This post first appeared as Steve Wunker's piece for LinkedIn
Clay Christensen taught me countless things, but there was one topic on which we always disagreed.
Clay, whom I worked with for six years, advocated that companies in the midst of being disrupted should separate out new business units that could freely respond using distinct business models. If those new units competed with the core business, so be it.
I’d tell him that was unrealistic – it’s a huge decision to make, it goes against many self-interests in a company, and it ignores the competitive advantages corporate parentage can bring.
With years of hindsight, I’ve come to think the right course is actually a mash-up of these approaches, and it’s been illustrated this week by the New York Times.
The Old Grey Lady, as staffers call her, didn’t respond to the internet disruption very well. But recent moves have been different. It’s built out – largely through acquisitions – new value propositions that work best online, such as with its product recommendation site Wirecutter, its word game Wordle, and its site for sports news, The Athletic.
Sounds like Clay’s suggested approach, right? Not really. While each of these sites can acquire subscribers directly, the Times has invested heavily in pushing an All Access bundle. And it’s working. There are now approximately 10 million of these subscribers, up about 1 million from a year ago. The goal for 2027 is 15 million. The newsrooms are distinct entities, but the monetization is done cohesively.
The Times also can make clear decisions about winners and losers in this set-up. This week, it closed its sports desk – a storied institution that covered the greats for over 100 years. Its 40 journalists were less than a tenth those of The Athletic, a site that wasn’t founded until 2015.
What are the lessons?
If the Times is still called The Old Grey Lady, she’s certainly become a nimble one. Here’s to all our companies being so spry at 172-years-young!
If you’re interested in a quick summary of intriguing research that Clay and his colleague Clark Gilbert did on how the way newspapers framed disruption (threat or opportunity) led to later success or failure, I urge you to give this a read.
by Steve Wunker