USA Today - Pursuing the Network Strategy

USA Today
- Pursuing the Network Strategy
By January 2000, USA Today (USAT) was the highest circulated newspaper in the United States (J. Roberts, Tushman, 2005). Even though the company has had positive operating profits for the last years and indications on an increase in 2000, Tom Curley, USAT’s CEO, was concerned about a couple of trends affecting USAT. In January 2000 Curley presented a vision of a “networked” USAT to his senior staff. In his speak he tried to imply that the industry is about to change in steps with the digital revolution that is upon the news business.
Structure, culture & management tools
The organization of USAT is partly centralized with a group of higher-level managers with decision-making authorities. These authorities lies within a group of smaller independent realms, such as circulation, the newsroom, advertising, production and obviously the very independent Online business. In 1994, when Curly took over the newsroom, he underlined the importance of a newspaper’s core values “independence, fairness, accuracy and trust”. The core values led to an attitude among the reporters that they don’t want to be told what to do or write about. Judging by these values and attitudes there aren’t any clear standardized guidelines on how to perform their work, which reveals a low degree of formalization.
When it comes to differentiation and integration USAT has succeeded with their own specialization, the hotels, which are an important source of revenue for the company. USAT is also America’s only national general-interest newspaper that delivered news about every state in the union, focusing on “mobile, interested, intellectual etc.” readers. The integration on the other hand isn’t yet very developed as it comes to coordination of various tasks, functions and divisions. An example on the unsatisfactory integration, which also interferes with “accuracy” in the core values, is that the content of Online is only 15% drawn from the content of the paper. This is also of importance for the readers that expect more in-depth stories from Online than from the newspaper.
As for the culture in the organization there seems to be a mutual feeling of fear between the paper and Online. The senior staff on the paper is looking down on Online and can’t see them as a strategic partner at all, while Online’s senior vice president, Cichowski, claims: “We [Online] are dead unless we spin off”. Independence is something that characterizes USAT’s culture, largely, as early mentioned, because of Curley’s statement regarding the core values. With these core values together with the hard work to confirm that their facts are correct, the culture at USAT’s newsroom, the cultural center of USAT, was very traditional. In another meaning it was not traditional, in that sense that the reporters write to the advantage of the reader, not to win awards. Many of the employees feel great loyalty to the paper and claim a very familiar atmosphere in the newsroom. Despite the loyalty and the familiar atmosphere there was a great reluctance among the senior staff to develop and regenerate the organization. Instead of consider the evidence of a changing market the senior staff was absorbed with their own responsibilities.
The dominant management philosophy of USAT is to “generate timely, accurate, trusted, in-depth news coverage”. According to Curley the paper is trying to combine exceptional coverage with hard news and business reporting. Furthermore it is a standard practice at USAT to avoid paying for news content, Online solved this problem by sourcing the news rather than to buy them.
One challenge for USAT is the issue around “ When is news news?” The paper is basically yesterday’s news, while the Online’s news is instant news. The problem is if Online would put up a scoop in the afternoon, other newspapers would look it up with their sources and print their version the day after. Another challenge is that Online’s technology infrastructure is falling behind from its competitors. The newsroom was doing little to adopt technology or interface with USAT’s Online operation and the Online employees were leaving due to the bad staff relationships. One of the most important challenges is that the costumer’s behavior is changing. At the start of the paper, USAT were in head of the readers, today the critical condition is that the readers might get ahead of the paper. There are also indications on advertising migrating to online businesses.
As it stands today, USAT are unlikely to be able to manage all these challenges without some radical changes in the organization. The growth of technology allows alternatives to the traditional newspaper and to beat the competition in this fast developing business you need to be very clear on which direction you’re heading. These kinds of aims aren’t specifically defined within the USAT organization.
The network strategy
Curley’s network strategy is to introduce a new media outlet, Broadcast LIVE. To make this work Curley wanted to invest in a technology platform, which should be able to transmit and receive various kinds of news content. The platform would be the link between the three media outlets. The paper would deliver content to Online and LIVE, LIVE would send digital images to the newspaper and video to Online and so on. LIVE would also, according to Curley, expand the presence of the USAT brand.
The strategy is built upon that people do what they’re best at. This results in decentralizing the organization by “pushing responsibility down, respecting all, improving rewards and compensation, maintaining an enormous supply of talented, well-rounded, indoctrinated people” as Curley puts it.
Curley has a vision with a “networked” USAT that could thrive in the fast changing market. He also says that USAT isn’t any longer in the news business, but a part of the information business and that it’s important to be able to produce news regardless of media. Furthermore he fears that the organization won’t be able to meet the challenges presented by the ongoing revolution in the news industry.
USAT’s strength and key to success is that they are “everywhere” and by implementing Curley’s network strategy this would be even more applicable.
Formal and informal barriers
To be able to successfully implement this network strategy there are a few barriers that needs to be considered. These barriers aren’t only to be solved favoring the network strategy but also if USAT wants to develop and move forward.
To begin with, we have the informal barriers. The greatest barrier here for the implementation is that no one in Curley’s senior staff agrees to an implementation. It’s crucial to have the leaders supporting in a new company strategy. Then we have the general reluctance to change, perhaps because of the positive results USAT have been producing the last couple of years. Another important barrier is the atmosphere of “we against them” that prevails between the divisions, especially between Online and the newsroom.
Then we have the formal barriers. One great barrier is that Curley has a lot of higher-level managers directly under him; this might impair the communication in the organization. The technology infrastructure of Online is falling behind compared to competitors. The balance between “differentiation and integration” isn’t very good; Online must be more integrated with the company as a whole. Despite the expansion of distribution channels the power remained in the newsroom. Another barrier is that the company is physically separated; the climate would probably be more dynamic if they all were at the same place.
Action plan for February 2000
To succeed with the integration of the three media significant changes in USAT's IT infrastructure, corporate culture and its organizational structure is required.
The most decisive challenge for Curley is to get the higher-level managers and the company owners’ support. Without their support, the network strategy and everything it brings would be likely to fail.
I would suggest that he should decentralize the organization slightly and in that way push some of the responsibilities down. I see some similarities between USAT and the crisis of autonomy as Larry E. Greiner describes. With fewer people in the senior staff it would probably be easier to communicate and consequently get their support.
Curley should be more direct about what it is he wants and how these changes will affect the paper and Online. It is also important that he more explicitly clarifies the procedures for implementing these changes. Curley says in his speech: “To get there we must not simply open a window but tear down all the walls” These are big words for an audience that is already afraid of changes. He should approach it in a more specific way, where he describes and defines the new roles and commitments that have to be taken.
He must also unite the divisions by introducing a unified culture throughout the whole company. He should rephrase the mission of the company, clarify the vision and set up concrete goals for the whole organization. Curley says that: “we should view USA TODAY as a local paper for the global village” This might be a good vision for the new generation of USAT.