Possible Questions
National Geographic Society 1. Fahey remarks about magazine piles “ that has come to haunt people today don’t want clutter. Comment? 2. How can Fahey promote cross functional and cross divisional collaboration by bringing radical changes in business model from paper to digital. 3. What should be the best strategy for fahey to integrate the media and magazine by transforming the culture, behavior and value of a legacy organization. 4. In 1994 Fahey was CEO of ‘Life Time’ ironically facing same challenges with earlier generation of media and technology. Fifteen years later same person is seen as elite general manager at work in a completely different organization. Has his thinking and management style changed? 5. Whom should the e commerce boss report to?

How to transform a 123-year-old cultural icon and prepare it for the digital world? Slowly, Key concepts include: 1. Practitioners need to understand the power of the history of their own organizations in order to effect change. 2. Making transformational changes at the National Geographic Society involved pulling management levers to alter a deeply ingrained culture, develop new organizational capabilities, and design a compensation structure aligned with new values. 3. A one-size-fits-all approach to management doesn't work. General managers encountering similar problems in different organizations may need different solutions to solve them.
That has come back to haunt us," Fahey says."People today don't want clutter."It turns out that many things that made National Geographic one of the world's top brands during its 123 years are obstacles to overcome. Like many other print publications, National Geographic's subscription revenue has declined significantly, from $284 million in 1999 to $211 million in 2009. The value of becoming a member of the Society, once a matter of prestige, has eroded. The institution has made large bets on various forms of media—Internet, movies, TV, cable programming—but is still trying to figure out the best strategy for integrating them. Despite repeated structural changes, employees still operate in silos.
In short, the National Geographic case is fertile learning ground for managers. Its lessons address transforming the culture, behaviors, and values of a legacy organization, changing a business model from paper to digital, capitalizing on huge brand awareness and international presence, and promoting cross-functional and cross-divisional collaboration. Increasing knowledge Founded in 1888 as an educational and scientific society with a mission "to increase and diffuse geographic knowledge," the National Geographic Society (NGS) soon launched a scholarly journal, National Geographic Magazine. Using revenues secured from members, the Society supported many groundbreaking scientific adventures—Dian Fossey's 18-year study of mountain gorillas in Rwanda, for one—filling in the empty spots on the world's map as it went along. But when Fahey arrived to head the National Geographic Ventures unit in 1996, the institution was in decline. Decision-making was slow and fusty. A digital strategy was just emerging. Various units operated as independent fiefdoms. In 1998, Fahey was named CEO, and the task was clear: build an organization to thrive for the next 100 years. To do so, he "assembled a management team of diverse backgrounds to transform the Society's culture and organization, fostering more risk-taking, a greater focus on commercial activities, and more cross-departmental collaboration .
Slow to change in 2009, Fahey was heading what appeared to be a steady but slow-motion revolution. His effort to rebuild the organization for the digital era was now more than a decade old, with some notable successes—a new mission in 2004, a reorganization in 2007—but with unresolved problems. Fahey says his leisurely pace of change was deliberate, that creative people take longer to accept change. However, "He's been at it 12 years, and people's first loyalty is still to their silos," Is Fahey moving too slowly? Does he have the right people in the right positions? Is the new mission—"to inspire people to care about the planet"—the right one? How does the situation facing Fahey at National Geographic compare with the challenges at Time Life? Is he taking the right steps to destroy silos and integrate the organization?
But the case actually hangs around another question. Fahey created a position of senior vice president, e-commerce. It's a pivotal and, for NGS, radical step. The position will be responsible for coordinating web-based offerings and outreach across the Society's numerous departments, integrating several direct-mail efforts into a cohesive e-commerce strategy, and leveraging the NGS relationship with subscribers. Fahey debated with his team: to whom should this person report? To Fahey himself, signaling the importance of the role? To the Global Media Group, which is responsible for the magazine, book publishing, TV and film, and digital ventures? Or to the Enterprise Group, which operates the Society's merchandising businesses, brand extensions, and licensed products and services? "This issue appears to be pretty straightforward—it's just a reporting issue, "says Garvin. "In fact it embeds the larger issue of who is going to control the integrated aspects of e-commerce, and what authorities and what decision rights that person will have relative to the existing divisions. The position should report to the CEO. "The easy out is to say John Fahey should be the direct report," But Fahey already has 14 direct reports. And do you always want a centralized position to report to the CEO?" Maybe reporting to Global Media makes sense, if the position is considered functional rather than strategic. My Recommendation: The position should reports to the Enterprise Group, If the person reported to Global Media, pressure on the new e-commerce senior VP would be immense from the various units—magazines, catalogues, and expeditions—to push their products. Instead, Fahey wants someone to think holistically about NGS's offerings and how best to approach customers and sell them what they want to buy. Fahey is a highly skilled general manager. He thinks like a generalist. He focuses on integration and how to make it a reality."The first relatively straightforward lesson is how difficult it is to move beyond your historical culture and legacy," History has power. Faulkner writes in Requiem for a Nun, 'The past is never dead. It's not even past.' Old ways of thinking and acting are deeply embedded and slow to change. So it needs to be understood that the powerful influence of the history of own organizations."Other lessons include the importance of getting the organizational culture right, and the need to pull multiple levers when pursuing integration. "There is an organizational structure lever Fahey pulls when he reorganizes. There is a culture and values lever—he changes what behaviors are valued in the system as they move from silos to collaboration. There is a people lever; you often have to change personnel. And there is an incentive lever where you change the compensation structure. All of those need to be done in a mutually reinforcing fashion." Finally, combining the Time Life and National Geographic cases offers a unique view of how a manager evolves over time. Practitioners need to recognize that 20 years out, in a different organization, perhaps their natural tendency when faced with problem X again is to do Y, but maybe problem X is a little different in this organization and this context than the other one. So maybe this time you don't do Y, you do Z." Just to give an off the case study information, Fahey is on the right track with his work at National Geographic. One big factor favoring the Society is that it has bought itself time thanks to a multiyear cable deal with Fox that is expected to net NGS $100 million in 2012."These kind of changes take time, and they have time. Second, these kind of changes require lots of experiments, not all of which will succeed. They are running lots of experiments. Third, it requires a change in culture and values, and that change is well under way—I would say that those changes, including the necessary changes in people, have accelerated quite rapidly over the last year. Fourth, this is a world-class brand. And finally, as Fahey said himself, he's not sure they are the ones who are going to figure out what the right digital combination is, but surely because of their progress to date they will be in a position to take advantage and exploit that opportunity when someone does figure it out. Certain ingredients which NGS must focus are the ability to offer membership benefits—access to a research team in the field, for example—lifts the value proposition of the Society much higher than what competitors can offer. Another issue which needs to be explored is decision-making in an era of blinding technological speed, something Fahey didn't have to think as much about at Time Life. "The iPad basically didn't exist two years ago, and now it's a core platform. Digital delivery of content to the cell phone didn't exist a few years ago, and now it's everywhere. You go six months, and it's two generations. That's something which NGS must exploit in the future.