When Trains Fly: Explaining the Name

Posted by Scott Donaton on 05.22.07 @ 02:19 PM

Did airplane travel doom the railroads, or did train tycoons commit corporate suicide? For marketing and media executives, the answer is crucial.

Forty-seven years ago, Theodore Levitt posited in "Marketing Myopia," an essay in the Harvard Business Review, that industries risk obsolescence when they forget what business they're really in, and he chose the railroads to illustrate his point. Train lines didn't stop growing because of competition from airlines, he wrote, but because fat-and-happy railroad tycoons forgot what it was they actually did for a living.

"Their executives incorrectly thought that they were in the railroad business, not the transportation business. They viewed themselves as providing a product instead of serving customers," Levitt wrote.

Had those leaders defined their business as transportation, they would have evolved into airlines. But instead they were left behind by high-flying upstarts.

It's a safe bet that few of today's marketing and media tycoons have read Levitt's essay. But the question of what they do for a living is one with which nearly everyone who earns a paycheck in those businesses has become intimately, if uncomfortably, acquainted. That's especially true as the consequences of the digital-technology boom have begun to be felt where they most hurt: on the bottom line.

Lessons for the media
But there are lessons to learn from Levitt's cautionary tale to avoid being left to rust in history's train yards as a new crop of digital information, entertainment and marketing companies takes flight. "Traditional" media businesses, marketers and agencies are determined to grow wings. Whether they can, and how quickly, will determine whether they have a future.

It's vaguely humiliating, how in just a few brief years some of the 20th century's most powerful, influential communications companies have been lassoed together under the pathetic sobriquet of "old media." Great newspapers, TV networks, magazines, movie studios, book publishers and radio giants are reduced to being portrayed (often, ironically, in their own pages or over their own air) as flat-footed anachronisms.

It's partially their own fault -- the price of early denials and resistance to change -- and partially an unfair mischaracterization by cocky "new-media" executives who've painted an "either/or" scenario in which their victory will be sealed only when they're feasting on the bones of their analog forebears.

After all, the old models were flipped on their heads with stunningly disrespectful ease, disrupting decades-old business structures and strategies. And the new players by definition have no "old way" of doing business, no existing pot of money to protect.

Awkward position
The more traditional companies are in an awkward position, trying hard to embrace and exploit new technologies while simultaneously defending their existing positions and protecting the legacy models that still account for the bulk of their revenue and profits.

How well they adapt, and whether they ultimately can survive and thrive, will come down to how they answer Ted Levitt's question. Are they defined by a distribution platform or specific communications channel, or are they defined around serving their mission and audience? Can they make their trains fly? Everything is riding on the answer. Market share. Power. Profits. Careers.

These are the issues I plan to tackle in this blog, the transformation of legacy models and the development of new ways of doing business in a world where everything is digital and the consumer is in command.