Change is hard and failure looming
Many of the critical questions media companies face today deal with human capital, knowledge management, digital assets and expertise. Media companies are supposed to be sophisticated managers of these assets because these are the main if not only assets these firms possess. Hence, they are pure-form exemplars and the lessons drawn from their experience for business model innovation have applicability across industry.
In the media industry risks are high and the key to success is the understanding of complex, ambiguous problems leading to creative and innovative solutions. Being highly flexible will help, while standard-operating procedures won’t do the job. Still many companies operate as standard-procedure practices. Routinized, programmatic solutions are the core of their corporate culture and represent the essence of managerial work. Such an approach works most of the time. It produces efficiencies and profits and is then deeply enrooted in the corporate culture. In such an environment developing new competencies will provide no advantages so focus is placed on optimizing the existing skills. If tomorrow’s problems are much like yesterday’s, such a mindset will work great. Unfortunately this fails the test of reality, as the Internet has evoked major changes.
Managers who succeed in a standard-procedures environment rarely have the aptitude and inclination required for diagnosis under complexity and the formulation of customized and complex solutions. Consequently, denial is a common response to discontinuous change. Hence it comes at no surprise that firms often fail to adapt and that change programs are difficult to complete even when they are started.
The real challenge in crafting strategy lies in detecting the subtle discontinuities that may undermine a business in the future. And for that there is no technique, no program, just a sharp mind in touch with the situation. Such discontinuities are unexpected and irregular, essentially unprecedented. They can be dealt with only by minds that are attuned to existing patterns yet able to perceive important breaks in them. Unfortunately, this form of strategic thinking tends to atrophy during the long periods of stability that most organizations experience.
Henry Mintzberg, “Crafting Strategy”, Harvard Business Review, (July -August, 1987)
Even those professionals who attempt to address the challenge of understanding the change-event find that they must fight the inertia and opposition of most of the organization. So the failure of established firms to grasp the importance of technological breakthroughs is a recurrent theme. Focusing on operational excellence today easily leads to that tunnel vision which blinds executives to tomorrow.
