Thursday, June 27, 2013

How Magazine Publishers Can Think “Inside the Box”

When I’m unsure about what to do with a cardboard box, I give it to a child.  She in turn puts it on her head, sits in it, and uses it as a rocket, slide, pillow and weapon, in no particular order.  And after her nap, she reinvents the game all over again, this time with video.

I’m sure I’m not the only one who cringes when invited into the boardroom with other acolytes to participate in a strategic planning session which will require “out of the box thinking.”  I learned my lesson early in my career when I suggested that the owner’s wife, who loved medieval, cultist things, be brought on board as the resident astrologer.  I mean, she read a mean horoscope and wore gypsy skirts and headbands.  I was following orders and thought, I thought, outside the box, but the blowback I received from the corporate powers was that I had somehow slandered her.  But, in a sense, none of this mattered because most strategic comments fall to the cutting room floor to be swept up curtly latter on by the janitor who knows what to do with trash.

Most of us have our merry tales of crawling around meeting rooms trying to sound like an unreconstructed lion or some other beast that might upset the status quo.  And then there are those “brainstorming” sessions.  I recall during a retreat with a New York publisher spending too much time listening to suggestions from men and women to either put the toilet seat up or down, depending on aim and strategic intent.  I won’t bore you with the list of deadly atmospheric metaphors that would make an eighth-grader blush.

In a delicious article that makes a grand case for plucking “brainstorming” from the executive quiver, the WSJ makes a case for behavioral science and why we should with pride and aplomb find our way back into the box.  The Journal published an adaption from Inside the Box: A Proven System of Creativity for Breakthrough Results (Simon & Schuster), by Professors Drew Boyd and Jacob Goldenberg, at the University of Cincinnati and the Hebrew University of Jerusalem, respectively.   

The authors suggest that advocates of “out of the box thinking” have it all wrong and actually have it backwards.  “Would-be innovators are told ‘to think outside the box,’” and go wild making analogies that have nothing to do with the essential product.  They suggest that playing word association games or chasing grand abstractions at a company retreat are pretty much a waste of time.  Their approach is to think about the essential business differently.  So get inside the box, deep inside the box.

They offer five techniques for doing this:  subtraction, task unification multiplication, division, and attribute dependency.  The technique of subtraction would mean removing essential elements.  The authors provide the examples of contact lenses, an exercise bike, a package of powdered soup, and an ATM.  The question: what do they have in common?  The answer: they all have something subtracted.  The contact lenses are without the frame.  The exercise bike is without a rear wheel.  Extract water from soup and you have the powdered form.  And so on.

The authors note that companies have discovered new product lines using these techniques.  Philips Electronics removed functions from the bulky DVD player and placed them in a handheld device.  This led to a new design standard not only for the DVD, but for the home-electronics market.

The professors offer Samsonite as an example of a company that used task unification to create new products, redesigning the college backpack so it was better designed to provide comfort for the students under a heavy load of books and electronics.  The heavier the contents, the more stress relief for the wearer.

Multiplication suggests copying a component, then altering it.   Though this technique has been used with razors, light bulbs and photography, it can also be used in services.  For example, the College Board, which designs the SAT, adds about 25 minutes of experimental, un-scored questions during the 225-minute test to test appropriateness of including them in later exams.

Division is a technique by which you separate the components of a product or service and then rearrange them.  “Instances of this technique abound, from airline check-in procedures that now have you print your boarding pass at home to the TV remote control whose functions used to be attached to the box itself.”

According to the authors, an excellent example of attribute dependency “is eyewear with transition lenses, which change from light to dark in the sunlight.  So, too, are windshield wipers that speed up as it rains harder.”  

I haven’t heard whether publishers and media companies are using this kind of approach to innovation.  If not, they should consider it.  Too often, the strategic conversation shuffles between the urge to centralize or decentralize the organization, with digital developments making this conversation all the more severe.  Wired magazine just celebrated its twentieth anniversary and that means we’ve been struggling with digital issues for at least that long.  I can’t think of any of the publishers I’ve worked with who got digital right early or even later on.  One reason for this, I’m sure, concerns asking the right questions.  And a willingness to get back inside the box!

Ken Doctor, writing in the Nieman Journalism Lab, provides a quiz:  The era of paying for digital access is about: 1. Getting more money out of core subscribers; 2. Getting new money out of new subscribers; or 3. Getting money any way you can.  Doctor acknowledges #3 is a “gimme,” but #1 and #2 are very different strategies.  “While most newspaper publishers are leaning heavily on their long-time core bases by promising and delivering all-access, Hearst Magazines is taking a contrarian turn in the market.  It’s a strategy that is largely at odds with peers Conde Nast, Time Inc. and Meredith, as well as most newspaper publishers.  It’s betting on almost wholly on new customers.”(

Unlike its competitors, Hearst is not focused on bundling print and digital products, although that may be an option in the future.  Rather, as Doctor notes, the company is seeking out and attracting consumers who want to read in the digital format.  And the proof seems to be in the pudding.  Recently, President David Carey announced that Hearst Magazines had reached one million paid digital subscribers.  While this number is about 4% of Hearst’s total subscription, I wouldn’t bet against Hearst reaching the desired 10% mark by 2016.  It’s a start.

In Doctor’s opinion, “Hearst’s strategy is the one to watch.”  I agree.  This strategy is consistent with demographic changes, tablet adoption, decline in retail magazine sales, and the necessity of breaking through the “analog dollars for digital dimes” syndrome.  Hearst is demonstrating that consumers will pay full price for magazine tablet editions.  If this trend continues, it would be a huge finding for publishers who have been trying to generate digital revenue through bundling and pay-walls with inconsistent results.  Hearst is demonstrating there is another way.   

Perhaps Hearst has used a version of the “subtraction technique” suggested by our professors; removing seemingly essential elements to get at some core strategic issues.  For the last decade, the magazine industry’s narrative was necessarily anchored in print because that is where the revenues were and are.  Digital was there, of course, made more sexy and promising by the iPad.  But the print and digital dance continued, sometimes featuring ungainly partners with vastly different footwork.

Perhaps Hearst has also done the industry a huge favor by demonstrating that a company can chart a new, bold and scalable digital magazine business centered specifically on the tablet that Doctor refers to as the linchpin, with 98% of digital magazine reading taking place on the tablet.  “For many, the tablet is truly becoming a replacement for the print magazine.” And the good news continues. Ad Age just reported that iPad magazine ad units are up 24% in the first quarter of 2013 compared to the same period last year.  

If our professors were in the room, they might also suggest Hearst executives could be wittingly or unwittingly invoking the “attribute dependency” technique, “making the attributes of a product change in response to changes in the environment or in the surrounding environment.”  The tablet has been with us since 2009 and although companies, including Time Inc. and Conde Nast, have had some success in this space, Hearst has shown us emphatically that consumers will pay a pretty penny for magazine content on tablet devices; on average, 30% more than the print edition.  It’s a start.

By keeping the bundling of print and digital in the background, developing ways to get new revenue from new subscribers and focusing on the tablet magazine edition as a distinct business and editorial entity, Hearst seems freer to respond, unhindered, to changing marketplace exigencies.

That’s good news for them and the rest of the industry.  Perhaps the professors are right.  The solutions are closer than we think. 

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