This is a post I’ve been meaning to write for ages, but Neil McIntosh’s post about the closure of The Economist‘s skunk works, Project Red Stripe, has finally prodded me into action.
Project Red Stripe was a small team of six Economist employees who were given £100,000 and asked to “develop something that is innovative and web-based and bring it to market” within six months. They brought in outside experts to talk to the group and solicited ideas, from Economist readers and the wider blogosphere, which they then “evaluate[d …] against a set of criteria that the Project Red Stripe team have predetermined”.
Unfortunately, the idea that they came up with wasn’t really one that The Economist could see a way to earn any money out of. Project Lughenjo was described as:
[A] web service that harnesses the collective intelligence of The Economist Group’s community, enabling them to contribute their skills and knowledge to international and local development organisations. These business minds will help find solutions to the world’s most important development problems.
It will be a global platform that helps to offset the brain drain, by making expertise flow back into the developing world. We’ve codenamed the service “Lughenjo”, an Tuvetan word meaning gift.
Announced only four weeks ago, it has now had the plug pulled.
Neil, in his response to this turn of events, rightly questions whether ‘profitable’ is the only definition of success, and points out that innovation isn’t always radical and that a single innovation’s success can be, instead of based on it’s own performance in isolation, a result of its position within a group of innovative components that are profitable only in the aggregate. He says:
The lessons for news organisations? We needn’t make innovation hard by insisting the end product is always huge and/or high-profile. We shouldn’t think that innovation is something that can be outsourced, either to a small team or to a software vendor (the latter being a surprisingly popular choice for many newspaper publishers).
And we needn’t necessarily worry that we’re not having enough ideas. If you ask around, you’ll probably find it’s not ideas we’re lacking. What’s tricky (I know – this is my job) is capturing the best ideas, mapping them to strategic goals, and delivering them in a way that makes them successful.
To do that, you need innovators who understand the importance of baby steps and can deliver them, one after the other, regular as clockwork. And, unlike Red Stripe, you can make their life easier by making sure they’re not locked away from the rest of the business, worrying about a blank sheet of paper and a mighty expectation from the mother ship that, somehow, they’ll be able to see the future from there.
Neil also links to Jeff Jarvis, who says:
[T]hey ended up, I think, not so much with a business but with a way to improve the world. Their idea, “Lughenjo,” was described in PaidContent as “a community connecting Economist with non-governmental organizations needing help – ‘a Facebook for the Economist Group’s audience.’ ” It wasn’t intended to be fully altruistic; they thought there was a business here in advertising to these people, maybe. But still, it was about helping the world. And therein lies the danger.
I saw this same phenomenon in action when, as a dry run for my entrepreneurial course, I asked my students at the end of last term what they would do with a few million dollars to create something new in journalism. Many of them came up with ways to improve the world: giving away PCs to the other side of the digital divide, for example. Fine. But then the money’s gone and there’s not a new journalist product to carry on.
This gives me hope for the essential character of mankind: Give smart people play money and they’ll use it to improve the lots of others. Mind you, I’m all for improving the world. We all should give it a try.
But we also need to improve the lot of journalism. And one crucial way we’re going to do that is to create new, successful, ongoing businesses that maintain and grow journalism. We need profit to do that.
A very good point. Altruism isn’t really what’s needed, and it doesn’t necessarily equate to innovation (although in rare cases, it does – think of the $100 laptop project).
It’s not just newspapers
One thing that’s really important is to remember that the problems that The Economist have with innovation also face many other businesses in many different sectors. I see, for example, the PR industry just storing up trouble, the way that they have segmented themselves in to different agency types such as creative, print, TV, or online. I don’t think that any company can afford to segment its PR and marketing like that, let alone an entire industry. How can the situation where your creative team is separate from your online team – and those teams are run by different companies – be a good way to keep abreast of technology, to understand and grasp the opportunities? If a creative agency has an idea for online, how will they be able to implement it if online is run by someone else who is actually in competition. Now, maybe I’m misunderstanding the way that the PR world works, but that’s how it looks to me on the outside: like built-in failure.
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