Earlier this week, Harvard Business School’s e-newsletter, Working Knowledge, interviewed former Random House CEO Peter Olson, who now teaches at HBS. At a time of significant changes in technologies and business models, Olson laments the inability of traditional publishers to develop direct relationships with readers, something he now values highly.
Around the time that Olson’s interview was posted, news broke that HarperCollins is folding HarperStudio, a two-year-old imprint, into the larger organization. It is not clear what will happen to HarperStudio’s innovative initiatives, including lower-advance signings, profit sharing with authors and an attempt to sell books under a “no-returns” policy.
Recently, I was part of an e-mail exchange questioning whether established businesses – larger trade publishers, for example – could truly foster innovation that potentially (or actually) undermined their business model. As a student of disruptive innovation, I answered, “It depends”.
It depends on things like culture, markets, reward systems, leadership, the perceived stability of the traditional model and the nature of the potentially disruptive change. That’s a healthy list, maybe even a long one, and it’s more than enough to justify saying “never say never.”
But reading Olson, I started to question myself. Where was this focus on readers when Olson ran Random House? Why couldn’t the largest U.S. publisher lead the way in reshaping the industry, if the way was so clear?
Parsing the news about HarperStudio, I had the same doubts. Did HarperCollins really expect to shift the business model in under two years?
Or did they find that the parent company’s scale was actually a liability when the time came to negotiate things like non-returnable sales? Certainly a retailer might be reluctant to support HarperStudio and give HarperCollins a beachhead along the way.
If the innovation answer remains “it depends”, the first thing on my list really should be “vision”. Established publishers can survive, I believe, but they will have to act in ways that nurture innovation, even at the expense of the current model.
That’s not a new idea, but living that reality is the new role of leadership.