USA Today has been a widely successful company. When newspapers were the only form of read news, USA Today cornered the market in the national newspaper arena. As the digital age came about, it was time for change. New companies were emerging as leaders in the online news arena, and even established companies were moving towards online news. USA Today had to move in a different direction. They had to deal with staying ahead, or even with the competition. USA Today, or USTA was launched in 1982. It was the first daily national newspaper, and offered news regarding every state in the nation.
It had both weekly and daily newspapers. Though it started out slow, as the reporting quality increased, so did the advertising and revenue. Values included independence, fairness, accuracy and trust. Loyalty was something that the reporters loved and cherished about the company. But, in the late 1990s, things started to change. Online reporting became popular, and more and more people were going from the daily newspaper to the internet for their breaking news. How was USAT going to handle such a change? They were losing their market share in the daily newspaper sales.
Their response was Online, USTA’s version of online news. They started the Network Strategy. This strategy integrated television, paper and digital news. USAT would create content for television, the paper would deliver content to Online, and then digital images would be sent to the newspaper and video to Online. Online started as news in which people would pay a monthly fee, this quickly changed into a free paper, with advertising as the main source of revenue. Online started as an operation that was autonomous and independent of the newsroom, its operations and culture.
Because Online determined that it was important to constantly update its website, it was unable to really rely on the newsroom, a location that put out a paper once a day. They also determined that the audience for the online version was much different that the audience that preferred to read the paper version. Another difficulty was the ability to stay true to the values of independence fairness, accuracy and trust. Because the Online version of an article is much different than a paper story, there were no real reporters, but people that had to make a story readable for the online audience.
The differences between the newsroom and the online department caused a significant rift in USTA. Online was still part of USTA, and still had to adhere to the values of the company, yet it was a different beast altogether, and did not exactly fit into the same mold. Curley, the CEO tried to integrate the newspaper and Online. He left the integration ideas to his senior management team. The attitude of the newspaper was that Online was competition, and that the newspaper did not want to spend more time and resources than needed for Online.
As the demand for Online grew, the competition for resources between the departments grew also. Inevitably, there was too much separation between online and the rest of USAT. Most of the company wanted to spin off Online on its own, while the CEO wanted to keep Online within the USAT family. The Senior Vice President of Online developed it as an independent business unit, while Curley was trying to maintain integration. One of the critical issues that USAT was dealing with included new entrants into the market. Yahoo. com and AOL were making significant profits on online news without the graphics that USAT had.
They also had to contend with other newspapers that were moving into the online market such as The Wall Street Journal and the New York Times. USAT was competing against companies that were geared towards the online market specifically, and paying their employees significantly more than USAT could afford to pay. Other companies that entered the market specifically for online readers could focus on the online readers’ wants and needs. USAT had to deal with taking news from the paper and trying to integrate it into the online portion of the business.
USAT was not as successful because it was trying to take information from one group and translate it to another. In order to appease the online readers, USAT would take an article written by the paper and attempt to make it more in depth, and more to the point. USAT felt that straddling the market was the best choice. The CEO felt that “separateness equals death”. He had seen the international market successfully integrated and thought that Online could do the same thing. In doing this, they are able to keep the values of the paper, and consolidate one company.
Straddling the market is actually a good choice. By straddling the market, having both the online portion and the newspaper, USAT can reach a much wider market. The balancing act however is very difficult. USAT must maintain the same look and feel of the newspaper in both arenas, but must meet different needs. A scoop can be delivered to both departments, but each department much approach the story differently. Each department must know their customers, and their wants and needs, and be able to meet those. There is no reason why Online should be taking stories from the paper and changing them.
There should be reporters in both departments that can write a story based on their customers wants. USAT also faced serious animosity between the newspaper staff and Online. Instead of working as a cohesive company, they were almost sabotaging each other because they considered one another competition. The resources that USAT had were being stretched, and there was competition between the two. The atmosphere and culture was so different between the two departments, that there did not seem to be anyway to act as a team.
Curley left integration up to senior management which was a mistake. None of the managers wanted to take an active role in integration. Curley should have taken a more active role if he decided that integration was the right way to go. USAT should have made a decision about integration and communicated that throughout the company. Curley should have taken on more of a leadership role to alleviate the animosity between the two departments. Thought should go into how this competition is affecting the bottom line of the company.
It is an issue that should be handled aggressively through management and communication. They should have the departments work together on some projects and have meetings that are companywide. Communication initiated by senior management that there should be no competition between the departments is crucial. Lastly, the problem of the spin off itself is a critical issue. Curley was really one of the only managers that thought that integration was a good idea. Most of senior management felt as if the spin off was the best choice. This left the team distraught.
Though Curley wanted to move to integration, he did not take responsibility for making it happen and left it up to his managers, who clearly did not want to take the steps to integrate. The research should be done to find the cost of integration versus a spin off. Communication must be made with management to determine whether to spin off or integrate, and make a clear move toward that choice. Whichever the choice, the decision must be made, and management must be aware that regardless of their personal feelings, they must communicate it to everyone in their department.
USAT needs to determine where they are going, and deliver that message to everyone. Management needs to take a lead role in making a decision, and bringing everyone on board with that decision. By communicating the way in which the company is moving, and making everyone’s role clear, USAT can make the transition much clearer and easier for all employees. Enviably, Curley decided to integrate, and it seems to have been successful. They only had one year where circulation was down. Though people seriously doubted the integration processes, it worked and USAT is still a successful company.