The importance of innovation along with evaluating the same in the growth and development of Fairfax Media Limited - Essay Example

?HRMT20019 Innovation & Change Term 3 Assignment 2 By [Presented to] of EXECUTIVE SUMMARY Innovation is often considered as the way towards the success. However, it is important to identify the impact and influence of innovation in every sense. Innovation can be used in the operational framework by adding technological values and at the same time can be used in business processes and stakeholder management to take it to the next level in the competitive business environment. However, it becomes important to identify the need and importance of innovation that will be followed by great number of changes within and outside the organisation. Change is inevitable and cannot be controlled and sustained for a long period of time. At the same time, changes should be implemented and defined in a clear and systematic manner to avoid resistance and complications. It becomes important to understand and analyse the impact and influence of internal and external factors that play an important role in change management process in the short as well as in the long run (Turner, Muller, 2005) The discussion aims at underpinning and identifying the importance of innovation along with evaluating the same in the growth and development of Fairfax Media Limited; one of the oldest media conglomerate operating majorly in Australia and New Zealand. Along with this, the importance and relevance of change management has also been discussed in a critical and logical manner to assess the overall value of innovation in the competitive business environment that affected by wide arrays of internal and external factors. The discussion also presents a thorough analysis on the impact of innovation and change management over the core competencies of the organsiation along with identifying potential deterrents that can affect the overall operational framework of the organsiation in the present as well as in the future. The analysis and evaluation starts with the understanding over the organisation’s need for innovation and proceeds further covering different impacts and influence of innovation on the organisational framework. TABLE OF CONTENTS EXECUTIVE SUMMARY 2 Part 1. The Organisation Need for Innovation 4 1.1 General Imperatives in the Industry Sector 4 1.2 Innovation Imperatives 5 Part 2.0. The Organisation Vision and Strategies for Innovation 6 Part 3.0. Context, Competencies and Culture for Innovation 9 3.1 SWOT Analysis 9 3.2 Culture for Innovation 10 Section 4.0 Learning for Innovation 11 4.1 Reasons for Continuous Innovation 12 Section 5 Potential Change Management Issues 13 5.1 Overall Change Processes 13 5.2 Barriers and Enablers to Change 13 5.3 Internal and External Communication 13 5.4 Leadership and Change Agent Roles 14 5.5: Project Management and Measurement Requirements 14 Part-1: The Organisation’s Need for Innovation The media industry has been changing at a rapid pace with the rise of technology changing the dynamics of the industry. Fairfax Media Limited has been operating in the media industry for more than 150 years. It operates in publishing news, information and entertainment. It’s Australian and New Zealand newspapers include; The Sydney Morning Herald, The Age, The Australian Financial Review, The Dominion Post and The Press. It also published regional and community newspapers along with few magazines. The company is also engaged in online business where readers can read newspapers. Overall, it can be said that the organsiation has a diversified portfolio with a balanced mixture of traditional and innovative business strategies helping it to make a mark in the competitive business environment. 1.1: General Imperatives in the Industry Sector As per the research conducted by the Sydney Investment Group (2011), there are strong signs that print media is dying with the rise and acceptance of technology and online platforms cannibalizing revenues. Australian newspaper circulation has declined rapidly in last few quarters. This trend is more visible in foreign countries like OECD where readerships have plummeted largely because of the advent of digital media. The profit margins have shrinked and organsiations are left with no other option other than to embrace the innovation and technology by altering their business strategies. It needs to be understood that revenue is primarily generated through advertisements and in case of a fall in readership; advertisements will also suffer offering sleepless nights to media organsiations. The industry is in a fix considering the role of innovation that is impacting and influencing the readers along with compelling media organsiations to add an element of technology by striking the right balance between the traditional and digital media in a logical manner (Simons (2010) With the introduction of new gadgets like iPad and Tablets in last few years, people are inclined towards enlightening themselves through these gadgets. A number of newspapers like The Sun, The Sydney Morning Herald and few of the past; the News International has been offering convenience of reading newspapers on iPads and Tablets. This has changed the dynamics of the industry with more number of people switching to the technology and using it to access information, news and entertainment while traveling and working. More importantly, the publishing cost had gone high in the past along with the headache of maintaining and controlling different operational frameworks and resources. With the advent of technology, these issues have been tackled a bit but the major question that can either offer bliss or plight revolves around the acceptance of digital and online media amongst the masses (Sydney Investment Group (2011) 1.2: Innovation Imperatives Simons (2010) in his report published in Crikey stated that Fairfax has been planning to converge its online and print media products in order to survive for a long period of time in the competitive business environment. It needs to be mentioned that with declining profits and revenues in the print media, it is important to control costs and expenditure pertaining to operations and maintaiennce. It has been speculated that this will create internal conflicts as things are still vague in proportion. However, with technology being considered as the changing face of the media industry, the innovation imperative of Fairfax can be considered as a judicious move considering the acceptance of new and innovative technology amongst the masses across the world. The current level of innovation is a robust mixture of print and digital media products offering different benefits and advantages to different customers as per their needs and demands. The organisation’s current strategy of leveraging the existing digital asset base to balance the shrinking profit margin through an effective combination of online and print media can be considered as a judicious and imperative move of managing risks along with diversifying it in the right manner. There is no denying that the organsiation is not willing to thwart the progress and benefits of print media but it is more on a ride of introducing online media that will help in managing costs and expenditure along with balancing the overall operational risks in the short as well as in the long run. Fairfax is using an outdated revenue model to extract benefits and profits from the online advertising. Fairfax has been selling directly to the customers through their websites and often faces difficulty of measuring the overall accountability. It needs to be understood that companies offering advertisements want to know the behavioral aspects of customers rather than general studies. With an outdated revenue model, behavioral aspects of customers are unknown offering very little reason for other organsiations to place their advertisements on the website. Fairfax needs to implement a behavioral targeting strategy for their new websites in order to understand and identify the behaviour of customers in a logical and critical manner. Fairfax needs to change its business model along with being open to new ideas and strategies; this will offer a momentum that can be used in order to succeed in the online business environment (Sydney Investment Group (2011) Seven West Media is considered as one of the leading media houses in Australia with a diversified portfolio. The organsiation along with Fairfax is considered as two of the major players in offering competition across mastheads. Seven West Media has also embraced digital; media along with creating a balance with the digital media. It needs to be mentioned that Fairfax was on talking terms with News Corp to develop a joint printing plant but with the fall of News Corp; things have gone beyond the control seeking individual responsibility of standing up and creating the difference. The next part of the discussion presents a thorough analysis of organsiation’s vision and strategy for innovation (Sydney Investment Group (2011) Part-2: The Organisation’s Vision and Strategy for Innovation The vision of the organisation is to move forward by setting new directions in the new media age in a logical and systematic manner. It needs to be mentioned that Fairfax has been operating in the media industry for a long period of time and started as a traditional media organsiations publishing news, information and entertainment. With changes in the business environment, the organisation transformed its strategies in order to remain competitive. However, with huge losses and rise in operational costs, the organsiation has faced severe financial crisis in the past as well as in the present. This required a new and innovative strategy to deal with all sorts of issues and problems posed by the internal and external factors. As per the report published in Sudan Vision (2010), newspapers around the world have faced declining readership and revenue because of the severe competition from the internet. Fairfax realised the cyclical downturn and along with responding to structural changes in a positive manner. However, this phenomenon was not sudden as the advent of the internet was linked with the change in the business environment that will change the face of different business environments in the past as well as in the present and future. Fairfax owns more than 300 newspapers, 50 websites and 15 radio stations and with an increase in the competition from the internet; the dynamics were bound to be challenged. In this situation, it becomes important to redefine structural changes along with initiating new changes to become tough for the future situations that can be more complicated. As per Greg Hywood; CEO Fairfax Media; the organsiation has a clear and transparent vision of creating high value premium journalism and content for print, online and mobile in a significant manner. The organisation aims at achieving all this by investing in quality and independent journalism that will differentiate it from its competitors in the long run. (Hywood, 2011) In order to achieve the vision strategy, the organsiation has defined certain strategies that have been discussed as follow: (Hywood (2011) The organisation aims at doing things differently in order to be competitive rather than following traditional course that will make the organsiation still and later on defunct in the complex business environment The organsiation is trying to find a way through which challenges of fragmenting audiences and revenue can be addressed along with creating a successful and sustainable Fairfax using innovative technology and embracing the digital media The organsiation has set certain agendas of cutting costs by eliminating costs pertaining to the operations issues and the process requires few layoffs in order to create a better online platform requiring minimum resources. Mostly; there has been a proposal of striking the right balance between the resources along with allocating them in the right direction to seek desired outcomes The organsiation aims at gaining efficiencies through production processes along with reinvesting in the part of the organsiation that will offer more benefits and advantages in the future. i.e.; digital media The fundamental strategy of the organsiation is to increase the investment in quality journalism for The Sydney Morning Herald, The Sun-Herald, The Age and The Sunday Age – and The Canberra Times The organisation aims at introducing trainee programs along with balancing between the digital media and print media by developing skills of trainees through effecting training and development programs. These strategies have the potential to enhance core competencies that have been discussed in the next part Part: 3: Context, Competencies and Culture for Innovation In order to identify the context, competencies and culture for innovation; it is important to analyse the strengths, weaknesses, opportunities and threats of the organsiation in a critical manner. 3.1: SWOT Analysis It needs to be mentioned that Strengths and weaknesses are affected by internal factors while opportunities and threats are affected by external factors. A detailed analysis is as follow: It can be said that the strengths are in numbers but with weaknesses affecting the overall operations of the organisation, things can be really complicated in the short as well as in the long run. There is no denying that the internet is going to create opportunities for the media organsiations and it depends on them how well they can grab it and position is by striking the right balance between the sources and resources. There is no denying that the organsiation needs to define its strategies well in order to thwart the progress of overall threats in the present as well as in the future (Sydney Investment Group (2011) 3.2: Culture for Innovation It needs to be mentioned that changes are very much on cards with the organsiation thinking of converging the digital and print media. At the same time factual issues are very much on cards with shift in the focus. People taking care of the operational framework of the print media and publishing houses may have to face the crisis if the organisation defines the digital media as the savior in the current business environment. More importantly, structural changes are bound to reflect in the operational and fundamental changes that may or may not affect the fundamentals and dynamics of the organsiation. Fairfax has a proud legacy of existing in the media industry for over a century and the organsiation has seen different changes happening in the business environment. There is no denying that with a number of newspapers doing well and new strategies having the potential to add long term value; the organsiation’s competencies are surely on the right path that can only be enhances and adorned through more effective and logical strategies. The organsiation culture is driven by values and beliefs that have to be injected by the top management. Considering the claims and beliefs of the CEO of Fairfax; it can be said that the organizational culture is dedicated to enhance the overall value of the organsiations by introducing new ideas and redesigning the existing products and services. The organsiation is willing to introduce regional applications for iPads along with national applications that already exist. There is no assurance over the acceptance of these applications as readers may download a number of other applications introduced by other media organsiations. However, one thing that offers belief and clarity over the vision of the organsiation is its strategies that have been defined well in the vision statement. Fairfax has opened its door to embrace innovation and technology along with creating core competencies offering competitive advantages. The coming years may test these strategies but in the mean time, the focus is on introducing structural changes. Part-4: Learning For Innovation There is very little doubt over the learning for innovation existing in the organsiation considering its growth in the past as well as in the present. In printing and distribution, the organisation is finding ways to rationalize printing and distributing processes. The aim is to streamline the whole process that will require fewer people to manage printing and distribution works. The organsiation is keen on strengthening the existing products and services along with launching new products and services as per the needs and demands of customers and after analysing the dynamics of the industry. The organsiation is keeping a close eye on the sale of iPads and tablets that have the potential to change the dynamics of the Internet along with taking it to the next level. With the rise in the sale of these devices, the organsiation’s initiatives of introducing new applications will shape up making the whole concept of online media planning a resourceful one (Sydney Investment Group (2011) Presently, the organisation seems to be confused in terms of its management strategies as the print media has been the center of the primary business activity for a long period of time. The digital media has just knocked the doors having great potential to add value and shoot up the profit margins. However, the organsiation seems to be in a dilemma where things pertaining to cost control and introducing new products and services affecting the overall structural design of the organsiation. After assessing the current business environment and organisation’s potentials; it can be said that the best way to balance the presence and impact is to focus on new products and services along with understanding the value of the internet that can change the image and reputation of the organisation. However, the digital products are dependent on digital devices and thus it is important to study the acceptance and usage of such devices before planning to offer all attention in developing a digital operational framework. 4.1: Reasons for Continuous Changes and Innovation The primary reason behind the continuous changes in the organisational framework is the changes in the business environment. The complex and competitive business environment always compelled the organsiation to take initiatives along with changing the overall strategies with times in a logical manner. Moreover, with rise in the competition from different parts of the country, the organisation was left with no other option other than to develop new strategies in order to move forward in quest for value and benefits. It needs to be understood that only quest and zeal is not enough to add value; there should be a well defined process and strategy to accomplish the competitive advantages in the competitive business environment. It needs to be mentioned that changes are inevitable and bound to happen, In order to ore forward and accept the complexities of the business environment; organisations needs to change their strategies and operational framework in the present as well as in the future (Spender, Grant, 1996). Fairfax has been a successful media organsiations because it was able to accept changes. It is always nice to think global and act glocal in order to survive in tough situations. If Fairfax would have not initiated and accepted changes, some other organsiations would have done that leaving the prospects of growth and development for Fairfax really low. There is no denying that future possibilities of new technology affecting the business environment are really high as technology will grow and develop with times. It is important to reciprocate to changes in a positive manner in order to survive for a long period of time. The next part of the discussion explains the potential change management issues that need to be understood well in order to develop strategies for the organsiation to grow and develop in the present as well as in the future (Stalk, Evans, Schulman, 1992). This will also define the present and future complexities pertaining to changes in a logical and critical manner. Part: 5: Potential Change Management Issues There can be a number of change management issues that the organsiations need to manage and monitor well in order to justify them and extract desired benefits out of them. Some of the key elements have been discussed in a critical manner. 5.1: Overall Change Process Fairfax needs to define the change path in a clear and transparent manner to stakeholders. If the organisation wants to focus on digital media, print media stakeholders should be communicated the same and vice versa. At the same time, it is important to initiate changes in a systematic manner by analysing the pros and cons in a logical manner. The change process should be based on logical justification and stakeholders should be motivated and empowered to accept and embrace changes in the desired manner. 5.2: Barriers and Enablers to Changes It is very much obvious that changes attract positive and negative criticism that needs to be identified well right before the initiation and implementation of changes. The major barriers can be in the form of competitors developing similar strategies and stakeholders resisting to the change strategies. On the other hand, the major enablers can be traced in the form of motivation of enhancing the overall reach and presence of the organisation along with adding value and benefits to the existing operational framework and organisational structure. Key enablers also include the dynamics of the media industry compelling the organisation to initiate new and innovative changes. 5.3: Internal and External Communication It is important to develop effective communication channels based on transparency and honesty. Internal communication is meant for internal stakeholders like employees, suppliers and the management while external communication is meant for customers, government and competitors. Overall, the mode of communication should be different for the internal and external stakeholders as both are different. It is important to strengthen the internal communication as this will help in strengthening the impact and influence of external communication in the present as well as in the future. 3.4: Leadership and Change Agent Roles Axing Brian McCarthy was not a tough challenge but the bigger challenge of appointing someone willing to take the challenge along with taking the organsiation to the next level was more challenging (Elliott (2010). With Greg Hywood at the helm of the business; certain promises have been made and strategies have been developed. There is no denying that at least the strategies and vision is much clearer and transparent that will help in defining the role of each agent in bringing desired value and commitment at different levels of the organsiation. The next few years will test the leadership and change agent roles if things did not work out as per the strategies but at this moment; there is a sound clarity and purpose that is well defined. 3.5: Project Management and Measurement Requirements It is important to initiate strategic project management that aims at attaining core competencies through the successful implementation of strategies. The project should be well defined and analysed in terms of benefits and loopholes and roles and responsibilities should be conveyed in a transparent manner. Moreover, there is a need of monitoring the project at every moment along with implementing it when stakeholders are ready to accept it as a whole. The benefits of the project outcomes can only be accessed through the level of satisfaction and acceptance. This can only be analysed after the implementation of the project through surveys and observational studies. Right now, initiatives have to be taken and that too innovative ones REFERENCES Geoff Elliott (2010), Fairfax board fails to set vision by having a CEO replacement ready, [Online], Retrieved on January 18, 2011, Available on http://www.theaustralian.com.au/media/fairfax-board-fails-to-set-vision-by-having-a-ceo-replacement-ready/story-e6frg996-1225966646008 Greg Hywood (2011), Greg Hywood: Transforming Fairfax, [Online], Retrieved on January 18, 2011, Available on http://www.abc.net.au/unleashed/1213916.html Margaret Simons (2010), Fairfax plans fundamental shift from print future, [Online], Retrieved on January 18, 2011, Available on http://www.crikey.com.au/2010/11/10/fairfax-plans-fundamental-shift-from-print-future Sydney Investment Group (2011), Can a tiger change its stripes? [Online], Retrieved on January 18, 2011, Available on http://beta.afr.com/rw/2009-2014/AFR/2011/10/11/Photos/349b6914-f3af-11e0-92a1-71d8d37bfd67_USyd_Final%20Report%20winner.pdf Spender, J. C. and R. 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