A Case Presentation on New York Times

Presented to : Pro.Manish Chaudhari

Presented By:
Rujuta Patel (45) RituPatel (48) Nisha Patel (17) Krupa Shah (23) Sonali Modi (26)

Flow of Presentation
Introduction about Case The New York Times Company Organizational structure and leadership Culture and values Hiring and Compensation The Budgeting Process Performance Evaluation Conflicts with the core business Questions

Introduction about Case

Scott Meyer ,GM of NY Times.com website for New York Times Newspaper Lisa Desisto,GM of Boston.com website for Boston Globe which is Englands largest regional portal. Both websites were operated by New York Times Digital (NYTD), a division of New York Times Company. Meeting on September 28,2001,the main focus is on Possible changes to NYTDs Organizational structure. Martin Nisenholtz, CEO Of New York Times Digital NYTD

The New York Times Company

In 2001,Company owned a variety of media properties like New York Times newspaper, the Boston Globe, Worcester Telegram & Gazzate and 14 other regional newspaper, located primarily in the southern U.S. Broadcast media Properties accounted 5% of Revenues and NYTD Accounted for 2% of Total Revenues. The New York Time -Brand as a most valuable Asset Won 79 Pulitzer Prizes more than any other newspaper Profitability of newspaper operations sensitive to Economic Conditions.

Organizational structure and leadership

Steve luciani, 2 employees from the news desk and an advertisement executive were assigned to the new web side project. Expert Martin Nisenholtz was hired as a president of NYTD. There was Chinese Wall between Editorial and business side of org. Company increase investment in online operation. AS newspaper staff and NY Times.com was supervised closely there was similarity in culture and decision making biases. Insufficient resources devoted to NY Times.com

Cont..
Two major decision: New operating decision which report directly to Corporate rather than news paper management. tracking stock which raise capital at internet valuations. NYTimes.com experimented with several org structure

Culture and Values

The NYTNP was steeped in tradition and operationally vary conservative. AT the time of separation distinct internet culture created. Experimental culture Bureaucraticcontrols,procedure and paper work minimized. Team approach was emphasized. Culture was modern and diff from corporate HQ in NYTD.

Hiring and Compensation

Hiring policy were modified to support distinct culture. Young, smart, ambitious and with .com experience were hired. Remove of pension program.

The Budgeting Process

Budgeting process was completely integrated with the corporation. Financial commitment.

NYTD invested aggressively in creating a world class IT infrastructure which is dedicated to interactive media, that supported news paper operation.

Cont

NYTD developed bottom-up approach to budgeting. To help generate ideas, NYTD constantly reviewed usage data for its websites. Promising ideas were assigned to product manager. Evaluation would be done by senior executive team, by using combination of loose netpresent- value analyses and experienced judgment.

Cont..
Lot of guesswork involved in projecting revenues. In late 2000 and early 2001, the financial resources become primary constraint.

Performance Evaluation

Financial performance vs. forecast and budgets, and long term path to profitability would influenced the performance. Other dotcoms revenue growth become the most significant influencer. In 2000 they get the revenue which is double what they had budgeted. Positive impact on the value of the New York Times brand.

Conflicts with the core business

Editorial

Operations and New York Times Brand Newspaper industry had adopted the separation of editorial and business operation Some of more innovative and successful additions are coming from cross functional collaboration

Advertising Sales Traditional newspaper customers were not ready because 1. They Dont understand the new media 2. Hesitant to put customer relationship at risk 3. Digital sales were expected to be very small

 Subscription

Sales offering free newspaper content on the internet would have a negative impact on subscription sales Compare the readers of website and newspapers web readers are different audience- younger, affluent & geographically dispersed Survey & focus group failed to support fear of online newspaper Websites are viewed as complementary assets than as competitors Websites become trial use of the newspaper & become the source of new subscription

Questions
Question 1:

Describe NYTDs evolution to date. What is the strategy of NYTD? Are the Organizations and control consistent with the strategy?

New York Times Digitals Evolution

NYTD had developed and was operating two websites: NYTimes.com and Boston.com NYTD also responsible for managing the Companys Digital Archive Distribution Business There is a Sophisticated Information Technology systems automated significant portions of the process of converting newspaper content to website content. Access to NYTimes.com free . User Registration to website with Demographic information which serves advertisements to Target Audience. All Revenue for NYTimes.com was generated by selling Advertisements on websites.

NYTimes managed its own sales force and selling display ads. New products were introduced regularly to website.

Strategy of NYTD
1.Advertisement related strategy 2.Free online Registration 3.Decentralize to Centralize 4.One website for all information 5.Classified advertisements 6.Crossfunctional operation Yes, the organizations and control consistent with the strategy.

Que.2 What the impact had on the rest of the company?

Many senior newspaper executives would have been actual uncomfortable with entrusting priceless New York Times brand to an operating unit that they didnt control. Developed values and culture similar to newspaper Decision making biases Tracking Stock(Tracked the performance of division within a corporation) ,NYTD enable to raise capital at Internet Valuations rather than newspaper Valuations. A team approach and a spirit of openness were emphasized/ Information was shared. Decision making was Transparent.

Cont..

Hiring Policies were modified to support the effort to create a distinct culture. Budgeting Process was completely integrated with that of corporation. Performance evolution more based on financial data or other qualitative metrics. Several Areas of friction were at top of mind due to overlap between the operations of core business and NYTD.

Q-3 : How does the way NYTD is managed compared to the way a Venture capital firm manages a Start Up? What insights if any, do you draw from this Venture Capital: 1. Different stages of finance 2. It might bring culture which may not be suitable for growth 3. Increased intervention may increase lead time of product development

Company: 1. Company managements decision would be the final decision 2. Company can increased its investment in any condition 3. They can choose their own culture 4. Bottom up Approach

Que .4 What Impact do internal perception of NYTDs performance have on its operations?

Initially they focus on revenue generation only, not concerned about expenses. Performance evolution based on forecast revenue-achieved revenue Company revenue- competitors revenue By the end of 2000, they are having pressures to achieve profitability, and for that they were increasing the operating efficiency by centralizing operations. Performance evolution based on operating problems

Initially the two divisions editorial and business were operating separately. But Some of more innovative and successful additions are coming from cross functional collaboration

Que :5 Would you change in NYTDs existing organizational structure?

Yes as a manager I would change organizational structure. Environmental changes and organizations increased product line compel to change in structure.

Que.6(A) How would you change the culture and leadership style?
There should be informal culture as they are hiring young employees to retain them. There should be some necessary distance between senior executive and other employees. Internets culture should meet with culture of head corporate. Should be coordinating leadership and decentralized functionality.

(B) How would the change in NYTDs likely Budget?

AS there is already lot of investment in IT infra, there should be less investment in it further. Employees salary structure should be revised. Outsourcing of HR activities which are necessary for new projects of NYTD. There should be long term budget but changes should be updated weekly or when most necessary. Senior staff should be paid as per there experience and caliber. Proper allocation of finance to have necessary resources.

 The way NYTDs performance is

judged?????
NYTDs performance is primarily evaluated by the following questions: 1. Can we tolerate the loss we are generating? 2. Are we having any significant operating problems? 3. If any damages being done to the core business or the core brand?

(d). The way new ideas for the websites are generated?????

Cross functional culture Innovative ideas from employees are appreciated.