Legacy Media Companies: A 3-Box Approach to Reinvention

The industry is caught in the crosshairs of a tectonic shift from legacy media that remain the dominant revenue generators to techenhanced media and marketing resources which offer innovative but often untested opportunitiesMedia consumption is increasingly personalized with concentrated realtime mass audiences disappearing and new consumption dynamics emergingBusiness is more dependent than ever on data intelligence and analytics which combined with media fractionalization result in new measures of performance and currencyFundamental shifts in consumer behavior are resulting in declining relevance to purchase decisions of historic brand equityBuying decisions are more wellresearched and also more shortterm resulting in consumers being less influenced by traditional advertising campaigns and marketing programsIs More and Better Data Management the Solution for Future GrowthCompanies are responding to these new realities but successful longterm strategies are not apparent even to the most astute visionaries The answers and the most imperative solutions lie in projectable data and new futurelooking insights gleaned from artificial intelligence and computer learning But better data management alone is insufficient to guide decisionmaking Marketers media companies and agencies must fundamentally redesign their business models for the future ecosystem while acknowledging organizationally that the status quo continues to drive the majority of current revenues as proven by this year39s national television Upfront marketSo how do companies foster innovation and become more nimbly responsive to rapid fire industry disruption The Harvard Business Review offers a solution in a 2011 article by Katherine Bell The ThreeBox Approach to Business Model Reinvention Putting the Idea into Practice A more detailed guide to follow for senior management is provided in another HBR article The CEO39s Role in Business Model ReinventionDefining Your Personal Business PrioritiesThe article provides a template see below for identifying a company39s strategic direction In simple terms take out a piece of paper and write down the three most important strategic responsibilities you personally are responsible for performing in your current business role in the next 12 month Then review them in the context of the below graph and identify whether each goal is focusedon current business requirements is measured by established metrics and analytics and is perfectly aligned with organizational imperativesis focused on overcoming destructive forces impacting on business growth anticipates future trends is measured against future expectations and while not perfectly aligned within the corporation is clearly identified as a strategic needis experimental nontraditional has no performance measure other than breaking out of traditional models and operates within an independently managed and directed group within the organizationIf every executive in a legacy company were to complete this easy task results would naturally be predominantly focused on Box 1 which reflects the vast majority of the media industry and is the driving force behind analytically and metrics guided decisionmaking Let39s say 70 of a strong company should be centrally organized around Box 1 work About 20 should be focused on overcoming destructive forces with 10 focused on experimentation operating outside of the daytoday business organization not subject to established performance measures and designed to develop new businesses than may take as many as five or even ten years to scale to meaningful revenues and profitsBased on MyersBizNet assessments and business model experiments conducted over the past three decades today39s leading legacy media and advertising businesses invest an average 85 to 95 of organizational and strategic investments on Box 1 activities amp8211 ie operating within legacy business models legacy performance metrics and legacy organizational structuresWhile the average invested by media and advertising companies in Box 2 strategic resources is less than 10 progressive media and advertising companies should be investing 10 to 20 of their organizational resources on responses to external threats primarily technological advances amp8211 that are disrupting legacy models and organizations These initiatives typically focus on building digital businessline extensions that can ultimately be integrated into the legacy business ecosystem Within media and advertising content marketing branded entertainment OTT distribution social media extensions and investment new research tools would be defined as Box 2 initiativesCompanies should be committing as much as 10 to 15 of organizational resources and focus into Box 3 experimentation innovation and literally outoftheorganizationbox initiatives The typical media and advertising company invests only 0 to 5 on initiatives that are longterm are not required to deliver results based on legacy performance standards and are not required to operate within legacy hierarchical organizationsAs legacy companies across all business categories seek to attract young people to their organizations they will find it nearly impossible to compete with entrepreneurially spirited companies that are reverse engineered with 70 to 80 of their organizations focused on innovation and a longterm business model These companies are typically creating disruption of traditional businesses and can operate with only a fraction of their organization pursuing shortterm revenues via legacy business models and even then they are typically heavily dependent on innovation to compete effectivelyThat39s the conundrum facing large legacy media companies and agencies how do you compete when current business models will be obsolete or radically altered within a decade and when the vast majority of revenues now and into the midterm future require that most of your organizational resources and strategic priorities remain dedicated to and embedded within legacy models The answer must be to reallocate funding and invest in teams focused exclusively on experimentation and creation of new business models performance metrics and operational structuresamp160The ThreeBox Approach to Business Model ReinventionSource Harvard Business Review The CEO39s Role in Business Reinvention

REQUEST A FREE AD SALES MARKETING EFFECTIVENESS AUDIT

Legacy Media Companies: A 3-Box Approach to Reinvention

Author

Publish date

Channel

Jack Myers

"About That with Carl Mayer": Involved Media Connected Audience Fall 2024 Report (Episode 5) - By Carl Mayer

More Videos:

REQUEST A FREE AD SALES MARKETING EFFECTIVENESS AUDIT

Legacy Media Companies: A 3-Box Approach to Reinvention

Enjoying This Commentary? There's More to Love

Jack Myers

"About That with Carl Mayer": Involved Media Connected Audience Fall 2024 Report (Episode 5) - By Carl Mayer

Cookies