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Here is a headline, from Feb. 27:
Personally, I hate headlines about a 150-year-old Colorado newspaper going bust and closing, throwing journalists and other workers into unemployment.
So, I am appoint myself Chief Copy Editor. Here is my new headline.
Now, how can I change reality to make the headline true?
In the sharp downturn, which saw the U.S. economy contract by 6.2 per cent in the last quarter of 2009, advertising revenues have plummeted. Newspapers and magazines everywhere are losing fortunes, and some are closing their doors. To keep Rocky Mountain News alive, we must slash its costs by half.
How in the world can that be done?
By ‘printing’ a paperless paper. Deliver the paper every morning, at 4 a.m., to each subscriber, electronically, downloaded to an electronic book (say, Amazon’s Kindle 2) provided free of charge by the newspaper, in return for a year’s subscription. Every newspaper in the world that is printed on paper can instantly cut its costs in half, and save the world’s forests, by becoming paperless and digital. Even when Kindle 2 is priced at $399, Rocky Mountain News could still make money if it gave them away in return for a multi-year subscription. A supplementary business could be selling downloaded books, music and movies. In time this business could grow far bigger than the newspaper.
Why, then, don’t papers do it?
They will. The global crisis may not always be the direct cause of paradigm shifts in industry, but it is always a force multiplier that accelerates the speed such shifts take place. The necessity to slash costs radically, as revenues dive, will force newspapers to abandon paper. And in every single industry, there will be equally radical shifts in business designs.
What is the paradigm shift for your industry? And what actions are you taking to prepare for, and implement, it?
We cannot make people younger, like Benjamin Button. But can we stop them from growing older?
Almost two years ago, a brief piece appeared in the New York Times that described a magical pill, a molecule called resveratrol, that had the following properties:
Imagine a pill, derived from a compound found in something as benign as red wine, that treated the most feared and debilitating diseases of aging: illnesses like diabetes, neurodegenerative conditions like Alzheimer’s and Parkinson’s, and many forms of cancer. Imagine, furthermore, that this pill had no injurious side effects. Imagine, finally, that the pill’s only side effect conferred what human beings have always wanted: an increase in life span. (NYT, July 8 2007).
Resveratrol is the discovery of David Sinclair, Professor Pathology at Harvard Medical School. Sinclair partnered with Christoph Westphal, M.D. and Ph.D. and a venture capitalist, in 2004, to found Sitris Pharmaceuticals. This startup was built to commercialize Sinclair’s amazing discovery, made in 2003 when Sinclair was only 37, that resveratrol, found in red wine and other plant products, extends the life span of mice by as much as 24 percent and the life span of other animals, such as flies and fish, by as much as 59 percent. It also helps those with diabetes.
How does resveratrol work? Apparently it turns on the SIRT1 gene, found in all living cells, that is normally inactive but has the ability to delay aging. Resveratrol is found in red wine and comes from the skin of red grapes. In grapes, it evolved to battle insects and pests. There have been numerous reports that drinking red wine slows aging. Alas, according to Dr. Westphal, interviewed on the CBS program 60 Minutes, you would have to drink 1,000 bottles of red wine daily to get enough resveratrol to matter
“Not recommended,” Dr. Westphal says drily.
But concentrated, in a pill, that’s a different matter. Resveratrol has had startling results in mice, and is now undergoing additional clinical trials in humans. It may be on the market within five years.
How does the SIRT1 gene get turned on, to slow aging and prevent disease? Dr. Sinclair’s mentor at MIT, who discovered the gene family of which SIRT-1 is one, believes that SIRT-1 is normally activated by caloric restriction. That is, somehow, if the body is hungry, it activates the gene. A long series of studies shows that a 30 per cent reduction in calories extends life substantially among both people and mice and reduces morbidity. Apparently hunger turns on SIRT1. Most of us, however, are not able to slash our caloric intake by that much for extended periods — even though there is a society known as CRS, Caloric Restriction Society, whose members do precisely that, and show great vigor and good health. (They are now the subjects of a large clinical study). But popping a reservatrol pill daily? Well — that’s easy. And reservatrol does turn on that powerful SIRT1 gene.
For those who understand genetic biology, some of the results from Sinclair’s lab were published in a leading academic journal, Cell, in November 2008. And it is already possible to buy resveratrol (unofficially) on the Web.
By the way, Sitris was acquired by Glaxo Smith Wellcome. The price: $750 m. Apparently Glaxo sees big profit in a drug that may make aging obsolete.
I recently spoke to a group of managers, including the CEO, from a successful high-tech company that makes semiconductors. I tried to explain why the current global crisis is not another recession or business cycle, but in fact, in every industry, comprises a global paradigm shift — a totally new set of ‘rules of the game’, for doing business.
As expected, some of the managers expressed skepticism, saying they had heard this line before, in previous recessions.
Here, then, is my attempt to persuade them, and everyone, why this downturn is different.
A global paradigm shift is a fundamental, major change in the way people (workers, managers, investors) think and behave. Such a shift should be pervasive, sweeping and self-evident. Here are a few of these paradigm shifts, taken from today’s issue of the International Herald Tribune. In this single issue, Feb. 23, chosen randomly (the day after I gave my talk), we can see many of the key changes now sweeping global markets. Here are 10 of them. Perhaps each individual trend is not massively important — but taken together, they do comprise a radical difference in how we will do business tomorrow and in the future.
1. From luxury to modesty. “A dose of deference and earnest showbiz” by Alessandra Stanley. “Every Oscar ceremony tries to reclaim old Hollywood glamour; this one tried to suit the times by reverting straight to old Depression-era glamour.” Conspicuous consumption is no longer acceptable. Even those with money no longer flaunt it. At last night’s Academy Awards, dresses were more modest. See also: “Advertisers shun Academy Awards spotlight”, by Stuart Elliott. “Consumers change their attitude toward conspicuous displays of consumption”.
2. Reverse privatization: “As doubts grow, U.S. will judge banks’ stability,” By EDMUND L. ANDREWS. America and Obama will be forced to take over Bank of America and Citigroup. We will see this policy spread, as governments begin to understand that until they nationalize banks and other businesses, they will not be able to look into the balance sheets of these troubled businesses, separate good assets from bad, and relaunch them. This is a paradigm shift, because it reverses the tidal wave of privatization, in which governments sold businesses they owned. Now they will buy businesses or nationalize them.
3. Reverse globalization. Businesses once went ‘global’ at breakneck speed. Now they are retrenching and returning to becoming more local. “Royal Bank of Scotland faces major retrenchment”, by Joseph Schmid. “Royal Bank of Scotland is preparing a sweeping reorganization of its businesses that could see it exit half of the roughly 60 countries where it operates”.
4. Return to sanity. “Brother, can you spare a few million more?” by Jonathan Abrams. “This is a period of economic-induced retrenchment for many [baseball] teams.” Not only baseball teams. Individuals, investors, hedge funds, companies — all are re-evaluating the bubble-like inflated prices they paid for other companies, for stocks, for assets, for buildings, or even for free-agent baseball players. The IHT account speaks of Randy Wolf, a left-handed pitcher who missed out on a $28.5 million three-year contract with Houston Astros, as the latter ‘retrenched’. Instead he ended up with only a $5 million one-year contract with another team. Wolf was philosophic about it.
5. …and return to empathy. The wealthy and well-off are becoming more empathetic with those who have little or nothing, and no job. (See above). Wolf said: “I make a very good living and get to do what I love to do. With people losing their jobs and they’re making $40,000 a year and they’re working their tails off 12 months a year to make ends meet, it’s not right for me to complain.”
6. Nostalgia: When times are hard, we long for earlier, better days. This is reflected in fashion and in product design. “The incredible ’80s”, by Suzy Menkes. “The overwhelming theme of the early shows of London Fashion Week has been a 1980s revival.”
7. Return to sanity in executive pay: Executive salaries, once astronomical, will now become more sane. Some executives may have to give back some of the excessive pay they received in previous years. “Reclaiming pay from executives,” by Gretchen Morgenson.
8. Fierce streamlining of operations: “Ryanair plans to scrap airport check-in desks”. Ryanair wants its passengers to check in on-line, and will have only baggage drop counters, and those, only for ‘one in five’ travelers, at extra cost. Companies everywhere are fiercely streamlining their operations, to boost productivity and reduce costs.
9. Back to basics: Consumers increasingly take public transportation, and eschew restaurants for McDonald’s, now enjoying an enormous boom in revenues and profits. ”Ridership on subways at its highest since 1950″. In 2008 ridership on NYC subways was the highest in almost six decades. We are seeing major increases in price sensitivity everywhere, as customers and clients who once ignored price now focus on it. Saving is back in fashion.
10. Fierce tightening of regulation: All over the world, regulators are tightening their control over the companies and institutions they oversee. “An investment gian left to wither?” by Elinor Comlay. ” ‘Regulatory requirements are going to dramatically reduce the amount of risk that Bank of America is allowed to take’, said ..an analyst at Morningstar in Chicago.”
These are only ten of the many global paradigm shifts now taking place all over the world. I have doubtless missed many of the most important ones. Readers are invited to contribute their own observations.