Advice for the incoming class

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The newspaper business is in play, and the suitors-private-equity types, assorted local billionaires-think they've got just the plan. The appeal is clear: The industry is shrinking, but newspapers are still printing money. New private owners figure they can whack costs, inject fresh thinking and make more money, free from the scrutiny faced by public companies.

New owners, coming from outside the tradition-bound industry, would be free to make difficult choices that need to be made. The new plans could work-in the short term. But where's the long-term vision to rethink the business by looking beyond the ... newspaper?

For the answer, turn to Theodore Levitt. The venerated Harvard Business School professor died in June at age 81, but the wisdom he offered in his groundbreaking 1960 Harvard Business Review article, "Marketing Myopia," is timeless. (You can download it at for $6.)

Mr. Levitt raised the simple question: What business are you really in? His observation on railroads is part of business lore: "They let others take customers away from them because they assumed themselves to be in the railroad business rather than in the transportation business." More relevant to the challenge of newspapers with the internet, he wrote: "Hollywood barely escaped being totally ravished by television. ... [Hollywood] thought it was in the movie business when it was actually in the entertainment business."

His insights are stunning: "The view that an industry is a customer-satisfying process, not a goods-producing process, is vital for all businesspeople to understand." "The organization must learn to think of itself not as producing goods or services but as buying customers." "There is no such thing as a growth industry.... There are only companies organized and operated to create and capitalize on growth opportunities."

Mr. Levitt had it right. Newspapers must stop thinking they are in the newspaper business. There remain immense opportunities to create products and services to satisfy consumers and advertisers. The question for newspaper owners: What business are you really in?
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