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May 8, 2007 / Toby Dayton

Star Tribune Cuts More Staff; Downward Tailspin Continues

In business school, I took a great class in my first year on organizational behavior. It was one of the most interesting classes I have ever taken and I find myself recalling information from it more than almost any other. One of the books we read was Peter Senge’s The Fifth Discipline, which is one of the few business books I have ever enjoyed or thought worth reading. I don’t remember all the details, and the following summary is wildly simplistic, but Senge identifies the characteristics of a learning organization and the vital importance of systemic thinking. His basic premise, as I recall, is that success for a business depends upon the extent to which it can learn faster than competitors and truly think objectively about the organization, its influences, its environment, and the cause and effects of various strategic and tactical decisions. One of the areas covered in the discussion of systemic thinking is reinforcing cycles, both positive and negative, and what it takes to sustain or turn them around.

In all my years of work, I have never seen a more explicit example of a negative reinforcing cycle than what is happening to the Minneapolis Star Tribune and most other daily papers in the country. The Star Tribune announced yet again this morning that they were going to make drastic cuts in staff in response to the decline in ad revenue, mostly in classifieds. This is just the continuation of the cycle that began years ago when daily papers started losing readers and advertisers for various reasons (high prices, complacency, monopolisticly poor customer service, better alternatives online and offline, ignorance of the web, failure to innovate, etc.). In response to sagging revenue, the dailies cut costs and staff to preserve profit margins. This in turn further reduced the quality of their value proposition, so they lost more readers and more advertisers. They then made more cuts, lost more readers and revenue, and the cycle has and will continue unabated until they either go out of business, reach some new point of equilibrium with a very different looking business model, or make some drastic change that forces the cycle to stop. Unless Par Ridder takes steps to break out of this cycle, and it will need to be in dramatic fashion, the path he and the Strib are on can only end in oblivion.

[tags]Death of Daily Newspapers, Decline of Dailies, Publishing, Media, Star Tribune, Death By A Thousand Cuts, Peter Senge, The Fifth Discipline, The Learning Organization[/tags]

5 Comments

  1. Anon / May 11 2007 10:42 am

    A no-duh post that OF COURSE POSES NO POSSIBLE SOLUTIONS.
    Industry in major decline. $670mm loss in valuation over 7-8 years.
    Trying buy time and stem the tide (ie create some interim form of equilibrium) until they can figure out what biz model is workable/desirable.
    From the inside, the recent cuts are focusing on Features/Source portion of paper rather than News (eds consider F/S fluff but it is voice of paper and draws big readership – so bad judgement).
    There is no obvious panacea for this situation. Infotech outpaces printing easily.
    And they obviously can’t compete against CraigList for ad rev.
    Hey maybe they should buy JobDig?
    Are metro papers like metro sports teams – perhaps public subsidy is in order?
    Maybe the Strib should finance the new Twins stadium – hahahaha.
    Where are Ideas, solutions for keeping newspapers afloat – Bueller, bueller, bueller???

  2. Toby Dayton / May 11 2007 12:26 pm

    Over the course of many posts throughout the past year, and in a month-long, concerted effort earlier this year, I have written extensively about what the daily newspaper industry could and should do to try to stem their losses. Not all the ideas were original, not all the ideas were earth-shattering, and not all of them were good by any stretch. But rather than simply lob a constant stream of critiques, which takes virtually no thought or creativity, I thought it would be more instructive and worthwhile to actually offer some suggestions, ideas, and strategies that might help the dailies strengthen their business. For over a month, I actually ended each post with a ‘Daily Recommendation for the Dailies.’ They ranged from small to large, good to dumb, free to costly, and realistic to impractical, but they represented some tangible ideas and solutions that could potentially add value to the business model rather than detract from it which is what most dailies have done in the recent past. While I do not have any illusions that I have the definitive answer or answers for daily papers, I have tried to balance my criticisms with ideas and solutions. Before you comment anonymously and slam a single post, take a little time and read through the relevant categories like ‘Daily Papers,’ go back to previous posts, and see if your critiques are justified or unfounded. As you’d discover in this case, I have offered a plethora of ideas, solutions, and recommendations. You may not believe them to hold much merit, but they are there.

  3. Gunnar / May 11 2007 12:50 pm

    To Mr. No Duh

    >A no-duh post that OF COURSE POSES NO POSSIBLE SOLUTIONS.

    read the diggings blog it is full of them

    >Industry in major decline. $670mm loss in valuation over 7-8 years.

    i dont have a mba but this probably not good,

    >Trying buy time and stem the tide (ie create some interim form of equilibrium)
    >until they can figure out what biz model is workable/desirable.

    right, the same people who drove the car into the ditch should be able to get
    them back out. got it.

    *the* defining paradigm for the information age is:

    “The best way to predict the future is to invent it.” Alan Kay

    please note the massive difference between the above statement and “buying time” their is no time to buy – either

    a) know your customers better than anyone else
    b) innovate
    c) have insanely scalable distribution infrastructure

    local papers had the industrial age equivalent of C, so they never worried about a or b. now it is too late. time to ctrl-alt-del.

    >From the inside, the recent cuts are focusing on Features/Source portion of
    >paper rather than News (eds consider F/S fluff but it is voice of paper and
    >draws big readership – so bad judgement).

    they need to look at what wapo (hyper localization previously reported on diggings) is doing. the strib HAS NO NEWS TO BEGIN WITH. if you don’t believe try and find how many times it took toby more than 10 minutes to read the paper.

    “you don’t have to change, survival is not mandatory” -edwards deming

    you can be in the crm business, the innovation business or infrastructure
    business. currently the strib is world class in none of these.

    >And they obviously can’t compete against CraigList for ad rev.

    why not?

    >Hey maybe they should buy JobDigg?

    that would be a start except they would likely run it into the ground. job dig
    is in the crm business. tjob dig has been growing for the last
    several years while the strib whithers. coincedence??????????????????

    >Where are Ideas, solutions for keeping newspapers afloat – Bueller, bueller,
    >bueller???

    1) figure out what business you are in – customer, innovation, infrastructure
    2) whack everyone and everything that does not align with #1
    3) get good at whatever your answer to #1 is for my money it is hyper
    localization. the guy at wapo’s vision is summed up as “we want to cover little
    league games like they are the ny yankees”

    so just STOP with yet another uninformed, liberal arts grad-esque take on
    baghdad, and INSTEAD use tech to your advantage(!), put digicameras everywhere,
    broadcast cretin derham hall baseball, heck solve a local crime case, find out
    what is going on around the corner and publish it, tag content THAT YOU DON”T
    OWN AND DIDNT CREATE (see steve johnson’s stuff), give everyone in the tc
    blogging software, link britt robson’s wolves reports off your sports home
    page, tear down the walls, read the cluetrain manifesto, create networked
    content, i could go on. enter the 21st century or go bye bye.

    when local paper asked dave winer (inventor of rss the stuff that enables blogs) how to get involved with blogging – the paper wanted to give all their reporters blogs. winer said no instead give free blogging software to anyone who wants it. this is the kind of inside out thinking that papers are ill positioned to do.

  4. Anon / May 11 2007 1:40 pm

    you asked for response to a single post not a series of posts and your post slammed w/o suggesting what the strib should do. now i can go connect dots myself about your previous posts but i suggest placing trackback links in your musings to other related posts to create interconnectivity. most helpful for attracting and keeping new readers not familiar with earlier posts and helps with time management. be happy that someone is actually reading your stuff, agrees with it, and takes time to comment.

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