Clay Shirky on newspapers or really any innovative industry

Vacation time is reading time. And I’ve built up quite a queue of Instapaper articles I needed to get through. As I was moving my archive to DevonThink, in order to be able to consult it quicker, I came across this quite old article by Clay Shirky. Titled “Newspapers and Thinking the Unthinkable”, Shirky explains some of the reasons behind the demise of most newspapers and the industry as a whole as well as why they did not see it coming.

In hindsight I find this article extremely interesting as it not only covers the newspaper industry but most industries that have seen disruptive change. It is most certainly worth the read. But what did I learn from it?

The noble art of self-delusion

One of the first elements that Shirky touches upon is the ability of an entire industry to stick its head in the sand by means of committee. As he states:

“When reality is labeled unthinkable, it creates a kind of sickness in an industry. Leadership becomes faith-based, while employees who have the temerity to suggest that what seems to be happening is in fact happening are herded into Innovation Departments, where they can be ignored en bloc”

This rings true for many industries that never saw it coming, whatever disruptive change it was. And it continues to be true for many industries that are losing their relevance. What is interesting is that Shirky points out a very important underlying dynamic that drives this change, a dynamic easily ignored because when you deep within an industry, you lose the ability to look at it from the outside, dispassionately. As Shirky writes:

“It makes increasingly less sense even to talk about a publishing industry, because the core problem publishing solves — the incredible difficulty, complexity, and expense of making something available to the public — has stopped being a problem.”

The big issue is that the problem the industry was based on when it developed no longer is a problem. Like getting music in a consumable form to people was a long time exclusive capability of the record companies.

What is really worrisome is that people absolutely fail to understand that there is more going on than just a surface deep change that requires a surface deep response. Again talking about the newspaper industry, Shirky says:

“the core assumption behind all imagined outcomes (save the unthinkable one) was that the organizational form of the newspaper, as a general-purpose vehicle for publishing a variety of news and opinion, was basically sound, and only needed a digital facelift”

We will fix it is the idea, but when the entire industry is crumbling under you, this makes no sense whatsoever. As was the case with newspapers, where:

“The competition-deflecting effects of printing cost got destroyed by the internet, where everyone pays for the infrastructure, and then everyone gets to use it.”

And while industries aim to “solve” the problem, if there no longer is a “problem” to solve, there is nothing to bring to the table anymore. Shirky one final time:

“That is what real revolutions are like. The old stuff gets broken faster than the new stuff is put in its place.”

Key questions to ask oneself as an actor in an industry

I believe it to be critical to any industry that the incumbents on a regular basis examine the following questions:

  • What problems was your industry built on?
  • What problems did you industry address?
  • Are these still problems?

In case the answer to the last question is no, you are facing a real problem. But then again, you did know that, right? The people in the innovation departments had been telling that for years.

However, not all is lost. Because often solutions are not only relevant for one problem, but for multiple problems at the same time. Think about for example certain pharmaceuticals that address diseases and in adapted dosage work (sometimes only reasonably) well for other diseases. So here are a couple of additional questions to consider

  • What additional problems did your industry address?
  • Are these still problems?

Now imagine that the answer to that second question remains no. At that moment not just your initial industry but your new industries are under threat as well. Luckily there is a third set of questions to ask.

  • Are there any problems that your industry, in a new form, could provide a good answer to?
  • What are these?

The experience you have built, or the capital you have amassed, may well be used in a very effective manner in a different industry. Time to up and go explore those new frontiers.

Time for critical assessment

These simple questions which may yield complex answers are questions any management team needs to ask itself on a regular, and at least yearly basis. The answers may not necessarily be pleasing, but they will allow you, as an organisation, to think about a future. The alternative is to go the way of the dodo, or the newspaper.