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March 2, 2009, 1:34 p.m.

Hearst’s 100 days of change: On the right track, or misguided?

Steven R. Swartz, appointed president of Hearst’s newspaper division in December, sent around a memo last week reporting to his troops on the “100 days of change” he launched not long after taking the job, the midpoint of which had come around.

Predictably, the memo got leaked and was published by the Wall Street Journal (scroll down).  And predictably as well, Jeff Jarvis deconstructs it, line by line, as “too little, too late”:

…a memo that could and should have been written and tried out 12 years ago (I’m sure people in this company and others did write versions of it; I know I did). If these actions had been taken back then, there still would have been time to make change and survive. But that time is over. Now the memo comes off only as desperation as the company threatens to close its papers in San Francisco — its onetime center of gravity— and Seattle.

Give a guy a break, already.  It’s not hard for us journobloggers to pounce all over the industry’s hapless execs.  I’ve done it myself, back in November when the clueless gathered at API to deal with “an industry in crisis” and decided that meeting again in six months would be a really good idea.   (To their credit, they met again after just two months.)

But Swartz is not waiting for six months, he’s trying to reinvent a company in 100 days.  Surely he knows that history is against him — as I suggested the other day, newspapers are in the same desperate straights passenger railroads were throughout the 1950s and 60s, and it’s a truly rare thing for a legacy business to survive disruptive innovation of the kind newspapers face.  But as the lone onetime corporate hack in this stable of bloggers, I have to suggest that perhaps Swartz is breaking the mold and actually trying to change the business model.  We (bloggers) can’t forever beat up on newspapers for their cluelessness and then pounce all over a guy who is at least getting some of it right, and might actually know what he’s doing.

Among the steps he and/or others at Hearst have taken or suggested are these:

  • Content sharing: Joining the ranks of other newspapers that have announced content sharing agreement, Heart’s Albany Times-Union announced on Feb. 18 the formation of  the Northeast Consortium, which includes the Times-Union, The Buffalo News, the New York Daily News and two New Jersey papers, The Star-Ledger of Newark and the Record of Bergen County.
  • A Hearst e-Reader: This has been rumored and hinted at in the past, but Fortune reported last week that Hearst “has developed a wireless e-reader with a large-format screen suited to the reading and advertising requirements of newspapers and magazines. The device and underlying technology, which other publishers will be allowed to adapt, is likely to debut this year.”  The new gizmo is a product of Hearst’s investment more than 10 years ago in e-paper developer E Ink of Cambridge, Mass.
  • Online-only in Seattle:  While no announcement has been made, the company has hinted broadly that following the likely end of the print edition of its Seattle Post-Intelligencer, the company would continue to put out an online-only edition; and it has made some apparent preparations for this, for example by getting employee ideas for such an enterprise.  As I noted earlier (and elaborated on), it’s a plausible scenario: the enterprise could probably be brought to a breakeven point quickly, giving Hearst a free (and needed) laborotory for testing large-scale online-only business models.
  • Outsourcing all printing: unless Swartz is being imprecise when he writes that “we must use third-party printers in all of our markets in order to significantly add more color to our products, not so much for our readers’ needs, but to be more competitive in the battle for advertising dollars in a high-definition world,” he seems to be suggesting what Jarvis, myself and others have pushed in our blogs: the need to delayer or disaggregate news firms — to outsource all printing and become truly digital enterprises by getting rid of as much iron and steel as possible.
  • Hyperlocal: “We must develop a rich network of correspondents to help us grow the deepest hyper-local community microsites in our markets,” Swartz writes.  Now, it could be that he has no idea what that means and is just be borrowing a phrase and a tactic from the New York Times, which launches two “hyperlocal” community sites today.  But Swartz spent the first seven years or so of his career in a newsroom himself (at the Wall Street Journal); he goes on to mention the need to cultivate local bloggers and to link to other local sources, so I perceive this as a legitimate intention.
  • Charging for some content: Much has been made of this part of the memo, but we’ll have to see what it really means.  Swartz is clear that he doesn’t intend to “wall off our Web sites behind a paid barrier.”  The journoblog scepticism about the relative merits of various potential payment schemes notwithstanding, it’s clear that some testing and experimentation with paid content should happen.  There are more options available than there used to be when “we tried that once and it didn’t work” at Times Select.
  • Transforming the sales force to consultative selling, apparently with a three-month training program and sales contest now under way
  • A marketing campaign: “…we have done a poor job of telling our story. This becomes even more important as we change our business model. Our communications task force has developed a wonderful new campaign that begins to put us back where we should be—on the offensive about the vital role we play in the politics, social lives and commerce of our communities.”  My only suggestion is that it needs to be a sustained campaign, not a one-day wonder like the day-after-superbowl “campaign” carried out by the Newspaper Project, which still has not been followed up with a single new ad.
  • Finally, while Swartz’s memo is mum about Bay Area plans, as I’ve suggested previously the company has an opportunity to team up with MediaNews and invent the future, rather than just walking away from the San Francisco Chronicle.

Hearst’s change agenda is not too little, too late.  Viewed in the aggregate, these steps indicate a willingness to take bold steps and to look beyond the short term.  Whether the strategy is visionary is hard to say, because we’re not really hearing the strategy. The leaked memo, written for internal consumption (but, one assumes, with the anticipation that it would be leaked) enunciates a variety of tactics, but fails to express a single overarching strategy.  “Fundametally change the way we do business” is not a strategy.  “Transforming Hearst Newspapers into a fully digital media enterprise” might be. The memo’s first focus on cost control detracts from strategic thinking.

Still, I think there is a conscious strategy somewhere under the surface, and it would be useful to employees, as well as to observers and kibbitzers like us, if Swartz would be clearer about what it is.  Hearst’s traditionally secretive approach might preclude this, but openness, a virtue in doing business digitally, would be a nice goal: how about a “100 days” blog? (Swartz mentions a website, 100daysofchange.com, but that URL is not in business.)

POSTED     March 2, 2009, 1:34 p.m.
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