Dual Transformation: 2 Routes to Resilience - Clark Gilbert Summit 2013

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Dual Transformation: 2 Routes to Resilience - Clark Gilbert Summit 2013
@clarkgilbert

Our Mission: Trusted voices of light and truth reaching hundreds of millions of people worldwide

Sustaining versus Disruptive Innovation

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  • Dual Transformation: 2 Routes to Resilience - Clark Gilbert Summit 2013

    1. 1. Dual Transformation: Two Routes to Resilience Clark G. Gilbert President and CEO @ClarkGilbert
    2. 2. Our Mission Page 2 Trusted voices of light and truth reaching hundreds of millions of people worldwide The Trusted Digital Voice
    3. 3. “In the early 1980s AT&T asked McKinsey to estimate how many cellular phones would be in use in the world at the turn of the “The „telephone‟ has too many short-comings to total market century. The consultancy … concluded that the be seriously considered 900,000. At of communication. The AT&T is would be about as a means the time this persuadeddevice to pull inherently of nomarket.” us.” out of the value to — Western Union internal — The Economist, 1999 memo, 1876 3
    4. 4. Product Performance Sustaining versus Disruptive Innovation Disruptive Innovation Time Source: The Innovator‟s Dilemma The Trusted Digital Voice
    5. 5. "Overall, the newspaper industry's involvement with the Internet has been one where it had a lot to lose and it's been trying not to lose it, as opposed to starting Finding New from scratch and having a lot to win." Market Growth --President of Online Newspaper Division Displacement Established Business Net New Growth Disruptive Business Starts Outside Established Business
    6. 6. Newspapers: Familiar Pattern of Disruption The Trusted Digital Voice
    7. 7. Separate Division, Separate P&L, and Separate Team
    8. 8. AutoTrader Structure Always Operated Independently from The Trusted Digital Voice
    9. 9. Like Defying Gravity “Businesses Evolve, Business Units Don’t” --Clayton M. Christensen The Trusted Digital Voice
    10. 10. Dual Transformation: Two Transformations, Not One Transformation A Transformation B Separate Disruptive Organization Legacy Organization •Dramatically Lower Costs in the Core •Reposition Core around a Post-disruption “Job-to-be-done” “Capabilities Exchange” between Legacy Core and Disruptive New •Create a Separate P&L •Separate Management Structure •Hire Disruptive DNA The Trusted Digital Voice
    11. 11. Dual Transformation in Content Transformation A 1. Step-change reduction in content costs 2. Differentiated Content: Invest where you can be “the best in the world” Tranformation B 1. Digital only, not digital first 2. New Channels are Key to Disruption 3. Hire digital DNA The Trusted Digital Voice
    12. 12. Step-change Cost Reductions: The Huffington Post vs. NYT Unique Users 35 30 25 20 15 10 5 0 Head Count 1400 1200 1000 800 600 400 200 0 New York Times Huffington Post New York Times Huffington Post The Trusted Digital Voice
    13. 13. Significantly lowering cost per story in traditional news gathering, but . . . >$1000 $250 $227 $200 $150 $100 $50 $0 $143 $119 $75 $20 The Trusted Digital Voice
    14. 14. Differentiation: Where can you be the 'Best in the World' “The web favors things that are narrowly comprehensive. That is everything about something. Newspapers, by contrast, are variety shows; something about everything.” – Lisa Williams, founder, PlaceBlogger The Trusted Digital Voice
    15. 15. Differentiation: Deseret News Six Areas of Emphasis • Strengthening the Family • Faith in the Community • Care for the Poor • Values in the Media • Excellence in Education • Financial Responsibility The Trusted Digital Voice
    16. 16. Faith-based Segmentation of U.S. Public Segment 1 Tolerant Believers 27% Segment 2 Devoted Denominationalists 16% Segment 3 Secularists 12% Segment 4 Fence sitters 14% Segment 5 Humanists 18% Segment 6 Strugglers 13% National Total LDS Sample Factor 1: Religious Devotion 5.80 5.82 2.37 4.37 3.74 4.95 4.72 6.08 Factor 2: Helping Others 5.56 5.15 3.82 3.79 5.02 4.80 4.84 5.36 Factor 3: Commitment to Marriage 4.79 4.42 3.47 4.22 4.82 2.95 4.26 4.79 Factor 4: Teaching Children 5.27 4.86 3.78 3.23 5.34 4.44 4.64 5.43 Factor 5: Decline in Moral Values 6.03 6.08 2.93 4.00 3.98 5.14 4.91 6.45 Factor 6: Many Religions Lead to Heaven 6.21 2.92 3.46 5.72 5.57 5.63 5.10 3.70 Six Defining Factors Used in Segmentation Source: DMC Research Panel, Cathy Chamberlain The Trusted Digital Voice
    17. 17. 56% “Niche” = Like-Minded Believers Strugglers 13% Tolerant Believers 27% Like-minded Believers Humanists 18% Devoted Denominationalists 16% Fence Sitters 14% Secularists 12% Source: DMC Research Panel, Cathy Chamberlain The Trusted Digital Voice
    18. 18. Like-Minded Believer Job-to-be-Done “When I am well informed I feel more confident living my beliefs, so I can make a difference in my family and my community.” The Trusted Digital Voice
    19. 19. Family and Faith, Reported with Rigor The Trusted Digital Voice
    20. 20. Deseret News Sunday National Print Edition 2012 Growth: Fastest Growing U.S. NP 180,000 160,000 140,000 120,000 100,000 80,000 60,000 40,000 20,000 - The Trusted Digital Voice
    21. 21. National Site Focused on Core Job-to-be-Done The Trusted Digital Voice 2
    22. 22. Dual Transformation in Content Transformation A 1. Step-change reduction in content costs 2. Differentiated Content: Invest where you can be “the best in the world” Tranformation B 1. Digital only, not digital first 2. New channels are key to disruptions 3. Hire digital DNA The Trusted Digital Voice
    23. 23. Digital Only (Not Digital First) Audience Penetration* 120 100 80 60 40 20 0 0 10 20 Source: Harvard Business School Newspaper Study *Unique Page Impressions/Circulation 30 40 50 60 70 80 90 Percentage of Non-print Content on Site The Trusted Digital Voice
    24. 24. Web-Only Strategies •User-Generated Content •Remote Contributors •Web Curation •Photo Galleries, Lists, Databases, Contests, Quizes User Generated Content Newsroom Remote contributors /Curation The Trusted Digital Voice
    25. 25. Deseret Connect: The Power of Remote Contributors The Trusted Digital Voice
    26. 26. Deseretnews.com a Top 25 Newspaper Site in America The Trusted Digital Voice
    27. 27. Finding New Market Growth Displacement Established Business Net New Growth Disruptive Business Starts Outside Established Business
    28. 28. Organizing around the Job-to-be-Done: Over 50 million Social Followers 4.5M Followers 4.8M Followers 2.5M Followers 3.0M Followers The Trusted Digital Voice
    29. 29. Digital Media: Establishing Family Sites in English, Portuguese, and Spanish The Trusted Digital Voice
    30. 30. New Channels are the Difference between Transformation A and Transformation B Legacy Media Sales Channel Revenue Has More Than Doubled Since 2009 100% 90% 80% 70% 60% 50% 40% 30% 20% 10% 0% Total $* $ UP 2009 Meanwhile, Dependence On Legacy Channels Has Been Cut By Half 2010 2011 90% % DOWN 55% 45% 2009 2010 2011 *Actual Revenue Numbers Not Disclosed The Trusted Digital Voice
    31. 31. Digital is now a foundational core business Revenue Total DDM Revenue 2009 Revenue 2010 Revenue 2011 Revenue 2012 Budget The Trusted Digital Voice
    32. 32. Hire Digital DNA: DDM Team did not Come to Work for a Newspaper The Trusted Digital Voice
    33. 33. Concluding Thoughts •Strategy is never more than 49% of the solution—Only special people make a special company •There has to be an organizing mission and an organizing “job” •Dual Transformation decouples: •Transformation A •Transformation B • Exchanges Teams can work, but “buyer beware” • This is the greatest leadership challenge in business The Trusted Digital Voice

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