“The survival of the company is at stake.” Chris Harte, Star Tribune Publisher, asking unions on December 2, 2008 to cut pay by $20 million by mid-January, 2009.
“The Star Tribune has agreed to pay more than $300,000 to settle a sexual harassment lawsuit bought by the U.S. Equal Employment Opportunity Commission.” Editor & Publisher, November 25, 2008
Like many around the world, I follow the painful decline of the Star Tribune newspaper with a sense of disbelief and sorrow.
Disbelief that a once dominant newspaper could fall so far so fast. Sorrow for the decline of a company that played a central role in my life. Was this collapse inevitable or was it caused by a lack of bold and visionary leadership at the Star Tribune over the past 20 years?
The Star Tribune’s story of decline is not unique. It is the story of the newspaper industry, of many other traditional industries, of the national and global economy, and of America’s decline and need for renewal.
This pattern of decline is similar at all levels of scale and is the story of how world views trap us and the story of how people struggle to adapt to discontinuous and chaotic changes in their environments. Ultimately the story is one of human courage, creativity, flexibility, and adaptability as systems large and small—families, communities, organizations, and nations—renew themselves boldly and routinely or stagnate and die.
I grew up in St. Cloud, Minnesota, and I delivered the daily and Sunday Star Tribune as a youngster. In the winter I delivered my route and then helped my dad—the circulation district sales manager for the city–deliver routes he could not find carriers for during the cold winter months.
While a student at the University of Minnesota (1965-68), I worked in the Star Tribune’s Classified Advertising Department.
I went off for my first career as a special agent in the U.S. Secret Service and returned six years later to begin an 18 year career in the Star Tribune’s Circulation Department. Like my father before me, I raised my family on income earned at the newspaper.
I got an education in leadership and management at the Star Tribune and received nine promotions over the years. When I resigned in 1994 Cowles Media CEO David Cox said my leadership from 1990-94 had changed the company forever.
Nothing is forever.
I completed a Ph.D. in Leadership and Organizational Change and began a 13 year career as an organizational consultant. I also wrote extensively about leadership and organizational change. I focused on the renewal and transformation of organizations and the leadership required to save organizations and industries from premature decline and death.
In 1998 the Star Tribune was sold to the McClatchy Company for $1.2 billion. While the short term value of the company was maximized by Star Tribune executives, I wondered if the changes needed for the long-term sustainability of the newspaper were neglected.
The Star Tribune remained threatened by demographic changes, technological advances, circulation decline, the potential of the internet, and other unknown variables and systemic dynamics. Rapid decline, long in the making, would soon begin.
Many efforts to reform the Star Tribune were made over the years. New editors redesigned the look and organization of the newspaper, new technology was incorporated, distribution models were changed, and departments reorganized. New executives came and left. The changes gave the illusion of progress but proved to be like rearranging the deck chairs on the Titanic. In the end, all the energy expended simply recreated a lesser version of the newspaper they were trying to change.
Reform is like putting a new façade on an old building. The new exterior looks great but underneath the deeper systemic dynamics and infrastructure remain appropriate for a world that no longer exists. The Star Tribune needed transformation not reformation.
Transformation is not about changes in appearance, a reinvention of the status-quo, a repeat of the past, or quick-fixes to difficult problems. Transformation creates something never seen before. Something not foreshadowed or predicted by the past.
Few, if any, newspaper executives have ever led transformation. They are adept at managing the status-quo and implementing incremental improvements and cosmetic reforms. Most are not equipped by talent, training, or temperament to lead transformation—few in any industry are as the American economy today demonstrates.
On December 26, 2006, the Star Tribune was again sold. The sale price was $530 million plus a future tax benefit of $160 million. The sale price was not a good omen for a newspaper industry with plunging advertising revenues.
Since then I’ve watched as the Star Tribune continues to suffer declines in circulation and advertising revenues. A revolving door of executives downsizes staff and outsources work as the company cannot pay its bills. Morale plunges, behavior regresses, and people become bitter, cynical, and disillusioned. Leaders lose all credibility. The Star Tribune is not a good place to work.
The recent sexual harassment settlement at the Star Tribune is a symptom of organizational disease and failed leadership at the company. I find it almost unbelievable that such a culture was allowed to exist in this day and age in a once progressive company. Managers either knew about or should have known what was happening. Are people just tired of caring?
The future looks bleak for the Star Tribune. Bankruptcy looms on the horizon.
Was this decline at the Star Tribune (and in industries across the nation) inevitable?
Leaders created these messes by the decisions they made and failed to make over many years. Are people helpless to change what they created?
Are leaders and workers not ready to change how they do things? Have they grown too lazy, myopic, cynical, fearful, arrogant, complacent, and too entitled to do the hard work of change?
Are people like fish in water that cannot imagine life on land? Are leaders unable to step back and visualize a new way of doing things as their old ways fail them?
Do leaders and workers lack the ability to adapt daily to the unknown? Are people victims of their own rigidity?
Are the systems we organized our nation and lives around too big and complicated to transform? Are they unable to adapt to changes in their environments? Should we abandon these systems and begin anew?
We know from the story and lessons of The Sigmoid Curve that transformation is possible, at least theoretically. Is this theoretical possibility practical and possible in the real world? I think fundamental transformation of organizations is possible but incredibly difficult.
I believe the Star Tribune had a window of opportunity for transformation in the early 1990’s. Signs of decline were beginning to show, but the Star Tribune remained near the peak of its success. Resources were abundant and energy in the company was high. Leaders had credibility.
This is the best time for change. Wise leaders understand that decline always follows success. Change is more difficult when in decline because leader credibility is lost, resources are exhausted, and energy depleted as we see at the Star Tribune today.
People had ideas for change and renewal at the Star Tribune in the early 90’s, and there were dramatic success stories that showed the potential for a new future—maybe a different Star Tribune could have been created then. But a safer, more traditional strategy was adopted.
Successful and sustainable change would not have been guaranteed even with the boldest of strategies and best of transformative leaders.
People generally require more certainty that change is needed than proactive change provides. And only deep decline provides that certainty; the kind of decline we now face throughout the United States. Suddenly everyone is for change.
Deep belief in a vision, faith in the future, and trust in leaders are required to change dramatically at the peak of an organization’s success. Myopic Star Tribune management, fearful employees, and entitled unions would have resisted massive change ferociously in the early 90’s.
I’ve come to believe that anticipatory transformation requires a deeper wisdom, courage, and maturity than most of us possess today.
The window of opportunity for renewal and continued dominance in news and advertising closed for the Star Tribune and the newspaper industry. The world moved on quickly while the industry dawdled. I fear that the Star Tribune’s future—even with transformation today—will be much less than its past—a niche product and industry in a new world that is fast, innovative, and adaptable.
That said, what do we know about companies that sustain themselves indefinitely and renew themselves continually that can help the Star Tribune stay alive?
1.Continually adapt to the external environment. Leaders constantly imagine a better future and rally people to join together to make the vision come true.
2.Have a core identity of purpose (why they exist) and values (guiding principles) that provide stability and continuity as all else changes over time. Most organizations today have vision and values statements. Few make them real by holding people accountable to “walk the talk” of the enterprise.
3.Change everything but the core identity: culture, strategies, operating practices, and products as they learn continually and adapt to the world around them. They experiment with ideas to find what works.
4.Are inclusive of those who stretch their understanding of what is possible: critics, outliers, risk-takers, and different points of view.
5.Are fiscally conservative. In sustainable companies profits are necessary to sustain the enterprise but they are not sufficient; they are an outcome of leading engaged people. In long-lasting companies researched in the book Built to Last an investment of $1.00 in those companies on January 1, 1926 would have grown to $6,356 by 1994—over 15 times the general market—15 times by putting the “community of humans” first.
How did leadership at the Star Tribune do on these elements of sustainability over the past 20 years?
I hope Barack Obama—a potentially great transformative leader–will free the transformative leaders at all levels of our organizations and institutions from the forces that have kept them marginalized so they can join him and renew our nation.
The alternative to such transformation will be sadder than we can imagine.