The Hedgehog Concept: How TEGNA Became a Master of One
Today’s media landscape is as competitive as ever as media companies offer more and more marketing services in order to be a “one-stop-shop” partner for their clients. Jay Donovan, Director of Digital Sales & Training at TEGNA, discusses why TEGNA is taking a different route, avoiding the famous phrase “Jack of All Trades, Master of None.”
By Jay Donovan, Director of Digital Sales & Training at TEGNA
I was recently asked to speak on a panel regarding what makes my company different. In preparation, it caused me to reflect on the current media landscape.
It also had me revisit the famous book “Good to Great” by Jim Collins. This seminal book, published more than 20 years ago, has taught thousands of business leaders what makes the difference between a good company and a great one. It has me thinking that many media companies have not learned some of the book’s key lessons.
One of the lessons Mr. Collins provided was the Hedgehog Concept. It is, in essence, the understanding of what a company can be best at. A company can develop its Hedgehog Concept by answering three questions:
1. What can we best at?
2. What things can we be passionate about?
3. What is the key economic indicator we should concentrate on?
Looking across the media landscape, I struggled to find strong examples of companies that have figured out their Hedgehog Concept.
Today’s media landscape has never been more competitive. To grow revenue – or perhaps protect it via the belief that they are insulating their business – media companies are rapidly expanding their menu of marketing services to become a “one-stop-shop” partner for their clients. The thinking is that by providing as many services as possible, clients won’t have to seek other media partners and thus garner more of their client’s marketing dollars.
This practice is a common one utilized by many in the media businesses. We see it from large media companies such as Google, Facebook, Amazon, and even Tik Tok providing everything from search ads, e-commerce offerings, OTT opportunities, and everything in between. But it’s just the big companies trying to be everything to everyone. Print and newspaper companies are providing search or social media offerings. Radio companies are also offering display, video, and OTT services.
It’s understandable why all these companies want to be able to provide as many media solutions as possible. Doing so allows them to offer the perception of savings, whether in terms of actual media cost or simply the clients’ time. In turn, clients don’t need to work with as many media vendors, thus enabling the media company to earn more revenue per client
The reality, though, is that these companies are perfect examples of falling into the trap of being a fox. The reference comes from the Isaiah Berlin essay “The Hedgehog and the Fox.” “The fox knows many things, but the hedgehog knows one big thing.”
For years, we at TEGNA adhered to the same school of thought. In addition to linear television and the corresponding local websites and apps, we offered just about every marketing solution option to our clients. We positioned ourselves as a full-service or “one-stop” media partner.
While our advertising business was strong, with many clients utilizing multiple TEGNA solutions, it also brought many challenges. All our solutions were handled in-house, not farmed out to third-party entities. The workload required to support and service all these solutions was a constant challenge. It required significant employee staffing as well as continuous employee training. Our sales teams often felt overwhelmed and struggled to stay on top of all the different solutions. We were not only Isaiah Berlin’s definition of a fox, but we were also the epitome of the famous phrase “Jack of All Trades, Master of None.”
Due to this, we at TEGNA made a critical business decision. In the third quarter of 2019, we decided to sunset many of our solutions. We scaled back our client offerings to include linear television, local websites and apps, targeted display, video, and OTT.
The decision wasn’t easy as it would significantly impact company personnel, our clients, and overall revenue. It would force us to have difficult conversations with clients and agencies to inform them that we are no longer supporting parts of their business that they entrusted us with, in some cases for years.
There was concern if some of our customers would still even want to do business with us at all. We also had to rethink and restate our value proposition for our clients and our sales staff. Despite all these challenges, we forged ahead. We believed it was the right thing to do for TEGNA and our clients.
While it may have seemed that we were taking a step or two backward, we felt it was vital for us to do so to move forward. Reducing the number of solutions would allow us to focus our efforts better. While we could no longer claim to be full service or a one-stop-shop, we could genuinely be experts across all the solutions we offered.
As television broadcasters, we know video; we have been creating and selling it for decades. Since the launch of our OTT platform, Premion, in 2016, we’ve proven ourselves as pioneers and leaders in the space. We are focusing on what we are best at and passionate about. We’ve bet that by doing so, we will grow revenue not because we can offer everything clients want, but by being marketing experts and their trusted partner.
This transition was not easy. We had to rework our brand positioning and client value proposition. Sellers had to become comfortable not being able to offer a solution for every client’s need or request. We found ourselves, and sometimes still do, walking away from significant revenue opportunities.
While this can be difficult, especially for salespeople, it has proven to be the right decision. Our business is stronger than ever as we delivered record full-year company revenue in 2021. Our sales teams are more confident and comfortable with all our client solutions.
Fewer solutions have meant fewer processes and workloads in many cases. It has allowed us to have more meaningful conversations with businesses and clients as they don’t feel we are always looking to sell them an additional product or selfishly garner more of their budget.
I am proud to say that while we may not have perfected our Hedgehog Concept, TEGNA is not trying to be everything for all our clients. We are successful by being the absolute best video partner that delivers the best quality audience to help our clients’ business grow. Does that make us a great company? Not sure yet, but I think we are on the right path.
Is your brand looking to stand out and align with a Good Company that has mastered video? Let’s Get In Touch.