Tuesday, October 26, 2010

Thriving on Complexity: Reinventing Your Publishing Company's Culture

As traditional media companies grapple with the rapidly changing landscape for publishing, many are confronting the problem of not only how to survive but also how to define themselves in a new era framed by the potential and capabilities of the Internet. Familiar memes such as "print is dead" or "cable is dead" or "copyright is dead" don't really capture the depth and the complexity of the problems that media companies face. It is not simply a matter of publishing technology or monetization models having changed; it's really a matter of fundamental perspectives and ways of organizing for success in publishing have changed due to the different perspectives and organizational structures enabled by the Internet.

A recent article in The Wall Street Journal underscored some of these key themes for me from a broader perspective. Titled "The End of Management," the article has a key quote from a management consultant that explains elegantly the core problem faced by large media companies - and many companies in general; "The single biggest reason companies fail is that they overinvest in what is, as opposed to what might be." In an era in which production capacity no longer is as strong a determinant of success as market consumption capacity, media companies are tied to cranking out gobs of highly finished content to satisfy familiar patterns of consumption rather than considering whether other patterns of consumption may prove to be more fruitful.

Financial pressures are partly to blame for this pattern, of course; the tyranny of producing favorable quarterly results in the media industry is in its own way as strong as the tyranny of the Soviet Union's old five-year centralized economic plans. Both models sacrifice questions about new approaches in favor of attaining quotas that may have nothing to do with long-term growth or productivity. In both instances, the economics of incremental improvement in the hands of well-established experts blocked out the flow of new and innovative approaches that could foster "what might be" in ways that would ensure commitments to growing blue-sky markets exponentially. Even today, many major publishers have "skunk works" or "tiger teams" of specially devoted staff who are committed to reinventing their products and services - while doing little to touch the fundamental structure of their businesses.

How do major media organizations change their approach to innovation in ways that will result in substantial changes to corporate culture? There is always the "Cultural Revolution" way, of course - radical restructuring of organizations with new "vision statements," all of which may bring about some changes - for a time. But inevitably most of these types of drastic organizational change mechanisms settle in to enabling old norms of behavior. Reward structures go unchanged and fundamental measurements of success go unchanged, so it's only a matter of time before one reorg blends into the next - increasingly a time span measured in months.

At Shore we've been helping our clients to wrestle with these types of change issues, and have started to come up with some key approaches that may help media and technology organizations to analyze their situation in regards to market and organizational challenges. Below is one of our recent 10 Minute Strategy videos that provides an overview of how publishers need to wrestle with the flow of managing chaos, complex problems, complicated problems and simple problems. After the video I explain a few key points that may give your organization a starting point for attacking a reinvention of your own company's problem-solving culture.

The key to reinventing media company cultures is to realize that to "overinvest in what is" is a symptom of a culture is not allowing for the natural flow of problem solving that all organizations must allow to keep a healthy balance between introducing new innovations and ways of working together and meeting current production and measurement needs.

Recently I was accredited as a practitioner for the research and analysis techniques developed by Cognitive Edge, a company founded by Dave Snowden, a leading knowledge management and organizational expert. Cognititive Edge's techniques span a range of tools, which include one particularly handy one called a Cynefin diagram, a simplified version of which you can see to the right. To state the problem another way, media companies have a lot of experts who are good at figuring out how to make things simple for their executives and production staffs, but their investment in their existing expertise tends to resist the flow of emergent practices from chaotic and complex domains. At the same time, executives who expect simple results from their media experts and production staffs are invested heavily in simple metrics that reflect industry best practices.

These over-investments hamper the flow of activities in an organization that are required to address novel problems and emergent practices. For example, when ebooks and videos were introduced in online markets, publishers focused largely on how to maintain their current methods and market metrics for unit packaging, distribution, sales and advertising - while tending to neglect the opportunity to consider new approaches to creating value in the newly chaotic and complex domains of delivering immersive content through electronic channels. To state this problem more specifically through the lens of the Cynefin diagram analysis, a problem appeared that seemed to be threatening to push complex and simple systems into chaos, so the response was to address the chaos with known good practices that maintained a simple vision of the publishing world. While this may have worked in the short run, the under-investment in responding to novel practices with developing emergent practices that deal with complex options pushed publishers towards having to deal with problems shifting from simple systems to chaotic systems in a state of crisis rather than in a state of inciting real innovation.

Google, on the other hand, is heavily invested in harvesting value from chaos and the complex. Its requirement to have its R&D staff spending a fifth of their time trying out new ideas means that they are constantly invested in moving novel problems from a chaotic state to a complex map of possible solutions. Its search experts and its expertise encoded in its search algorithms are focused not on mass manufacturing a few simple publications but on producing tiny amounts of simple content - search results and embedded content - for a massive amount of complex requirements expressed through their "white box" search interface. There is certainly room in a Google for experts to move complicated problems into the realm of the simple, but these are focused mostly on the "back end" of the business - harvesting revenues from ads via efficient monetization of complexity. Many of the complicated problems that Google could choose to focus on for audience-facing products are farmed out to partners for solutions or exposed to any number of solutions via their APIs. This enables them to respond to many market requirements very rapidly and to avoid many of the crises that media companies face (Google faces its own unique problems within this model, but that's a story for another time).

Media and publishing companies cannot expect to become Googles overnight, of course - nor are they likely to want to. However, these companies can begin to recognize that they need better views of what their problems are - and better organizational skills and metrics that they can use to identify them and to respond to them. The techniques that Cognitive Edge has trained us in can help your organization move towards this goal. In the meantime, here are a few key things to consider in transforming your organization into a more responsive and profitable content producer:

  • Learn new skills that can help you to identify bottlenecks in your problem-solving flow. There is no one ideal state for an organization within the Cynefin framework. The important thing is to ensure that your organization is able to see itself and its problems clearly within this framework and to identify where there is resistance to the natural flow of problem-solving. Sometimes chaotic problems do have simple solutions; sometimes they are forced on solutions, and so on. Sometimes one part of an organization view a problem as under the control of experts, while other parts see it as complex or chaotic. Having people who have the right language and tools to express these problems can keep your staff making the most of its time together in problem-solving sessions and make the most of their time when they're off doing their own thing.
  • Learn how to move from "fail-safe" solutions to "safe-fail" experiments. Media companies are surrounded by companies of all sizes that are willing to bet a lot on possible solutions that might fail. While this may appear comforting in the short run, lacking a culture that can support experiments that fail as a positive part of your organization's culture puts you at a disadvantage to other innovators, who in sum have far more capital and energy than your own organization to attack these problems. There are specific techniques that you can learn that will help your organization to identify, challenge and support innovative approaches to your publishing problems cost-effectively. Without enabling and sustaining this key component of your culture, healthy problem-solving that delivers higher returns on investment will never take hold in your organization.
  • Learn new ways to listen to people inside and outside of your organization. Traditional surveys, focus groups and other forms of quantitative and qualitative research continue to be important tools for executive decision-makers, but when so many of the decisions that result in higher profits lie in the realm of interpreting the complex, these traditional tools tend to fall short. Traditional organizational and market research tends to test pre-formed hypotheses. Testing a hypothesis is good if you're trying to hand off a complicated problem to experts, but not as good for exploring complex problems in a more open-ended way that can lead to forming better hypotheses. Our narrative research services, based on Cognitive Edge tools and techniques, are but one way to listen to people in a more unbiased way that will help you to listen to both strong and weak signals that can trigger productive responses to threats and opportunities in the marketplace.
In the process of learning these techniques and implementing them, it's likely that your organization will come up with new kinds of metrics to measure your progress and your success. Some of these metrics may look a bit topsy-turvy at first, in much the same way that Google's approach to providing access to more content and not less content as the key to its success seemed quite counterintuitive to most of the publishing industry. But with a new way to look at your business, you just may discover that old and new metrics can co-exist quite comfortably when your organization has the right skill sets to define them and implement them. Shore can help you to get there; hopefully we can help you and your organization to do so. It's a method that has its own madness, but it works.
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