The New York Times has a great article today on how David Bradley turned around the venerable but chronically unprofitable Atlantic Media. It's a story of vigorous entrepreneurial energy, perseverance and creativity. But, how did it happen and can other companies do the same?
Bradley and Co did it first by defying conventional wisdom (what I call Banishing Small Thinking here) and by being willing to reinvent themselves with an unrelenting attack on their own business model (something I call an Appetite for Destruction also here). Now, Atlantic media is a growing and profitable enterprise in a segment characterized by contraction, frustration and red ink.
A terrific example the article sites is the merging of the digital and print sales forces. While many other publishers have since followed suit, this was complete heterodoxy at the time. In most cases, the digital and print sides of the house didn't even believe they were in the same business. Nonsense, said the Atlantic. There's no New Media and Old Media, there's no Digital Media and Analog media, there's only media: one strategy, one company, one experience. Banishing Small Thinking indeed.
My favorite quote from the article, however, comes from Justin Smith, President of Atlantic Media, and circumscribes the Appetite for Destruction attitude. In discussing the mindset required to endure such wrenching change, he states:
“We imagined ourselves as a venture-capital-backed start-up in Silicon Valley whose mission was to attack and disrupt The Atlantic...In essence, we brainstormed the question, ‘What would we do if the goal was to aggressively cannibalize ourselves?’ ”
When working with our portfolio companies, I try to push management to ask themselves the same question, although phrased a little differently. Specifically, I ask them:
"If the board fired you tomorrow and you started a new enterprise but could only hire one person from the company, who would it be? Now, with that one other person, how would you eviscerate our business model?"
This question inevitably initiates a fascinating conversation about first priorities:
- who is the one hire? Is it a tech person, a marketing person, or a sales person?
- Who is contributing the most to our future and are we vulnerable to losing her/him?
- What does this vulnerability say about our dependencies in other areas?
- Whose position should we buttress immediately with backup resources?
and then more broadly, our economic exposure:
- where are we weakest?
- whose business model is cheaper than ours?
- how would they slice off our most promising customers?
- Which ones would they attack first?
And finally, what do we do about it? Could we restart our business with 75% less in operating costs? How? Who would lead it? What should we start doing today to hasten the business model change we believe is inevitable?
Answering these questions leads to a generative discussion about what we should be doing to transform ourselves first, before someone else does it for us.