In mid-May, the “Innovation” Report from the New York Times was put online in an abbreviated form. This was quickly followed by a leaked scan of the full report. This post is based on a reading of the full report, which is more urgent and unvarnished than the abbreviated version intended for the public.

A notable first sentence greets the reader:

The New York Times is winning at journalism.

Charlie Sheen springs immediately to mind with his famous “winning” line after being fired from his top-rated sitcom, complete with the subtext that in fact he was behaving like a loser at the time. This impression continues throughout the report, as claimed strengths are offset by sobering realities, all part of trying to take the sting away from observations indicating that parts of the Times organization is trapped in the past while a divide between editorial and business hamstrings new initiatives.

Sound familiar?

Nearly every page of the report has a bombshell insight in it, and my copy is densely marked up. Some of the fascination comes from the comparison between a Times of the past which built an amazing print-based distribution and information infrastructure (the reminder that trucks, presses, workers, news vending machines, and newsstands were all used to support the Times for decades is sobering), and a Times of the present which seems to be underinvesting in itself and underperforming in the market. A tenor of frustration and urgency vibrates through the report.

On a single page (p. 41), there is the story of how the Times became the “paper of record” because it tagged articles with metadata more than 100 years ago to produce a historical index; how in the digital age its outmoded structured data has hamstrung interactions with readers; how the years spent neglecting these things will prove more expensive than it would have cost to deal with them ongoing; and how a major metropolitan paper the Times recently sold does great geo-tagging, underscoring a litany of squandered opportunities and legacy strengths lost or misunderstood.

The report includes competitive analyses, which segue to real worries about why news competitors are growing while the Times is not. This kind of urgency should lead to change, but a house divided cannot stand, and the Times is to some degree a house divided.

The divide seems to have a few dimensions to it, and it’s not clear anyone except top management is to blame. The newsroom is doing what it should do — attending to news gathering and meeting deadlines. The production areas are doing what they should — getting the paper out, getting the technology to work, and executing well. The innovation team is doing what it should — delivering innovations that work and pushing the organization forward. What seems clearly to be holding it back is top management’s inability to make all these effective groups into an effective team working on things that are effective in the modern era. An obeisance to the past is perhaps the root cause.

I found myself repeatedly taking inspiration from or identifying with things in the report, such as:

• “At the New York Times, far too often for writers and editors the story is done when you hit publish. At Huffington Post, the article begins its life when you hit publish.”
• . . . at the Times, discovery, promotion, and engagement have been pushed to the margins . . .
• There is no single solution like home delivery that will solve the challenges of digital distribution.
• The Times produces more than 300 URLs every day. Because of this bounty, readers easily miss stories and features.
• The Verge, for example, redesigned its home page 53 times in two years. We must push back against our perfectionist impulses.
• Embracing personalization does not mean flipping a switch that gives different stories to every person. Nor should it.
• At the New York Times, we generally like to let our work speak for itself. We’re not ones to brag. Our competitors have no such qualms . . . [and] regard this as a core function of reporters and editors, and they react with amazement that the same is not true here.
• . . . a great Facebook post has become a better promotional device than a headline . . .
• Even though audience development is the kind of work that should be shared across the company, it instead falls into silos . . . all answering to different bosses and rarely collaborating.
• “Aspirations have outpaced our technology, templates, and workflow.”
• Because our digital competitors adapt faster to changing technology and trends, their lesser journalism often gets more traction than our superior journalism.
• We are far behind in adjusting to these trends.

Perhaps the most important thought in this jarring report comes on page 58, where the report quotes the CEO of Bloomberg News:

Technology is disrupting every distribution platform. Consumers are redefining decades of consumption habits. Seizing the opportunity will require long-term investment and a large appetite for transformation, risk, as well as tolerance for intermittent failure.

This speaks to issues of governance, long-term planning, executive leadership, and culture. The problem isn’t one technology will solve — it will require these more fundamental aspects of organizational health to work in concert. Organizations won’t succeed in making these transformations with short-term thinking, iterative annual budgets, inherent risk aversion, and an unwillingness to fail now and again.

For the Times, an unwillingness to even acknowledge failed experiments has led to a herd of zombie initiatives they call “ghost operations” — failures that nobody will close down definitively.

These ghost operations distract time, energy, and resources that could be used for new projects. At the same time, we haven’t tried to wring insights from these efforts.

The frustration and fear seeping from the pages of the Times‘ “Innovation” Report is given urgency by the investments being made elsewhere in digital-first operations — from Jeff Bezos’ billions pouring into the Washington Post to First-Look Media, Vox, Huffington Post, and others.

However, as Politico points out, all this hand-wringing may obscure a harsher truth:

Nowhere does [the report] mention that these digital sites have all struggled to define a working business model. HuffPo, for instance, is said to take in just $100 million in revenue, and even BuzzFeed, for all its mammoth pageviews, is still only a $120 million business. And there’s little evidence that a display ad-driven or even a native advertising model is good enough to make up the gap between those places and the Times or the Wall Street Journal/Dow Jones, much less a Thomson Reuters ($12.5 billion in revenue in 2013) or a Bloomberg ($8.3 billion).

Perhaps the alternative isn’t as appealing as the status quo for the Times, an option the report’s existence doesn’t allow for. They seem to underestimate the value of print and print-based revenues, something I wrote about recently. However, Politico’s story obscures the rate of growth and profitability of these sites. For instance, BuzzFeed has doubled in revenues in the past 12 months. In addition, the prospects are better for these digital-only initiatives, as they have cultures that accord with their path forward and don’t have to grapple with unwinding legacy businesses.

There is nothing quite comparable to this cutthroat competition for scholarly publishers. Instead, I think the competition for us comes at the talent level, which I wrote a little about a little while ago. In addition to technologists, we have to attract marketing, editorial, design, sales, product development, analytics, market research, and user experience talent, either by hiring from inside or outside our industry, or by finding partners we can trust. Are we investing in this? Are we thinking long-term? Are we managing for the future?

A lackluster strategy with middling execution won’t have talent flocking to your door. Competition hits us at a different level.

There are many lessons to be drawn from the Times’ “Innovation” Report. I’ve scratched the surface here. I would recommend you read it, share it inside your organization, and evaluate whether the sense of urgency permeating this document is matched by your own culture, and whether the digital-first strategy actually makes sense for your organization today. Depending on your answers, the report may foreshadow a situation you might want to avoid.