Wednesday, March 28, 2012

Arianna Huffington - News Dominatrix and Biz Model Innovatress

Buzzwords and catchphrases this week: strategic planning, performance evaluation, “prepared minds”, strategy review, top management, long term goals and short term budgets, business unit reviews, strategic performance management, balanced scorecard use to build consensus, linking rewards to scorecards, double-loop learning/strategic learning/"learning by doing", radical business model innovation, breaking the rules (established enterprise confines), innovation = small scale but aggressive timetable, business value proposition precision, business model packaging vs. focus on new technologies


Article: http://nymag.com/news/media/arianna-huffington-2011-11/ / November 20, 2011

"The domination of news is clearly her goal, even news as defined as a mix of aggregation, original content, and unapologetic linkbait (stories like “What Time Does the Super Bowl Start?” or “Sex With Animals Can Lead to Penis Cancer: Study”)"

"Reinventing Your Business Model" by Johnson et al. outlines the elements of a successful business model (a core Customer Value Proposition fueled by interplay of profit formula, key processes, and key resources) and identifies when a new model becomes necessary for a company or industry. Of course, the article brings in "the Apple example" which simplifies but also exemplifies business value proposition: what matters is not the iPod technology, but rather the business model that is packaged with the iPod (namely the iTunes platform). 
This week I want to feature Arianna Huffington, the woman responsible for innovating a successful new business model with her half-blog half-news site the Huffinton Post. Though AOL's falling stock price seemed to signify the end of the company, Huffington came at just the right time to breathe some new life in the company: "AOL had nothing to believe in for a decade, so it made sense to believe in Arianna, with her narrative abilities and her hypnotic, cult-leader power." She has redefined the news industry in more ways than one, recognizing various innovation needs:

  • Meeting unmet customer need by focusing on news aggregation from various sources, "becoming an online tabloid that was a kind of cousin of The Daily Show"
  • Tapping into a mature business for leverage: “For our macro, go-forward AOL corporate strategy and the future of where we think the Internet’s going, the Huffington Post was a plug-in that fit multiple strategy points for us” - AOL CEO on the acquisition of the Huffington Post
  • Reaching for new customers previously deterred by boring news format: design-focused, colorful blog site with catchy headlines (this links back to Arianna Huffington's past when she was known as a socialite. What better way to grab attention than through scandalous headlines?)
  • BHAG: "Huffington’s five-year plan, she told employees, was to become a competitor with the New York Times"
  • Pursuing domination: " Huffington has just about absorbed AOL—these days, you can barely see its outline"
Just as Apple's iProducts revolutionized the music industry, Arianna Huffington's new approach to news revolutionized the way we interact with the thousands of news "bytes" uploaded every minute of every day. How did she do it? Her CVP was definitely there, offering a tool for consumers to get a job done. Her profit formula relied mostly on the absorption of HuffPost by AOL. Her key processes build from a core demand for more productivity from AOL staff composed of new and old reporters and editors, as well as a plethora of news "specialists" in different areas (politics, current affairs, fashion, food...).

Some questions come to mind:
- Why did no one else do this before her? Did others attempt? If so why did they fail?
- How much do networking and connections help in getting a new business model off the ground?
- Is the Huffington Post falling into a spiral of "being all things to all people"? Shouldn't Arianna Huffington focus on developing specialty areas? Or does this no longer matter in an era of horizontal skill sets in an information age?
- The article "Reinventing Your Business Model" covers case studies of Tata Motors and Hilti power tools. Is the space different for web start-ups/ventures? (i.e. It seems that Arianna Huffington was able to get traction for her new business model and growth much faster than Hilti or Tata)

Nevertheless: She disrupted competitors. Nailed the job with a focused CVP. Utilized the "confusion" of mass media/internet aggregation to her advantage, funneling it into an aggregated, user-friendly news source.






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