Innovation tunneling, organizations & disruptive change
AJC Says: Surely "innovation tunneling" = personal networks? Big organizations are inherently incapable of innovation. Individuals can innovate if they have the freedom to do so. That's part of what #postdigital is about.
A couple of days ago, @michael_nielsen posted a thoughtful article on his blog tackling rapid and disruptive changes in the scientific publishing business – especially the challenge of overcoming organizational immune systems that actively obstruct change and adaptation. Reading through the piece, I was particularly struck by his conceptualization of the barriers to change faced by established organizations. He used a neat piece of physics-speak – “local optima” – to describe the inevitable isolation businesses face when the price of change simply becomes too great for them to compete with emerging enterprises. But what really intrigued me is how, by turning this analogy on its head and talking about potential wells rather than local optima, a new approach to surviving disruptive change could be conceived – innovation tunneling.
Michael uses a comparison between the New York Times and TechCrunch to explain the problem:
A good example is the popular technology blog TechCrunch, by most measures one of the top 100 blogs in the world. Started by Michael Arrington in 2005, TechCrunch has rapidly grown, and now employs a large staff. Part of the reason it’s grown is because TechCrunch’s reporting is some of the best in the technology industry, comparable to, say, the technology reporting in the New York Times. Yet whereas the New York Times is wilting financially, TechCrunch is thriving, because TechCrunch’s operating costs are far lower, per word, than the New York Times. The result is that not only is the audience for technology news moving away from the technology section of newspapers and toward blogs like TechCrunch, the blogs can undercut the newspaper’s advertising rates. This depresses the price of advertising and causes the advertisers to move away from the newspapers.
Unfortunately for the newspapers, there’s little they can do to make themselves cheaper to run. To see why that is, let’s zoom in on just one aspect of newspapers: photography. If you’ve ever been interviewed for a story in the newspaper, chances are a photographer accompanied the reporter. You get interviewed, the photographer takes some snaps, and the photo may or may not show up in the paper. Between the money paid to the photographer and all the other costs, that photo probably costs the newspaper on the order of a thousand dollars. When TechCrunch or a similar blog needs a photo for a post, they’ll use a stock photo, or ask their subject to send them a snap, or whatever. The average cost is probably tens of dollars. Voila! An order of magnitude or more decrease in costs for the photo.
Here’s the kicker. TechCrunch isn’t being any smarter than the newspapers. It’s not as th /javascripts/tiny_mce/themes/advanced/langs/en.js?1246494938" type="text/javascript"> ough no-one at the newspapers ever thought “Hey, why don’t we ask interviewees to send us a polaroid, and save some money?” Newspapers employ photographers for an excellent business reason: good quality photography is a distinguishing feature that can help establish a superior newspaper brand. For a high-end paper, it’s probably historically been worth millions of dollars to get stunning, Pulitzer Prizewinning photography. It makes complete business sense to spend a thousand dollars per photo.
What can you do, as a newspaper editor? You could fire your staff photographers. But if you do that, you’ll destroy the morale not just of the photographers, but of all your staff. You’ll stir up the Unions. You’ll give a competitive advantage to your newspaper competitors. And, at the end of the day, you’ll still be paying far more per word for news than TechCrunch, and the quality of your product will be no more competitive.
