Monday, March 11, 2013

Nieman Foundation talk with Clayton Christensen & David Skok

As someone interested in not just great writing, but also the production of great writing, I found of note a recent videotaped discussion hosted by the Nieman Foundation for Journalism at Harvard. The Feb 27 session was on the topic of "Disruptive Innovation in Journalism" and featured Harvard Business School professor Clayton M. Christensen and 2012 Nieman Fellow David Skok along with Nieman Foundation Curator Ann Marie Lipinski.

Christensen is a renowned business author I was familiar with from his latest effort, How Will You Measure Your Life? co-written with James AllworthKaren Dillon. I enjoyed the book quite a bit and was interested in watching this Nieman talk with Christensen as one of the featured guests. Lipinski notes early on in the session that it follows up on an Oct 2012 Nieman Report by Christensen, Skok and Allworth titled "Mastering the art of disruptive innovation in journalism" and in terms of the recent talk itself, there was some fascinating points made by Christensen and Skok. While certainly not all-inclusive of what the two discussed, below are some of the things I took from the session...

Sustaining & disruptive innovations

Christensen spoke of how sustaining innovations are about making good products better and disruptive innovations, on the other hand, transform something that used to be complicated and expensive and make it accessible to a whole new mass audience.

One example of this is in the general field of higher education, and specifically that provided through the Harvard Business School. Along with the competitiveness in getting accepted, resulting caliber of the graduates and high cost of attending, Christensen noted how many HBS graduates wind up in Financial or Professional Services firms. With few few operating companies (such as GE or GM) recruiting at Harvard, these firms instead often focus on creating exceptional in-house educational systems. The result of this becomes a disruptive force in education along the same lines as online learning available outside of a corporate ed department.

One key point made about disruptive innovation is it's something that has to be incubated outside of a current sustaining business. The reason for this is disruptive innovation needs to be worked on at the same time current business continued and if the disruptive business done by the same people or even in the same space as the sustained business, the disruptive business will lose its differentiation and become like what's already been there. Closely related to this idea of separating disruptive from sustaining business is someone can't bring about disruption by simply changing the tasks done within a sustaining business.

Jobs to be done

One concept discussed that sounds to be a hallmark of Christensen's lecturing was that of jobs to be done. Two things I noted out of the How Will Your Measure Your Life? book were personal focused ideas with "the two fundamental jobs that children need to do are to feel successful and to have friends- every day" and the encouragement that people should “think about what jobs your spouse is looking to you to do.”

The basic idea of consumer or jobs to be done as I understood it was an argument against demographics as the driver of choices made and for the idea that people spend money or support causes to get specific jobs done. Companies shouldn't worry so much about the customer or technology used, but rather on the job that needs to get done. Then along with this identification of the job to be done comes perpetual efforts to get the job done better, with focus on both enhanced value of the job to be done and at lower cost.

As an example of disruption based on jobs to be done, Christensen cited Apple under Steve Jobs (who was known for not focusing on demographics or research into existing markets) as a company that introduced the iPod as a better way to fulfill the job of making music available and accessible easily.

Newspapers and their future

What got newspapers as an industry to its current difficult business state was discussed with Skok noting how many of the things that used to make up pieces of a newspaper got picked off by companies that focused exclusively on those areas, with products for sale going to sites like Craigslist and help wanted to a Monster or one of the other job sites.

What remains for newspapers is the same basic question that all companies in all industries face, what jobs do newspapers serve? Skok and Christensen discussed how the job fulfilled may be that of providing truth, may serve the job of helping someone unwind, may be to help start the day for people or may be something different. Either way, newspapers just like any other industry need to hone in on what job they serve and focus on fulfilling that.

Four elements to a business model

Christensen talked about every venture has a business model with the elements being the following: (1) Value proposition – there’s a job to be done and we’re trying to get people to hire our product to fill that job. (2) Resources – have to have these to deliver a value proposition. (3) Processes – as the people in a company do things in support of filling a job, processes emerge. (4) Profit formula – how do you get money to cover resources?

Changes that occur with disruption

Skok and Christensen noted that when a business becomes commoditized, new jobs to be done open up. It was said that as a general rule, when disruption occurs, the market booms and the interesting point made that if the top of the market drops off, the bottom will rise. Related to the field of journalism... if print dies, online writing fees should rise as there would be no more two-tier system with much higher compensation for print pieces.