Myopia: A Tale of Two Companies for 2009

In 1960 the economist Theodore Levitt wrote an influential essay in the Harvard Business Review entitled "Marketing Myopia".  In it he discussed the parlous decline of the US railways in the twentieth century. Decimated by the widespread use of automotive transit,  by the 1960s the railways were a shadow of their former selves- broken and bankrupt. Levitt argued that there was no fundamental problem with the railways contrasting the States with Europe, where to this day railways are thriving.  Rather there was a problem with the attitudes of the railway companies. They had always seen themselves to be in the railways business and focussed their efforts as such.  According to Levitt this was their mistake- had they realised from the beginning that what they were in was the transportation business they would have been much better prepared to respond to and piggyback on innovations like the car, the lorry, the highway and the airplane.  In short, had they not had a bad case of "marketing myopia" they might have been in a much better state.

In contrast take Nintendo.  In a recent article for the London Review of Books John Lancaster looks at the cultural status of computer games. He highlights the history of Nintendo as an interesting casestudy.  Founded in 1880's Kyoto, Nintendo originally produced  hanafuda (Japanese card games).  Throughout their history though they refused to define themselves as makers of card games-  they saw themselves as facilitators of play, and so had a constantly evolving product set while maintaining a consistent purpose. It meant they were always ideally positioned to exploit new advances and could comfortably react to change.  Moreover it has led to them being in the vanguard of innovation; just when their competitors Sony and Microsoft were beefing up their consoles for the hardcore gamer, spending mega bucks turning games machines into omnipotent media playing nodes, Nintendo re wrote the rule book.

The DS and the Wii, with their intuitive gestural interfaces and ludic game design, perfectly fit what legendary Nintendo games designer Shigeru Miyamoto sees as the defining goal of Nintendo: to create products grandparents and grandchildren can play together. Both consoles were colossal risks for Nintendo; both paid off handsomely.

There appears to be a fairly obvious moral for publishers in this story.  There are certainly those like Booksquare who argue that digital is a new market, a new market in which publishers will have to redefine their approach in order to succeed.  In 2009 I don't think anyone is seriously pretending that this digital stuff will go away and no one really has to worry.

For me the real issue is that we obviously cannot be the railways. We cannot be myopic in ignoring the challenges, opportunities and changes of the internet and digital distribution. Here is the but- But neither is it realistic for publishers to be Nintendos. As much as we can say that we are curators of stories and information, people involved in the entertainment/education business pure and simple, we simply don't have the scale, the expertise and the financial muscle to become full on web platforms, film studios, arts infrastructure bodies or whatever else moving beyond print matter might entail. Publishers cannot jeopardise their core operations by completely losing focus.

The question, then, for 2009 is how publishers can effectively steer the line between being a railway and being a Wii.  Between myopic decline and radical re-engineering. It means doing this in a dire economic climate, with limited resources, managing what we do best with what we've not done before.

We're working on it.