Organizational Development: Organize For Tomorrow’s
SuccessModerator: Howard Roth, Ascend Media
Panel:
Peter Goldstone, Hanley Wood Business Media
Chuck Richard, Outsell, Inc.
Toni Nevitt, Nielsen Business Media
2© 2007 Outsell, Inc. All rights reserved.
Digital Velocity, New York
March 28, 2007
CREATING THEE-MEDIA ORGANIZATION
Chuck Richard, VP & Lead AnalystOutsell, Inc.
4© 2007 Outsell, Inc. All rights reserved.
Agenda
The Study
The Set Up
Four Organizational Structures
Wisdom of Crowds (of CEO’s)
New Functions, Roles
Essential Actions
© 2006 Outsell, Inc. All rights reserved.
5© 2007 Outsell, Inc. All rights reserved.
The Study
Outsell, Inc: Chuck Richard
New Coordinates, LLC: Cara Erickson
August 2006
18 executive interviews, anonymous
Quotes tell it straight, but not ascribed
Insightful, battle-tested and free-wheeling
Analysis and take-aways
6© 2007 Outsell, Inc. All rights reserved.
The Set-Up
Source: Outsell, Inc.
“What I don’t know yet is whether any of us will find [new] business models as profitable as we want them to be.”
“The equation doesn’t work – traditional revenues don’t come back at the same level when they leave print for online.”
“Online is the growth engine but the dollars are still a long way from print. A dollar that leaves print doesn’t become a dollar online … it comes back as 20 cents.”
“We are in five-alarm fire mode…, and it’s scary!”
7© 2007 Outsell, Inc. All rights reserved.
Typical Revenue Model to 2015
0
50
100
150
200
250
2004 2005 2006 2007 2008 2009 2010 2011 2012 2013 2014 2015
Rev
enu
e $
Mill
ion
s
Print Digital In Person Total
50% Print
36% Digital
14% Events
82% Print
8% Digital10% Events
3.9% 3.4% 1.4% (0.4%) (1.6%) (2.7%)(0.6%) 1.4% 1.8% 3.2% 4.0%Growth Rate:
8© 2007 Outsell, Inc. All rights reserved.
Revenue Dip 19% of Total
0
50
100
150
200
250
2004 2005 2006 2007 2008 2009 2010 2011 2012 2013 2014 2015
Rev
enu
e $
Mill
ion
s
Print Digital In Person Total
10-Year Total Revenue at 4% $2.70 billion
10-Year Total Forecast Revenue $2.27 billion
Revenue Dip $428 million
Revenue Dip as Percent of Total 19%
4.0% Growth
9© 2007 Outsell, Inc. All rights reserved.
Four Organizational Structures
Least Integrated Most Integrated
1. Publisher’s Pureplay 3. Hybrid/Matrix 4. Brand IntegratedSeparate OL P&L Rolled No OL-Only
Resources OL & Print Units Into Brand P&L Only Brand P&L’s Separate P&L’s Reports to 2 Managers
2. CentralizedNo P&L
Expense AllocatedTo Business Units
Source: Outsell, Inc.
10© 2007 Outsell, Inc. All rights reserved.
Four Organizational Structures 1. “Pure Play” 2. Centralized 3. Hybrid/Matrix 4. Brand Integrated
Separate Online Unit
Reports to CEO or Board
Separate P&L
Dedicated Staff and Management
Collaborating with core business as needed
Can nurture separate culture
No Pure P&L
Corporate Group reporting to CEO
Costs Allocated
Drive Strategy from Center
Implement Locally
Incubate new businesses
Brand P&L controls
Some Integration with Dedicated Online Resources
Dual Reporting
Double $ Counting
Variations on this theme
Brand P&L only
Operating execs have power across print and online
Few or no dedicated online roles
11% of sample 11% 61% 17%
Source: Outsell, Inc.
11© 2007 Outsell, Inc. All rights reserved.
1Publisher’s “Pureplay”
Strengths
“My view is that we would never have gotten to where we are today if we weren’t separate."
Challenges
“There’s no single individual who owns the whole brand. I won’t say there’s no tension around this at times.”
“There’s an inherent tension in the structure. On my better days, I think it’s healthy”
Source: Outsell, Inc.
12© 2007 Outsell, Inc. All rights reserved.
2Centralized E-Media Organization
Strengths
“The smaller brands did not have robust Web presence, so we pooled them... The big brands can stand alone on the Web"
Challenges
“Often these structures are unpopular internally – tension between the corporate staff and operating executives arises, and the central group can be perceived as ‘gatekeepers’. ” – Outsell
“You still have print people running the brands.”
Source: Outsell, Inc.
13© 2007 Outsell, Inc. All rights reserved.
3Hybrid / Matrix Integration
Strengths
“We’ve created as much integration across the functions as made sense…You need some key people waking up in the morning just thinking about online … but it’s not as simple as full integration."
Challenges
“What you want is a shrewd, calculated, calibrated coordination. What you don’t want is a mud puddle where people don’t know: Am I supposed to be selling print or online?”
“The jury is still out on fully integrated selling teams, and we anticipate continued experimentation and restructuring will go on for the next two to three years.” -- Outsell
Source: Outsell, Inc.
14© 2007 Outsell, Inc. All rights reserved.
4Brand Integrated
Strengths
“People need to have a huge familiarity with their industries, so they need to be fully responsible for all platforms."
“We don’t isolate the [print and digital] elements by creating special incentives. That creates loopholes and distortions.”
Source: Outsell, Inc.
15© 2007 Outsell, Inc. All rights reserved.
The Wisdom of Crowds (of CEO’s) - 1
“The longer you chase the print dollars, the further behind you get in capturing new online growth rates.”
“Straddlers – executives who have a traditional media background but have spent much of the last five to 10 years in interactive media.”
“Online staffers don’t want to learn print."
On internal promotions: “We’re still promoting people who come in the traditional way and are sucking up knowledge from the online side. They get it. It’s a mindset, not an age.”
Source: Outsell, Inc.
16© 2007 Outsell, Inc. All rights reserved.
The Wisdom of Crowds (of CEO’s) - 2
“Converting print staff to online is very rare. The print staffs now are so thin, and the digital groups work much harder than print, so most print people are not interested in moving over.”
“Some sell e-only. Some sell e-media plus print. None are assigned print only.” Upward mobility requires emedia experience. To want a print-only job in this culture? “That would be declaring yourself a dinosaur.
Source: Outsell, Inc.
17© 2007 Outsell, Inc. All rights reserved.
The Wisdom of Crowds (of CEO’s) -3
“E-media’s role in the organization? Teach, push, cajole, collaborate, consult to print."
“My two predecessors basically ‘lost it’ after three years.”
“In the beginning, surgical strikes were okay. Now you need ground forces, a frontal attack.”
“Old Media is finally taking New Media seriously”
‘’This isn’t a skunk works any more’’
Source: Outsell, Inc.
18© 2007 Outsell, Inc. All rights reserved.
New Functions, Roles!
Audience Development Ad Operations Online / Viral Marketing Search Engine Marketing / Search Engine
Optimization Web Analytics Content Producers Community Managers / Social Networking
Directors Mobility and Wireless Product Managers Blog / Wiki / Podcast / Webinar Managers
19© 2007 Outsell, Inc. All rights reserved.
Hiring – A Sellers’ Market - 1
“It’s a tight market out there now when it comes to Internet experience.”
“We’re still able to recruit good people at the right price, which is higher than previous. It is impossible to hold the company’s growth rate and set new growth paths without changing and adding staff.”
“Demand for e-talent is five times greater than supply.”
Source: Outsell, Inc.
20© 2007 Outsell, Inc. All rights reserved.
Hiring – A Sellers’ Market - 2
“We have to start working to increase the overall digital talent pool; it doesn't help anyone to keep stealing the same five people."
"It's a tug of war out there.“
“Metrics is huge. We are definitely in the age of the rocket-scientist data analyst. Analytics are a major new area.”
Source: Outsell, Inc.
21© 2007 Outsell, Inc. All rights reserved.
Hot! Hot! Hot! More Jobs for Metrics than Editors!
Web Metrics
Search Marketing
Web Analytics
Web Editor
22© 2007 Outsell, Inc. All rights reserved.
Hot! Hot! Hot! Search Marketing Jobs Equal Site Ops
Search Marketing
23© 2007 Outsell, Inc. All rights reserved.
Hot! Hot! Hot! Audience Development v Circulation
Content Development Rises to Equal Editor
24© 2007 Outsell, Inc. All rights reserved.
Hot! Hot! Hot! Social Networking Up 8-Fold
25© 2007 Outsell, Inc. All rights reserved.
Outsell’s Essential Actions
Don’t Obsess About ‘Getting all of it Right’
Don’t Rush to Judgment
Match Org Structure to Stage of Evolution
But Structure is Only One Element in the Mix
Seed the Organization with Versatile Talent
Money Speaks, Metrics Leads
Don’t Operate In State of Denial
Source: Outsell, Inc.
26© 2007 Outsell, Inc. All rights reserved.
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