Strengthening the core: 3 steps to survival (+infographic)


As a company on the leading edge of digital innovation, we at Deseret Digital Media focus nearly all our efforts on the digital side of the news industry. Understandable, right? As we’ve tried to share our insight and best practices with friends in the industry through speaking engagements, webinars, the Innovation Wire, and hosting guests at our offices in Salt Lake City, we realize that devoting all of our attention to digital paints a one-sided picture of the overall work required to transform an organization. So, today, we give a nod to the core business.

A common misconception companies face once disruption strikes is that a major, yet single, transformation is needed to adapt to the new realities of the industry. This is a flawed concept Clark Gilbert works frequently to refute.

“With the changes facing our industry, or any disruptive innovation for that matter, senior executives need to manage two, not just one transformation,” says Gilbert, Executive Vice President of Deseret Management Corporation. “A lot of people read the early work on disruptive innovation and said, ‘a change is coming to our industry, I’ve got to drive change for my organization,’ and they kind of framed it as one monolithic change process.”

Under Clark’s direction, our organization focuses on two separate changes: one, affecting the legacy or core business – in our case, a newspaper, television station and radio stations. The other, focused on a new digital-only business. Each has unique and specific tasks required to transform post disruption.

“When you fail to think of these as separate transformation processes and mash them together, unfortunately, you’re good at neither,” says Gilbert.

He breaks the tasks required to transform the core into three main steps: align costs with revenue, identify post-disruption jobs to be done, and reposition the core around those jobs to be done.

Align costs

The first step is painful. The first step is necessary. Our costs need to be more aligned with revenue. The graph entitled 50 Years of Growth Wiped Out in a Decade shows the media industry’s current revenue sitting at 1950s levels. Yet, generally speaking, our costs are much higher. This needs to change if we are to survive.

To better align costs with revenue, the Deseret News went through a major restructuring in 2010. This included moving into a different facility, reassignments and a 43 percent reduction in staff. It merged with a sister television and radio station and drew out all digital assets into a new digital business, Deseret Digital Media (Transformation B).

“The upheaval created intense amounts of work and uncertainty,” says Deseret News Editor Paul Edwards, “but there was also earnest dedication to the mission and vision of the organization.”

Identify jobs to be done

The newly articulated mission and vision Edwards mentioned were, in part, the result of answering a fundamental question Gilbert says any organization must ask: what is the post-disruption job to be done? What is the core benefit of my product?

Is a newspaper’s job to report breaking news? Probably not in an always-on world with a 24/7 news cycle. Is it to give deeper detail, insight and analysis on yesterday’s breaking news? That’s a more viable approach. Is it to use a trusted, well-respected brand with deep connections to offer local coverage like no one else possibly can? Perhaps.

When you’ve answered this question – and there may be several answers – the next step is to differentiate yourself by asking, ‘in what ways can we be best in the world?

“For us,” says Gilbert, “that was the six areas of editorial emphasis.”

Edwards explains, “We identified some key issue areas where we felt that we had a comparative advantage in terms of interest and expertise, and then we did market research to get a sense of which of these areas really provided us with an advantage. Through that iterative process we identified six areas where we felt there was an unmet demand in the market and where we had some unique capacity to deliver.”

Those areas are: the family, faith, care for the poor, excellence in education, financial responsibility, and values in media. These areas tested positively in a survey of national news readers, among whom a large segment – more than 56 percent – expressed interest in consuming news focused in these areas and felt largely underserved by traditional news outlets.

“What the Washington Post is to DC politics, we want to be to the American family,” Gilbert often tells audiences and reporters. He adds that as great a paper as the New York Times is, “when it comes to covering faith and family, we will beat them every time.”

Reposition

Next, the Deseret News repositioned its efforts around the newly identified job to be done. The now-combined newsroom set out to be the most relevant news source for Utah families by framing every issue around its impact on families. A team of enterprise writers was created and assigned each of the six core areas. The topic of The Family, for example, would now be covered as a beat the way other reporters might cover city hall or a crime beat. Contrary to the hyper-local strategies to which many organizations gravitate, the enterprise team was further charged to write these stories from a national perspective – the emphasis being on relevance over location.

“Several years ago, Deseret News leadership noticed that the deseretnews.com website was attracting more visitors from outside Utah than from within,” says Allison Pond, Editor of the National Edition, a weekly subscription-based publication created to reach this large, national audience in areas where the local Deseret News isn’t available. Each issue showcases the enterprise team’s work in the six areas.

This national strategy has led to significant growth for the Deseret News, whose total circulation (including the National edition) is up 21.7 percent from 2013, according to a semiannual report by the Alliance for Audited Media (formerly the Audit Bureau of Circulations).

The digital business (Transformation B) is taking notice.

“As it became clear that the potential audience for the National Edition differed from the core audience for the local website, the idea of the National Edition website was born,” says Pond.

The National website officially launched April 13, 2014 at national.deseretnews.com with a ten-part series examining the Ten Commandments in contemporary society. The site had a successful first month with about 600,000 page views.

The overall strategy is proving successful for Deseret News and offers insight to other core media businesses, like yours, looking to transform. So, to further refine one of the key questions above, ask yourself, “in which areas can we offer world-class coverage to better serve our local – and perhaps even a national – audience?” Or, maybe for you the strategy is solely local. Maybe it’s launching other products around the newspaper like events, direct mail or targeted niche publications that fit your presence in the market – all with deeper efficiencies and lower costs.

Gilbert says the focus on Transformation A is just as important as all the transformation happening around digital. He says lowering the cost structure of the Deseret News, identifying what they could do uniquely well, and then repositioning the entire paper really made the paper robust and strong. He says others can follow suit and find similar success.

“If the core newspaper business can do that,” says Gilbert, “we think it can live for a long time.”

Deseret News dual transformation infographic

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