If we were starting today, would we do this? A perfect question to ask for business model innovation from journalist Jason Fry in a recent post (hat tip to Mark Coddington). Fry looks at some of the issues facing newspapers these days, and decides that the entire model needs to be rebuilt from scratch. I think he’s right, but the issue illustrates why it is often so difficult for established industries to react to disruptive innovations. Here is his final conclusion:

Why didn’t we change? Journalists are masters at filtering, synthesizing and presenting information, yet we’ve spent more than a decade repurposing a 19th-century form of specialized storytelling instead of starting fresh with the possibilities of a new medium. Newspapers could have been Wikipedia, instead of being left to try and learn from it. And what are we learning? The news article is in some fundamental ways just as broken as the game story — if it weren’t, Jimmy Wales wouldn’t see a surge of traffic to Wikipedia in the wake of any big news event. We need to rethink the basics: If we were starting today, would we do this? But when will we unshackle ourselves from print and really ask the question? And at what point will the answer come too late to matter?

The problem is path dependence – it is very difficult to act like you are starting over again today. You already have people, processes and structures in place, and all of them have to change if your answer to that question is no. That is painful for everyone, and it is one of the reasons that organisations end up fighting rearguard actions that look insane from the outside – such as the American Booksellers Association arguing that selling books for cheap is bad for consumers. That strategy will never work, but it is easier than asking Fry’s question – if we were starting today, would we do this?

The problem that we face is that there are competitors starting today. And they don’t have to do things the way that you do. In fact, if they’re innovative at all, they definitely will do things differently. So you better be asking that question too, and acting if your answer is no.