With more than 200 companies from publishing to health information services, Hearst is a big company. The kind that usually creates special research units to figure out how to cope with future technologies, like the boom in mobile device usage. But Hearst CTO Philip Wiser says that's exactly what his company didn't do.
"I'm not a big believer in a large, centralized R&D group," Wiser says. "If you have a centralized R&D group that's trying to envision what's going to happen five-plus years out, you're likely going to miss the mark. In the context of a content and information company like Hearst, I think it has to be much more pragmatic and focused on issues that we're facing within the next year or so rather than looking out five to 10 years."
Instead of one R&D group, Wiser decided to decentralize his company's experiments with new tech. So he opened up Hearst’s data to a select pool of developer partners—many of which have already surprised him with new ways of viewing magazine content.
Last year, Hearst partnered with one of its fashion magazines Elle, to create the first magazine optimized for Google Glass called Glassware.
"We felt that doing that would give us insight into how we would develop content and products with the next generation of wearable devices with different form factors and much more real-time interaction with the consumer," says Wiser. "It’s a strategy where we have key domain experts that drop in and partner with other brand’s teams to develop prototypes based on where we think the market is going and where technology is going."
In addition to internal collaboration, Wiser says the company has been experimenting with colleges. Recently, a Parsons student presented an image-based navigation tool that is now in serious development at Hearst.
"It will let users look at all the images across Hearst Magazines and let them browse using a mediated trail to find content of interest," Wiser says. "It's a very different approach than going into a branded destination site and looking at that information as a way of re-aggregating the content that works really well on mobile devices."
With the success of projects coming out of such collaborations, Wiser says the company is in the process of creating an even more public API.
"With our hackathons and development to date, we've found some experimentation and we haven't really taken it to an external party yet but we expect to do that this year. What we're trying to do right now is create the right framework so that when a third party develops against these APIs, they can develop something that can be useful in the marketplace.
"We see that with open APIs ranging from companies ranging from Twitter to Google are enabling the community of developers to move very quickly—that is the hacker mentality and that’s what we’re going for."
Wiser says that along with APIs, having a technologist perspective has been essential to making a company’s R&D move at the necessary speed.
"Even when you have R&D or you have people hacking and developing things in a medical manner, general business management is trying to operate based on a rigid annual plan or a rigid product plan. Of all our challenges, that's been our single biggest challenge—to operate our businesses in a way that really supports this real-time innovation."
He says removing the distraction of traditional tech operating groups in the minds of higher-ups has worked as a good strategy.
"Changing the perspectives of what tech means within operating groups, general business leaders, presidents, the CMO and to different divisions on how they view tech as a partner in meeting our goals is important. Developing the talent is a key prerequisite to developing the tech," Wiser says.
"Trying to go in and teach a traditional IT team and ask them to do product development is obviously not in their traditional skill set. So we really focus on taking the traditional IT functions and pulling that into common teams so we can teach them to develop more custom product to work with the technical talent within the operating groups."
To stay up on the technical talent, Wiser says Hearst brought in a former Amazon.com employee with specific expertise in programmable interfaces and cloud infrastructure. He says bringing in talent with various technical and entrepreneurial backgrounds has been key to changing the culture and R&D efficiency.
"We're developing that culture so that this emerging wave of the next generation of technologists is really attracted to it. By bringing in talent from emerging media companies, pure online digital plays that are coming over to Hearst and finding the scale and support—I think that's just starting to create a really nice, virtuous cycle within the company right now."
By challenging internal and external developers to see who can create the best product first, Wiser has found that the friendly competition results in a quicker, more inspiring development process.
"With existing talent in the company, there is a strong desire to do hacker-like things—I've been delighted by the amount of people that raised their hands and really stepped up when given the opportunity. I think it's important to understand that a lot of what I consider fresh talent in the company has been within the company for quite a while but really sees the opportunity to do something bigger and better."
Wiser says there's a common quote the team uses to inspire and challenge them during development: "Ninety percent of the revenue that's currently generated across Hearst comes from businesses that did not exist in 1979—when our CEO took over."
He says it goes back to treating developers like the artists they are—not just another IT department to call for secondhand help.
"If you recognize that and give them the ability to create something really great—and you give them a platform where they can impact hundreds of millions of consumers on B2B scale and major industries like health care—you have the ability to affect large-scale change."
"Get the right technical talent in the company and let them do great things. I think that by celebrating and promoting those that have taken some risk and developed something creative makes others want that kind of recognition. It's that simple."
In order to narrow down the right expansions on which to focus R&D efforts, Wiser says he and the team have needed to find innovative ways of using and measuring audience data.
"Moving to the cloud forces us to rethink the way we develop and some of the courtship abilities we have around things like audience data—that aggregation and use of data is a real asset to drive new products and elements of our business being a content and information company."
Wiser says the company has been able to create a company-wide data set of both on- and offline companies.
"We touch more than 100 million consumers each month online, we’ve now instrumented those digital touch points with off-line consumers—which is a much larger set of consumers. We're using that to create company-wide audience data sets that we can use to deliver personalized product."
But Wiser says big audience data has its drawbacks when it comes to focusing on key efforts—even with a big corporate budget.
"It's very easy to get enamored with the latest technical trends or being interested in too many areas that are impacting our products. You could waste a lot of time and money building the wrong things the wrong way if you don’t have a good understanding of the data and objective decision-making of it. But to really affect change across hundreds of millions of people with content—that requires a lot of focus."
He says that finding where audience data meets profit works well for determining where to focus efforts for the next year.
"I’ve focused on the first couple of projects on the areas where we can really see real quantifiable business impact. And once we've built confidence and capabilities—then we could look at longer-term R&D efforts," he says.
"On the audience data side, we look at the rising use of programmatic buy-ins for online advertising and that could buy us an opportunity to apply some of our data analytics to give us a competitive advantage in the programmatic stages. Then, if we can improve on engagement with advertisers and the amount of where CTM lies with online exchanges, we have real quantitative measures to know that the tech we're building is producing a real, viable result."
Tracking progress on that data is one thing, but measuring overall innovation is another thing—one that Wiser has yet to quantify.
"We haven't yet conquered tracking performance and measuring what an increase in innovation and creating better products really means objectively," Wiser says. "You can look at the overall earnings of the company and if it's performing better but really providing something of substance to know whether or not you truly are creating a more agile or innovative organization—I think the jury is still out for that."