Archives For Change Management

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This is the final post in a series about the key pivots our company has made in the past few years. In part 1, I discussed our first major pivot: the decision to begin producing and owning our own content. That pivot led to the creation of our Milestone Documents series of reference books. In part 2, I explained our decision to wind down our reference publishing and focus instead on reaching educators and students directly via MilestoneDocuments.com. We spent the last half of 2010 redesigning the site, switching to a subscription model, and gearing up for a late 2010 launch. Alas, by the time of the launch, yet another pivot was practically begging to be made. This is the story of that pivot, which turned out to be critical.

The Adoption Model

Over the course of the fall of 2010, while working with our designers and developers on version 2.0 of our site, we began to mull over the possibility of marketing our site directly to college history professors as a textbook replacement. At first, it seemed a distant possibility. However, we decided to poll some of the scholars who had written our expert commentary to ask them whether they might use and assign a site such as ours to their classes.

To our surprise, a fair number of these historians responded positively to our inquiry. They loved the idea of having a large number of primary source documents to choose from, they liked the all-digital paradigm, and they were in favor of anything that might reduce their students’ textbook costs, which had soared to $100 apiece and beyond. We quickly settled on an approach in which we would give away the site to all students whose professors assigned it for the first semester. The idea was to let professors try it out with their students risk-free, and then—presuming the professors (and students) were pleased with the service—begin charging students a fee of $50/semester thereafter. At that level, we reasoned, the site would still offer a tremendous savings over a traditional textbook.

We quickly made plans to attend the American Historical Association annual convention in Boston in January 2011, where with very little notice we would attempt to launch our new adoption campaign to professors attending the conference. We had a large banner printed that said “Ditch the Textbook,” and we set up a couple of tables with computers on them.

Making a Splash

It’s hard to describe what an outlier our little booth was at that first convention. Amidst a sea of booths filled with books, ours was a spartan square devoid of “stuff”: no books, no brochures, just me and Andrea Betts with our computers and a cheeky, slightly outrageous banner that drew stares, guffaws, and occasionally even hostile responses from attendees (“I’m not ditching my textbook. I WROTE the textbook!”). However, more typical were the warm greetings, serious interest, and outright praise (“This is great. You are the future!”). We signed up a number of professors for semester trials that spring, and we made connections with many others who would later on become loyal customers.

Settling In for the Long Haul

By the end of that first semester, we knew we had a product that could succeed. Surveys of the professors and students using the site were almost uniformly positive. Most of our professors signed up to continue using the site in the fall term. At the same time, however, we realized that we had launched the site in a form that was not quite ready for prime time. It lacked any central organizing place where professors could interact with and direct their students. Our coverage in certain key areas was lackluster. The site didn’t offer professors enough flexibility in choosing which elements to assign to students.

And, very importantly, we realized that our price point was too high. Sure, $50 might be a bargain to students used to having to pay $100 or more for a textbook. But a number of our professors confessed that they preferred to assign our site not as a replacement to their traditional textbooks but as a companion to it. In those scenarios, we were making the crisis of expensive textbooks even worse.

Course Corrections

What has followed in the wake of that first semester more than a year ago is a series of course corrections. We added unique home pages for every class using the site. We added tons of new documents and new controls for professors. Finally, we dropped the price to $19.95 per semester.

These actions are not additional “pivots” in my mind but something less radical. Every business, especially an upstart like ours that is pioneering a new approach in a digital format, has to make constant improvements and enhancements to find the sweet spot where customers (professors) and users (students) alike are thrilled with the service and loyal to it. That’s exactly what we’ve done. And while we are still working hard to find our way to that elusive sweet spot, we are getting closer every day.

So what’s ahead for our service? Are there additional pivots in store? One should never say never, but my guess is that we have only just now joined the battle, and it took those 3 initial pivots to find the battlefield. Our service has matured to the point where it is a viable choice for a sizable and growing number of educators—not only at the college level but also at the high school level—and our challenge is to do the hard work of telling our story, reaching out to customers, and making our product ever better. First came the pivots, laying the foundation. Now comes the execution, building upward toward the sky.

 

This is the second post in a series about the key pivots our company has made in the past few years. In part 1, I discussed our first major pivot: the decision to begin producing and owning our own content. That pivot led to the creation of our Milestone Documents series of reference books. We had a great time producing those sets, and they were well received by critics and customers alike. And yet, a couple of years into that effort, some clouds began to appear on the horizon.

Hat tip to our managing editor Ben Painter for finding the video clip. I suppose I play the part of Ross, only shorter and with no hair.

Recession Times

In 2010, on a rainy evening in Ann Arbor, Michigan, Andrea Betts (our former vice president) and I convened a gathering of informal advisers and friends, all veterans of the reference industry, to help us brainstorm about the future of our Milestone Documents product line. The talk naturally settled on the troubled state of the library market. It had been hit hard by the recession, and many of us had begun to think that in an era of chronic public funding shortages, it might never recover. One person in the group made a startling pronouncement:

“If I were you, I would spend at least 10% of my time thinking what we would do if the library reference market disappeared altogether.”

As we had only just begun our drive to build a business as a full-fledged reference publisher, this was sobering indeed. And yet the notion struck a chord on a couple of levels. First, it was clear that the market WAS under severe pressure and that the trouble might be not merely long-lasting but indeed permanent. Second, we faced a practical dilemma familiar to many small businesses: Go big or go home. That is, in order to increase our profile in the marketplace and make a larger splash, we needed to invest substantial funds not just in new products but also in new marketing and advertising efforts.

What Do We Want Our Company to Be?

The issue of where to invest our limited funds dovetailed with another dilemma: Leaving aside the troubled market, did we even want to be a reference publisher in the long run? Having created a cohesive body of content around a topic that we excelled at and loved, not just collectively as a company but individually as well (my own college degree was in history), did we really want to reinvent the wheel repeatedly for new products on new topics? That, after all, is standard procedure for reference publishers.

The full answer revealed itself only much later. But even at that time, we made the conscious decision not to abandon the brand we had worked so hard to build (Milestone Documents) but instead to double-down on a side experiment we had begun in 2008, around the time our first reference set was published: selling our content directly to individual students and educators via the Web, as opposed to reaching them through an institutional middleman (the library).

MilestoneDocuments.com

From the beginning of our Milestone Documents content effort, we knew we wanted to dip our toes into the direct-to-consumer market. Thus, in early 2008, we hired a web developer to create a simple e-commerce site where students and teachers could purchase our content by the article for a few dollars each. We thought we might see incremental revenue from this effort, and we wanted to experiment with a paradigm that others in our industry were talking about but hardly anyone was doing. For our part, we had nothing to lose by experimenting.

By 2010, when we were seriously questioning whether to continue as a reference publisher, we knew there was a market for our content via the direct-consumer model. But we didn’t really know how big that market was. Our Web sales had been extremely modest, but at the same time our site was very rudimentary, and we had done no outreach whatsoever. Also, most of our content was not yet on the site; we hadn’t yet added the content from our other sets that had subsequently been published. We felt that we hadn’t really given the direct model a fair shake.

In the end, faced with investing in a new reference set or giving our direct model a more serious chance to succeed, we decided on the latter route. It was perhaps a riskier move, but we were increasingly convinced that it was the only viable long-term strategy. If the library market was in permanent decline, we obviously had to move quickly into another market.

In the last half of 2010, we hired a new design firm to overhaul the look and functionality of the site and a new development firm to beef up the back end. And we made another crucial decision: We would switch the site from a per-article sales model to a subscription one built around monthly or annual plans.

MilestoneDocuments.com 2.0 was launched in December 2010. And the rest, as they say, is history. Right?

Not so fast. By the time of the 2.0 launch, we had yet another pivot staring us in the face, daring us to reconsider our strategy yet again. Did we have the energy to pivot once more? Did we have the resources? In the next installment, I’ll tell the story of pivot #3.

The concept of the “pivot” is trendy these days in the business world. According to Fast Company, Eric Ries (author of The Lean Startup) was the one who “made the term ‘pivot’ part of the business vernacular.” While the buzzword is a fairly recent phenomenon, the concept behind it of course is nothing new. Businesses have been changing directions to better succeed as long as there have been businesses.

In looking back at our own history, I can pinpoint three key moments at which we changed course. In some cases these actions don’t fulfill Ries’s strict definition of a “pivot” (“a change in strategy without a change in vision”), but nonetheless I think they form part of our overall trajectory as a business. Since I always enjoy reading the histories of other small businesses, I thought I would tell our story and provide one more model for other entrepreneurs out there to consider. Herewith, the original pivot of my company.

The Early Years

In our first decade as a company, we did one thing and did it well: we produced books and database projects for other publishers. When I founded the company in 1997, outsourcing was just coming into vogue in our part of the industry (reference publishing). Our timing was right, and in the ensuing 10 years we built a nice little business. Publishers hired us because they knew we would produce work of high quality, on time and on budget and with a minimum of fuss. For several years I operated solo, seeking help among freelancers and scholars on a project-by-project basis as needed. In 2002 I hired my first full-time employee, and by 2007 we had grown to a staff of six.

Own What You Do

As gratifying as it was to see my company grow and thrive in this arena, as the years passed I gradually felt more uncomfortable and anxious about our future. The reason was simple: when you are a hired gun, your future is not in your hands. I knew that the same publishers who had hired us—and who had been pleased with the work we created for them—could at any point stop calling us. They could hire other firms, they could bring the work in house, they could go out of business. It became clear that we had to find some way to start creating our own content—something that we would own and control. Only then could we hope to one day control our own destiny. Thus, we began to sketch out some possibilities for the kind of content we might develop.

The real pivot was made possible by a somewhat lucky turn of events. A publisher approached us about any ideas we might have for new projects, and we realized that here was our chance. In short order, we reached an agreement for a series of reference sets to be developed and published under our own imprint but distributed and marketed by this new partner—one that had an existing sales and marketing infrastructure and an existing customer base of libraries around the country. For the first time, we would be responsible for creating and producing our own books, and in return we would own the copyright and a substantial portion of the revenues.

Thus was born our Milestone Documents series of reference sets. Over the next 4 years, we would publish 5 multivolume sets in this series, each set garnering rave reviews and awards. And yet, as you’ll see in my next post, our journey was only beginning. As tends to happen in any journey, we encountered bumps in the road. Unforeseen market forces complicated our plans, and that nagging and anxious feeling returned. It was soon time for another pivot.

I saw recently that Malcolm Gladwell’s next book is going to be about underdogs. In this interview at the New Yorker’s website, he talks about some examples from his forthcoming work: a girls’ basketball team, a cancer researcher, the Impressionist painters. One of the points he makes is that underdogs can win only with the right combination of effort plus strategy. Effort alone won’t cut it.

In the business world, one of the key factors in any underdog’s success (or lack thereof) is the general state of the industry in question. There are plenty of industries where the barriers to entry are so high, and the market so mature, that it’s difficult for underdogs to compete. However, there are many others that are experiencing some measure of upheaval. Consider publishing, for example. In an interview at Digital Book World about book publishing and e-books in particular, Kobo executive Michael Tamblyn made this observation:

When industries are stable and things are ticking along steadily, industries tend to be dominated by insiders; you have to grow up in it and pay your dues. During times of upheaval is when outsiders get in, when start-ups get in, when innovators get their shot.

Disruption in Education

Or consider the higher education market, which is abuzz these days with talk about MOOCs (Massive Open Online Courses). Several entities have formed to offer new online courses in this area (Coursera, EdX, Udacity), and they include some of the most famous universities in the country. Despite the lack of any clear business model or any evidence that online learning is as good as (or superior to) traditional classroom learning, huge amounts of investment money are being poured into this marketplace. It’s like a modern-day gold rush, only no gold has been found. A good many people had a chuckle about this remark in a New York Times article about Coursera’s latest expansion announcement:

Coursera does not pay the universities, and the universities do not pay Coursera, but both incur substantial costs.

So in other words, it’s a win-win situation! Obviously, these new online players are making a bet that a revenue model will be found at some point. And maybe they are right. If they are, then MOOCs will indeed prove to be enormously disrupting to many organizations in the higher ed field. In this case, the disruption may lead to a consolidation of power at elite universities at the expense of the rest, a point made by Mills Kelly of George Mason University.

Looking for an Edge

Like every other company that services the higher ed market, we are watching these developments closely and wondering how they might affect us. And there is no doubt that for a small upstart like our Milestone Documents service, online education represents a significant opportunity. I say this even though personally I’m quite skeptical about online learning. We didn’t design Milestone Documents specifically for online learning (and most of our customers use us in a traditional classroom setting), but it happens to be perfectly suited to an online environment. At the same time, the competition will be fierce, from the established heavyweights at the top to other upstarts at the bottom. A market in the midst of change may open up spaces for small innovators, but the journey is still long and difficult.

What about your market? If you’re an underdog in your industry, how do you succeed? What’s your strategy for changing the rules of the game so that it tilts in your favor? These are the questions that a lot of us in the higher education industry—companies and institutions alike—will be working on in the next few years.

In the business world, “change” is a hallowed term. If your business isn’t constantly assessing the changing market and figuring out ways to adapt, it will be in trouble. As a business owner, I understand this well. Like most owners, I have long since grown accustomed to not just adapting to a changing marketplace but also figuring out ways to disrupt it, to heap more change upon it.

In our industry (educational publishing), for example, plenty of companies and nonprofit organizations have looked at the dynamics of the traditional academic textbook model—particularly as it relates to pricing—and decided that it was sorely in need of having some change foisted upon it. I referred to this in my recent post “Competing on Price.” 

Size Matters

Small companies have an advantage here over big ones: they can pivot quickly, turning on a dime to take advantage of a new opportunity or to fine-tune the path they are following. Still, this capability carries a large risk: small businesses must take care not to change too quickly, not to act too impulsively. If your company, like mine, operates in an industry undergoing major upheaval, this is a very real danger. Making sure you install some checks on your decision-making process is critical.

At big companies, the challenge is the reverse: turning the ship around takes time, skill, and finesse. Leaders must convince staff throughout the organization that change is not only important but, indeed, essential, and they must provide a vision for executing that change in a way that doesn’t threaten the existing business. To my mind, one of the most fascinating experiments going on right now in the corporate world is taking place at JC Penney, where former Apple exec Ron Johnson is trying to overhaul this large retailer from the ground up. It has not been a smooth ride so far, to no one’s surprise. Have they moved too quickly on some changes? Can they survive the rough road ahead and reposition themselves on the retailing landscape? It will be interesting to watch.

Not Everything Is a Business

What about educational and governmental institutions? One hallmark of our times, at least in the United States, is our mania for infusing “business thinking” into organizations that are not businesses. Certainly, there are many who advocate for this approach, and not surprisingly many who do are business leaders themselves. But failing to consider the different missions of a business and an educational institution can jeopardize any effort at change.

Consider the recent fiasco at the University of Virginia. A minority of the governing board, all of them business leaders, decided that the university was not changing fast enough and that the university president, Teresa Sullivan, was the one responsible for putting the brakes on. So they fired her, only to encounter such vehement pushback from faculty and alumni that they had to back down and reinstate her. Not only did the board not account for the other stakeholders in their organization (thus mistaking their university for a business, where top-down decision-making is more acceptable), but they also appear to have reacted too impulsively to various well-hyped changes taking place in the educational industry. The juxtaposition of Sullivan’s measured approach to change and the governing board’s reckless follies would make for a great business school case study.

Managing Change

Managing change successfully is one of the biggest challenges for any leader, whether in business or some other sphere. I’ve certainly made plenty of mistakes in this arena. As a result, I think the smartest approach to change management is to keep your skeptic’s hat on at all times. When considering a new course of action, here are some good questions to ask yourself:

  1. Is this change really necessary?
  2. Will it benefit our customers?
  3. How do I successfully persuade our organization’s stakeholders to get on board with this change?
  4. What are the potential risks of action and nonaction?