Predicting Failure: Pot Calls Kettle Black and Blue

January 2, 2012

Fascinating is traditional media’s ability to attack a hopelessly confused big corporation for a failure. The failure documented by the New York Times was Hewlett Packard’s immolation of its mobile strategy. The outfit doing the criticizing—what I call the pot calling the kettle gray lady black and blue—is the New York Times. Ah, irony.

Which is more flawed? The management of HP or the management of the New York Times. Let me try to remember. The New York Times lost its top manager and its head of digital stuff. The home delivery rate is nudging close to $700 a year. The Safari loophole makes its digital content free. The company has muffed the bunny with its indexing, its property, and just about every financial knob and dial setting available.

HP, on the other hand, has engaged in improper behavior, the CEO revolving door game, the tablet fiasco, and the open sourcing of a $1.0 billion plus investment. HP bought Autonomy for $10 billion, creating a mini cash concern for some Wall Street types.

Sounds like a pretty even game of management

Now to the business at hand: “In Flop of H.P. TouchPad, an Object Lesson for the Tech Sector.” (If the link goes dead, just use Safari. Access to NYT content seems to be “free”. Nifty, eh? What is the New York Times suggesting? For me, the write up is more about the New York Times itself than about Hewlett Packard. Three points:

  1. HP created a flop due to various management mistakes. Okay, sounds like the NYT’s problem
  2. HP had a good idea but it “was ahead of its time”. Right. The NYT had a deal with LexisNexis which worked pretty well, but not well enough. So the NYT decided it could go it alone. It was, as the NYT says, “ahead of its time.” No kidding.
  3. HP faced a problem with newcomers who dominated a market. Check. Same with the NYT and its various digital efforts. Being good at one thing does not mean that one if good at another thing.

My take? The NYT is trying to be just like the Harvard Business Review, adding value to what is not even a news story any longer. Going down this path ignores some of the basics of creating high value business and management analysis. The information is not what makes money. It is the other revenue streams. The NYT will learn as Time and Newsweek have that trying to up one’s intellectual game does not automatically make the money flow or the analysis insightful. Business information is often a loss leader or a way to generate consulting revenue.

The write up does explain how the NYT sees the woes of other companies. That is indeed interesting. I wonder if the NYT team remembers its original online search service. I bet Jeff Pemberton does.

Stephen E Arnold, January 2, 2012

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