Innovate, or die trying

Paul Flewelling Agile lead theagilecoach.co.nz

A Kodak moment

Steve Sasson “EVERY DIGITAL CAMERA THAT WAS SOLD TOOK AWAY FROM A FILM CAMERA AND WE KNEW HOW MUCH MONEY WE MADE ON FILM” “THAT WAS THE ARGUMENT. OF COURSE, THE PROBLEM IS PRETTY SOON YOU WON’T BE ABLE TO SELL FILM — AND THAT WAS MY POSITION." Kodaks First Digital Moment http://lens.blogs.nytimes.com/2015/08/12/kodaks-first-digital-moment/

Our Kodak Moment

1907 prints The Dominion 1972 WELLINGTON PUBLISHING acquires The Evening Post and The Dominion, consolidates print and distribution INDEPENDENT NEWS LTD BLUNDELL BROTHERS 1865 prints The Evening Post The rise and fall of the newspaper business

2003 2000 goes live - one website covering many print titles STUFF.CO.NZ acquires INL’s print publications FAIRFAX MEDIA LTD 2005 reaches peak in US at
 around $50 billion ADVERTISING REVENUE 2011 goes live ANDROID APP 2010 iOS APP goes live The rise and fall of the newspaper business 2007 Advertising revenue goes off a cliff FINANCIAL MELTDOWN

2016 DIGITAL TRANSFORMATION MANDATE New CEO DIGITAL FIRST 
 AUTHORING LAUNCHES A combined authoring platform allows journalists to use one tool to publish to digital and/or print ADVERTISING REVENUE has halved in US to $25 billion 2012 2013 Plant consolidation and improvements cost $20 million PRINTING PLANT 2011 The rise and fall of the newspaper business

Billions USD 0 20 40 60 2003 2004 2005 2006 2007 2008 2009 2010 2011 2012 2013 2014 Print ad revenue (US) Digital ad revenue (US) Google ad revenue (global) The rise and fall of the newspaper business

Digital disruption

Theory by Jeanne Ross, MIT Sloan SMACIT

SOCIAL MEDIA
 SMACIT

MOBILE SMACIT

ANALYTICS SMACIT

CLOUD SMACIT

INTERNET OF THINGS SMACIT

Theory by Jeanne Ross, MIT Sloan SMACIT

Moore’s law TRANSISTOR DENSITY ON AN INTEGRATED CIRCUIT WILL DOUBLE EVERY TWO YEARS Combined with David House’s observation that with speed increases, raw computing power also doubles every 18 months

Thirty linear steps

Five exponential steps

Thirty exponential steps

1985 CRAY 2 SUPERCOMPUTER 2012 IPHONE 5 Has 2.7 x processing power of the Cray 2 and a fraction of the size

Buurtzorg focus on delivering a single tiered health care system in small 12 person Agile teams. Not because they wanted to be “Agile” but because that’s what gets the best result for the client Customer engagement Digitised solution Uber provides a digital solution that makes getting from A to B simple & safe

Our digital strategy H O W W E ’ R E F A C I N G D I G I T A L D I S R U P T I O N

1. DIGITAL FIRST PUBLICATION We publish stories that can be syndicated to any publication but with digital being the primary concern We’ve built a software platform that supports this end-to-end 
 This allows us to be leaner in our production costs. It’s our “operational backbone”

No content

2. SUSTAINING INNOVATION A Lean Startup approach for building of new ideas to improve membership and commercial - validate early and often - build, measure, learn - encourage collaborative, innovative thinking - metrics driven culture

MAY 2014 MAY 2015 0 million 1 million 2 million 0 million 1 million 2 million 1.47 million unique browsers 1.85 million unique browsers MAY 2016 0 million 1 million 2 million 2.025 million unique browsers

It looks like it might work, but when you try it nothing happens… except we tracked you wanted to push it Button to nowhere The Wizard of OZ It looks like it’s fully working, but don’t look behind the curtain.

3. TAKE AN INTEGRATED APPROACH Consider all streams of work and how they touch on each other Digital is whole organisation responsibility Content creation, curation and discovery is at the heart of this

What’s the job? “PEOPLE DON’T WANT TO BUY A QUARTER-INCH DRILL. THEY WANT A QUARTER-INCH HOLE” CLAYTON CHRISTENSEN By World Economic Forum from Cologny, Switzerland CC BY-SA 2.0 via Wikimedia Commons (saturation adjusted)

4. BECOME A MODERN BROADCASTER Diversify using different channels such as our community focussed Neighbourly Also becoming the medium of transmission gives us a signal regardless of the other players

No content

5. PERFORM ORGANISATIONAL SURGERY Breakdown the silos Maintain separation of “the Church and the State” 
 View Editorial as audience draw card View Commercial as the money makers

Disruptive innovation L O O K I N G T O T H E F U T U R E

No content

L O O K I N G T O T H E F U T U R E Disruptive innovation By Clockready (Own work) CC BY-SA 3.0 Katherine Viner, The Guardian, 12th July 2016 By Wilgengebroed on Flickr CC BY 2.0 via Wikimedia Commons

What we can learn? • Digital disruption is only going to accelerate • Organisations should consider restructuring to adapt to the rate of change • Lean startup “experiments” are going to help • You might need a seperate R & D dept to look for new revenue streams

Category Axis Media Telecom Consumer financial services Retail Technology Insurance Consumer products Nonprofit Business & professional services Education Health care Asset wealth management Industrial 0 25 50 75 100 61 57 53 50 49 48 48 47 43 43 39 36 28 39 43 47 50 51 52 52 53 57 57 61 64 72 SOURCE: Digital Pulse 2015, Russell Reynolds Associates % executives who responded that their business would be moderately or massively disrupted by digital

HOW WILL YOU SUSTAIN YOUR CURRENT APPROACH? 3 things to think about WILL YOU FOCUS ON CUSTOMER EXPERIENCE OR A DIGITISED SOLUTION? HOW WILL YOU FACE DIGITAL DISRUPTION IN YOUR MARKET?