In a riches-to-rags odyssey, Newsweek magazine's management took a $30 million-a-year winner and turned it into a $30 million dollar-a-year loser -- in just 2 years! Now, it just sold that loser, reportedly for a one dollar bill.
What could have produced such devastating results? Newsweek tried to "reinvent" itself. I did an analysis of that process, which appears in the July 2010 issue of STRAT newsletter. You can see it at www.stratnewsletter.com.
But what in the world was management thinking? And indeed where was Newsweek's publishing consultant, if in fact they actually had any competent outside help?
Newsweek's plight is a good example of the pitfalls of do-it-yourself reengineering. The skill set required for the day-to-day operation of a magazine and that for designing and orchestrating significant change are quite different. An experienced agent of change can draw upon experience with many publications and bring a fresh new perspective to the table. The insight of the day-to-day managers is, of course, also essential. But, with a strictly in-house job, thinking can become quite incestuous and off the mark. Maybe Newsweek had outside help from a yes-man or yes-woman. That can even compound the problem.
There's one benefit from Newsweek's failure: It is a lesson to us all on what not to do. My STRAT article sums up the lesson, and explains in detail what went wrong.