"Gannett to shut down print version of Tucson newspaper" is the latest headline. Yet another newspaper either cutting staff, cutting content, cutting print days, or stopping printing altogether. That this would happen isn't really surprising. Even Warren Buffett recently said he didn't see any way newspapers could make money. (Yet, according to Marketwatch Berkshire Hathaway still owns shares in Gannett – primarily a newspaper company.)
What's surprising is that Gannett isn't doing anything to change the company. A quick visit to www.Gannett.com and you'll learn that the company has almost no on-line business. They company's profile says that it's online business consists of a 50% ownership in CareerBuilder.com and Shoplocal. That's it. No financial news site, no social networking site, no food site, no sites dedicated to the TV stations owned by Gannett, or the newspapers owned by Gannett. A visit to the page dedicated to the Gannett online network is actually a page where you can ask for a salesperson to call you for placing an ad on USAToday.com.
Everyone today has to deal with market shifts. Everyone. The newspapers are in a position where their very survival depends upon making a shift. This isn't new. It's been clear for several months – and for those in the media actually well known for a few years. So why hasn't Gannett done anything to reposition its business? Over the last year equity value has declined 85% – some $6Billion of lost value. Since June, 2007 the equity value has dropped from $60/share to $4/share (a loss of some $10Billion in value) [see chart here].
Leadership should not be allowed to behave like the lonely deer, caught on a rural road in the evening. The proverbial animal caught staring into the headlights of the car speeding directly at it – and sudden death. Leadership's job is to react to market changes in order to keep the business viable. Gannett has succumbed to Lock-in – unwilling to take actions necessary to keep its customers (advertisers and readers) engaged. Unwilling to help employees mobilize toward a new future, and help vendors identify growth opportunities. By simply doing more of what the company has always done, leadership is dooming the investors to lose their money, and their employees their jobs and pensions.
Everybody knows that the future for newspapers is bleak. All of us will face these sorts of market shifts in our careers. Doing nothing is not an option. Leadership must engage the workforce in open dialogue about what the future holds, taking great pains to discuss competitors and how they are changing the market. And leadership is responsible to Disrupt the Lock-ins, attacking them, so that new ideas can be brought forward and new investments can be made in White Space where the company can grow and migrate to a new Success Formula.
If somebody steals $100 that's a crime. But if you lose $10Billion in market value that's not. When market shifts are as obvious as those in newspapers, and management doesn't take action to reposition the company and engage employees in transition, not taking action seems criminal. No wonder shareholders file class action lawsuits.