You don't have to agree with Rupert Murdoch's politics to recognize his business savvy (in fact, ignore them if you want to understand his business acumen). A new book is coming out today on his life, and according to reviews and interviews with the author, it continues to reinforce how Mr. Murdoch followed The Phoenix Principle for building News Corp. into a major, industry leading, corporation. (read about the book here)
Don't forget that News Corp. began as a small Australian newspaper company. As large as Australia is physically, it is sparsely populated. While you may recognize an Australian accent, I bet you struggle to name an Australian corporation. It's relatively small population, abundant natural resources and remote geography (don't forget, it's an island continent) means it is easy for Australia to be missed on the global business landscape. But it is from these humble roots that Rupert Murdoch saw great opportunities for growth if he first moved into newspapers around the globe - eventually becoming what is now America's largest media empire.
Not only does Mr. Murdoch plan for the future, rather than fixating ont he past, but that Mr. Murdoch obsesses about competitors is made clear in his biography. His fixation on CNN helped move Fox News from a fledgling idea to the #1 rated news channel. He fixated on CNBC when deciding to recently launch Fox Business Network. Obsessing about competitors, especially when in a different field, is a trademark of Phoenix Princicple companies that make long-term higher rates of return. They let competitors lead them into new businesses – where they learn and grow.
Mr. Murdoch is certainly Disruptive, and his biographer describes him as "the least corporate person I've ever met in corporate life." And this sort of willingness to Disrupt is what made it possible for News Corp. to win the bidding for MySpace.com. News Corp. is not just a newspaper company – it has vast interests in fim, broadcast television, cable television, direct broadcast satellite, magazines, inserts, books and the internet. Such widespread White Space keeps News Corp. out front of its competitors. (See News Corp holdings and business interests here.)
Contrast this with Ted Turner's empire, for example. Like Rupert Murdoch, Mr. Turner started with a company that was almost exclusively a billboard enterprise – and almost exclusively in the south. Yet, he was able to see that the future of broadcast media was much stronger than billboards, leading him to move forward with projects in radio, broadcast TV and eventually cable television. Launching CNN as the world's first global news network put his company in the forefront of the media industry.
But, eventually Mr. Turner sold his company to another television, film and magazine company – Time/Warner. Rather than continuing to branch out with White Space onto the internet, Mr. Turner agreed to a "grand play" by merging with AOL. Instead of White Space where Turner could learn to expand and grow, with multiple investments in the new media environment, Turner/Time/Warner became trapped in a very costly, and over-committed, situation with AOL. Too early in the lifecycle, and with insufficient learning opportunities, this became a grand disaster leaving Time/Warner a far weakened competitor – and making it possible for Google to emerge as the leading American on-line media company.
I don't ask that you like Rupert Murdoch. Nor that you like News Corporation. Nor that you agree with the heavy political overtones of Mr. Murdoch and those on his executive team. In fact, feel free to disagree with their politics vehemently. But if you look at their business results you see an organization that followed The Phoenix Principle to great success. And, as the media business keeps changing, we will see many competitors disappear – especially those too closely aligned with print and broadcast news. But I would not expect News Corporation to be one of those struggling to survive. Its practices have positioned the company well to continue growing, despite dramatic industry dynamism. And that's what being a Phoenix Principle company is all about.