DSI Newsletter

By Tom Oser, Ph.D
Consulting Practice Leader for Telecommunications, Technology and Media, DSI

In the late 1990s, The Industry Standard magazine was, as its name implied, the standard for critical information about the information age. It offered a skeptical voice on the Internet and was an irreverent chronicle of digital business in the thick of the dot.com era. In 2001, for example, the magazine won a prestigious award for journalism in its coverage of the AOL-Time Warner merger. It was at the height of its game, running 300 pages of advertising. The current wisdom of the time was that the "new economy" associated with the Internet and e-commerce would continue to support unprecedented growth. With this, the monthly magazine decided to double its issue rate to become a biweekly publication. The operations costs associated with this ramp up proved fatal. The tactic of doubling production was closely followed by the dot.com bust with an accompanying collapse of advertising demand, which left a rapidly declining top line sitting on a position of high-cost operations.

Meanwhile, many other publications were similarly affected by heady run-up of tech advertising and the following tech bust and recession. Older titles such as Barron's and Kiplinger in the financial segment, as well as broader-interest periodicals such as Time were able to maintain focus on the core business in the face of fad and bust by keeping an eye on the long-term trends and uncertainties while executing in the present. They weighed the costs of their business against the promise and threat of ramping up to chase a fad.

The executives from Time, Kiplinger, and Barron's, aided by the institutional memory of their long histories, saw the normal cycles of boom and bust that affect their industry over the long term, and effectively weathered the storms in the economy and associated changes in various advertising categories and industry structures. Asking about how marketing, sales and advertising executives act strategically generates a mixed response that says that they are distracted from real strategic thinking in current conditions, focusing largely on the tactical. But almost all have an understanding of the need to maintain a strategic perspective to effectively challenge and correct the path of their organizations based on new events.

What could these leaders see that those running The Industry Standard may have missed? All executives have the potential to play a strategic role in their organization, if they approach their role with an appropriate frame of mind. The exceptional leader's mind is always prepared to strategically frame the issues. Such thinking provides the ability to recognize and seize upon emergent opportunities. Framing also provides the ability to consistently make decisions that account for complexity and uncertainty in the environment.

This article considers characteristics of strategic frames of mind that can serve one well. Executives and managers need to develop a point of view on the key success factors that will help make decisions that navigate through uncertain and competitive futures. They need to ensure their organizations plan for sustainable financial and market success, no matter what future happens to unfold.

We'll consider some of the challenges facing executives at print publications that serve the financial industry advertisers. Part of the research for this topic has been through a series of interviews with members of in the Financial Communications Society (FCS), a leading professional association of major financial industry advertisers, print media publishers, and agencies.

External industry and market forces often conspire to present management's day-to-day lives with few opportunities or time to think and act strategically in the short run. Such challenges to strategic thinking were reported among a number of print publications' marketing, sales and advertising executives. They cite a number of forces that kept them focused on the present to produce earnings in the recent recession economy, many of which persist in the now recovering economy. Those forces include:

How are managers in the industry responding to these forces of uncertainty? Some of the reported immediate term strategic responses cover a wide range including:

While several of these responses reflect strategic framing, many are admittedly reactionary responses to the pressures felt through operations and performance measures in a "learn as you go" mode. In hindsight, there is a reported lack of a robust process for anticipating the big changes and considering the range of appropriate responses through advanced planning.

A Strategic Framework

Given the complexity of these forces of change in the industry, how can managers frame their strategic challenges? Even with the strong pressures for short-term results, how can managers make strategic responsiveness a normal part of their mindset?

DSI's scenario-based strategic planning process provides a way to frame strategic planning to address complexity and uncertainty. Leadership teams are taking steps toward business intelligence system tools to sense and react to their immediate environment along with their "budgeted" targets of success. But they also need a framework of understanding for the uncertain future that they face, which will evolve out of multiple possible future scenarios. The forethought that comes with having considered multiple futures in detail will enable flexibility in strategies, typically not addressed by those who pick a 'best guess' on the future and plan for it.

The scenario based strategic process is designed to help managers be better prepared to sense and act on weak signals that have significant implications. Periodic formal scenario planning prepares the mind of management to act with authority and "anticipated memory" when changes occur in the marketplace and environment. Anticipated change events can trigger rapid and responsive actions from portfolios of rehearsed strategic options. There are six elements to our strategic planning process that culminates in the implementation of strategic options as shown in the figure below.

There are certain key elements in scenario planning for strategy that can be translated into a strategic frame of mind for managers. Those elements include:

Over time, evidence arises as uncertainties are resolved and the picture of the future becomes clearer. As a particular scenario becomes more certain, a prepared management team can act on pre-meditated plans to capitalize on the emergent scenario.

Different parts of an organization can actively sense changes in the competitive environment, but a strategic mindset and context for understanding are needed to make sense of these inputs. Of all the functions within a financial publishing organization, the marketing, sales and advertising groups are among the most externally connected and aware of the forces in the market on a daily basis. Many of the elements of the strategic process show up as implicit elements of the normal course of work for these groups. These activities include monitoring, sensing, segmentation, and strategic relationships management. In terms of monitoring and sensing, some groups and their activities include:

While these parts of the organization are constantly sensing, they may not be "seeing" the patterns in data they collect. A strategic mindset and context are needed to interpret these data, and it may be the case, that the time-frames relevant to longer-term strategy are so out of synch with the cycles of operational data collection and action, that the strategic perspective is not served by the collected data. The strategic impact of these behaviors depends upon how well prepared and connected they are to apply it in the context of the longer-term strategy and strategy process.

DSI works with executives and their organizations to drive the use of framing tools such as scenario planning and critical thinking methods derived from behavioral decision theory. With these tools, a portfolio of strategic options are developed and imagined to play out in multiple future scenarios. To the extent the executives and key managers participate in the process and formulation of the future scenarios, they will be better prepared to frame the strategic issues and define the new information they would choose to receive, focus and act. This can create new opportunities versus being blindsided by new events in the market and environment.

Every leader in government and business has the opportunity to act strategically in virtually any role if their mind is set with:

Executives rise to the position of leadership when they demonstrate that for most situations, they are not "seeing them for the first time", but rather, acting decisively and swiftly with appropriate actions to the presented situations or opportunities. DSI subscribes to the notion that by actively planning for multiple future scenarios, business leaders and managers can mentally play out the contingent actions that will be appropriate when situations of crisis or dislocations occur that present opportunity. Scenario planning prepares the mind, and as Louis Pasteur said, "Chance favors the prepared mind."

Acknowledgements: Special thanks go to a number of media and financial industry executives for time in interviews for research on this article, including: Don Black, SVP of Marketing, Barron's Magazine; Sean Giancola, Manager New York, Money Magazine; Tim Hart, VP Director Financial Advertising, Financial Times; Charlie Kammerer, Director of Advertising, Time Inc.; Bob Kelly, Publisher, Lenore Kantor-Hendrick, Director of Marketing, BNY Brokerage; Kiplinger's; Brendan Ripp, Account Manager, Time Inc.; Carolyn Wood, Account Manager, Wired Magazine; Ken Shapiro, Financial Advisor, Merrill Lynch; Kevin Rees, President, The LanguageWorks Inc.; Matthew Rodano, Director Business development, The LanguageWorks Inc.