Recently Newsweek magazine announced that it would stop its publication of its print edition at the end of December, 2012 and become a digital only magazine. This is fifteen years after Bill Gates made the controversial statement that newspapers and magazines would likely become dinosaurs as the internet gained momentum. Bill was criticized heavily by the press back in 1997 when he said that but instead of reacting defensively, the industry should have read that as a clear signal of an important inflection point emerging.
What do we mean by an inflection point? When a new technology or significant change in consumer habits in a particular industry takes place, the leaders in that industry better be very aggressive at experimenting with ways to capitalize on the upcoming change or they run the risk of being run over as the world evolves. Such inflection points don’t come often but when they do, it can represent a tsunami for the established, successful entries in that particular industry (remember when the now bankrupt Kodak dominated photography).
Newsweek was launched in 1933 and by the mid-1990’s was at its peak. Then readers and advertisers started their exodus to the internet in the late 1990’s and the speed of that transition has continued to increase. Between 2005 and today, Newsweek circulation dropped from 3 million to 1.5 million and advertising pages dropped 80%.
All during this period Newsweek management ignored the four classic steps any leader should follow when an inflection point emerges:
1.) Talent – Be sure you have, or you hire, individuals totally familiar with the inflection point that is emerging and are enthusiastic but totally unbiased about its potential.
2.) Experimentation – The faster you get out into the marketplace, testing a variety of options for exploiting the inflection point, the better off you will be.
3.) Protection – Management will need to protect these individuals who are experimenting, since the status quo of your organization will attempt to squelch any such activities.
4.) Cannibalization – If the inflection point cannibalizes the current business that is not a reason for ignoring it. After all, someone in your industry will exploit it.
It is sad to see an eighty year old brand like Newsweek get run over. On the other hand, it’s their lack of leadership that is to blame.