An internal report about the organizational structure leaked to SWR (Südwest Rundfunk) in March 2016 and many issues also relevant to other publishers were revealed.
The report was highly self critical and created a “McKinsey reviewed” scenario which portrays what would happen if the Spiegel group were tailored for “ultimate profitability”.
Source of this report was an internal staff questionnaire with a 60% response rate, as well as former editors, consultants and media experts. The authors of the report demand a completely new organizational culture to survive in the digital age.
Highlights of the 61 page report
Hierarchical structure is killing creativity, communication and cooperation
- Associates not willing to take risks, slow in decision making
- New building unfit for the organization
- Too many individual offices.
- The report’s advice is to actually move out.
- “McKinsey alternative” would recommend moving to Berlin altogether.
Too many “privileged” employees in the different departments
- 19% (Science) to 65% (!) (Society) of staff were “privileged” employees (Chief Editors, Department Heads, Deputy Department Heads)
- Departments are “black boxes” to employees
6 out of every 10 Euros made were generated by the print publication of Der Spiegel
- Der Spiegel is only one of many publications (11 magazines, 2 TV channels, 4 web portals) and one part of the whole Spiegel group’s business.
- Print sale numbers are dropping drastically
Number of circulation 23% decrease in 10 years
- Especially bad with single publication sales (46% lower than 10 years ago)
- Der Spiegel can’t live off prestige and exclusivity of stories forever
- High share of readers are “decision-makers” and highly cited magazine are pleasant facts; comforting but not helpful.
- Lost 70% of ads since 2000
Too many brands
- 37 different logos in the group
- No feeling of togetherness
“How we hurt our brand”
- Over-bearing our importance
- Can‘t admit weaknesses
- No surprises
- Don‘t try new things
- Wrong priorities
Outcomes for the Spiegel Gruppe
The authors of the report warn that change is necessary in order to keep up profits in the following years. Otherwise one of the majority shareholders could pressure changes and have external consultants make the cuts. The thought experiment of a McKinsey scenario of “easy wins” creates an alternative that leaves many parties worse off and pushes members of the staff to get on board with the ideas of a transformation process proposed by the management.
While the leaked report is generous with its critique it forgets to mention solutions for how to address the mentioned issues.
Der Spiegel has since released a statement regarding the leaked report.
The Innovationsreport is part of the transformation process called “Spiegel 2018”. Editorial staff, documentarists and publisher employees were included in the assessment. Der Spiegel welcomes the commitment and work of its staff and is looking forward to the final report which will be happily discussed in the whole group. Der Spiegel has already started the restructuring and at the same time included growth projects on their agenda. Their common goal is to lead the Spiegel into the future as a modern, multi media house.
Reactions from other publishers:
- “Every successful transformation process starts with an honest status review”, says Wolfgang Blau, Chief Digital Officer at Condé Nast International. Past experience from such a process at the Guardian has shown him that a broadly selected team needs to work independently to get an accurate picture of the current situation. Furthermore, he thinks that it will depend on the editor in chief and the general manager to find the right approach towards the fundamental changes in the industry.
- According to Holger Steltzner, editor of Frankfurter Allgemeine Zeitung, a “thorough report is not necessary” for his publication. He states that the FAZ is continuously innovating and sees no friction between print and online newsrooms because there is already no separation between digital and print content.
- “Many publications lie to themselves and spread one announcement of success after the other. While in truth there are no success stories”, Bernd Ziesemer, former Editor in Chief at Handelsblatt, states. Moreover, “The FAZ is still resting on its oars from the past instead of openly facing the issues of today.” He sees the Innovationsreport as a wake up call for the whole industry.
- Former Editor in Chief and Member of the Board at M. DuMont Schauberg, Franz Sommerfeld, is missing concrete change measures in the leaked report. While moving out of the office will facilitate the transformation at Der Spiegel, it will not replace necessary changes. “The key question that remains for the industry is to find a Digital Business Model for journalism in the magazine tradition.” He insists that the disturbance created by the Spiegel Innovation Report is necessary for the dated structures in journalism. “For the creation of a new strategy you have to bring Digital Natives and journalists together.”