Reinventing the national geographic society

Reinventing the National Geographic SocietyPublished: April 4, 2011Author: Sean SilverthorneComments19E-MailPrintDownloadShareExecutive Summary:How do you transform a 123-year-old cultural icon and prepare it for the digital world? Slowly, as a new case on theNational Geographic Society by professor DavidGarvindemonstrates. Key concepts include:Practitioners need to understand the power of the history of their own organizations in order to effect change.Making transformational changes at the National Geographic Society involved pulling management levers to alter a deeply ingrained culture, develop new organizationalcapabilities, and design a compensation structure aligned with new values.A one-size-fits-all approach to management doesnt work. General managers encountering similar problems in different organizations may need different solutions to solve them.About Faculty in this Article:David A. Garvin is the C. Roland Christensen Professor of Business Administration at Harvard Business School.More Working Knowledge from David A. GarvinDavid A. Garvin - FacultyResearchTeaching a case study on the National Geographic Society for the first time, HBS professor David A. Garvin walks out to the middle of the horseshoe-shapedclassroom and asks his students, "How many of you have familiarity with National Geographic magazine?"Nearly all 72 students, many from foreign countries, raise their hand. "What do you associate with it?" The yellow border, answers one. Others note the stunningphotography, detailed maps, and magazines piled up all around the house.A few minutes later National Geographic CEO John Fahey is addressing the class, and recalls the remark about magazine piles. "That has come back to haunt us,"Fahey says. "People today dont want clutter." It turns out that many things that made National Geographic one of the worlds top brands during its 123 years are obstacles to overcome. Like many other printpublications, National Geographics subscription revenue has declined significantly, from $284 million in 1999 to $211 million in 2009. The value of becoming a memberof the Society, once a matter of prestige, has eroded. The institution has made large bets on various forms of media—Internet, movies, TV, cable programming—but isstill trying to figure out the best strategy for integrating them. Despite repeated structural changes, employees still operate in silos.In short, the National Geographic case is fertile learning ground for managers. Its lessons address transforming the culture, behaviors, and values of a legacyorganization, changing a business model from paper to digital, capitalizing on huge brand awareness and international presence, and promoting cross-functional andcross-divisional collaboration.Increasing geographic knowledgeFounded in 1888 as an educational and scientific society with a mission "to increase and diffuse geographic knowledge," the National Geographic Society (NGS) soonlaunched a scholarly journal, National Geographic Magazine. Using revenues secured from members, the Society supported many groundbreaking scientificadventures—Dian Fosseys 18-year study of mountain gorillas in Rwanda, for one—filling in the empty spots on the worlds map as it went along.But when Fahey arrived to head the National Geographic Ventures unit in 1996, the institution was in decline. Decision-making was slow and fusty. A digital strategywas just emerging. Various units operated as independent fiefdoms. In 1998, Fahey was named CEO, and the task was clear: build an organization to thrive for thenext 100 years. To do so, he "assembled a management team of diverse backgrounds to transform the Societys culture and organization, fostering more risk-taking, agreater focus on commercial activities, and more cross-departmental collaboration," notes the case, cowritten by Garvin and Carin-Isabel Knoop, executive director ofHBSs Global Research Group.The story especially appealed to Garvin because he had profiled Fahey in an earlier case study in 1994 when Fahey was CEO of Time Life, ironically facing many ofthe same challenges with earlier generations of media and technology. Fifteen years later it was an opportunity to observe an elite general manager at work in acompletely different organization, to see how his thinking and management style had changed or stayed the same.Slow to changeWhen Garvin and Knoop flew to NGS headquarters in Washington D.C., in the summer of 2009, Fahey was heading what appeared to be a steady but slow-motionrevolution. His effort to rebuild the organization for the digital era was now more than a decade old, with some notable successes—a new mission in 2004, areorganization in 2007—but with unresolved problems. Fahey says his leisurely pace of change was deliberate, that creative people take longer to accept change.However, "Hes been at it 12 years, and peoples first loyalty is still to their silos," Garvin observes. The case encourages students to put themselves in his place. Is Fahey moving too slowly? Does he have the right people in the right positions? Is the new mission—"to inspire people to care about the planet"—the right one? How does the situation facing Fahey at National Geographic compare with the challenges at Time Life? Ishe taking the right steps to destroy silos and integrate the organization?But the case actually hangs around another question. Fahey created a position of senior vice president, e-commerce. Its a pivotal and, for NGS, radical step. Theposition will be responsible for coordinating web-based offerings and outreach across the Societys numerous departments, integrating several direct-mail efforts into acohesive e-commerce strategy, and leveraging the NGS relationship with subscribers. The students are asked the same question Fahey debated with his team: to whom should thisperson report? To Fahey himself, signaling the importance of the role? To the Global Media Group, which is responsible for the magazine, book publishing, TV and film,and digital ventures? Or to the Enterprise Group, which operates the Societys merchandising businesses, brand extensions, and licensed products and services?"This issue appears to be pretty straightforward—its just a reporting issue," says Garvin. "In fact it embeds the larger issue of who is going to control the integratedaspects of e-commerce, and what authorities and what decision rights that person will have relative to the existing divisions."With Fahey listening on, the students dive in. The first few think the position should report to the CEO. "The easy out is to say John Fahey should be the direct report,"Garvin says later in his office. "But Fahey already has 14 direct reports. And do you always want a centralized position to report to the CEO?" Maybe reporting toGlobal Media makes sense, one student suggests, if the position is considered functional rather than strategic.The decision revealedWhen Fahey steps in front of the class he reveals his decision, which was made after the case was written. The position reports to the Enterprise Group, the alternativehardly mentioned by students. If the person reported to Global Media, he says, pressure on the new e-commerce senior VP would have been immense from thevarious units—magazines, catalogues, and expeditions—to push their products. Instead, Fahey wanted someone to think holistically about NGSs offerings and howbest to approach customers and sell them what they want to buy.Many of the cases taught at HBS involve a visit from the case "protagonist." There are pluses and minuses, says Garvin. The minuses are that students can be mutedin their criticisms and concerns, a situation he saw teaching "National Geographic." But the good far outweighs the bad. "They got to hear how Fahey thinks and how he addresses the problem," Garvin says. "Fahey is a highly skilled general manager. He thinks like a generalist. Hefocuses on integration and how to make it a reality. They need to hear him in action, how he responds to their questions. What levers is he pulling? Where is hepushing? How is he assembling the pieces into a whole? Where is he drawing lines?"Lessons for practitionersJust as the case is rich in lessons for students, it is also instructive for practitioners."The first relatively straightforward lesson is how difficult it is to move beyond your historical culture and legacy," Garvin continues. "History has power. Faulkner writesin Requiem for a Nun, The past is never dead. Its not even past. Old ways of thinking and acting are deeply embedded and slow to change. So practitioners need tounderstand the powerful influence of the history of their own organizations."Other lessons include the importance of getting the organizational culture right, and the need to pull multiple levers when pursuing integration. "There is anorganizational structure lever Fahey pulls when he reorganizes. There is a culture and values lever—he changes what behaviors are valued in the system as theymove from silos to collaboration. There is a people lever; you often have to change personnel. And there is an incentive lever where you change the compensationstructure. All of those need to be done in a mutually reinforcing fashion."Finally, combining the Time Life and National Geographic cases offers a unique view of how a manager evolves over time. "If you teach the cases together it showsstudents both how a general managers style evolves and how it stays very much the same. And practitioners need to recognize that 20 years out, in a differentorganization, perhaps their natural tendency when faced with problem X again is to do Y, but maybe problem X is a little different in this organization and this contextthan the other one. So maybe this time you dont do Y, you do Z."Garvin thinks Fahey is on the right track with his work at National Geographic. One big factor favoring the Society is that it has bought itself time thanks to a multiyearcable deal with Fox that is expected to net NGS $100 million in 2012."These kinds of changes take time, and they have time. Second, these kinds of changes require lots of experiments, not all of which will succeed. They are running lotsof experiments. Third, it requires a change in culture and values, and that change is well under way—I would say based on Faheys comments in class that thosechanges, including the necessary changes in people, have accelerated quite rapidly over the last year. Fourth, this is a world-class brand. And finally, as Fahey saidhimself, hes not sure they are the ones who are going to figure out what the right digital combination is, but surely because of their progress to date they will be in aposition to take advantage and exploit that opportunity when someone does figure it out."When he teaches the case in the future, Garvin says, he wants to up the volume on certain ingredients. For example, the ability for NGS to offer membershipbenefits—access to a research team in the field, for example—lifts the value proposition of the Society much higher than what competitors can offer. Another issue he wants students to explore is decision-making in an era of blinding technological speed, something Fahey didnt have to think as much about at TimeLife."The iPad basically didnt exist two years ago, and now its a core platform. Digital delivery of content to the cell phone didnt exist a few years ago, and now itseverywhere. You go six months, and its two generations. Thats something I would love to exploit in the future. Just what do these speed changes mean for how Faheyneeds to operate?"High quality global journalism requires investment. Please share this article with others using the link below, do not cut & paste thearticle. See our Ts&Cs and Copyright Policy for more detail. Email [email protected] to buy additionalrights. http://www.ft.com/cms/s/0/c114f762-cc0e-11df-bd28-00144feab49a.html#ixzz2M9qDr01GThe story: In the 1990s, IBM was struggling. The rise of Silicon Valley as a hotbed of innovation had created a perception thateverything innovative in the technology sector was created in small, high-growth companies. IBM, by contrast, was seen asoversized and decrepit.The challenge: The company was finding it hard to attract talented computer scientists and salespeople, who were instead going toSilicon Valley. Reversing the perception that IBM was not an innovative company became a priority for senior management.The solution: IBM decided to build BlueGene, a supercomputer. High-performance computers were used by meteorologists,security and intelligence analysts, particle physicists and geneticists. But in their efforts to push the boundaries of their respectivefields, they were constrained by the speed of the world’s fastest computers. IBM believed that if it could meet this demand, it wouldbe in a position to make a strong, symbolic statement about its prowess at innovation.MoreON THIS STORYPerson in the News Ginni RomettyIBM offers concessions to EU on mainframesBusinesses must act to make IT benefit older workersIBM buys Algorithmics for $387mIBM buys UK crime analytics company i2IN MANAGEMENTBanking’s handy revolutionDesign space Wilton’s safer sledgehammerYahoo sets the trend with home work banThe next problem can I end working from home?Impetus from the top: Lou Gerstner, chief executive, understood the power of symbols. In 1997, for example, the companygenerated a lot of attention by creating Deep Blue, a machine that defeated Garry Kasparov, the reigning world chess champion.In 1999, when the company was more stable but still struggling to attract talent, the most exciting field of scientific inquiry wasbiotechnology. Scientists were close to completing a map of the whole human genome.Rethink the model: Ambuj Goyal, head of computer science at IBM Research, led the project to create the first ―petaflop‖ computer.Computer speeds are measured in ―flops‖, floating point operations per second. At the time, the world’s fastest computers operatedat speeds of about 1,000bn flops. A petaflop was 1,000 times faster than a teraflop.To create a new machine, however, IBM had to abandon the existing paradigm for how to design supercomputers. Traditionally,advances in computational power came through increases in processor speed and sophistication. But faster processors consumedmore power. So, the company decided it needed to build a supercomputer while at the same time reducing the speed andcomplexity of the microprocessors. This had never been done before. Tell the world: Whether the company’s theory could be turned into reality was uncertain but Mr Gerstner and his PR team seizedon the opportunity to make their ambition public. IBM held a press conference in November 1999 to announce it would invest $100mover five years in a new machine, to be dubbed BlueGene.There was a shift in press coverage of the industry: a New York Times article, for example, declared that only an organisation ofIBM’s scale could assemble the expertise in computers, mathematics, biology, chemistry and physics to build such a machine.By September 2004, the company had surpassed its original ambition of creating the world’s fastest computer: BlueGene wasrunning with more than 8,000 chips and just over 36 teraflops.BlueGene did not break the petaflop barrier until 2007, but IBM was still able to get attention in 2004 by publicising its ambition.IBM expected the investment to signal a redoubled commitment to research that would in turn help recruit the world’s greatest minds– and it did. When asked about the project’s return on investment, Mr Goyal responded: ―BlueGene has attracted a number of theworld’s most talented graduate students to IBM. What’s the return on investment of that?‖Key lessons: First, IBM is defined by innovation and cutting edge technology. Attracting top talent requires understanding thepurpose of your company and fulfilling it better than anyone else.Second, IBM used disciplined experimentation, meaning it innovated in incremental steps and tested the progress at each stage. Inso doing, it was able to learn quickly, make good decisions and get better results at the least expense possible.