Why “partner to expand your capacity and capabilities at lower and more flexible cost” is Table Stakes

This is an excerpt from “Table Stakes: A Manual for Getting in the Game of News,” published Nov. 14, 2017. Read more excerpts here.

Use partnerships, third-party services, shared resource arrangements and flexible staffing to expand your capacity and capabilities across all areas of your enterprise: content creation, marketing and distribution to target audiences, new services and products, access to needed skills, technologies, tools and data, and more. Do this in ways that lower investment requirements, reduce and add flexibility to your cost structure, increase speed, and better share risks compared with doing it on your own.

Why this is Table Stakes

a) Metro, local and regional legacy news enterprises cannot afford to do everything themselves

Newspapers were extremely profitable when they had oligopoly or monopoly market power. Thirty to forty percent or more of revenues went to the bottom line. Newspaper companies could and did pay for every aspect of the enterprise. Moreover, the range of required investments and related risks were well known: printing plants, equipment, trucks, zoned editions and so forth.

Today, metro, local and regional news enterprises generate much lower profits – which means less cash. They face a new and riskier range of required investments. Corporate chains do retain more flexibility to self-fund than family owned or otherwise independent news companies. That, though, underscores the point: chains are but one approach to sharing resources. And, even corporate chains have limits unlike a few decades ago. Going it alone is not a feasible option.

b) Shared resource approaches expand what’s possible for resource constrained local news enterprises

Shared resource approaches allow metros, locals and regionals to use clean sheet of paper thinking with regard to every aspect of what they do. That means exploring such possibilities as:

• Lowering and making costs more flexible through aggregation, use of freelancers, automated reporting tools, outsourcing all or parts of print, using open source software approaches, tapping into students at colleges and universities, pooling back office functions and more
• Pooling risks and resources in pursuit of new products, services and revenue/business models
• Recognizing and acting on the insights that ‘not all of us need to do everything alone’ as well as ‘some of us are really good at something and can do that for the rest of us’

c) Better solutions often arise from working with others

Metro, local and regional legacy newspaper enterprises face fragmenting audiences and ad markets, relentless technological disruption, geographically imposed competitive disadvantages, significant skill and capability shortfalls, and deteriorating economics. It makes no sense for news enterprises to isolate themselves with ‘not invented here’ habits. Indeed, quite the opposite is true: metro, local and regional news enterprises must tap into expertise, creativity, fresh perspectives, needed capabilities and additional resources wherever and with whomever they can.

The Knight Temple Table Stakes effort itself illustrates this. By sharing their respective market contexts, strategies, performance results and challenges, Miami, Dallas, Minneapolis and Philadelphia partnered in tackling key initiatives to help each get to table stakes. Over the course of a year of collaboration, many positive gains happened, including:

• Collaboratively defining what’s needed (roles, skills, work flows, technology and tools)
• Crafting, deploying and learning from methods aimed at closing gaps (e.g. skills assessments, workshopping and training approaches, timing and purpose of daily meetings, newsroom design and build out, use of mini-publisher and “Inc” approaches, how best to deploy/use Slack, and more)
• Establishing and growing informal and trusted relationships (e.g. the social editors regularly tap into one another for ideas, insights and best practices – and that’s just one of several similar informal and productive groups)
• Holding each other accountable in supportive and caring ways.

d) News enterprises are technology-dependent companies

Metro, local and regional news enterprises are primarily news and information companies. And news enterprises are not technology companies in the sense of Facebook, Google, Oracle or IBM. Still, technological capacity and capability is a sine qua non for news and information: if your enterprise is not “tech enough” you cannot be in the game. You must have the hardware, systems, software, applications, technology architecture – and the technology talent – demanded. Furthermore, the hardware, software and “wetware” (the tech talent) must integrate with, and effectively support and enhance, all the core work and workflows of news enterprises. Yet, no metro, local or regional news enterprise – even those part of larger chains – can be ‘tech enough’ alone. This is self-evident: consider only the role played by vendors who provide technology to many enterprise customers.

e) Investments in technology, publishing platforms and technology-related capabilities carry significant risks

Consider the anxiety and frustration you expend on content management systems. Much of this arises from difficult tradeoffs demanded by print and digital requirements. It also arises because established print CMS providers themselves must balance print versus digital customer requirements against current and prospective revenue streams. They wish to preserve big accounts and print related cash flows while transitioning to digital realities. Put differently, CMS vendor interests conflict with your interests – at least in part.

Yet, content management systems are but one example of risk-filled technology choices you confront. Social, mobile, communications (e.g. email, Slack, etc.), customer relationship management (CRM), apps, ad tech, data, analytics, coding, hosting – these and other technology capabilities and requirements weave themselves through everything your enterprise does. And all of them carry risks. Finding ways to share those risks with others reduces potential costs and losses while, importantly, increasing the nature and number of risks you can take.

f) Partnering generates revenue and financial resource opportunities

Your metro, local and regional news enterprise must maximize every opportunity to attract cash (see Table Stake #5). Partnering is a different way to diversify revenues through building the kind of local ecosystem that Dallas/Belo had done through acquisition. Content marketing, search engine optimization and marketing, analytics and data management, events, and other services and products all might generate more revenues for your enterprise and a partner enterprise together than either of you could do alone. And revenues are not the sole form of cash. Philadelphia, for example, used partnering to attract foundation funding – cash – to support the “Next Mayor’s Project.”

g) Partnering creates possibilities that otherwise will not happen

Innovations and strategies that demand cross-functional coordination have lower odds of success if the only option is for Function A of the enterprise to work with Function B of the same enterprise – as opposed to Function A finding a partner organization to provide what B does. For example, imagine that a mini-publisher “Inc” type effort (see TS#7) shapes a revenue strategy that includes selling sponsorships for events. If the ad sales force declines (whether explicitly or implicitly) to sell the sponsorships, the plan fails. Partnering disciplines and processes help the mini-publisher explore how other entities could do sponsor sales. True, senior management might choose to say no to what the mini-publisher proposes. In the absence of partnering disciplines, though, the option of working with outsiders never even arises.