’s circle of acquaintances. databases, knowledge-sharing platforms or community platforms. The idea emerged for a “MasterMom” on- lineprint- mobile solution where moms (dads, How should you choose your target audi- too) could fi nd suggestions on kids’ activities, ences? A good place to start is by identifying such as lessons, summer camps and birthday nonconsuming groups your company doesn’t parties. They also could share their experi- reach effectively with its existing products ences and provide feedback to other parents Nonconsumers: — especially those desirable to advertisers. through user ratings and recommendations. some examples These may be demographic groups, such as • Busy mothers young adults or busy mothers. Or they may Because parents were seeking to get these jobs done during small snippets of time, such • Teenagers be groups in circumstances where existing products are diffi cult to consume, such as as while waiting at a playground or in a doc- • Young professionals commuters. Or there may be a job that spans tor’s offi ce, the Web site could be optimized • Non-English speakers many groups of consumers, such as fi nding for viewing on a mobile phone or supple- • Recent movers out more information about local merchants mented with a reverse-published newsletter. • Out-of-towners, e.g., snowbirds and the products they sell. Through “MasterMom,” the Dallas team Nonconsuming occasions: Creating new products and solutions usually hopes to reach out to mothers of young chil- some examples will require new tools – online software solu- dren, many with no time for the newspaper. • During morning/evening tions enabling consumers to get the new jobs commutes done. To win customers beyond news, the solutions must be “good enough” to get the FIGURE 3: PROPOSED ‘MASTERMOM’ • While waiting, e.g., at an airport, SOLUTION FOR BUSY MOTHERS IN DALLAS doctor’s offi ce information job done better than other available solutions. • While out of town or on the move • At the gym or playground Mastering these tools can open the door to other nonconsuming groups. When you have identifi ed a high-potential group, a key job and a solution, consider who else might face the same problems. The solution you’re building may be adaptable to serve multiple audiences. The goal is to become the recognized “go-to” source for local information of many kinds in the community you serve. The following examples illustrate how two N2 demonstra- 44 NEWSPAPER NEXT: BLUEPRINT FOR TRANSFORMATION © 2006 AMERICAN PRESS INSTITUTE North Jersey Media Group: Helping people in the community fulfi ll FIGURE 4: ORIGINAL NORTHJERSEY.COM SITE important jobs

Facing the need for a Web site redesign, the North Jersey Media Group (NJMG) wanted to retool its online strategy to reach audiences not attracted by the news-focused NorthJersey.com Web site. The team interviewed family members and friends; people in malls and offi ces; and visitors to the Web site, and found myriad non-news jobs that people in the community were trying unsuccessfully to get done. For example, homeowners wanted more peace of mind about the safety of family members at home. Parents wanted to make their kids “stars” by documenting their achievements, whether sports, academic or simply fun. Lo- FIGURE 5: NEW NORTHJERSEY.COM SITE cal business owners wanted to get the heads- up on latest trends that could help them make money. College alumni wanted to stay in touch with news of their sports teams. This led the team to brainstorm about potential solutions that could address a range of audiences with differing “jobs to be done.” Ideas included a high school sports Web site with reverse print publication, an information service for new movers, a Web site addressing parents’ jobs, and relevant topics to help local businesses reach out to other businesses. This led to the idea of tying these new solutions together in an all-new, multipurpose NorthJersey.com site, repositioned as the portal for local information. The new site contains features that helped audiences solve range of those needs. The new site also pro- frustrating jobs such as: “Help me fi nd activi- vides ample opportunities to use new revenue ties to do this weekend” (event calendar), models like paid search and lead generation. “Help me fi nd a reputable home contractor” These and other models are discussed in more (local service directory) and “Give me up-to- detail in Area 3 of this section. date weather and traffi c information” (traffi c Living in North Jersey requires more than and weather icons). just the latest news, and the aim of the new It also points audiences to other relevant NorthJersey.com site is to help with a wide resources from both NJMG and third parties range of those needs. The new site also pro- that can help address more specifi c jobs. vides ample opportunities to use new revenue Living in North Jersey requires more than models like paid search and lead generation. just the latest news, and the aim of the new These and other models are discussed in more NorthJersey.com site is to help with a wide detail in Area 3 of this section.

NEWSPAPER NEXT: BLUEPRINT FOR TRANSFORMATION © 2006 AMERICAN PRESS INSTITUTE 45 B. Create solutions using key This content and know-how can be a for- building blocks midable asset, which national competitors like Google and Yahoo! will fi nd diffi cult to Looking beyond news requires developing replicate. new skills and capabilities many newspaper companies do not possess. Internet capabili- Most local information, both inside and out- ties assume greater importance, as functions side newspaper offi ces, has not been orga- such as interactivity, search, scalability and nized yet for easy public access and search- customizability are the key elements for new ability. Organizing and tagging information offerings that help audiences get their jobs in databases so it can be retrieved easily can done better than existing solutions. enable people to accomplish many important jobs in their lives. Three of the new capabilities enabled by the Internet that are certain to have massive For example, Kudzu.com launched last year local impact are databases, user knowledge by Cox in Atlanta, helps residents fi nd service exchanges (unlocking the collective wisdom) professionals in the region. Businesses are and community (providing platforms for com- organized by categories, such as pets, health munities to form). These “building blocks” and automotive. Each listing contains data cus- can underpin a wide range of solutions to tomers need, such as descriptions of services, help audiences get important jobs done. contact information and distance. User ratings Mastering them can open large growth op- and reviews — invaluable local knowledge portunities for newspaper companies. —also are provided. In reality, there are many Internet capabilities In Naples, Fla., The Daily News sports staff, like that also can open new opportunity spaces most, maintains statistics on high school teams for newspaper companies. These three and athletes. On naplesnews.com that data is are basic elements of a wide range of local provided in searchable databases, enabling growth offerings, and therefore represent a local sports fans to compile their own compari- good place to start. Some newspaper compa- sons of local teams and athletes online. nies are advancing rapidly in theses areas, but The jobs-to-be-done lens can help to deter- most have barely begun. mine which data is most critical. One news- All three building blocks can open excellent paper planning a youth-focused dining site Some useful databases: opportunities to serve new groups of custom- found that the main job in its target audience • Local entertainment (restau- ers in new ways. Realistically, however, no of young adults was, “Help me plan my Friday rants, events, attractions, etc.) company is likely to go on a shopping binge evenings by showing me half-decent eating • Small businesses to acquire all of these capabilities at once. places close to where I’m going afterward.” • Shopping The practical approach is to acquire them one They wanted practical information such as by one, as you identify frustrating consumer • Home-related services (contrac- where the restaurant was located, whether tors, plumbers, lawn/pool, pest jobs and create the products and solutions to there was onsite parking and whether credit control, etc.) meet them. cards were accepted. They cared much less about getting the newspaper’s well-written • Kids-related services (childcare, Building Block 1: Assembling relevant and researched restaurant reviews. schools, kid friendly attractions, databases etc.) Assembling databases can be challenging for Every community is chock full of local informa- • Local school/college sports newspaper companies because a different tion residing in many places around the land- mindset is required — not looking for news, • Pet-related information scape, from institutions to businesses to the but collecting and updating mundane details. knowledge banks of local residents. Newspa- This calls for hiring a different labor force. Con- pers often house extensive stores of local data, sider using interns, temps and hourly employ- and their staffs generally know better than ees to “scrub” existing data and add important anyone else how and where to get more. pieces of data.

46 NEWSPAPER NEXT: BLUEPRINT FOR TRANSFORMATION © 2006 AMERICAN PRESS INSTITUTE Also, consider databases already available case law remains uncertain, but user ratings Businesses successful at in your community, which could get impor- and comments are so common that newspa- unlocking collective wisdom: tant jobs done for consumers with the right pers should be able to fi nd approaches with • Amazon (consumer goods, touches. acceptable levels of risk. (Consulting your legal e.g., books, music) counsel is advised.) • TripAdvisor (hotels, attractions) For example, Chicagocrime.org automatically • Rotten Tomatoes and harvests data from the Chicago police depart- Beyond incorporating user-generated content Netfl ix (movies) ment’s online reports and organizes them into (such as blogs and user forums) on existing • Angie’s List (home contractors) a Web site that enables citizens to do the job, newspaper Web sites, companies can experi- • LinkedIn (professional networks) “Find out how safe I am (or how safe my parents ment with many other ways of unlocking the • Wikipedia (encyclopedic or children are.)” Users can search crimes by collective wisdom in their communities. Using knowledge) crime, street, date, ward, zip code, and other the N2 Method can help companies identify • iTunes (music) parameters and see them displayed on an promising fi rst opportunities, develop the • Yahoo! Groups (broad range of interactive Google map. It was built by a single necessary platforms and then expand into ad- interest groups, e.g., hobbies, developer, Adrian Holovaty, in his spare time, ditional kinds of local collective wisdom. young parents) and it requires no daily manual labor. • craiglist forums (broad range of Building Block 3: Providing platforms information areas) A nearly infi nite amount of data exists in most to facilitate collective conversations communities, and many databases can be An inevitable outcome of the democratization created only by hard work. So it is critically Examples of platforms important to prioritize, acting fi rst on the most of media is that communities will self-form. urgent and widespread jobs consumers are Newspaper companies cannot expect to be • Bulletin boards trying to do. The N2 “jobs-to-be-done” at the center of all these communities, as they

approach in Section II is a great help. often were in print’s heyday. However, they can stay engaged with these new audiences by • Virtual roundtables Additional databases can be added over time providing the platforms and tools they need. to target different audience groups or types As with unlocking collective wisdom, many of needs, and build a rich set of resources that platforms already are in use. These span a wide will serve a wide range of users. range of types, from photo- and videosharing tools to bulletin boards to e-mail groups to wikis. • Discussion forums Building Block 2: Unlocking

collective wisdom One of the N2 demonstration projects, Wick- edLocal.com, provides these kinds of plat- • Email-based groups Many local information jobs are best done by forms. While the site has substantial news tapping the prior experiences, opinions and content, it also has numerous blogs, discussion knowledge of people in the community. For • Ratings and reviews forums and places for user-submitted photos. example, someone trying to fi nd a good home The site fi rst launched in Plymouth, Mass. In its contractor or dentist wants the lowdown from fi rst fi ve months, traffi c grew 300 percent, with others based on their personal experiences. consumers drawn in by the local community We call this unlocking the community’s collec- • Hosted personal sites feel of the site. Scripps’ Yourhub.com, Mor- tive wisdom. ris Communications’ Blufftontoday.com and

The popularity of sites like Amazon, TripAdvi- privately held Backfence.com are other com- • Blogs sor and eBay demonstrates that people value munity platforms. other users’ input as they make decisions, The challenge for newspaper companies is to from good vacation destinations to trusted acquire a set of applications and tools that can merchants. support a range of communities. Having dif- • Knowledge repositories Newspaper companies have been slow to en- ferent platform types makes it easy to develop ter this realm for a variety of reasons. A leading new solutions that fi t a variety of audiences and concern is that unvetted user comments may their needs. • Content-sharing directories be wrong or unfair — normal on the Internet, The good news for newspaper companies is but uncomfortable for institutions that value that many of these platforms are available eas- accuracy and know the risks of libel. Internet NEWSPAPER NEXT: BLUEPRINT FOR TRANSFORMATION © 2006 AMERICAN PRESS INSTITUTE 47 ily as plug-and-play features from technology • Hold a brainstorming session for the team to vendors, such as PlanetDiscover, Travidia and report what they heard, and talk about ideas Harvest, or from open-source development for “good-enough” solutions to address groups such as phpBB. Hence, launching some these frustrating jobs. of these platforms could be done with a rela- • Nine out of 10 new product ideas begin with tively small investment of money and resources. the wrong strategy, so it’s important to keep initial investment small. If the idea shows METRICS promise in the market, you can invest a little more. The goal is to “invest a little, earn a Some metrics newspaper companies can use little, learn a lot.” to measure their progress in reaching out to new audiences with non-news solutions are: • Some of the ideas that emerge to serve specifi c audiences may be small. The key is • Combined audience reach for noncore making sure they can be profi table by man- products. (For companies lacking the data aging costs and adopting effective revenue needed to determine unduplicated audi- models. A newspaper company’s portfolio ence, a simple total of audiences will be can contain both large and small products, enough to refl ect growth.) This will ensure as long as they are profi table. that innovation focuses on new types of products as well as traditional ones. • To keep risk lower in the early stages of building a product, look for low-cost and • Number of nonconsumers surveyed to learn fl exible labor options. Instead of hiring full- about jobs to be done. To get innovative time staff, consider using interns or freelanc- new products correct, it is essential to get ers. Drawing from nontraditional sources of input from the target customers. talent, e.g. stay-at-home moms, can give a • Number of products in the portfolio that fresh and realistic perspective to jobs that are non-news focused. This simple metric audiences are seeking to get done. reinforces how fast the company is moving • Instead of building every idea from scratch, beyond the core. look for a successful product in another market that might be emulated or licensed. POINTERS AND SUGGESTIONS • Build out the components of a Web site • Remember that content is more than words gradually instead of launching everything at and pictures produced by professionals. once. Focus on the one or two most crucial Structuring pieces of data and user com- categories of information, and then add new ments in useful ways can help consumers categories based on users’ search terms or address important, unsatisfi ed jobs. requests. • As a simple fi rst step, have a small team of • Features that rely on user-generated content, employees ask about jobs that are causing such as user ratings, can fl ounder with too frustration for people they know — family, few ratings at the outset. Seed content friends, colleagues, shoppers, and other quickly by asking employees to contribute people in the community. comments or by organizing “all you can write” sessions at local colleges, malls, librar- • When you have identifi ed a key job and a ies, country clubs and other locations. possible solution, check to see what competitive solutions are available in your market • Recognize that existing assets, such as — local or national Web sites, print options, databases of restaurant reviews, are attrac- or others. How well do they fulfi ll the job you tive only if they make it easy for audiences to have identifi ed? How would your offering be get their key jobs done. Minor adjustments more attractive? in presentation and usability can make a big difference.

Historically, newspapers had a Use new models to fulfi ll simple and powerful business model. “jobs” of current/new advertisers As dominant information providers, A. Identify important, they attracted most of the popula- unsatisfi ed advertiser/ tion and most of the businesses who business jobs wanted to reach that population. B. Offer new models that get Newspapers enjoyed healthy mar- identifi ed jobs done better gins selling subscriptions, display than traditional solutions advertising, classifi eds and inserts. In recent years, newspapers have set up Web sites that largely repli- offerings and add effective new offerings for cate this historical model, minus the current advertisers. subscription revenue. Many of these To navigate the emerging online revenue have become substantial online realm, newspaper companies should: properties, with booming revenues A. Identify important, unsatisfi ed advertiser/ and audiences. Yet their sites are not business jobs to be done in their markets growing quickly enough to offset the softening revenues from print adver- B. Offer new models that get these identifi ed jobs done better than traditional solutions. tising and subscriptions. A. IDENTIFY IMPORTANT, Along some dimensions, the picture looks UNSATISFIED ADVERTISER/ worrisome. The loss of subscription revenue BUSINESS JOBS is signifi cant. Classifi eds — especially in the “Big Three” categories of cars, homes and jobs The quest for innovation begins with under- — are under severe threat from players rang- standing the jobs that current and potential ing from Monster.com to craigslist. National customers cannot adequately solve with cur- advertisers — not a large category to begin rent solutions, as described in the N2 Innova- with for most newspapers — are turning to tion Method (Section II). the Internet in increasing numbers, and local Seeking out important, unsatisfi ed jobs of advertisers are beginning to do the same. current and potential advertisers yields an im- With valuable content, strong brands and portant insight. While many businesses (and vibrant online properties, newspaper com- individuals) advertise, the job they are trying panies have every right to be serious online to get done is never advertising. Advertising players. However, simply moving traditional is a means to an end. Consider the following business models online, like display advertis- quotations from Newspaper Next interviews: ing and paid classifi eds, will not be enough. “I want to target an upscale audience, but the newspa- Rates are too low and competing advertising per can’t do that.” solutions from nimble and increasingly pow- — Specialized lighting contractor erful entrants are too compelling. “We are not able to buy preprints in terms of geography, To create and sustain robust online busi- and it dilutes our message.” nesses in this competitive media landscape, — National retail chain newspapers must adopt a broad set of “Mine is a relationship-centric business — I rely heavily revenue strategies going beyond their tradi- on my own Rolodex. Newspapers cannot do that for me.” tional models. They must reach companies — Mortgage broker and individuals who do not purchase current

NEWSPAPER NEXT: BLUEPRINT FOR TRANSFORMATION © 2006 AMERICAN PRESS INSTITUTE 49 “The biggest problem with a small business is that you As a result, the Times-Dispatch interviewed try to do everything yourself, and you just don’t know current advertisers, nonadvertising business- how. Life became 100% easier when I hired a payroll es and their own advertiser-facing employees. service.” They found that certain unfulfi lled jobs came — Bookstore owner up repeatedly: These frustrated businesses want to fi nd new • Hyper-local businesses (e.g., drycleaners ways to connect with customers, reach the and grocers) and businesses with distinct au- audiences they want, build brands and solve diences (e.g., baby stores and luxury goods problems that go beyond those addressed retailers) wanted to target their marketing through traditional advertising. message more narrowly. Most current advertisers feel newspaper • Businesses with high staff turnover (e.g., advertising fulfi lls a crucial job. But large contractors) and businesses in closely knit numbers of nonconsuming businesses con- communities (e.g., real-estate brokers, sider newspaper products too expensive, too lenders, inspectors and lawyers) expressed broad and too diffi cult to use. Many noncon- frustration about the diffi culty of fi nding the sumers, local and national alike, use other right employees, partners or suppliers. media; they combine various approaches to reach their desired audiences or simply do not • Businesses dependent on personal rela- advertise at all. tionships (e.g., mortgage brokers, investment advisers and personal care providers) In its N2 demonstration project, The Rich- wanted to make direct contact with their mond (Va.) Times-Dispatch chose to investi- particular types of prospective customers. gate nonconsuming advertisers in its market. The impetus came from an insight: The num- Few ideal options are available to these ber of local businesses who did not advertise potential customers. Designing solutions in the newspaper was at least four times to meet their needs — profi tably — has the greater than the number of advertisers who potential to unlock massive new growth. did. They had identifi ed a signifi cant weak- The Times-Dispatch’s work also highlighted ness — and a tremendous opportunity. the need to create structures to continue learning about jobs to be done of current and potential customers (for more information, FIGURE 6: ADVERTISING MARKET IN RICHMOND, VA. see Area 4 of this section and the Times-Dis- patch project summary in Section IV). 16,000 12,500 To learn more about the jobs to be done in your market, consider asking the following questions to businesses or employees who Denominator traditionally used by newspapers for regularly interact with businesses. measuring advertising Growth potential Notice that none of these questions asks market share includes 78% of businesses about the newspaper or news- the customer- paper advertising. The goal is to understand facing businesses in the specifi c problems the business faces, and 3,500 Richmond area then to use that insight to develop solutions that solve that problem better than any existing solution:

Number of customer- Number of businesses Untapped potential facing businesses who actively advertise advertisers

Source: Example given by Reid Ashe, Media General in newspapers

50 NEWSPAPER NEXT: BLUEPRINT FOR TRANSFORMATION © 2006 AMERICAN PRESS INSTITUTE Advertisers/potential advertisers B. OFFER NEW MODELS THAT • What do you do? GET IDENTIFIED JOBS DONE • How do you make money? BETTER THAN TRADITIONAL SOLUTIONS • What are you most worried about at the moment (“keeps you up at night”)? The good news for newspaper companies • What are some problems that you can’t is that new technologies allow them to fulfi ll adequately address? existing and potential advertisers’ jobs better • Under what circumstances do you usually than ever. Putting together the right solutions encounter these problems? can increase revenue by delivering new value to their best customers, and by serving new • What do you currently use to help you solve noncustomers including small businesses and these problems? individuals for whom the newspaper is too • What other options have you considered? broad, expensive or diffi cult to use. If newspa- Why did you use or reject these? per companies were to collaborate effectively • What “hiring criteria” (functional, emotional and on a national level, they also could use these social) do you use to evaluate available solutions? new tools to serve national advertisers who • How would you describe the “perfect solution”? long ago rejected newspapers as too expensive and too diffi cult to buy (see Section V). Many of the new technologies and models will Advertiser-facing employees be well known to some newspaper companies — especially large ones — but less familiar to • What are some things that potential advertisers have asked us to do in the past that we could not? others. Yet most newspaper companies still are not using these successful strategies that • Are there characteristics that these potential many non-newspaper companies and a few advertisers share, e.g., from the same industry, newspapers use routinely. similar company size, trying to reach the same audience? In short, most newspaper companies continue • Why couldn’t we deliver what they wanted, e.g., to leave money on the table. By implementing product did not exist, product was too expensive, the strategies discussed below — in conjunc- product was not timely enough? tion with the new offerings described in Area 2 • What were the alternatives that they turned to? 2 of the N Game Plan — newspaper compa- How well did these alternatives meet their needs? nies can develop a more robust, diversifi ed • What were the “hiring criteria” that infl uenced their business model. decision making? • What ideas do you have for helping them get their SOLUTIONS TO HELP job done? ADVERTISERS REACH A SPECIFIC AUDIENCE Many companies advertise because they want to reach a very specifi c audience. Creating The terms we use can get in the way of seeing targeted publications or targeted sections opportunities. Newspaper staffs use the word on a Web site can achieve this. Targeting or “advertiser” and “reader” constantly, uncon- profi ling technologies and techniques can sciously obscuring possible growth oppor- help newspaper companies match audiences tunities among nonconsumers. Look beyond and advertisers. “advertisers” to nonadvertisers — and to businesses in general — to see all sorts of new In many cases, rates for targeted advertising customers. The insights you gain about their can be substantially higher than “run-of-site” important, yet unsatisfi ed jobs will highlight rates because advertisers are able to reach the need for new models. prequalifi ed prospects.

NEWSPAPER NEXT: BLUEPRINT FOR TRANSFORMATION © 2006 AMERICAN PRESS INSTITUTE 51 ad space. (Many of the models discussed in FIGURE 7: WAYS TO INCREASE REVENUE this Area are closely related; the “consumer direct” opportunity discussed below is very National similar to “push” newsletters and coupons.) companies Across the industry, these offerings are still small today. However, Borrell Associates Regional/ estimates that newsletters and coupons will local companies produce close to $250 million in revenue by 2007. Starting an e-mail program can be as Small local businesses and individuals easy as contacting a vendor (such as Con-

Typical advertising spend Typical stant Contact) to provide the technological Number of backbone. Customers Audience profi ling How can we offer How can we How can we design products that increase our share products and business Newspaper companies that develop a deep- national companies of wallet of our models to serve small er understanding of their online audiences need in traditional customers profi tably? can help customers target advertisements local markets? advertisers? more precisely. Many newspaper companies appropriately worry about driving away visitors with cum- bersome registration procedures, but there Targeted publications are other ways to build deeper profi les of and/or Web sites online audiences. Opt-in offers and custom- By organizing content into packages aimed at izable choices can help newspapers collect specifi c audiences, newspapers can provide user information. attractive vehicles for advertisers, increase Newspaper companies also should consider their high-value inventory and jumpstart other using targeted advertising solutions (e.g., ad revenue models such as lead generation software from Kanoodle, Tacoda, Revenue (discussed below). Science) that automatically serve relevant For example, some newspaper companies ads. Consider contextual targeting programs and online entrants have targeted focused that match advertisements to the content on content at niches such as youth entertainment, a page, and consider behavioral targeting ethnic audiences, home improvement, mom programs that serve ads according to user and baby, neighborhoods, baby boomers, surfi ng patterns. sports and teen issues. As a simple example, There are also low-cost ways for small to an “Education” tab on a Web site could be a midsize papers to gain targeted advertis- desirable location for companies like Kaplan ing dollars. One solution is to sign up with or the University of Phoenix targeting educa- a national paid search provider like Google tion-seeking consumers. or Yahoo! to host search ads on their sites In addition to organizing content, newspapers (discussed below). Creating content areas on can create additional revenue opportunities sites that allow users to self-select according by pushing content to willing consumers. to their interests is another approach. Finally, Organizations like The New York Times and newspaper companies can join a behavioral Belo have found success in opt-in e-newslet- targeting affi liate ad network, such as those ters and e-coupons. These programs leverage run by Tacoda and Revenue Science, where a existing content to deliver value to consumers central manager tracks user data across a net- (such as daily sports updates or coupons from work of sites and serves corresponding ads. local stores) while creating valuable targeted

52 NEWSPAPER NEXT: BLUEPRINT FOR TRANSFORMATION © 2006 AMERICAN PRESS INSTITUTE SOLUTIONS THAT MAKE IT One online ad broker said, “It takes me 10 Launching a lead-generation EASIER OR MORE AFFORDABLE minutes and three clicks to get my clients’ ads program FOR ADVERTISERS TO REACH up on Google for a national audience, but to • Sign up with online ad brokers CUSTOMERS get the same ad up on a newspaper site, it (such as CommissionJunction takes many phone calls to your sales person or AzoogleAds) to gain access Many businesses do not advertise because it and I can’t change my campaign easily.” In to their database of pay-per-lead is too expensive or too diffi cult. Newspapers some cases, the best customer service is no campaigns. could serve these businesses by creating self- service at all. • Talk to current advertisers in service channels that allow customers to “do prime lead categories such as it themselves,” by launching lead-generation There are many vendors that can help vendors autos, homes, mortgages and programs where advertisers pay for perfor- establish a self-serve advertising platform, such colleges about their interest in mance and by creating paid search offerings as AdMission, AdDynamix and AdScriptor. lead-based advertising. that tie advertisements to particular search Lead generation • Talk to small businesses that terms. might otherwise not be able to Lead generation is a “cost-per-action” model. afford to advertise on your site Self-serve channels Instead of paying a newspaper company for (e.g., restaurants) about a pay- Simple, low cost, do-it-yourself ad placement the number of people who view an advertise- per-lead program. can help newspaper companies serve the vast ment, advertisers pay newspaper companies number of small businesses and individuals for the number of people who take action on who do not have the time or money to buy an advertisement. conventional ads. In a typical lead-generation model, a user Self-serve works especially well for print and clicks on an ad and fi lls in a form expressing online classifi ed advertisements. Many com- interest in a particular product or service. The panies already offer this feature on their Web newspaper company or a third-party online sites, and others should follow suit. broker validates the information and passes it on to a company, charging a fee for each Self-service models also help support text- qualifi ed lead. based models such as paid search. Fees can range from $5 to $40, or even higher Craigslist and Google operate primarily on in some cases. These rates can translate into a self-serve models. Craigslist allows individu- much higher effective CPM than a traditional als to create their own listings. Google allows banner advertisement. users to “bid” for targeted search terms (e.g., “Boston homes”), set the amount they are Many newspaper companies — especially willing to spend per day on a particular term small- and mid-sized properties — have never and manage multiple advertising campaigns used lead generation, but it is already a big simultaneously. business. Estimates of market size in 2005 range from $750 million to $4 billion. Some Their huge success shows how the defi nition advertisers, like the University of Phoenix, of quality depends on the job a customer is almost exclusively use online brokers with trying to get done. Newspaper companies lead-generation models. pride themselves on professional salaried sales forces, but Google’s customers love Businesses prefer lead generation or other the fact that they can handle their ads all by cost-per-action models because results are themselves. so tangible. Instead of wondering about the impact of an advertisement, a business sees the direct results of its ad. As lead-based sites like Autobytel and programs such as Google’s AdWords proliferate, many advertisers — especially small local businesses with limited budgets — will want the effi ciency of this model. NEWSPAPER NEXT: BLUEPRINT FOR TRANSFORMATION © 2006 AMERICAN PRESS INSTITUTE 53 Newspapers should consider experimenting Newspaper companies similarly can sell ad with lead generation in appropriate places, space alongside search results, tying ads such as targeted contexts like transaction ver- to particular search queries and charging ticals and alongside classifi ed search results. premiums for preferred placement and other advanced features. Lead-generation offerings can work even better on non-news related sites where the Borrell Associates projects that paid search mere fact of visiting the site shows the user is will account for $7.3 billion in online ad interested in the subject. One midsized news- spending in 2006, and, as local businesses paper company found that lead-generation shift dollars into search, Borrell predicts that advertisements on its news sites generated search will quickly become the primary form zero leads during a three-week pilot. However, of online advertising. lead-generation advertisements on its employ- Newspapers must protect and grow their ment pages generated considerable traffi c. share of local advertising dollars by establish- Another lesson here is that successfully ing themselves in this critical category. tapping into new revenue models requires An easy way to start is to sign up with a rethinking content strategies as well. Simply national paid search provider such as Google trying to force-fi t new models onto existing or Yahoo! that will serve targeted search ads content is unlikely to work. alongside queries in return for a share of the Paid search resultant commission.

Google’s phenomenal success largely comes Meanwhile, newspaper companies can build from the small, simple text ads that appear up searchable functions such as databases, when users run searches. Search is the ulti- classiﬁ eds and transactional sections to mate form of targeting. An increasing number increase paid search opportunities. After all, of companies are willing to pay premium you can not sell search advertising unless you prices to reach users whose searches indicate have something to search! an interest in a particular area. The N2 demonstration project with the Wick- edLocal.com team at GateHouse Media New England suggests that many local businesses FIGURE 8: EXAMPLE OF PAID SEARCH OUTPUT do not understand the value of an online search product. Showing potential advertisers a rich search product that clearly demonstrates impact can help to persuade skeptical companies. Newspaper companies also can capitalize on the explosive growth of search in other ways. Through its work with the N2 team, The Boston Globe decided to resell a package by a third-party, search-engine marketer. Busi- nesses would pay The Globe a ﬁ xed amount to get guaranteed “clicks” on their Web site, with The Globe’s third-party partner placing ads on search engines. The solution keeps The Globe’s initial investment low while helping businesses address the important job of attracting more visitors to their Web sites.

54 NEWSPAPER NEXT: BLUEPRINT FOR TRANSFORMATION © 2006 AMERICAN PRESS INSTITUTE SOLUTIONS TO MAKE Newspaper companies must constantly pay Launching a consumer direct MARKETING PROGRAMS close attention to jobs among the businesses marketing program MORE EFFECTIVE in their markets so they can identify the models • Offer data alerts to advertis- with the highest local potential, build content ers to notify them of news and Remember the old saying, “I know that 50% that supports the new models and be willing information relevant to their of my advertising dollars are wasted. I just to build the necessary capabilities to support businesses. don’t know which half”? Increasingly sophisti- those models. Such efforts may well yield addi- • Create “private-label newslet- cated technology allows companies to reduce tional creative — and promising — solutions. ters” for advertisers. the waste. • Help advertisers reach audi- In addition to the models above, consumer ences through database market- direct marketing, in which newspaper compa- The need for new capabilities ing (e.g., sending coupons and offers to your registered users nies help businesses create and send custom- Implementing many of these models requires building who have opted in). ized messages directly to consumers, can new capabilities. For example, it quickly became appar- create high-impact marketing programs. ent to The Boston Globe that it needed new capabilities • Manage advertisers’ market- to launch its “guaranteed-clicks” offering. ing programs by designing Online direct marketing is growing rapidly. newsletters and e-mails, and The reason? The small revenues from individual “guaran- Borrell estimates it will grow from $2.1 billion sending them to their customer teed-clicks” advertisers would not justify the use of The in 2006 to $7.3 billion in 2010 — and newspa- databases. per companies should lead the charge in their Globe’s salaried sales force, nor would the sales force local markets. see value in trying to land these small customers instead of servicing existing large customers. In a jobs-to-be-done interview with The Rather, The Globe needed to explore telesales or self- Oregonian in Portland, the marketing manag- serve offerings to make the economics of the model work. er of a regional department-store chain said Similarly, the WickedLocal.com team found that its she wished she could create and maintain a traditional sales force did not take easily to selling a paid one-to-one relationship with her customers search offering. — something her newspaper ads and inserts Generally, reaching nonconsuming businesses and using could not do. However, the job might be a new revenue models may require building specialized natural for a consumer-direct solution such sales forces or using third-party vendors that have the as user-selected e-mail newsletters on food, skills and motivation to push the new products. fashion or health. Newspapers can leverage their existing content and databases to produce valuable collateral for local businesses. For example, packaging travel articles into a newsletter would be relatively easy for a newspaper and valuable for a travel agent. Newspapers might design, e-mail, print and distribute such materials, effectively managing businesses’ marketing and e-marketing programs. The models described above are far from a comprehensive list, but all are well established and ripe for newspaper companies to implement. New, yet-to-be imagined models are sure to keep emerging.

NEWSPAPER NEXT: BLUEPRINT FOR TRANSFORMATION © 2006 AMERICAN PRESS INSTITUTE 55 METRICS • Seek “good-enough” solutions that get customer jobs done better than existing A newspaper company assessing its progress alternatives. Not all of the revenue models in unlocking the power of new models should require whiz-bang technology. track the following three metrics: • Create the opportunity for consumers to cus- 1. Percentage of revenue from nontraditional tomize content. The customization choices revenue models — in other words, the a consumer makes can provide useful clues percentage of revenues that does not come into their interests, which creates more op- from print display and online CPM print and portunities for targeted advertising. online advertising, print and online classifi ed advertising and subscription revenues. • Joining affi liate networks that track surfi ng The growth of new revenue models will behavior across multiple sites can be a way to ensure the success of diversifi cation efforts. increase inventory of high-value targeted ads. 2. Percentage of revenue from new adver- • A variety of opt-in, topic-oriented e-news- tisers added in the last two years. This letters can increase your inventory of highly measure emphasizes the importance of targeted ads. Opt-in e-coupons can give successfully fulfi lling new jobs for noncon- businesses additional ways to reach willing suming advertisers. customers. 3. Percentage growth in total number of ad- • Developing searchable content — such as di- vertisers served. Capitalizing on these new rectories, online classifi eds, and other trans- models should dramatically increase the actional channels — helps to increase search number of advertisers. volume and paid search opportunities. This also provides opportunities to upsell listings Progress on these metrics should indicate with features like preferred placement, pay that efforts to realize the potential of new per call and multimedia. models are bearing fruit. • Relying on elements of your core business model can sharply limit your ability to POINTERS AND SUGGESTIONS capture new business models. Consider • Set up formal and informal jobs research separate sales staffs, self-serve advertising mechanisms (see Area 4, Section III for more or other organizational changes to give new information). Start by inviting representa- models their best chance of growth. tives from nonadvertising local businesses to lunch and asking them about their business and advertising needs. • Look to partner with technology vendors when possible. It is not necessary to sink large sums into building solutions that can be bought or licensed for less. • Most of this section focused on online opportunities. Many emerging models have offl ine applications as well. Newspaper companies need to constantly be on the lookout for new models emerging in other delivery mechanisms, such as mobile telephones.

Following the suggestions in the Create innovation previous Areas of the N2 Game Plan structures & enablers should help newspaper companies A. Build a “common language” create successful products and ser- B. Dedicate resources to vices. But mastering innovation re- innovation quires more. Companies need to put C. Develop an innovation process in place structures and enablers that D. Create jobs-to-be-done make innovation a regular, repeat- feedback channels able part of everyday operations.

Structures and enablers are vital to success. disorienting to many corporate managers. A Intel’s common language Without the right structures in place, organi- common language refl ecting a shared view One of the most well-known stories zations have an overwhelming tendency to of innovation can help companies overcome in the innovation literature — how fall into old habits. Existing processes and some of the barriers that make it diffi cult. Intel recognized and responded to structures can subtly infl uence even the best threats emerging at the low-end To discover new growth opportunities, growth idea until it bears a striking resem- of its microprocessor business newspaper companies need to break out of blance to the company’s old products and — had a huge common language deep-rooted habits of thought and limits on business models. component. imagination. The concepts and processes of Clayton Christensen went to Intel Newspaper companies are organized to be 2 N give newspaper companies a way to do about 20 times in the late 1990s, extraordinarily effi cient within one basic busi- this, by opening eyes to a new way of thinking educating about 100 managers ness model. Now they are under great pres- and a new way of seeing opportunity. Teach- at a time on the principles and sure to develop and implement new products ing these concepts in the management team language of disruptive innovation. and business models. The traditional newspa- and across the company will generate new Intel went on to launch what is now per structure is not designed for innovation, ideas and create new excitement. Making known as the Celeron processor, much less for the kind of continuous disrup- them a constant part of the organization’s a stripped-down, low-cost chip to tive innovation they need today. internal communications can cement the con- compete in the least-demanding cepts and lead to real organizational change. There are four specifi c actions newspaper tiers in its industry. The Celeron processor slowed the advances of companies can take to create structures and Having a shared perspective on key innova- disruptive attackers such as AMD enablers that help them master innovation tion principles can dramatically change the and Cyrix and became a substan- and transformation: way organizations think, strengthening their tial business for Intel. ability to identify and develop new ideas. A. Build a common language Christensen believes that educa- Senior managers and middle managers need tion played a critical role in helping B. Dedicate resources to innovation a common approach to innovation. After all, Intel formulate and execute the C. Develop an innovation process middle managers make many of the most strategy. important day-to-day decisions, and doing “At the end of it all, I was talking D. Create jobs-to-be-done feedback channels. what they have always done they can under- with [then Intel CEO] Andy Grove,” These activities will help to ensure consistent mine the innovation goals of top management. Christensen says. “He said, ‘You prioritization, management and funding of Senior managers who “don’t get it” can derail know, the model didn’t give us any innovation efforts. They will help to create an a middle manager’s well-designed approach. answers to any of the problems, environment that enables companies to capi- but it gave us a common language There are many ways to ingrain key N2 con- and a common way to frame the talize quickly on emerging opportunities. cepts in an organization. Consider holding problem so that we could reach training workshops, consciously incorporating consensus around counterintuitive A. BUILD A COMMON terms into key documents such as strategic courses of action.’” LANGUAGE plans, having senior leaders apply the terms in speeches and conversations and encouraging Succeeding at innovation requires actions staff to use them in meetings, presentations, and approaches that are unfamiliar and and hallway discussions. NEWSPAPER NEXT: BLUEPRINT FOR TRANSFORMATION © 2006 AMERICAN PRESS INSTITUTE 57 Key terms in the An organization seeking to develop a shared resources can force teams to zero in quickly common language perspective faces a choice. It can seek to on critical assumptions, fi nd cheap ways to • Jobs to be done “saturate” the organization in new concepts test those assumptions and develop lean, • Disruptive innovation and unleash ideas and enthusiasm from many fl exible structures. directions, or “dip” a smaller group into the • Assure strong and active commitment from • Nonconsumers concepts and leave the rest of the organiza- senior management. Senior management • Overshooting tion largely unchanged. The former requires needs to “lean forward,” becoming actively careful oversight and attention, but can • Good enough involved in moving innovative strategies to- drive systematic change much more quickly, • Invest a little, learn a lot wards realization. Strong commitment does particularly if those new perspectives are more than signal the importance of innova- • Audiences coupled with the other supporting elements tion to the organization. It also helps teams • Diversifi cation described below. clear the inevitable obstacles to success and • New business models In its N2 demonstration project, The Desert harness senior management’s wisdom to Sun wanted to change its organizational struc- improve ideas. ture to make innovation a constant process, so • Identify a team of experts to help emerging it took the “saturate” approach. It worked hard innovators address problems. No individual to bring the common language to the entire innovator will be able to handle all the issues organization through training sessions, meet- that arise. Establishing a centralized panel ings and the inclusion of the language like jobs of people who are strong in certain aspects to be done in key discussions and documents. of business development — such as jobs-to- Not only did the tenor of conversations change, be-done research, prototype creation and The Desert Sun attributes many concrete im- business model formulation — should ease provements in core and emerging products to frustrations and speed project development. the different way of thinking embedded in its Developing this team can take time, because new common language. no organization will have all the necessary expertise at the beginning of its innovation B. DEDICATE RESOURCES journey. TO INNOVATION The Desert Sun learned quickly that jump- Many managers think their company’s strat- starting their innovation efforts would egy determines how it allocates resources. In require large time investments. During the fact, how resources are allocated typically fi ve-month engagement with the N2 team, the determines a company’s strategic direction. publisher and editor estimated they spent close to 40 percent of their time on innova- While many N2 concepts allow companies to tion. The organization’s operating committee start innovating without committing major re- spent a full day each week for three months sources, innovation still requires applying the wrestling with innovation issues. Numerous right resources in the right quantities. Specifi c meetings and activities within departments actions to consider: focused on innovation. The company created What makes a good innovation • Appoint innovation champions tasked with a new position to manage its innovation ef- champion? spotting and seizing new growth opportuni- forts. As a result, it made dramatic progress. ties. Ideally, innovation champions should • A demonstrated history of Editor Steve Silberman said it was diffi cult to spend a substantial portion (more than 50 entrepreneurship fi nd the time to work on innovation, but he percent) of their time on innovation. • General management experience and the other managers discovered they had (or tendencies) • Allocate “just-enough” money to help more capacity than they thought. “We found • Industry knowledge champions develop early-stage opportuni- that if we take our eye off the core a little bit, • General horsepower ties. Beginning the innovation journey need we’ll be okay. If we take our eye off innovation not be expensive. In fact, limiting funding a little bit, it will fail.” • Ability to network and can be exactly the right thing to do. Scarce collaborate

58 NEWSPAPER NEXT: BLUEPRINT FOR TRANSFORMATION © 2006 AMERICAN PRESS INSTITUTE C. DEVELOP AN INNOVATION 2. Appropriate tools. Companies often will Example Structure: Scripps PROCESS use fi nancial projections to assess an idea’s Entrepreneur Fund potential. However, typical fi nancial tools In early 2006, Scripps Newspa- Innovation should not be random and are likely to downgrade opportunities pers senior vice president, Mark unstructured. Developing a structured ap- that start in small, unmeasurable markets. Contreras, allocated more than $1 proach can help to make innovation a more Instead, consider using simple checklists million to create a fund for propos- 2 rigorous, repeatable capability. The N and the N2 tools in Section II to sort and als that would not naturally fi t the Method is in fact a process, a series of steps prioritize ideas and opportunities. They will core operations of the company’s designed to take an idea and shape it to help to screen concepts according to es- newspaper properties. Contreras appointed Bob Benz, the general increase its chances of success. sential criteria and focus team activities on manager of Interactive for Scripps There are countless ways to build innovation key risks and assumptions. Newspapers, to oversee the fund. processes. Some newspaper companies 3. An oversight mechanism. Senior manage- Benz, Contreras, two other Scripps already have innovation processes. However, ment needs to set the innovation agenda representatives and three outsid- they tend to be good at nurturing close-to- and ensure that the right ideas get handled ers (a former Apple executive, the-core incremental innovations but bad at in the right way. A board of governors a former Intel executive, and a building truly different growth strategies. (often called a “Growth Council” or an representative from Innosight) govern the fund. An innovation process that embodies the N2 “Innovation Council”) should defi ne what Method should have three components: ideas are in and out of bounds, evaluate The fund meets regularly to evalu- and fund new proposals and work with ate new ideas and review progress 1. Staged allocation of resources. The in- managers to solve problems and shape of funded ideas. novation process unfolds in iterative stages emerging businesses. The group need With initial investments as low as in which good opportunities are refi ned, not include the entire senior management $5,000, the goal is to invest a little while less attractive ideas are fi ltered out. team; limiting the group from three to six to learn a lot. As of September The early stage features numerous ideas, managers will maximize fl exibility. Outsid- 2006 the fund had evaluated 40 each receiving limited funding. As the ers such as local entrepreneurs or academ- proposals and funded nine. As process progresses, hurdles grow higher, ics can provide useful perspectives as well. Benz describes it: so the number of ideas shrinks, and the re- Such a structure ensures that the oversight “These investments aren’t big source commitment to each surviving idea body is fl exible, experienced and powerful, bets. They’re small disbursements 2 increases. As discussed in the N Method capable of providing steady management designed to test key assumptions section, early activities should focus on ad- and ready to pounce on opportunities. in the ideas that are being submit- dressing critical assumptions and risks. ted ... If we fail, we want to make sure everyone learns from our missteps. And when we succeed, FIGURE 9: PROCESS DO’S AND DON’TS we want to ensure that all of our papers can leverage that success … We don’t think we have all the DO DON’T answers, not by a long shot. But we believe we’re heading in the right Keep it simple and Say “anything goes” or make it direction.” Soliciting Ideas communicate “wants” daunting to submit an idea Utilize simple screens and checklists Force precision too soon; markets Focus to fl ag key risks/unknowns that don’t exist cannot be analyzed “Invest a little, learn a lot”; tie invest- Invest too much too soon. The curse Investment ment to risk-reduction milestones of too much capital can cause failure “Fail fast, and fail cheap”; the right Fear failure; if key risks cannot be Failure kind of failure can be a success overcome, move onto the next project Senior management actively partici- Have senior management involved Senior Management pates on boards and as sponsors once a quarter

NEWSPAPER NEXT: BLUEPRINT FOR TRANSFORMATION © 2006 AMERICAN PRESS INSTITUTE 59 D. CREATE JOBS-TO-BE-DONE Organizing for change: Integrated or separate? FEEDBACK CHANNELS Newspaper executives often ask how they should organize to innovate. Should they integrate new businesses Many newspaper companies do research on with their core business or create separate, autonomous readers and advertisers. Few, however, have any units? processes for exploring the wants and needs To succeed at disruptive innovation, newspaper compa- — jobs to be done — of nonreaders or business- nies need to be comfortable giving substantial autonomy es that do not advertise. As a result, large realms to noncore operations. of opportunity for new products and services remain invisible. Historical evidence across many industries, from retailing to computing, shows that autonomy is a necessary To fuel the innovation process, companies condition for companies hoping to create new growth need consistent mechanisms to constantly that may disrupt the core business. gather knowledge about the jobs noncon- Dr. Christensen advises companies to push for au- sumers and consumers are trying to do. This tonomy when a new venture needs to take an approach external input is critical for companies hoping that the old venture will dislike or reject. Otherwise the to create new growth. parent is likely to assign a low priority to the innovative strategy or force-fi t the old model onto the new At the most basic level, feedback can come opportunity. from casual interactions. In the N2 demonstra- To drive growth, newspaper companies need to serve tion projects, impressive results came from new customers, rethink content models, accept different acts as simple as inviting local businesses to an margin structures and create new revenue streams. If informal lunch, casually “interviewing” friends they do not create the right degrees of autonomy, they and family members at dinner or intercepting are unlikely to succeed. potential customers in locations such as malls At the same time, companies certainly can consider tap- or playgrounds. Simply initiating conversations ping centralized capabilities such as content generation, about the jobs individuals and businesses are editing, advertising sales and production. But they must trying to do can provide much insight into let the needs of the new business — not the existing consumer needs. business — dictate the organizational setup. Simple structures to make this feedback more In most cases, newspaper companies will need to adopt systematic can include having outward-fac- hybrid organizational structures. Different “channels” ing managers dedicate a fi xed portion of their (core print, core online, niche publications, other online, other businesses) should have different “owners.” The time to customer interactions. Also, newspaper owners should have profi t-and-loss responsibility, companies can create jobs-based panels that the ability to tap existing company resources and the mirror their reader panels. The key to success is freedom to build their own assets where needed. ensuring that the panels contain a mix of con- For example, an online manager is likely to need a sumers and nonconsumers and stay focused dedicated sales force to sell online-only offerings to on- on identifying important, unsatisfi ed “jobs to line-only customers. But the online sales force certainly be done.” could collaborate with the traditional sales team in sell- Even more systematic approaches include forming print/online packages and in selling online programs ing a dedicated group of consumers or busi- to traditional print customers. nesses as standing test beds for new ideas. This This type of setup maximizes an organization’s chance can allow newspaper companies to get quick of fi nding new customers and new revenue models. Too feedback on whether new ideas actually meet tight a connection to the core can lead to rigidity that the jobs of identifi ed consumers adequately. lowers the chances of long-term success. Finally, newspaper companies can consider solutions that are just beginning to emerge like vendor-hosted online communities that allow constant interaction with a group of current or potential customers.

60 NEWSPAPER NEXT: BLUEPRINT FOR TRANSFORMATION © 2006 AMERICAN PRESS INSTITUTE Through its work with the Newspaper Next METRICS team, The Richmond Times-Dispatch plans to launch a number of new channels to learn Measuring capability development need not more about local businesses. For example be complicated. We suggest tracking three (see Section IV for a complete list): specifi c metrics: • A Times Dispatch-sponsored series with 1. The percent of senior management time guest speakers on specifi c topics of interest spent on innovation efforts. A low alloca- to local businesses, which will create a venue tion of time demonstrates a lack of real for listening for jobs to be done without commitment to innovation. injecting a sales message. 2. The percent of employees who have been 2 • A free design service for multimedia ad- formally trained in critical N innovation vertising campaigns, which will present a concepts. If the percentage is low, the lack no-commitment way for the Times-Dispatch of common language can inhibit innovation. to learn more about the advertisers. 3. The total amount of money dedicated to • Regular attendance at small-business cham- innovation. Goals without resources are ber of commerce events and forums. nothing more than words on a page. Small but meaningful fi nancial allocations can Companies should consider creating mecha- demonstrate the organization’s commit- nisms for unsolicited input as well. Opening ment to innovation. channels for staff and consumers to share ideas can bring jobs insights from unexpect- These metrics can be important indicators ed places. about how seriously the organization is pursuing innovation. They can show where Finally, celebrating good behavior helps to the organization’s innovation structures and strengthen feedback mechanisms. One way enablers need to be reinforced or improved. to do this is to recognize staff members who use jobs concepts or undertake economical jobs research. Another key to success is POINTERS AND SUGGESTIONS encouraging senior management to model • The most important fi rst step in build- desired behaviors such as interviewing ing innovation capabilities is a fi rm senior nonconsumers. Procter & Gamble CEO management commitment to innovation. A.G. Lafl ey is famous for visiting consumers The demonstrated allocation of time and in their homes and observing them using attention drives many of the other structural P&G’s products. changes described in Area 4: Create innovation structures and enablers. • Reshaping your organization for innovation will take you into unknown territory. The important thing is to commit time and resources, take simple fi rst steps and keep moving. • Although some well-known organizations famously allow individual managers to dedicate a portion of their time to innovation, it can be better to fully allocate a small group of people to innovation. If innovation is a small portion of a manager’s job, the “tyranny of the urgent” almost always crowds out innovation activities. Time can be a scarcer resource than money. Smaller

NEWSPAPER NEXT: BLUEPRINT FOR TRANSFORMATION © 2006 AMERICAN PRESS INSTITUTE 61 organizations that lack the capacity to create a full-time innovation team should at least consider allocating half of an individual’s time to innovation. • A great way to build a common language is to hard-wire terms into documents. The N2 Idea Resumé and N2-OASYS tool (Section II) contain many of the key N2 concepts, forcing people to continually use the language system. • Culture is a lagging, not a leading, indicator. Trying to change culture by ﬁ at almost always fails. But, as N2 recommends, changing language, structures and tasks will change the way people approach problems, resulting in culture change. • Although this section discussed four separate items, the items are tightly inter- related. A process without resources will run aground; allocating resources without a common language can lead those resources in the wrong direction etc. Consider working on all four elements at the same time. • Do not accept “we don’t have capacity to innovate” as an excuse. Take a critical look at the things consuming your time. Odds are that 10-20% of time is spent on activities that overshoot market needs. • Beware the sucking sound of the core. In any company there is an overwhelming tendency to shape opportunities in ways that conform closely to what has been done before. Fol- lowing the recommendations in this section can limit these tendencies, but constant vigilance is required.

Managing a newspaper company’s transition from the monolithic model of the past to the diverse portfolios of the future is not an easy task. As companies move to strengthen existing products, add new ones and develop a variety of new business models, they need a way to set key goals and measure progress.

Each of the N2 Game Plan’s four areas identi- Besides targets for the N2 Game Plan’s four ar- fi es a short list of metrics that managers can eas, the N2 Dashboard includes targets for the use to determine how fast and how far they are company or newspaper property as a whole: moving their organizations. Four additional • Percent of EBITDA from online. While the N2 measures targeting a company’s overall prog- Game Plan covers offl ine and online opportuni- ress are provided below. ties, achieving a higher percent of earnings from Together, these 16 metrics constitute the N2 online likely requires substantial innovation. Dashboard (see next page). • Percent of revenues from products launched The N2 Dashboard encourages senior manage- in the last three years. A meaningful percent of ment to assess a company’s current state of revenue generated by new products indicates progress toward a diverse business portfolio serious progress in developing innovation and to consider where the company needs to be capabilities. — and realistically can be — in one to three years. • Percent of employees with experience outside In fi lling out the N2 Dashboard, answers will the industry. True innovation almost always differ markedly from company to company. The occurs at the intersections, when disciplines answers should take into account differences in interact in new ways. Outsiders can bring fresh markets, management teams, company goals, perspectives that allow companies to see new resources and many other factors. opportunities. For that reason, the 16 measures themselves • Total combined audience reached by all prod- are intended as a starting point, not a list of the ucts. (For companies lacking the data needed “correct” measures to track. Managers should to determine unduplicated audience, a simple consider modifying any of the 16 — and adding total of audiences will be enough to refl ect or deleting any — to provide an accurate refl ec- growth.) tion of their company’s situation and goals. For As companies plan their transitions to diversi- example, organizations trying to improve the fi ed portfolio models, it is advisable for senior internal fl ow of innovative ideas might measure management to sit down together and come the number of employee-submitted ideas. to agreement on current metrics and goals Some measures may require educated guess- for one and three years later. They should look work because accurate data are hard to get; beyond fi nancial targets alone, aiming for a the important thing is to use the same method dashboard that balances core growth with new each time the N2 Dashboard is updated. growth and sets ambitious but realistic targets No company should expect to make equal for building new audiences and adding new progress in all areas at once. The N2 Dashboard business models and advertising solutions. answers can be used to designate the “must- At regular intervals — for most companies, do” areas and the “when-we-can” areas by quarterly may be suffi cient — managers should setting targets appropriately in each. review progress. Each year a new Dashboard To some companies, the N2 Dashboard may should be completed, refl ecting progress look overwhelming. But even the smallest made and increased knowledge about how companies with the least resources can adapt much progress can be expected in the coming it to their needs by selecting just a few of the years. targets and making as much progress on those

Maximizing the core Now Yr 1 Yr 3 Innovation enablers Now Yr 1 Yr 3

Combined audience reached Percent of senior management by core products time spent on innovation

Number of core-product users Percent of employees trained in surveyed to learn about jobs to be done disruptive innovation

Number of niche and targeted Total spending on innovation products

Building audiences Now Yr 1 Yr 3 Fulﬁ lling advertisers jobs Now Yr 1 Yr 3

Combined audience reached by Percent of revenue from non- noncore products traditional revenue models*

Number of nonconsumers surveyed Percent of revenue from to learn about jobs to be done advertisers added in last 2 years

Number of products in portfolio Percent of growth in total number that are non-news focused of advertisers served

General Now Yr 1 Yr 3

Percent of EBITDA from online

Percent of revenues from products launched in last 3 years

Percent of employees with experience outside the industry

Combined audience reached by all products

*Traditional revenue models would include: display ads, classiﬁ eds, CPM Nontraditional revenue models could include: pay-per-click, pay-per-lead, search fees, database access fees, consulting fees © 2006 Innosight and American Press Institute

Introduction: The Disruptive Innovation Advisory Program 1. The Boston Globe: Small advertisers 2. The Dallas Morning News: MasterMom 3. GateHouse Media New England: WickedLocal.com 4. Gannett/The Desert Sun: Structures for innovation 5. Media General/Richmond Times-Dispatch: Nonadvertisers 6. North Jersey Media Group: Rethinking the online strategy 7. The Oregonian: Targeting ‘young creatives’ INTRODUCTION: THE DISRUPTIVE INNOVATION ADVISORY PROGRAM

In February 2006, Newspaper Next (N2) invited newspaper companies to submit applications for a demonstration program in which they would receive free consulting help from the N2 project team on innovative products, services or programs they planned to develop.

“Although its work is under- To help them shape and develop these initia- 1. The Boston Globe: Create solutions for pinned with a solid research tives, the newspaper companies would re- advertisers too small to use a metro daily and academic foundation, ceive Newspaper Next/Innosight training and newspaper coaching. In exchange, the N2 project would 2 2. The Dallas Morning News: Create a product N chose to demonstrate the gain valuable case studies showing how its to help busy moms master the many chal- concepts, tools and processes are applied in effectiveness of its strategic lenges they face in their lives practice. process with real world proj- 3. GateHouse Media/Suburban Newspapers Eleven newspaper organizations submitted of America: Improve our emerging local por- ects in real time. This ‘live applications for 21 project ideas. Submissions tal strategy, WickedLocal.com R&D’ should provide enough came from both large papers and small pa- validation for a skeptical pers, and included consumer-focused ideas, 4. Gannett/The Desert Sun: Develop orga- business-focused ideas and structural ideas. nizational structures to make innovation industry to embrace this systematic In the projects that followed, the organiza- much-needed process.” tions followed substantially different paths, 5. Media General/Richmond Times-Dispatch: — Robert Kempf, depending on their projects and circum- Develop new research approaches to better WickedLocal.com stances. But all agreed the N2 disruptive understand the jobs nonconsuming adver- innovation concepts and processes had a tisers are trying to get done transformative effect on their thinking, the 6. North Jersey Media Group (NJMG): Shape “[Most important is] un- steps they took and the products or solutions a winning approach to overhaul our online they chose to pursue. derstanding the history of strategy That transformation — much more than the disruptive technology and 7. The (Portland) Oregonian: Use innovative speciﬁ c products or solutions produced in approaches to grow our core products how established businesses each case — is by far the most important do not respond and ulti- outcome from the demonstration projects. Teams selected for the program received ad- 2 mately lose market share. To discover great new growth opportunities, vice and consultation from the N project team you must begin by changing the way you see over a 4-month period. The goal was to take This reality sinks in during opportunity, and you must use drastically teams as far as possible during the necessarily the training and causes you different processes to shape truly innovative short span of the project. solutions. to think in ‘non-newspaper’ Each team had an immersive one-day work- The value is in the journey as much as in the shop to introduce N2 innovation concepts and ways. That’s what our indus- result — and once the journey has been taken, develop a project plan. Participation ranged try needs to do to develop a team is equipped to repeat the innovation from the project’s core group and advisers future business models that process again and again. to large groups with cross-departmental and corporate representation from several levels. will be successful.” 2 THE SEVEN PROJECTS The N team then interacted with each team on — Nancy Lane, a regular basis to help them overcome ongo- Suburban Newspapers In consultation with Harvard Business School ing issues. In June, many of the teams came of America Professor Clayton Christensen, American Press together for a one-day joint learning session. Institute Executive Director Drew Davis and Following are overviews of each project outlin- Innosight Director and former HBS Professor ing its objective, team members, activities, Clark Gilbert, the team selected projects at project status at the end of September, next seven organizations: steps and key learning.

PROBLEM STATEMENT • Interviews with nine small, local advertisers sourced by “friends and family” How can Boston Globe Media gain a meaningful share of advertising spending from • Assessing strategic alternatives and select- very small businesses by providing effective ing a lead option (discussed below) marketing solutions that are proﬁ table and • Interviewing other newspaper companies scalable? that attempted similar solutions, and potential partners RATIONALE FOR SELECTION • Conducting detailed selection process for Most newspaper markets have large numbers sales vendors and product vendors; meeting of small businesses that cannot or do not use with vendors, selecting lead vendors and the newspaper’s advertising solutions — a working to design pilot activities large potential new market for newspaper • Working with Boston.com team and assess- companies. The Boston Globe’s market ing several different distribution channels includes more than 150,000 very small businesses, few of whom use the Globe’s existing • Building back-of-the-envelope market size offerings. Developing innovative business estimates for the market space and the models that target those nonconsumers selected opportunity could create substantial growth. • Creating a version 1.0 plan with steps to progress after initial introduction. THE TEAM STATUS ON 9/27/2006 • Core Members The plan is to sell small businesses a search- ~ Jay Fogarty: Vice President of Strategic engine marketing (SEM) program to provide Planning guaranteed clicks to their Web sites. Custom- ~ Laura Kauderer: Strategic Planning ers will spend $200 to $1,000 a month de- Manager pending on the number of clicks they want. A third-party vendor will place advertisements ~ Steve Galligan: Senior Divisional on search engines like Google and Yahoo! to Manager Local Advertising drive Web trafﬁ c. The offering will help small • Advisers businesses solve an important job: “Give me high-potential customers.” ~ Mary Jacobus: President and COO of The team plans to use telesales to reach Boston Globe Regional Media Group customers economically, as well as including ~ Lisa DeSisto: Vice President, SEM as a product offering available to onsite Advertising Sales local reps. The team also is working with other parts of the organization to evaluate the ~ Boston.com local search team further potential of telesales (either inside or outside). The team received approval in late KEY ACTIVITIES August to proceed with a test market in the fourth quarter of 2006. • Full-team kickoff workshop for the core team and advisers to learn N2 concepts and brain- In total, the team spent less than $10,000 and storm potential solutions four months of full-time effort from a strategic planning manager to develop this approach. • Several half- and full-day working sessions to It plans to spend roughly $50,000 in the assess and shape ideas and plan next steps fourth quarter of 2006. Estimates of eventual market potential range from $5 to $15 million.

NEWSPAPER NEXT: BLUEPRINT FOR TRANSFORMATION © 2006 AMERICAN PRESS INSTITUTE 67 NEXT STEPS • Learning from other newspapers can be very valuable. Other papers were able to validate The team is moving forward with its test the team’s assumption that the two most market activities. It plans to start selling critical areas to address were developing a the product in late 2006. At the end of 2006, low-cost sales channel and identifying what the team will assess its progress and plan would constitute a “good-enough” fi rst its next steps. If the test marketing achieves solution. its milestones, the team will make further investments to increase the scale of this • Existing distribution channels can be an solution. Depending on performance, it may asset and a liability. A newspaper’s “feet on also offer the product as part of an integrated the street” are a competitive advantage for Boston.com package in 2007. It also plans to some products, but the costs make it diffi cult begin other investigating next-generation to serve small businesses that cannot spend solutions. Finally, it is exploring other chan- much money. New distribution mechanisms nels to reach small businesses like small such as telesales and customer self-service business seminars, educational forums and solutions are critical to making a small busi- self-serve models. ness-based offering profi table. • As much as the Internet has disrupted KEY LEARNING the traditional newspaper business, it has disrupted Yellow Pages, shoppers and other • There are quick ways to learn more about advertising vehicles for small businesses, too. nonconsuming businesses. The team identi- Newspapers can use their assets and brands fi ed nine nonconsuming advertisers through to gain access to these nonconsumers, but friends-and-family connections, and the need to move quickly before other players resulting interviews contributed much to take advantage of the opportunity. shaping their eventual solution. For more information, contact Laura Kauderer • Small business jobs go well beyond advertis- at The Boston Globe: [email protected], ing. Three critical jobs that emerged through 617-929-7415. this team’s work are: ~ Make my phone ring with a high-potential customer. ~ Make it easy to do the things I don’t like to do so I can spend more time doing the things I love to do. ~ Make it easy to reach out to old customers who might have new needs.

PROBLEM STATEMENT • Advisers More than 700,000 mothers in the Dallas Fort- ~ Bill Tanner: Director of Strategic Research, Worth (DFW) area are online each month. The Dallas Morning News The Dallas Morning News reaches less than ~ Sara Rosenberg: Consultant 15 percent of that audience. What solutions can engage this attractive market segment by helping busy moms to master the many chal- KEY ACTIVITIES lenges they face in their lives? • Internal and external focus groups to develop a long list of potential jobs that local RATIONALE FOR SELECTION moms struggle to get done Almost any jobs-to-be-done brainstorming • Research on competitors to identify other exercise at a newspaper company surfaces the emerging local solutions possibility of new solutions for moms. Com- • Kickoff workshop for the core team and advis- petitors are beginning to target this space, but ers to learn N2 concepts and brainstorm about there still are opportunities to develop models high-potential jobs and possible solutions that get “mom jobs” done better than existing solutions. These are likely to include strong • Creation of a three-year proﬁ t and loss state- local information elements, creating a natural ment that included novel revenue streams opportunity for newspaper companies. • Development of prototypes and mockups • Analysis identifying 82,000 potential THE TEAM advertisers • Core team • Creation of a phased rollout plan ~ Laura Gordon: Senior Vice President, Marketing STATUS AS OF 9/27/2006 ~ Jiggs Foster: Director, Marketing and The team proposed a one-stop online activity Promotions planner where busy moms in the DFW area could ﬁ nd trusted recommendations to help ~ Erik Johnson: Assistant Director, plan their kids’ activities and book these ser- Marketing vices. The planner would be called GuideFam- ~ Rani Monson: Director, New Products ily.com, and would be closely related to The Dallas Morning News’ established “GuideLive” ~ Lisa Kresl and Jennifer Okamoto: online entertainment offering. Lifestyles Editors The initial phase would include options for ~ Michael Brown: Manager, Online 1) summer camps, 2) kids’ lessons and ac- Business Development tivities, 3) family activities, 4) family-friendly ~ Jon Reynolds: Manager, Advertising restaurants and 5) birthday parties. Points of Group Sales differentiation from other offerings would be mom-tested recommendations and ratings ~ Yvonne Kearby: Research Manager similar to Amazon.com, “Guide” branding and depth of content and recommendations from The Dallas Morning News trusted staff.

NEWSPAPER NEXT: BLUEPRINT FOR TRANSFORMATION © 2006 AMERICAN PRESS INSTITUTE 69 management (as in most companies) must FIGURE 1: GUIDEFAMILY.COM PROTOTYPE weigh many competing resource requests, and different-looking “disruptive innovation” proposals can fi nd it diffi cult to break through. In retrospect, getting management tightly bought into the approach early on, through participation in working sessions, might have facilitated future conversations. • It is important to balance the belief that small and simple starting points facilitate long-term success with the need to have a compelling long-term vision to excite management. • The right kind of focused Web site can present numerous revenue opportunities that go well beyond the traditional newspaper business model. • Dallas-area moms are beginning to turn to simple local solutions to address important jobs. Newspaper companies still have a window of opportunity to capture the moms’ space, but the window is closing quickly. • The innovation journey can provide interest- ing insights. Even if GuideFamily.com does The approach would feature numerous not launch exactly as the team envisioned, revenue opportunities, including sponsor- the team strongly believes that the learning ships, upsells, sponsored e-mail newsletters, about the moms’ space, how to think about targeted e-mail offerings, traditional banner “audiences,” and how to conceptualize on- advertising and lead generation (in Phase 2). line niche products will be useful throughout The team spent about $2,000 developing the organization. The work already has had this approach, with team members allocating two spinoff benefi ts: “nights and weekends” time to push it forward. ~ Identifi ed a database upgrade need for The proposed investment for the fourth quar- the existing GuideLive site and catapult- ter of 2006 was $80,000. The estimated rev- ed that project into the spotlight. The enue potential of the opportunity is $500,000 Dallas Morning News will likely imple- to $1 million in the third year of operations. ment a GuideLive relaunch in spring 2007 with signifi cant revenue potential. NEXT STEPS ~ Modeled and highlighted the work The team has launched a “mommy blog” as a that needs to be done for a planned way to learn more about the jobs to be done community user-generated site called in the space. It will continue to explore, refi ne Neighbors. The Neighbors team will go its proposal and seek to create bolt-on offer- through a similar process to the one used ings to GuideLive that address identifi ed jobs. by the MasterMom team.

KEY LEARNING For more information contact Jiggs Foster at The Dallas Morning News: jiggsfoster@ • Prioritization is a big challenge. The pas- dallasnews.com. sion of this middle-management team has allowed it to move the idea forward, but top

PROBLEM STATEMENT KEY ACTIVITIES What opportunities exist to refi ne the emerg- • Full-team workshop for about 20 (business, ing strategy for WickedLocal.com, a network of editorial and corporate representation) to hyperlocal Web sites? Are the assumptions that learn N2 concepts and apply disruptive in- drove the proof-of-concept launch in Plymouth, novation thinking to WickedLocal’s current Mass., validated to a point where it makes strategy sense to scale the project to other locations? • Interviews with audience groups and advertisers in local market to understand their jobs RATIONALE FOR THIS PROJECT to be done Sponsored by Suburban Newspapers of Amer- • Analysis of WickedLocal in context of jobs ica, the WickedLocal.com project provided the to be done — how well was WickedLocal opportunity to work on a Web strategy suitable responding to unmet jobs in the market? for many smaller communities and newspapers. Prior to the N2 engagement, Enterprise • Assessment of WickedLocal’s content strat- 2 NewsMedia had formulated the WickedLo- egy using the N -OASYS tool (described in cal strategy to leverage its local news brands Section II’s appendix) through a network of rich hyperlocal Web sites. • Assessment of WickedLocal’s local search A pilot project was under way in Quincy, Mass. strategy using the N2-OASYS tool Enterprise NewsMedia was acquired by Gate- House Media in May, 2006. • Implementation of a pilot WickedLocal Search sales plan as a “miniblitz” of local The aim of addressing consumer jobs well small/medium businesses to test their inter- beyond news and making money with new est in a local search product revenue streams was a close fi t with N2 strategies, and the pilot projects provided live data • Rethinking the WickedLocal sales model and a real-world environment to test critical based on disappointing results of sales blitz, assumptions. largely due to the existing sales force’s inability to prioritize the local search offering THE TEAM • Launch of two additional WickedLocal sites (Duxbury and Wareham, Mass.) to test scal- • Core Members ability and further validate WickedLocal’s ~ Bob Kempf: Vice President of Interactive ability to meet unmet jobs. Media STATUS AS OF 9/27/2006 ~ Kate Kelleher: Product Manager 2 ~ Sarah Corbitt: Editorial Director, MPG The N -OASYS assessment confi rmed that Newspapers WickedLocal was addressing important jobs of the target audience that were not met well ~ Chris Eck: Online Sales Manager elsewhere. Such jobs include “Help me fi nd ~ Courtney Hollands: Online Editor hyperlocal news and information,” “Help me fi nd local services” and “Help me connect to ~ Ron Welby: Business Development Manager other people in my town by sharing our expe- • Advisers riences.” Combining professionally produced content, user-generated content (photos, ~ Kirk Davis: CEO videos, news, blogs) and search functionality ~ Anne Eisenmenger: VP, Business Develop- help audiences to get these jobs done. Expo- ment nential traffi c growth since launch in March 2006 further validates that users were looking ~ Nancy Lane: President, Suburban News- for more than a traditional news site. papers of America NEWSPAPER NEXT: BLUEPRINT FOR TRANSFORMATION © 2006 AMERICAN PRESS INSTITUTE 71 The revenue side of the equation remains less KEY LEARNING clear. Interviews and observations confi rmed that local businesses have important jobs • Sharing content, expressing opinion and they cannot adequately address with current communicating about local issues is emerg- solutions, such as “Help me reach out to po- ing as an important unmet local job. The tential customers for my product/service in a early indications are that WickedLocal is pro- cost-effi cient manner.” However, experiments viding a better than “good-enough” solution. highlighted two key concerns: • Local small to medium advertisers do not 1) The paid search product in isolation has fully understand search advertising and are not gained traction. In the initial sales test, not universally convinced of the Web value print sales teams (under guidance of online proposition. sales management) presented the search • Leveraging existing newsgathering resourc- product as a component of integrated- es to enable community-generated content Web-marketing packages. Resulting rev- works. Newsrooms have legacy community enues were below expectation. The cause knowledge that is invaluable to the Wick- seemed to be that the existing sales force edLocal strategy. did not prioritize pushing the local search offering, focusing on core offerings instead. • Leveraging existing sales resources to offer local search and other Web marketing 2) It remains unclear how WickedLocal can products presents challenges. These are build a strong position in a market with resources that must stay focused on the core strong competitors such as Google, Yahoo! products. and Boston.com. • Traditional Web advertising revenue streams can be suffi cient to support initial versions of NEXT STEPS new content strategies. Those streams can The team has begun analyzing scalability provide “cover” while companies experi- concerns and developing rollout models ment with new approaches. for the WickedLocal sites. To address the For more information contact revenue issue, the team will test a number of Anne Eisenmenger at WickedLocal at different sales product variations. The team [email protected] also plans to address identifi ed sales process issues, such as the inclusion of self-service advertising after promising product variations are identifi ed. Finally, the team will consider alternative revenue streams. In the meantime, existing Web revenue streams will support the installed WickedLocal sites.

PROBLEM STATEMENT KEY ACTIVITIES How can we develop an organizational • Full-day kickoff workshop for about 25 (busi- structure that will drive and sustain innovation, ness, editorial and corporate representation) adaptable to other newspaper units of larger to learn N2 concepts, with real-time audit or smaller size? of organizational capabilities against 11 “best-practice” characteristics of innovative RATIONALE FOR SELECTION organizations • Weekly full-day operating committee meet- Making innovation systematic requires sup- ings dedicated to innovation porting structures and processes. The Desert Sun was selected because it is a representa- • Workshops and retreats to spread N2 con- tive midsize property at Gannett. The Desert cepts and language throughout the organi- Sun is in Palm Springs, Calif., and has an aver- zation age daily circulation of roughly 50,000. Online • Using jobs-to-be-done thinking to rethink makes up roughly 5 percent of revenue, and existing products a suite of nondaily products constitutes 12.5 percent of revenue. • Creating companywide idea submission process THE TEAM • Forming a panel to screen submitted ideas

• Core Members • Developing a specifi c new growth offering (discussed below) ~ Michelle Krans: President/Publisher • Hiring new manager to focus on innovation. ~ Steve Silberman: Executive Editor ~ Lori Edwards: Online Director STATUS AS OF 9/27/2006 ~ Other members of the operating com- The organization has made substantial strides mittee towards increasing its innovation capabilities in just four months. Specifi c accomplishments • Corporate Support include: ~ Sue Clark-Johnson: President, Newspa- • Generating more than 40 innovation ideas. per Division • Creating a process to evaluate and shape ~ Jennifer Carroll: Vice President, New ideas. A key element is the “Big Brain Panel,” Media Content a rotating group of employees chosen from ~ Bob Dickey: Senior Group President, different departments to act as a sounding Pacifi c Group board for ideas submitted by employees. ~ Dave Daugherty: Vice President, Re- • Selected an initial new growth idea, search a restaurant coupon Web site called FoodPsycho.com. The idea has been ~ Michael Maness: Vice President, Strate- shaped through several internal working gic Development sessions and interviews with 27 local restau- ~ Joni Silverstein: Vice President, Market rants. The fi rst version of FoodPsycho.com Development will allow local restaurants to place coupons for free. Registered users can search and print coupons. The Desert Sun will monetize the opportunity through e-mail database marketing, upsells and sponsorships.

NEWSPAPER NEXT: BLUEPRINT FOR TRANSFORMATION © 2006 AMERICAN PRESS INSTITUTE 73 “As a company we’re rallying • Made jobs-to-be-done modifi cations to • Organization capabilities can be real dis- together … offering sug- three existing products: abilities. The organization’s focus on process and its tendency to listen to the desires of ~ Changed distribution of business gestions, brainstorming, a its best customers make it hard to spot and publication from an insert in daily print seize different kinds of opportunities. heightened level of critical publication to a direct mailing to local thinking … we’re applying businesses. • Technology hurdles can inhibit innovation. It is critically important to build capabilities in- ~ Modifi ed entertainment weekly by innovation to a lot of our ini- house and gain skills in working with outside focusing on entertaining during idle time vendors. tiatives … we are using phi- and increasing youth-focused content, losophies of ‘good enough’ including games and puzzles to address • A common language is a powerful way to and ‘re-vectoring’ as we the “entertain-me” job. facilitate change. The repeated use of terms such as “jobs to be done,” “good enough” ~ Increased Web content and experi- turn up the volume online. and “invest a little, learn a lot” can help to mented with new distribution strategies hardwire new concepts into the organization. We are choosing projects (hawking at soccer games, family distri- that can be launched and bution) for Hispanic-focused publication. • It is possible to make time to innovate without hurting the core. As Steve Silberman said, • Innovation “best practice” audit in August in process in 90 minutes, “If we take our eye off the core a little bit, indicated progress on almost all 11 organiza- 30 days, etc. We’re making we’ll be okay. If we take our eye off innova- tional traits. decisions quicker and are tion a little bit, it will fail.” In fact, the core is improving because everyone is focusing on making a deliberate point of NEXT STEPS innovation. saying when we will revisit The team plans to focus on launching Food- • Transformation is not easy. Management what we’re doing and see Psycho.com and addressing organization dedicated a substantial portion of its time goals where it has not yet reached its desired to addressing these issues. Individual man- what can be done better.” end state. Specifi cally, it plans to focus its agers spent 20–40 percent of their time on — Monica Torline, Editor, idea-generation process by issuing specifi c innovation during the course of the project. Indio (Calif.) Sun innovation “challenges,” work to make busi- • Commitment at the top is crucial. The pres- ness model innovation more systematic by ence of key corporate Gannett managers in creating a business-model playbook to guide the kickoff session gave the team confi dence efforts and take simple steps to ensure that that the company supported its efforts. This external input informs innovation efforts. It support gave the team freedom to move plans to keep dedicating substantial time to forward quickly. innovation and hold quarterly review sessions to assess progress and plan next steps. Mean- • Targeting different consumers requires while, Gannett plans to share the learning different approaches; news will not be the from The Desert Sun’s N2 engagement with magnet that attracts low-end consumers and other properties. nonconsumers. • Increasing innovation capacity comes from KEY LEARNING sifting through ideas faster, not from de- creasing the number of projects. • Culture does not change overnight. The best way to change culture is to change the • People don’t change at the same pace. tasks that people do. The new tasks will cre- Some departments will lead the way and ate new patterns of behavior that will drive show other departments how to change. culture change and reveal needed changes in organizational structure. Leading with structural change could result in missteps.

74 NEWSPAPER NEXT: BLUEPRINT FOR TRANSFORMATION © 2006 AMERICAN PRESS INSTITUTE ‘STARTER KIT FOR INNOVATION’ things out because they don’t have every “Getting us to think out of the As The Desert Sun team assessed its progress “t” crossed, especially the ones that make box and shoot for the stars over its fi ve-month engagement with the N2 no difference. is a welcome part of the team, it developed what it calls an “11-Step 7. Nurture different schools of experience. Starter Kit for Innovation:” The division sought to fi nd and reward Newspaper Next project .… 1. Insist on doing things differently. At innovative thinking. Management expe- I think we’ll take things even rienced some frustration and anxiety at the beginning of the year, The Desert Sun further than most news- management team created a vision and the beginning, but was reassured when it mandate for change, saying “This is the began spotting innovative thinkers in un- papers do .… Our culture year that...” Throughout the year, manage- expected places in the organization. It is and mindset has changed ment has dedicated substantial time to in- now looking less at people’s titles and job novation and demonstrated commitment duties and focusing more on their abilities. and is changing — and still through action. 8. Understand consumers. Sales manag- has some changing to go. A 2. Get everyone to understand the mis- ers are now required to spend up to 50 lot of that has to do with percent of their time in the fi eld, and the sion. The Desert Sun spent a substantial empowerment and setting amount of time communicating the mis- organization is focusing on “low-end” sion to inspire the organization. It sought consumers and “nonconsumers” to spot goals …. We’ve come a long to develop a common language and opportunities and threats more quickly way and hopefully a year spread the message throughout all levels and systematically. from now we’ll say the of the organization. 9. Experiment with different business 3. Revise strategies for existing portfo- models. The team recognizes that new same thing.” lio. The Desert Sun took a hard look at its business models don’t happen overnight. — James Meier, existing publications and services. The It is seeking to “invest a little to learn a lot” Assistant Metro Editor, jobs-to-be-done lens helped it identify about new approaches, and hopes to gain The Desert Sun, Calif. tangible ways to improve several products. experience with novel approaches, such It also held “workout” sessions through- as free advertising, using its competitors’ out the organization to fi nd and reduce content and changing distribution ap- time being wasted on low-value activities. proaches.

4. Generate new ideas. The team tried sev- 10. Reorganize to ﬁ t the mission. Instead of eral different approaches to generate new forcing a new structure on the organiza- ideas. It created a “Big Brain Panel” to tion at the beginning, the team focused serve as a sounding board for new ideas on letting structural changes bubble up as — a rotating group of managers, not “the the departments and staffers start spend- usual suspects.” Furthermore, the division ing time on the right innovation activities. hired a manager to move the innovation The newsroom is leading the change, and process forward. the managers believe other departments will follow their example. 5. Invest in innovation. Every manager devoted a substantial portion of time to 11. Create new benchmarks. Transformation innovation, with the publisher and editor does not happen overnight. The team is 2 dedicating up to 40 percent of their time. working on using the N Dashboard (end They also sought to identify and nurture of Section III) to help ensure it focuses previously unrecognized innovators. activities on the right areas. 6. Be quicker to market, not perfect to For more information contact Michelle Krans market. The management team is trying at [email protected] and to make decisions faster. They have grown Steve Silberman at ssilberm@palmspri. increasingly mindful of not dragging gannett.com.

PROBLEM STATEMENT KEY ACTIVITIES What new research approaches can identify • Full-team kickoff session for about 25 (busi- the important and unmet jobs to be done of ness, editorial and corporate representa- nonconsuming advertisers (businesses who tion) to learn N2 concepts and brainstorm do not advertise with Media General) in the potential ideas Richmond market? • Lunch session with four nonconsuming business owners RATIONALE FOR THIS PROJECT • Market analysis to identify high-potential The Richmond market has approximately industry segments to focus on (healthcare 16,000 public-facing businesses, of which professionals, real estate, food manufacturers) about 3,500 are advertisers with the Rich- • Interviews with more than 40 nonconsuming mond Times-Dispatch. Developing deeper advertisers from these industry segments insight about the jobs to be done of nonconsuming businesses would be vitally important • Half-day follow-up team session to brainstorm input for creating innovative products and solutions to address some of these jobs services. • Interviews with Richmond Times-Dispatch advertising sales representatives THE TEAM • Interviews with Richmond suburban newspa- • Core Members pers’ advertising sales representatives

~ Steve Shaw: Director of Research, Media General STATUS AS OF 9/27/2006 ~ Paula Stallard Downey: VP Advertising, The research conducted during the project Richmond Times-Dispatch showed that nonconsuming businesses have many important jobs to be done that go well ~ Doug Forshey: Publisher, Virginia Busi- beyond advertising. Examples include: ness Magazine • “Help me reach a targeted, upscale audi- ~ Todd Williamson: Director, Customer ence in a specifi c geography” Relationship Management • “Help me fi nd qualifi ed employees” • Advisers • “Help me with back-offi ce duties that keep ~ Reid Ashe: Executive VP and COO, me from running/expanding my business” Media General • “Help me establish an online presence for ~ Tom Silvestri: Publisher, Richmond my business that will target customers and Times-Dispatch prospective employees.” These jobs demonstrate the team’s emerging belief that “advertising is a compensating behavior” and challenged the Times-Dispatch to think about solutions other than advertising that could help to get these jobs done. Fur- thermore, the research highlighted the needs to create more formal processes to gain understanding of the jobs of underserved advertisers and nonconsuming businesses.

76 NEWSPAPER NEXT: BLUEPRINT FOR TRANSFORMATION © 2006 AMERICAN PRESS INSTITUTE NEXT STEPS Richmond market. The goal is to hear these businesses discuss the jobs they are trying to The Times-Dispatch plans to launch a number get done and the solutions they currently use. of formal initiatives in the Richmond market, including: The team is preparing to launch these initiatives in the Richmond market. It expects to • Personal visits/interviews with nonadver- roll out fi ndings from these initiatives to the tisers and underserved advertisers. To other Media General newspapers. Information help identify the jobs to be done, interview- gathered will be shared with the core team 2 ers will continue to use the N interview and The Times-Dispatch advertising team so 2 questions, processes and N Idea Resumé. the methods used to discover key jobs can be • Formal efforts to interview employees of adjusted and enhanced for future efforts. nonadvertisers. Many times a salesperson’s view of jobs to be done is much different KEY LEARNING from the owner’s or manager’s. Front-line contacts with customers often reveal deep • The jobs-to-be-done interview technique is insights into how customers fi nd out about an abnormal behavior for many newspaper the goods and services offered. companies, who tend to think in terms of current solutions available versus listening for • Observation of nonadvertisers in their possible new solutions. natural business settings. Team members will go into the fi eld to observe nonadvertis- • Interviews can produce unexpected positive ers as they go about their normal activities, byproducts. The Times-Dispatch learned such as interacting with customers. They will how some of its processes make it more focus on identifying areas of high frustration diffi cult to serve potential advertisers. For and understanding what “compensating example, the team learned that its produc- behaviors” people currently use. This will tion-driven advertising deadlines are too help the Times-Dispatch fashion solutions far in advance for some advertisers and that that can get the job done better. advertisers fi nd its billing procedures complicated and frustrating. • Business Services Series. The company will create a Times Dispatch-sponsored speaker • The process of seeking to understand series on business topics. This will provide a jobs to be done helps to develop common good venue to learn about jobs to be done language and helps managers move out of a in a nonsales setting. “sell-the-product” mode into a true listening mode. • Advertising Campaign Design Service. The company will offer design services • Common tools help to reinforce the common for multimedia advertising campaigns at language. Using the “Identifying Jobs to be 2 no charge to selected nonadvertisers and Done” template and the N Idea Resumé in underserved advertisers. These consulta- all nonadvertiser interviews gave the team a tions will provide new understanding of the common diagnostic tool that all team mem- jobs these companies are trying to do. The bers could relate to, discuss and revise as clients will be selected from the Times-Dis- they received nonadvertiser feedback. patch database, focusing on high-potential • Structured sessions help allow team mem- categories. bers move out of their comfort zone by dem- • Attending small business chamber events onstrating the value of new concepts. and forums. Times-Dispatch representatives For more information contact Steve Shaw: will register for seminars, chamber breakfasts, [email protected]. etc., aimed at small businesses in the

PROBLEM STATEMENT KEY ACTIVITIES How can North Jersey Media Group (NJMG) • Full-team kickoff workshop for about 30 rethink its Web strategy to engage a broader (business, editorial and corporate represen- audience, including nonconsumers of news? tation) to learn N2 innovation concepts and brainstorm ideas RATIONALE FOR SELECTION • Interviews with family-and-friends of staff members to identify some preliminary jobs As a mid-sized, family-owned and print-cen- to be done for discussion tric media company, NJMG is representative of many newspaper companies across the • Phone interviews and online survey with country. Its existing Web site, NorthJersey. more than 100 respondents to understand com, was also typical: closely resembling the what jobs people go online to solve print product with a predominant news focus • Several rounds of internal and external focus and a strong overlap between print and online groups to get reactions to early prototypes audiences. NJMG was keen to use a jobs to of the new NorthJersey.com site be done approach to help grow aggregate audiences in the market. • Follow-up telephone interviews with customers to aid in understanding the prioritization of jobs FIGURE 2: CURRENT NORTHJERSEY.COM • Focus groups with both internal and external groups using similar existing sites to conﬁ rm look and feel aspects of the site and identify prelaunch improvements.

STATUS AS OF 9/27/2006 After fi ve rounds of rapid prototyping over three months to gather user reactions, the new NorthJersey.com site is ready for launch. It will feature tools to help users solve jobs that they currently can’t do satisfactorily, such as “Help me fi nd activities to do this weekend” (event calendar), “Help me share my favorite impressions of my community, opinions, hot tips” (user-submitted photos THE TEAM and blogs), “Help me fi nd a reputable home contractor” (user ratings) and “Give me up- • Core Members to-date weather and traffi c information” (traffi c and weather icons). The goal is to make ~ Ed Efchak: VP Marketing, NJMG NorthJersey.com a local portal for all types of ~ Howard Goldstein: VP Internet, NJMG information and services about the North Jer- sey region of nearly 3-million people, linking • Advisers to other NJMG and third-party sites. ~ Stephen Borg: Publisher of The Record In addition NJMG has been applying “jobs- and The Herald News to-be-done” thinking to existing print publications, such as planned modifi cations to the ~ Jon Markey: President of NJMG business, real estate, and education topics in The Record.

78 NEWSPAPER NEXT: BLUEPRINT FOR TRANSFORMATION © 2006 AMERICAN PRESS INSTITUTE KEY LEARNING FIGURE 3: NEW NORTHJERSEY.COM SITE • Rapid prototyping greatly facilitates low-cost ways to learn, modify and implement. • The concept of “good enough” helps to ensure that version 1.0 of a solution fulﬁ lls basic consumer requirements while avoiding overbuilding that can increase costs and time to market. • The jobs-to-be-done approach helps to pinpoint what content the customer needs in various circumstances. That understanding helps to determine how to marry content and distribution channels to best meet those speciﬁ ed jobs and serve new audiences.

• The N2 method is complementary to continuous improvement activities. Using the approaches together can improve existing work processes and reduce cycle time. The jobs nomenclature helps to clarify what the customer wants at the earliest stages of product development. Putting the needs of NEXT STEPS the customer fi rst and then building exactly to those specifi cations eliminates waste and The team plans to continue using jobs to be improves customer satisfaction. done to refi ne the NorthJersey.com site after launch. The team has also identifi ed addi- For more information contact Ed Efchak at ef- tional subject areas to add to the site after [email protected] and Howard Goldstein the launch. These include parenting, new at [email protected] move-ins and business-to-business information as starters. The team is also developing other ideas such as a high school sports site with reverse print publication for the end of 2006.

PROBLEM STATEMENT • Appointment and launch of three cross- departmental work teams to pursue How can The Oregonian, a metropolitan daily brainstormed strategies newspaper, increase readership among the 2 booming population of “young creatives” in • N training session for team members not the city of Portland? present in initial workshop • Regular and continuing team meetings to RATIONALE FOR SELECTION develop and refi ne product ideas and pre- pare proposals for implementation. The Oregonian’s desire to focus on the core product — the daily newspaper — provided an opportunity to demonstrate how the N2 In- STATUS ON 9/27/2006 novation Method and its key concepts such as The three teams are developing recommen- jobs to be done and nonconsumption could dations in specifi c areas: be used to maximize the core business model — a key component of the N2 Game Plan. 1. Mommy Team: A demographics-based opportunity targeting the key jobs of busy moms; products could be Web and or THE TEAM print. After defi ning key jobs and researching competitive solutions on the Web, the • Core Members team has concluded that a local Portland ~ Sandra Mims Rowe: Editor niche exists but must be pursued quickly. The team has proposed building a Web site ~ Peter Bhatia: Executive Editor prototype to assess advertising potential • Team Leaders and test content ideas. 2. Portland Team: A geography-based oppor- ~ Mommy Team: Jolene Krawczak, Senior tunity targeting “young creatives” in the Editor/Features City of Portland; products could be Web, ~ Portland Team: Susan Gage, Portland print daily or print weekly. A research team team leader (newsroom) of reporters, editors and ad reps interviewed or surveyed more than 100 mem- ~ Innovation/Niche Publications and Spe- bers of the target audience. They learned cial Sections Team: Peter Bhatia that this group uses the Web to fi nd local • Advisers information on topics from entertainment to neighborhoods, but that they fi nd it ~ Fred Stickel: Publisher hard to get the information they want. The ~ Pat Stickel: General Manager fi ndings suggest opportunities online or in print or both. KEY ACTIVITIES 3. Innovation/Niche Publications and Special Sections Team: A team concentrating on • Preworkshop jobs to be done interviews with how to make innovation continuous at The several nonconsuming individuals and busi- Oregonian, with an initial focus on how to nesses, some recorded on video. develop a range of niche products and spe- • Full-team kickoff workshop for about 40 cial sections. The team concluded that a (business, editorial and corporate represen- new department to spot and develop niche tation) to learn N2 concepts and brainstorm opportunities would be the most effi cient on potential jobs to be done and solutions solution.

80 NEWSPAPER NEXT: BLUEPRINT FOR TRANSFORMATION © 2006 AMERICAN PRESS INSTITUTE NEXT STEPS • Jobs to be done and nonconsumption are helping teams rethink other existing Mommy Team: Written recommendations for products, including a new high-demo- action given to senior management in mid- graphic magazine recently launched. September; now under review. • The committee structure is giving the com- Young Creatives: Group brainstorming pany an opportunity to develop its young is planned in September to translate the creative thinkers and involve them in major identiﬁ ed jobs to be done into ideas for initiatives. new products or services. • The Innovation Team is using the practical, Innovation Team: Recommendations to senior short-term challenge of creating a niche- management, describing how to implement a products innovation structure as a spring- niche products department. board for longer-range thinking about how In all three cases, the intent is to develop tan- to improve the company’s cross-departmen- gible plans for inclusion in 2007 budgets. tal strategy development. For more information, contact Peter Bhatia KEY LEARNING at The Oregonian: [email protected]. com. • The innovation concepts and brainstorming at the initial workshop generated so much energy that the project needed to be broad- ened to include the two additional projects, focused on mothers and long-range innovation/niche products/special sections.

• The N2 innovation process and the resulting team structure are creating long-needed organizational channels for cross-departmental dialogue, problem-solving and product development. As the teams make progress, their tasks and discussions are already changing the organization’s culture.

The N2 collaboration survey Key success factors for collaborations Appendix THE N2 COLLABORATION SURVEY

Headlines trumpeting major deals among big Internet players and media FROM THE SURVEY: companies break almost daily, but newspapers companies tend to be “It makes no sense conspicuously absent. whatsoever in an Internet- As pure-play online giants race to build and monetize huge national audiences centric world for multiple and capture national ad spending, the newspaper industry remains largely out companies to try going it of the picture. The industry’s fragmented ownership — a legacy from the era of locally owned printing presses — creates a severe structural handicap. alone in the mistaken belief that they can succeed online For the most part, this has kept large, well- With this backdrop, the Newspaper Next on a standalone basis.” capitalized newspaper companies from team decided to survey top executives at the — Company CEO creating new ventures on a national scale or largest newspaper companies and newspa- networking existing newspaper Web sites. pers to determine their views of and interest in collaboration. Although newspaper Web sites reach a “The only way to compete in unique audience of more than 50 million Wrenching the industry into new behaviors this brave new world is to users a month, generating about 2.5 billion is beyond the scope of the Newspaper Next join forces, put aside petty pageviews, almost all newspaper efforts project, but this section brings two things to focus on local Internet sales. the continuing discussion on industry jealousies and suspicions collaboration: When newspapers have attempted national and make some bold plays.” collaboration efforts, most have failed. Yet • The results of the N2 Collaboration Survey — Manager of Interactive a few industry success stories — such as Ca- • A look at key success factors for collabora- reerbuilder.com and Cars.com — prove that, tions, derived from “disruptive innovation” under the right conditions, the industry can “The challenge is taking what theory and collaborations inside and outside produce winners. the industry are largely local brands and Within the industry, the pattern of failure and Based on the survey’s results showing strong creating a national brand inaction is viewed with increasing alarm. The support for a national advertising collabora- subject comes up repeatedly in trade jour- to take advantage of the tion, it appears the question is not, “Why can’t nals, conventions and seminars: Newspaper we collaborate?” but rather, “How shall we?” opportunities.” companies must join forces to compete in the online world — why can’t they? — VP Digital THE SURVEY To the Newspaper Next task force — 26 executives in key innovation positions, mostly The Newspaper Next Collaboration Survey “Online competitors bring within the industry — this is a hugely vexing had one primary goal: To determine whether scale and national reach. issue. Every task force discussion saw spirited the largest companies and newspapers — the dialogues about the missed national opportu- most likely parties to undertake collabora- They leverage their costs nities and competitive threats. tions — would agree on the need and on the across all markets and thus most promising opportunities. The task force members virtually insisted that have a lightweight business 2 the N project ﬁ nd a way to press for action. and cost model compared to Lincoln Millstein, Hearst’s senior vice president and director of digital media, framed it newspapers.” this way: “Seventy-ﬁ ve percent of ad dollars — VP Digital are captured by three or four portals, while most digital newspaper properties have not attained even 10% of their parent companies’ revenues.”

NEWSPAPER NEXT: BLUEPRINT FOR TRANSFORMATION © 2006 AMERICAN PRESS INSTITUTE 83 FROM THE SURVEY: The survey targeted a small but select group: Respondents were less sure of the industry’s “I have been involved in a The CEO, division head or publisher and the ability to collaborate: top interactive executive at each of the top • 49% agreed or strongly agreed that newspa- number of relative failures. 25 newspaper companies and top 25 news- per companies are capable of successfully or- papers (by circulation) in the U.S. and Canada. Until our economic interests ganizing and managing joint online initiatives. Of the 95 individuals in this universe, 39 are truly aligned I doubt participated in the survey. A slim majority were interested in partnering with online giants: much progress can be Consensus was high on the need for made.” collaboration: • 54% agreed or strongly agreed that it would be good for newspaper companies to — Publisher • 72% agreed or strongly agreed that the partner with Yahoo!, Google or other major newspaper industry is missing large online nonnewspaper companies. opportunities because companies rarely “These search-engine collaborate. The survey also asked participants to rate the potential of 25 specifi c types of collabora- companies provide the audi- • 69% agreed or strongly agreed that non- tion opportunities (for descriptions, see this newspaper companies are preempting large ence and the technological section’s Appendix) and their company’s national online opportunities that newspaper fi repower we need. We, on interest in pursuing them. Among the most companies could win through collaboration. the other hand, provide the important fi ndings: content and credibility they need.” — Newspaper division president FIGURE 1: THE SURVEY’S TOP SEVEN COLLABORATION OPPORTUNITIES

“We’re not negotiating from Ad-related opportunities topped the list positions of strength if we 4.1 go it alone with the likes Joint ad Top-ranked results of Google and Yahoo!. I’d sales efforts from online survey 4 rather share revenues with Inventory monitoring system Ad ordering & invoicing Standard (online) trafﬁ c metrics other industry members by 3.9 Common ad serving platforms putting an industry plan together ﬁ rst, and then explore 3.8 alliances with the national 3.7 Common online competitors.” content Opportunity management — Publisher system 3.6

3.5 Standard ad types Newspaper Next online and sizes survey on industry collabo-

How large is the opportunity if companies collaborate? 3.4 ration, Aug-Sept 2006 3.2 3.3 3.4 3.5 3.6 3.7 3.8 3.9 Probability of success How likely is success if companies collaborate effectively?

84 NEWSPAPER NEXT: BLUEPRINT FOR TRANSFORMATION © 2006 AMERICAN PRESS INSTITUTE • National advertising-related opportunities to national advertisers, serve ads across a took six of the top seven spots. national network of newspaper Web sites and serve customers on a one-order, one-bill basis. • Interest in pursuing these opportunities is as high as the perceived potential. If newspaper companies could achieve this online, it would be a historic ﬁ rst. They failed • The preferred structure for ﬁ ve of the six long ago to create such a solution for national advertising opportunities was clear: partner- print advertising, unable to overcome the ships or strategic alliances. technical, economic and strategic barriers. As The six ad-related opportunities, as a group, a result, they win few national ad dollars today, constitute virtually all the major elements so a successful online initiative could open a needed to create a centralized entity to sell substantial new revenue stream.

Interest in pursuing speciﬁ c opportunities Urgency of the need for collaboration

Opportunity (# of 5s) Interest Opportunity (# of 5s) Interest Sales efforts (12) 4.11 Sales efforts (15) 4.19 Ordering/invoicing structure (9) 3.92 Ordering/invoicing structure (13) 4.11 Traffi c metrics (9) 3.91 Inventory monitoring & control (11) 4.04 Inventory monitoring & control (8) 3.89 Ad-serving platform (9) 4.00 Ad-serving platform (10) 3.78 Traffi c metrics (12) 3.96 Ad types and sizes (6) 3.46 Search (9) 3.56 Content management system (8) 3.42 Content management system (8) 3.46 Search (9) 3.20 Ad types and sizes (7) 3.40 News aggregation (6) 3.14 Advertising rate structures (5) 3.28 Travel (4) 3.11 Database formats, architectures (5) 3.27 Database formats, architectures (5) 3.11 New s aggregation (5) 3.24 Invoicing policies (4) 3.09 Shopping/Comparison (8) 3.16 Shopping/comparison (7) 3.06 Community site (6) 3.12 Community site (7) 2.97 Travel (3) 3.04 Advertising rate structures (5) 2.94 Invoicing policies (3) 3.00 Community tools (3) 2.86 Community tools (3) 2.96 Website design/production tools (4) 2.81 Website design/production tools (4) 2.96 Entertainment (4) 2.77 Entertainment (5) 2.92 Content storage formats (4) 2.69 Content storage formats (5) 2.76 Sports (3) 2.57 Ad deadlines, acceptance policies (2) 2.68 Social networking (0) 2.54 Sports (4) 2.68 Local knowledge exchange (1) 2.51 Social networking (0) 2.60 Ad deadlines, acceptance policies (3) 2.40 Local knowledge exchange (1) 2.60 Business/fi nance (2) 2.40 Business/fi nance (2) 2.64 Parenting (1) 2.06 Parenting (1) 2.20 All results from online survey, N = 39; scale 1-5 All results from online survey, N = 39; scale 1-5 Source: Newspaper Next online survey on industry collaboration, Aug-Sept 2006 Source: Newspaper Next online survey on industry collaboration, Aug-Sept 2006

NEWSPAPER NEXT: BLUEPRINT FOR TRANSFORMATION © 2006 AMERICAN PRESS INSTITUTE 85 Hearst’s Millstein points out that the econom- In terms of company interest, average scores ics are very different online: In print, the cost across the 25 opportunities ranged from a of standardizing press equipment across the high of 4.11 to a low of 2.06 on a 5-point scale. industry might have been far greater than the However, even for midlevel opportunities, gain in revenue, but online the cost of stan- some companies showed high interest, indi- dardizing online ad platforms is likely to be far cating that collaborations might be possible. less than the revenue gain. For example, nine respondents ranked their The market is substantial and growing fast. company’s interest in a national search site as For 2005, the Internet Advertising Bureau a 5, and seven respondents ranked a national estimated total Internet advertising at more shopping site as a 5. than $12.5 billion, a 30 percent increase over In examining the opportunity tables, it is the previous year. First-quarter 2006 fi gures important to remember that the scores repre- showed a 38 percent gain to $3.9 billion over sent averages among a small survey group, so the same period in 2005. small differences may not be signifi cant. Within the industry, a number of initiatives are In sum, the survey indicated high interest in proceeding in various directions. For ex- collaboration on national advertising oppor- ample, a Newspaper Association of America tunities among the largest companies and committee is working on advertising stan- newspapers. dards and solutions, a Suburban Newspapers of America (SNA) network is marketing a The next steps are up to the industry and its network of 250 smaller newspaper sites, a key players. As they consider the options, number of brokers and agencies are aggre- they would be wise to take note of several im- gating placements on newspaper sites, and portant lessons from “disruptive innovation” a number of companies are known to be in theory and past collaborations. private discussions within the industry or with major portals. What kind of collaboration would be best? The survey results indicated that for fi ve of the six ad-related opportunities, the preferred collaboration vehicle was “partnership/strategic alliance.” For the sixth, standard online traffi c metrics, “voluntary standards” and “trade association initiative” were tied for top choice. (A solution on metrics easily could involve both.) For most of the remaining 25 opportunities, responses about the preferred structure were more mixed.

Collaboration efforts in the newspaper industry and elsewhere have clearly had mixed results. The newspaper industry has seen its share of collaborative failures, and the N2 Survey shows that many top executives are skeptical about new efforts.

Assessing the root causes of success or failure DEFINE MISSION AND of any venture is always complicated. As the SCOPE NARROWLY N2 team reviewed publicly available reports about notable successes and struggles History suggests that collaboration works through the lenses of the disruptive innova- best when directed at a specifi c, clearly defi n- tion models (discussed in more detail in Sec- able set of objectives or tasks. tions I and II), the following six keys to success Classifi ed Ventures focused squarely on emerged: building online vertical sites like Cars.com • Defi ne mission and scope narrowly; set and Apartments.com, and has succeeded clear goals and bounds: “No questions in establishing them as recognized national about what we are trying to do.” brands. AdOne (which later became Pow- erOne) ventured into numerous other activi- • Start with a “good-enough” solution: ties, including classifi eds, ad networks, Web “Avoid the pursuit of unattainable perfection.” hosting, content management and consulting. • Build on shared incentives: “We are all in It recently sold off all but its classifi ed consult- the same boat.” ing businesses. • Give management considerable opera- Newspaper companies that set up a collabor- tional freedom: “No undue interference; ative venture should determine what job they we are shareholders, not managers.” are trying to do and organize their venture around it. • Agree to cannibalize existing business if necessary: “Think of the new growth we will create, not the existing business we may lose.” FOCUS ON A ‘GOOD ENOUGH’ SOLUTION • Use both carrots and sticks (e.g., revenue streams and penalties): “We will succeed Visions of next-generation solutions that solve or fail together.” every problem can be tantalizing. But great leaps forward, where companies spend years and millions of dollars seeking to jump over existing companies, almost never work. Com- panies have a much greater chance of success if they start with a simple springboard. Instead of trying to leap to a perfect solution from day one, the goal should be to fi gure out how to quickly construct a “good-enough” solution. The idea is to get into the marketplace early and then tinker and improve based on market feedback, following the disruptive innovation principle, “invest a little, learn a lot.” When SNA launched its national network in June 2006, it only had a single offering: a whole national buy. As SNA President Nancy

NEWSPAPER NEXT: BLUEPRINT FOR TRANSFORMATION © 2006 AMERICAN PRESS INSTITUTE 87 Lane described it, “We didn’t want to spend a To avoid this, it is important to give the new lot of time and money creating a complicated venture freedom to organize in ways appro- network — we wanted to get something out priate for the challenge it faces. there and learn from it.” The parent organization also should consider The smart disruptive innovator would begin bringing in management with experience by talking with target customers to zero in on in the target area, rather than appointing their important, unsatisfi ed jobs to be done. someone from within the parent industry. The next step would be to push for a fl exible Newspaper executives may not have the right fi rst-generation solution that gets the key job range of experiences to solve problems and done better than existing alternatives. see opportunities far different from the ones in their existing businesses. For example, Bid4Spots.com is a “reverse- auction” site that allows radio stations to bid When fi ve large newspaper companies joined for advertisers. A similar newspaper solution together in 1995 to form CareerPath, they might be able to allow a national retailer to gave the venture only limited freedom. In reach local markets without creating a com- an Editor & Publisher article in 2000, Classi- mon advertising platform whose develop- fi ed Intelligence founder Peter Zollman said: ment could delay the launch of an industry “CareerPath’s multiple owners … certainly solution by many years. have different directions and different strategic goals … that make it next to impossible to BUILD ON SHARED INCENTIVES run a company where everybody had equal ownership and all have a say. There are some Organizing carefully around well-defi ned that believe this is a newspaper strategy, and shared incentives — common benefi ts and some believe it’s a new business.” threats — can help to ensure the cooperation In 2000, two of CareerPath’s stakeholders a partnership needs. — Knight Ridder and Tribune — bought it out Bob Benz, general manager of interactive and merged it with a pure Internet play, Ca- media for Scripps Newspapers, told the N2 reerBuilder. They gave the venture substan- project team that notable industry fl op New tial autonomy, which has helped it become Century Network (NCN) lacked these shared a leading player in the online employment incentives. space. By 2006, analysts estimated Career- Builder’s market value to be close to $2 billion. “The trick is not to pull together because it feels good, but because we make lots of money,” Benz said. NCN “didn’t work that AGREE TO CANNIBALIZE way. That’s what would make these EXISTING BUSINESS go — strong revenue.” Disruptive innovation often requires companies to sacrifi ce a portion of their core busi- GIVE MANAGEMENT ness for the sake of greater growth. Partners CONSIDERABLE FREEDOM must foresee the cannibalization risk and agree to permit it if it comes. A lack of clear Companies often set up new ventures be- agreement may destabilize the venture later. cause they know their normal way of doing Contrast the success of the Associated Press business won’t suffi ce. Unfortunately, merely with the struggles of NCN. setting up a new company isn’t enough, because over-controlling parents can doom Six New York City newspapers founded the collaborative efforts. In essence, the DNA AP in the mid 19th century. The fi erce rivals from the parent companies can “infect” the agreed to pool newsgathering resources new organization. while sacrifi cing their own unique coverage and reporting networks. The collaborative ef-

88 NEWSPAPER NEXT: BLUEPRINT FOR TRANSFORMATION © 2006 AMERICAN PRESS INSTITUTE fort thrived. Among NCN’s problems was that Another key disruptor strategy is to fi nd a way certain stakeholders were unwilling to see to stay out of the incumbents’ line of fi re at their existing print franchises cannibalized. the outset. This could be helpful in a national The partnership struggled to fi nd a successful advertising initiative, because many of the business model. more obvious strategic choices would take a newspaper alliance straight onto the turf of USE BOTH CARROTS market leaders like Google and Yahoo!. AND STICKS Trying to muscle into an established space can be diffi cult and expensive, and can trigger Alliances often struggle if there are no mecha- immediate defensive responses from incum- nisms to reward collaboration and punish a bents. Disruptive innovation research shows lack of compliance. The Organization of the that new entrants have the best chance of Petroleum Exporting Countries, the oil cartel, success if they can devise an approach the has strong incentives to ensure cooperation incumbent sees as unattractive or insignifi cant. among member nations. The cartel’s success across decades of controversy shows the Questions that might help the venture fi nd an strength of its model. The United Nations, on off-the-radar starting point include: the other hand, has struggled to achieve its • Can we start with a customer group that the goal of serving as a catalyst for world peace incumbent is not serving? and stability because it lacks the ability to compel members to abide by its agreements. • Is there a customer group the incumbent would be happy to shed? FINAL NOTE: THINK LIKE • Can we make money in ways that would look A DISRUPTOR fi nancially unattractive to the incumbent? The N2 Collaboration Survey shows that the For example, newspaper collaboration might newspaper industry has a strong interest in col- consider starting its unifi ed sales effort by laboration to pursue national online advertis- focusing on a particular vertical, or on a ing. While it is beyond the scope of this report particular type or size of advertiser, or in a re- to plot out specifi c next steps, companies that gional area. This might lower the chances that do move forward should consider one fi nal a national player feels an immediate need to piece of advice: Think like a disruptor. respond. Then, as the venture gained lessons in the market and improved its offering, it In their home markets, newspaper companies could scale to broader and larger markets. are established, powerful players being disrupted by newcomers. In the national online advertising market, the roles are reversed. A newspaper-industry venture would be a newcomer competing against established players like Google and Yahoo! — a status that confers freedoms as well as limitations. Newcomers are free to develop new models, and they often succeed with solutions that get a key customer job done with a product that is simpler, easier to use, more convenient or less costly (explained in more detail in Section I, Part B: “Understanding the patterns of disruptive innovation”). A newspaper collaboration would be wise to adopt the same tactics.

25 collaboration opportunities: Standardization of policies survey descriptions and speciﬁ cations

The N2 Collaboration Survey asked participants Reach agreement on policies and speciﬁ - to rate size, urgency, likelihood of success and cations across newspaper companies and their company’s interest in 25 possible online properties to facilitate collaboration and collaboration opportunities. In the survey, the cross-property ad sales. opportunities were described as follows: • Advertising rate structures (compatible or National/regional ad sales uniform pricing strategies and rate plans to and marketing facilitate multiproperty ad buys)

Join forces across newspaper companies and • Ad types, sizes (compatible or uniform ad properties to enable advertisers to make one- types and space modules) order national/regional Web site buys. • Ad deadlines and acceptance policies (such • Sales efforts (such as a joint national sales as compatible or uniform insertion deadlines force, joint marketing budgets, unifi ed mar- or advertising content restrictions) keting campaigns) • Invoicing (uniform billing practices such as • Inventory monitoring and control (a way to invoice formats, billing periods, etc.) quote inventory availability and rates across • Traffi c metrics (uniform standards for multiple sites quickly) counting page views, unique visitors, etc.) • Ordering/invoicing structure (enabling an • Content storage (uniform standards on advertiser to place one order and receive one storage formats of various media) bill when buying multiple newspaper sites) National topical sites Standardization of platforms Join forces across newspaper companies and Reach agreement among newspaper com- properties to create national-scale Web sites panies to adopt same or compatible systems on specifi c topics. across newspaper properties. • News aggregation (create a recognized • Ad-serving platforms (systems for placing national/international news destination site online ads and managing inventory) by pooling newspaper resources)

• Content management systems (systems • Business/ﬁ nance for storing/accessing content elements in universal formats) • Sports • Web site design/production tools (software • Parenting and systems for creating and publishing Web • Travel pages) • Entertainment • Database formats and architectures (common platforms and structures for online databases and stored data) • Community tools (such as applications used for forums, chat, blogging, etc.)

90 NEWSPAPER NEXT: BLUEPRINT FOR TRANSFORMATION © 2006 AMERICAN PRESS INSTITUTE National functional sites How large How urgent Success Interest Join forces across newspaper companies and Ad-serving platform 4.04 4.00 3.77 3.92 properties to create national-scale Web sites Sales efforts 3.96 4.19 3.67 4.07 performing specifi c functions and services Inventory monitoring and control 3.89 4.04 3.63 3.85 • Search Traffi c metrics 3.88 3.96 3.72 3.80 • Shopping/comparison (e.g., products, Ordering/invoicing structure 3.74 4.11 3.56 3.81 prices, sellers) Search 3.68 3.56 3.36 3.48 • Community (e.g., discussion, photo/video Content management system 3.58 3.46 3.23 3.46 sharing, etc.) Ad types and sizes 3.36 3.40 3.28 3.32 • Social networking (e.g., MySpace.com, Database formats and architectures 3.35 3.27 3.23 3.23 facebook.com) News aggregation 3.32 3.24 3.20 3.36 • Local knowledge exchange (e.g., Advertising rate structures 3.28 3.28 3.12 3.08 angieslist.com, kudzu.com) Community tools 3.19 2.96 3.00 2.96 25 collaboration opportunities: Community 3.12 3.12 3.12 3.12 average scores Shopping/comparison 3.08 3.16 2.92 3.08 Survey respondents were asked to rate each Web site design/production tools 3.04 2.96 2.81 3.00 opportunity (1 = low, 5 = high) on four mea- Travel 3.00 3.04 3.04 3.08 sures: Entertainment 2.96 2.92 2.88 2.88 • How large is the opportunity if companies Invoicing policies 2.92 3.00 2.92 3.00 collaborate? Content storage formats 2.84 2.76 2.80 2.80 • How urgent is the need for collaboration? Ad deadlines and acceptance policies 2.84 2.68 2.68 2.64 • How likely is success if companies collabo- Sports 2.76 2.68 2.72 2.72 rate effectively? Social networking 2.72 2.60 2.52 2.60 • How great is your company’s interest in Business/fi nance 2.68 2.64 2.56 2.64 exploring a collaboration effort? Local knowledge exchange 2.60 2.60 2.56 2.64 Average ratings for all 25 online collaboration Parenting 2.16 2.20 2.16 2.16 opportunities appear to the right.

NEWSPAPER NEXT Anthony is coauthor (with Clayton Christensen) PROJECT TEAM of Seeing What’s Next: Using the Theories of Innovation to Predict Industry Change (Har- Stephen T. Gray vard Business School Publishing, 2004). He has Managing Director, Newspaper Next published numerous articles and case studies, and he serves as the editor of Strategy & In- Prior to joining the API project in September novation, a bimonthly newsletter published by 2005, Steve Gray was managing publisher of Innosight and Clayton Christensen. The Christian Science Monitor in Boston for seven years, leading implementation of nu- Prior to joining Innosight, Anthony was a merous new online, syndication, partnership senior researcher with Christensen, worked and multimedia strategies that introduced the as a consultant for McKinsey & Co., was a Monitor to millions of new readers, viewers strategic planner for Aspen Technology and and listeners. was a product manager for WorldSpace Corp. He received a B.A. in economics, summa Previously, he was president and CEO of cum laude, from Dartmouth College, and the family-owned Monroe Publishing Co. in an M.B.A. with high distinction from Har- Monroe, Mich., and editor of The Monroe vard Business School, where he was a Baker Evening News. He led the company’s conver- Scholar. sion to employee ownership and the creation of an award-winning culture of open manage- Adeline Ng ment and employee involvement. He also led Manager, Innosight the diversifi cation of the company’s business model through numerous new publications, In addition to the Newspaper Next project, products and services, and won awards for Adeline Ng recently worked with a large reporting, editorials and columns, including newspaper company to launch new ventures the Morgan O’Leary Award for Excellence in and diversify online revenue streams in two political reporting. markets, and to develop a plan for disruptive innovation with a major logistics company. He is a former president of Inland Press As- sociation, the Michigan Press Association She graduated from the Harvard Business and the Michigan Associated Press Editorial School in 2005 after spending four years as Association. He holds a bachelor’s degree in a consultant with McKinsey & Co. in Asia and journalism from Northwestern University’s the U.S. At McKinsey, she worked on engage- Medill School of Journalism. ments in industries including consumer packaged goods, energy, fi nancial services, high- Scott Anthony tech and healthcare. Her experience includes Managing Director, Innosight launching new business ventures in fi nancial services and logistics, developing growth At Innosight, Scott Anthony has worked strategies for IT and CPG clients, managing with Fortune 500 and start-up companies in large-scale change projects and improving industries including media (print and broad- operations processes in healthcare. cast), consumer products, medical devices, software, and telecommunications, and led Ng trained as a lawyer and is qualifi ed as an a multimonth project for the government of advocate and solicitor in Singapore and as a Singapore. He has been integral in developing barrister (Inner Temple) in England. She spent Innosight’s methodology to implement the a year as a law clerk with the Supreme Court ideas in The Innovator’s Solution and Seeing of Singapore. She received her law degree What’s Next, and he has given training work- from the London School of Economics and shops and presentations to senior manage- Political Science, and holds a B.S. degree in ment teams and broad audiences. accounting and fi nance.

92 NEWSPAPER NEXT: BLUEPRINT FOR TRANSFORMATION © 2006 AMERICAN PRESS INSTITUTE Natalie Painchaud NEWSPAPER NEXT Associate, Innosight TASK FORCE While at Innosight, Natalie Painchaud has Decker Anstrom, President and COO, worked on consulting projects and executive Landmark Communications education programs for healthcare, consumer Reid Ashe, products and media clients. A focus of her Executive Vice President and work is using the jobs to be done approach COO, Media General to understand customer needs in fi elds as Donna Barrett, President and CEO, diverse as pharmaceuticals, food and media. Community Newspaper Holdings Inc. Prior to joining Innosight, she was a senior Peter Bhatia, Executive Editor, associate with Cambridge Executive Enter- The Oregonian prises, an MIT-founded executive education Jennifer Carroll, company. She led a small team that produced VP/New Media Content, seminars sponsored by Hewlett Packard and Gannett Newspaper Division Oracle Corp. in China, Japan, India, Scandina- Rob Curley, New Media Director, via and South America. She was responsible Naples Daily News for interviewing the international executives Louis Alberto Ferre, attending the seminars and working on rapid Editor, El Nuevo Día development of customized technology Laura Gordon, Senior VP/Marketing, prototypes. Previously, she worked with the The Dallas Morning News interactive agency AGENCY.COM in New Christian Hendricks, York City. Natalie holds a B.A. with distinction VP/Interactive Media, in industrial relations from McGill University. The McClatchy Co. Jennie Lambert, Publisher, Shelby (NC) Star/ Josh Suskewicz Freedom Communications Associate, Innosight Jonathan Landman, Deputy Managing At Innosight, Josh Suskewicz has worked on Editor, The New York Times consulting projects and executive education programs for fi nancial services, healthcare Nancy Lane, President, Suburban and media companies. A focus of his work Newspapers of America is using the disruptive innovation theory to Caroline Little, CEO and Publisher, strategize fi nancial products for the unbanked WashingtonPost.Newsweek Interactive poor in developing countries. Stacy Lynch, Director of Innovation, Previously, he was a research associate at Glo- Atlanta Journal-Constitution balTech Research, where he covered emerging technologies in alternative energy, clean Joycelyn Marek, VP/Marketing and technology and sustainable development. Public Affairs, Houston Chronicle He also worked as a researcher and writer Lincoln Millstein, Senior VP and Director/ for Let’s Go Travel Guides and as a research Digital Media, Hearst Newspapers assistant for a think tank on Middle Eastern history and politics. He holds an honors A.B. Andrew Nachison, Director, in English literature from Harvard College. The Media Center Hilary Schneider, former Senior VP, Knight Ridder (joined Yahoo!, Sept. 2006) Rich Skrenta, CEO, topix.net Dean Singleton, Vice Chairman and CEO, MediaNews Group

NEWSPAPER NEXT: BLUEPRINT FOR TRANSFORMATION © 2006 AMERICAN PRESS INSTITUTE 93 Sreenath Sreenivasan, Dean of Students, Seeing What’s Next, was published in fall Columbia University Graduate School of 2004. He edited two casebooks on innovation: Journalism Innovation and the General Manager (1999) and Strategic Management of Technology Gary Watson, retired President, and Innovation, 4th edition (2004). Professor Gannett Newspaper Division Christensen’s writings won numerous awards, John N. Wilcox, Chairman & CEO, including the Best Dissertation Award from Ottaway Newspapers Inc. The Institute of Management Sciences, the Production and Operations Management Bob Wyman, Co-Founder and CTO, Society’s 1991 William Abernathy Award, the pubsub.com Newcomen Society’s award for the best paper Steve Yelvington, Digital strategist, in business history in 1993; and the 1995 and Morris DigitalWorks 2001 McKinsey Awards for articles published in the Harvard Business Review. Owen Youngman, VP/Development, Chicago Tribune In 2000, Professor Christensen founded In- nosight LLC to extend and apply the disrup- PROJECT ADVISERS tive innovation principles developed in his research and writing. Clayton M. Christensen Clark Gilbert Professor of Business Administration, Director, Innosight Harvard Business School Co-Founder, Innosight Clark Gilbert is a director at Innosight and former professor of entrepreneurial man- Clayton M. Christensen is the Robert and agement at Harvard Business School (HBS). Jane Cizik professor of business administra- Professor Gilbert published several leading tion at the Harvard Business School (HBS). articles on innovation in Harvard Business Re- His research and teaching center on the man- view and MIT/Sloan Management Review. He agement issues related to developing and is also the author of the book From Resource commercializing technological and business Allocation to Strategy, published by Oxford model innovation, with a focus on developing University Press. He recently left the Harvard organizational capabilities and ﬁ nding new Business School to work on issues affecting markets for new technologies. underprivileged youth for his church, accept- Prior to joining the HBS faculty, Professor ing an administration position at Brigham Christensen served as chairman and presi- Young University, Idaho. He remains an active dent of Ceramics Process Systems Corpora- director at Innosight. tion (CPS), which he co-founded in 1984. Professor Gilbert’s formal research focused From 1979 to 1984 he worked as a consultant on how disruptive technologies reshape and project manager with the Boston Con- the structure of existing markets. He exam- sulting Group (BCG). In 1982 Professor Chris- ined industries including healthcare, media tensen was named a White House fellow and and technology. His doctoral research won served through 1983 (on a leave of absence awards for best dissertation ﬁ nalist and best from BCG) as assistant to U.S. Transportation paper at the Strategy Division of the Acad- secretaries Drew Lewis and Elizabeth Dole. emy of Management. He was awarded the Professor Christensen is the author of the best- 2005 Best Article Award in the Academy of selling books The Innovator’s Dilemma (1997), Management Journal. Professor Gilbert has which received the Global Business Book written HBS teaching cases on corporate Award for the best business book of 1997, and entrepreneurship in companies such as Merck, The Innovator’s Solution (2003). His latest book, Knight Ridder, Intel and SAP.

94 NEWSPAPER NEXT: BLUEPRINT FOR TRANSFORMATION © 2006 AMERICAN PRESS INSTITUTE Professor Gilbert consults in media, healthcare and technology industries. He served on new ventures boards at Johnson & Johnson, Landmark Media and Scripps. He is a founding partner of Innosight Ventures, where he served as a founding director of several The American Press Institute, founded in healthcare and media start-ups. 1946, is the newspaper industry’s leading center for executive education. It provides Professor Gilbert graduated summa cum skills training and leadership development in laude from Brigham Young University, where the news industry, offering seminars, online he was his department’s valedictorian. He training and onsite programs for newspaper earned a masters degree from Stanford Uni- professionals. API is also the home of the versity and a doctorate from HBS. Media Center, which conducts research, Drew Davis educational programs and symposia and fa- President and Executive Director, The cilitates strategic conversations and planning American Press Institute on issues shaping the future of news, information and media. API houses the Donald W. Andrew B. Davis became president and execu- Reynolds National Center for Business Jour- tive director of The American Press Institute in nalism, which offers a nationwide forum and December, 2003. Previously, he was director of educational opportunities for improving the innovation and business development for the quality of American business journalism. The Media Management Center at Northwestern Learning Newsroom, a three-year laboratory University. Prior to joining the Media Manage- project aimed at improving the workplace ment Center, Davis was president of Chicago culture of newspapers, is located at API, too. Sun-Times Features, Inc. and of Performance Media, a custom publishing division he conceived and developed into a multi-million-dollar venture. He was vice president of the Sun-Times Company. For 10 years he was group publisher and newspaper operations vice president of Pioneer Newspapers, a 41-newspaper group in suburban Chicago. A Innosight LLC helps companies improve their major general in the Marine Corps Reserve, ability to create growth through innovation. Davis took leave from the Media Management Harvard Business School Professor Clayton Center between July 2001 and July 2003 to Christensen founded the company in 2000. serve as director of Marine Corps Public Affairs Innosight’s work combines Dr. Christensen’s at the Pentagon. He holds a bachelor’s degree research summarized in the bestselling books cum laude in English literature from Princeton The Innovator’s Dilemma, The Innovator’s University and a master’s degree with distinc- Solution and Seeing What’s Next with ﬁ eld tion in journalism from Northwestern Univer- work in dozens of large and small organiza- sity’s Medill School. He is the author of Rx for tions, including Procter & Gamble, Johnson New Product Success: A Guide to Successful & Johnson, the E.W. Scripps Co. and the Innovation for Media Executives. government of Singapore. Through its ﬁ eld work, Innosight has uncovered key principles to recognize patterns of success that lead to better connection with consumers and reduced competitive threats. It offers a col- lection of tools and delivery mechanisms that help companies build internal capabilities and identify ways to speed projects, minimize investment and increase revenue potential.

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