From Digital Book World:
Software is at once the existential threat and the messianic savior of the publishing industry. Publishers that pursue transformation strategies and successfully reinvent themselves as software companies will thrive, propelled by the value of their content assets and skills.
This is no simple feat, however. Coupled with the backdrop of financial, technical and market challenges, one overarching challenge makes any publisher’s transformation especially daunting—corporate culture.
Corporate culture shows up across any organization in a million small ways. It’s the set of reflexive behaviors, like default settings, that companies develop over time. It influences everything from how the company hires and how it interacts with customers to the way it develops its products. Corporate culture is the result of countless subtle inputs over time, and as many CEOs have discovered, it’s profoundly difficult to change.
But culture is precisely what must change in today’s publishing industry. From stem to stern, the most successful publishers are rethinking risk tolerance, speed of development, the opinion of the customer and even the structure of their companies. Although culture isn’t good or bad, it can certainly be right or wrong for what a company is trying to accomplish.
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A few decades back, in the heyday of desktop publishing, publishers were centers of intense innovation, leveraging new software to move from analog layout mechanisms to digital ones. Experimentation with tools like Aldus PageMaker and Quark Xpress led to entirely new workflows. Initial investments, while expensive, yielded exciting results in both the products and the financial efficiencies of the publishing process.
Over the ensuing years, publishers adeptly outsourced the non-strategic parts of their digital workflows. More and more work was done offshore and less of it in-house, and the institutional knowledge of these methods largely dissipated. Business process outsourcing (BPO) companies now own many of those core processes, with publishers providing inputs and receiving outputs, such as illustrations and page layouts.
It’s within that environment that publishers today confront the completely new problem of constructing digital content and products, and they haven’t yet figured out how to do it at large scale. Meanwhile, these same BPO companies are asked to ‘solve’ the digital content problem. They try, but these companies are skilled in process optimization, not in initial problem solving, especially when the end product isn’t yet fully understood by anyone.
When publishers reflexively outsource these supposedly non-strategic processes, the outsourced work is either frustratingly poor in quality or impossible to scale up. Instead, publishers themselves must first invest in the problem-solving, just as in they did in the ’90s with desktop publishing. Only then can the optimization of outsourcing begin.
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I’ve often marveled at the power editorial teams wield within publishers. They’ve traditionally controlled budgets, product roadmaps and sales teams, all in one. Talk about influence! But this cultural hallmark is unattractive to engineers and designers, who expect to be at the center of the discovery and decision-making processes of a software company. It’s the age-old MBA-meets-engineer cliché on the grandest of scales: “I’ve got a great idea, all I need is an engineer to build it for me!” Alas, the engineer, if she’s smart, has her own ideas.
The publishers that successfully shift their internal cultures to be technology-driven, rather than editorial-driven, will more quickly adopt methods and practices that favor the transition from publishing to software. These companies will, in turn, attract better talent. And the virtuous cycle will accelerate.
Link to the rest at Digital Book World
The author of this piece doesn’t use the term, but he is talking about disruptive change in the publishing world.
One of the common responses to disruptive challenges is “Let’s disrupt ourselves!” and change the disruptee into the disruptor. Perhaps the disrupt yourself strategy has worked somewhere, but PG can’t think of an example.
One of the reasons that startups are the most common creators and exploiters of disruptive technology is that a startup has no preexisting corporate culture to slow it down (or defeat it altogether). Disruptive technology doesn’t just disrupt companies, it also disrupts the management within companies. Many of the old kings and queens will lose out under the vastly different new business structure and they invariably manage to submerge the innovative new ideas beneath established corporate fiefdoms and processes.
PG suggests that tradpub corporate culture is the ultimate reason it will find survival in anything resembling its current form almost impossible in an ebook/ecommerce world.
He’s mentioned it before, but since most big US publishers don’t own themselves, but are owned by large international media conglomerates, PG says the corporate culture challenge is even more daunting. You not only have to change the culture of the publisher, you also have to change the culture of the conglomerate managers who are at least one step removed from understanding the disruptive business challenge and the need for change.
A tech startup is expected to lose money, often for a long time. Figuring out how to disrupt an existing business is very difficult work. Mistakes will definitely happen and U-turns will probably be necessary.
Conglomerate bosses become very nervous about any plan that expects to lose money and can’t demonstrate a clear path to a profit. Mistakes and U-turns are anathema.