In a year when a number of executives with unconventional media backgrounds are taking charge of newspaper companies, Clark Gilbert, newly appointed president and CEO of Deseret News, may have the most novel resume of all — former Harvard Business School professor, consultant and specialist in disruptive change.
Gilbert began applying theory to practice last September when he moved to Salt Lake City to take charge of Deseret Digital Media, a new division consolidating new media ventures owned by the Church of Jesus Christ of Latter-day Saints. In late May, he added the Deseret News to his portfolio (while leaving the newspaper’s editor and publisher in place).
The first of the jobs gave him the chance to test out a key finding from all those years of study — that new media thrive when separated out organizationally from the traditional paper. That’s the best way to make a disrupter (in most any industry) focused and nimble, Gilbert and his former Harvard colleague Clayton Christensen believe.
So far so good. Deseret Digital grew page views by 50 per cent and unique monthly visitors by 40 per cent over the last year, Gilbert says. That helped the Deseret News finish first in growth of combined print and online readership among American newspapers in the most recent period measured by the Audit Bureau of Circulations. The church’s KSL.com has revenues up 50 percent year to year and is the fourth largest broadcast site in the country measured in page views.
I caught up with Gilbert late on a typical day of meetings and more meetings when I was in Salt Lake City for a speaking engagement in late June. He told me two strategies are fueling the fast digital growth. First he has built an executive team recruiting from a range of non-newspaper digital successes: Blockbuster, Omniture, Overstock.com and Demand Media.
Second, the church connection provides an unusual opportunity to build beyond the typical local audience. Gilbert, who describes himself as “a devout Mormon,” said there has been “a world-wide diaspora (of the faith) and that gives us a chance for a world-wide audience — 60 percent of the traffic is not Utah-based.”
That prompts content that “is more thoughtful, more global” than just local breaking news. “We don’t want to be normal,” he continued, citing, as an example, coverage of church relief projects “improving people’s lives” after the Haiti earthquake.
Gilbert was never purely an ivory tower academic, nor was he plucked straight from the classroom for his executive role at Deseret. His credits including co-authorship of the Newspaper Next study for the American Press Institute in 2006 and service on several newspaper company boards including those of Deseret businesses. He moved west from Cambridge several years ago to direct online and distance learning programs at Brigham Young University-Idaho.
Though he came to the Deseret post with a game plan to build audience and revenues, Gilbert concedes he has learned an unexpected thing or three in his months at the helm.
“The separate structure works, but you also need to integrate as you can,” bringing the traditional sales force on board, for example. “Knitting [digital businesses] back in is critical, and we are ending up working the boundary like crazy.” Other lessons: “Execution is critical; good strategy will get you 49 percent of the way at best. Only special people make a special business.”
Next up will be re-engineering the Deseret News, which despite better-than-the-norm circulation performance, is in the unenviable position of being the smaller paper in a Joint Operating Agreement. “JOA’s are under lots of pressure,” Gilbert said. “Fortunately we have a very good partner [MediaNews's Salt Lake Tribune] or we could be in a lot of trouble.”
With the News readers overwhelmingly Mormon and The Salt Lake Tribune’s audience non-Mormon, Gilbert agreed with my suggestion that the JOA’s purpose of maintaining two viewpoints is a better fit than in the many cities where the arrangements have failed, most recently Denver and Seattle.
While big changes are in the works for later this year at the paper, Gilbert was reluctant to say much except that cost management and elimination of some “inessentials” would be part of the plan.
Generally, he faults newspaper organizations for trying to increase the value of news content to match their cost structure rather than paring back to an affordable set of basics.
“There never was a great business model for news content,” Gilbert added. During the good old days of 25 percent margins, expensive news operations were subsidized by newspapers’ quasi-monopoly hold on the classifieds business, now largely dispersed to assorted digital competitors.
Gilbert does not advocate substituting cheap generic content for news, but he is an admirer of Huffington Post, both for its robust traffic and ability to get “motivated contributors” to write for free in a congenial environment. He thinks the Deseret site and newspaper can tap into that sort of content from church members in various professional fields and remote locations.
Along with consultant Gordon Borrell, Gilbert believes that newspaper organizations have too often settled for the obvious overlap of newspaper and online ad bases, while hanging back on other big opportunities in local digital. He whips out a drawing of the first steam-powered automobile — comically designed just like a stage coach with passengers in the carriage and a driver outside in a little seat facing forward. That’s the sort of thinking you get when you try to develop disruptive enterprises from the perspective of a long-established incumbent.
Gilbert argued that newspapers were ripe for disruption in his doctoral thesis at Harvard in the late 1990s. The industry — often as not — listened politely and then ignored his academic work and never fully embraced in practice the Newspaper Next approach (identify “jobs to be done” in a community and create “good enough” lower-cost products). But Gilbert doesn’t see himself as a voice in the wilderness, the only smart guy around. “Belo is doing great things in Dallas,” he said; “So is Chris Hendricks at McClatchy.”
But he agrees with Borrell that the newspaper industry’s revenue prospects are “two years of flat to slightly positive, then long-term decline.” That argues for making digital the growth engine, rather than a side business, very quickly, as Gilbert is attempting to do in Salt Lake City.