One the things that makes the current state of the music and newspaper industries so frustrating is that there are many steps that could have been taken to prevent these outcomes. It was not inevitable that their business models had to be destroyed by the internet. One of the questions that came up in the last meeting of the Brisbane Innovation Network was ‘how do you sell innovation internally if things are going pretty well for your company?’ I’ve thought about this a fair bit since that meeting, and I think that part of the answer is to extend your planning horizon.
The point that was being made is that his firm is in a stable industry, they’re doing well right now, and things are looking good into the future as well. So why do they need to innovate? I think that if there is not an especially strong incentive to innovate now, that makes it a pretty good time to start thinking about what is going to make your industry or firm obsolete. As Clay Shirky dicusses in an outstanding essay on the current state of play for the newspaper industry, there was a time when things seemed pretty stable in that industry as well. Consequently, none of the major players seemed equipped to adapt when things started to change. Shirky outlines how in many cases people simply refused to believe that change could occur. I think this holds lessons for firms in industries that seem stable now. Don Tapscott suggests that higher education may well be facing a similar situation soon, and there are probably plenty of other firms and industries that should be thinking about these questions sooner rather than later.
So what should you do? Steven Johnson gave a speech at SXSW the same day that Shirky’s post appeared, and he has some excellent suggestions. He talks about ways in which the industry might evolve, and where the opportunities may lie. He focuses on how a disntermediated news industry might look, and stresses the idea that there will be opportunities to develop new profitable business models in several of these areas. There’s no reason that newspapers can’t take advantage of these opportunities themselves – in fact, in many areas they still have built-in advantages. Johnson may well have the beginnings of a general model of information-based industries making a transition into the digital age.
In light of all of this, my answer to the original question is: if things seem good now, then it’s time to start planning for whatever it is that will put you out of business. All innovations that fuel economic growth and change at their most basic level are information. We’re seeing more and more examples of what happens when it becomes easier to make and share digital copies of information. It’s time to learn from the experience of the newspaper industry. Instead of insisting that things will be different for you, it will be much more useful to ask ‘how can this work for me?’