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23.11.2017

A roadmap with ‘6 major levers for digital transformation’

By Piet van Niekerk

More than two decades into the emergence of the internet, publishers find themselves “at the end of the digital beginning”. While components of best practice in organisational transformation is starting to become clear, those who sit back are still in danger of being left behind, warns Lucy Kueng in her new, comprehensive report Going Digital: A Roadmap for Organisational Transformation, which was released today.

Disruption will not stop; rather it will gather pace.... Digital storytelling can be wondrous. Data can be fascinating. Transforming organisations is a grind. This report seeks to pinpoint the essential aspects of organisation transformation and shows, in their own words, "how leading players are approaching this task," says Prof. Dr. Lucy Kueng, Google Digital News Senior Research Fellow at the Reuters Institute, Oxford University, of her latest report on digital disruption in the publishing industry. 

To write the report ‘Going Digital: A Roadmap for Organisational Transformation’, Kueng, who spoke at Digital Innovators’ Summit in 2016 and 2017, did extensive research involving over 60 interviews in a wide range of media organisations. The report analyses the components of organisational transformation within the digital publishing industry and shows what best practice in core dimensions looks like. In her conclusion Keung picks six major “internal transformation levers” for best practice legacy transformation. These are:

1. Making strategy strategic again;

2. Putting the building blocks of agility in place in advance;

3. How to deal with ‘shiny new things’;

4. Leadership;

5. Upgrading ‘People Processes’, particularly hiring and continual learning; and 

6. Harnessing the power of culture to drive change. 

A crucial time for digital media

The report is published at a crucial time in the development of digital media when not even the new digital pure plays seem to be safe, says Kueng. "Two decades into the Internet, the challenges facing legacy media are only intensifying. Recent reports that digital pure plays like BuzzFeed are also struggling only underline the severity of the situation, and should serve as a warning to legacy media (especially broadcasters) that they can expect pressure on their revenues to intensify“.

Revenue pressure is a key focus of Kueng’s report. In a chapter titled “The challenge of revenue - that model has gone” she writes “the issue of business model has been problematic since the emergence of the internet. This is an issue of universal concern – even those who see subscription revenues growing, or have plentiful capital from private investors, worry long term about the financial viability of quality journalism.”

She says the working assumption seems to be that print advertising revenues will continue to decline. Digital advertising is also unlikely to compensate because classic media products can never compete against the targeting potential of social media platforms. Within this reality subscription models are gaining favour with the reach supplied by platforms seen as the first stage in the journey to acquire customers. For this reason the calibre of content becomes critical. 

Hope for legacy players

The report makes it clear that the game is far from over for legacy players. “In terms of the clarity and long-term perspective of their strategy, the rigour of their innovation processes, the intense focus on hiring, building skills, creating flexibility and shaping the culture, legacy media are being outperformed by new players. However the good news is that this can be corrected, quickly, if it is made a real strategic priority,“ writes Kueng. 

To make these corrections, factors like agility, people and people processes, and leadership are being highlighted. 

Of agility, she says, it’s “canonical concepts in the startup world” with multidisciplinary teams and the need for permanent reorganisation. Yet, agility is a high priority for legacy media and is feasible. “The building blocks are establishing a cultural expectation of ongoing change, using multidisciplinary teams, frequent reorganisation, and designing tech systems and processes to maximise agility.”

Of people and people processes she says the more journalism and engineering grow closer, the more media will compete with the tech sector for talent. Yet, “learning initiatives are widespread and varied. Digital roles often have an inbuilt training dimension, and companies are organising, sometimes quite complex, internal training courses using staff as teachers”.

She stresses that human resources, “never a core interest in the media sector”, is where legacy firms leave the largest transformation potential on the table. “Here much can be learned from Silicon Valley. Prioritise all people processes, especially hiring, retention of key skills, and permanent learning: recruitment, because it is critical the organisation has the expertise it needs to realise it’s strategy, and learning, because ensuring all layers of the organisation are exposed to new ideas and best practice will shorten innovation cycles and build momentum for transition.“

Leadership needs to change radically, she warns. “As the process of digital transformation has evolved, the leadership requirements have shifted. The era of the digital visionary has passed – what is needed now is prowess in implementation, a relentless focus on achieving core strategic goals, particularly revenue goals.” 

While legacy organisations “can’t pivot,” she says, “they can shift, and tactical shifts will be inevitable either to take advantage of changes in the strategic environment or when elements of strategy do not work out as planned. 

“Shifts have three building blocks: 

“clear signalling from a credible leader, 

“cultural acceptance, and 

“a degree of flexibility in organisational structure. 

“All need to be in place before a shift begins.“

Strategic strategy

Keung says digital publishing strategy must be more strategic. “As an industry we have been too short-termist.” In recent years, she writes, long-term strategy has been hijacked by short-term innovation projects, “a ceaseless stream of new technologies” described by Kueng as “shiny new things”. This is dangerous: innovation does not equal strategy, and speed does not automatically confer strategic advantage. “Strategy needs to become strategic again.”

Four strategy elements are crucial, and these need to be viewed systematically: 

an unwavering long-term goal; 

a clear business model/revenue strategy;

a rigorous process for responding to ‘shiny new things’; and 

a coherent ‘central nervous system’ combining technology and data.

Of ‘shiny new things’, Keung says “lots of stuff isn’t strategy and merely serves to divert attention and adding to resource overstretch. At the heart of assessing them, there needs to be a hard-nosed evaluation of how this new entity will contribute to core goals”.

Transformation levers

In her conclusion Keung picks six major “internal transformation levers” for best practice legacy transformation. These are:

Long-term strategy;

Agility;

How to deal with ‘shiny new things’;

Leadership;

People; and 

Cultural change. 

These, she writes, are the core elements that needs to be managed to achieve transformation. Ultimately, “organisational transformation is a process… Disruption will not stop; rather it will gather pace. Transforming organisations is a grind, and often in the immediate term unrewarding. All the organisations I studied for this research are taking the challenge of organisational transformation exceedingly seriously. All also acknowledged the scale of the challenge and that, despite the success they may have achieved, there is still much left to do. The majority felt they are not changing enough, nor fast enough. But by identifying change levers and sharing best practice, this report seeks to make that task easier, and I hope, profoundly, that it makes a contribution.” 

About the report:

Kueng’s report covers 12 chapters:

1. An introduction to the concept that the core challenge for publishers is now organisational;

2. An exploration of how tech platforms represent a shift and challenge in a strategic environment;

3. How long-term strategy has been hijacked by short-term innovation;

4. How business models remain a central challenge to publishers;

5. How strategies are being thrown of course by a stream of new technologies (shiny new things);

6. How journalism, technology and data are merging and how it is influencing product and its central role in ensuring digital content works on social platforms;

7. How digital storytelling is central to mobile consumption and digital business models;

8. How agility, especially in legacy organisations, has become a high priority;

9. How human resource management has become critical to prioritise hiring and permanent learning to ensure exposure to new ideas;

10. How a lack of cultural change still poses an impediment to digital transformation;

11. How leadership requirement have shifted from being digital visionaries to implementation, described as a “relentless focus on achieving strategic goals”; and

12. In her conclusion, she identifies six internal transformation levers to ensure sustainability and the ability for publishers to match their transformation of product with the rebirth of their organisations.

Download the full report from the Reuters Institute for Journalism at Oxford University, here

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