What Would Google Do_ - Jeff Jarvis [57]
Simplify, simplify
Get out of the way
Beware the cash cow in the coal mine
Sometimes, success can blind you to the oncoming possibility of failure. And fear of failure can keep you from success.
When I was TV critic for TV Guide in the mid-1990s, it still sold more copies in a year than any magazine in America. But it was slowly fading, stuck in the first stage of death: denial. Its circulation had fallen from more than 17 million a week to 15 million, then 13 million while I was there (entirely the fault of my bad taste, of course). TV Guide couldn’t keep pace with the explosion of television: Dozens, then hundreds of channels wouldn’t fit on the magazine’s little pages. The editors tried more than once to produce a larger version with big, colorful grids, but the old readership of the magazine was stuck in its ways, addicted to listings. There was the other problem: The readers were old and getting older. As I remember, when one readership survey came back with less than the usual level of response, a follow-up study was performed to find out why people hadn’t completed their questionnaires. The answer: Most of the folks who hadn’t responded had died.
Meanwhile, competition only grew. Listings were appearing on TV and computer screens, forcing TV Guide to enter those businesses. Newspapers’ TV listings had long been perceived as free by readers. There was discussion of syndicating TV Guide’s listings to papers—which, using Googlethink, could have spread the brand—but the magazine feared that would cannibalize the core product. Beware any strategy built on protection from cannibalization, for it probably means the cannibals are at the door and ready to eat you for lunch.
Fast-forward a dozen years, long after I’d left. In 2005, TV Guide transformed into a regular-sized magazine with big, colorful grids. At the same time, it eliminated almost all of its 140 local editions. It raised its price. And it lowered the circulation it guaranteed advertisers to 3.2 million, a dizzying drop from its high of 17 million. About then, I had lunch with my old boss from TV Guide, who had also moved on. I said the company had finally done everything we should have done a dozen years before: putting out the right product, reducing costs, and getting realistic about its legitimate circulation. Why didn’t we do that? I asked rhetorically. She responded: “You know why. Because it was a cash cow.”
Cash flow can blind you to the strategic necessity of change, tough decisions, and innovation. Take the fate of TV Guide as a warning: Beware the cash cow in the coal mine.
How many companies and industries fail to heed the warnings they know are there but refuse to see? The music industry is, of course, the best example of digital dead meat. Detroit waited far too long to make smaller cars and pursue electricity as a fuel. Many retail chains opened stores online but stopped there, not seeing opportunities to forge new relationships with customers as Amazon had. Telecom companies were blindsided by the emergence of open networks that undercut their businesses—even though those networks operated on the telecom companies’ own wires. Ad agencies kept trying to forestall the reinvention of their industry, still buying mass media even as more targeted and efficient opportunities grew on the internet. News executives thought they could avoid change and even believed they should be immune from it because they were holders of a holy flame: Journalism with a capital J. They finally woke up when they watched the giant Knight Ridder chain get gobbled up by the McClatchy chain, which like every public company in the sector lost billions in market value. Now newsmen are willing to change, but it may be too late for them—as it was for the one-time giant TV Guide. They lost the next generations of customers. They lost their destinies because they wanted to save their pasts. Protection is not a strategy for the future.
Encourage, enable, and protect innovation
Google is well-known for giving its technical employees the chance to