October 11, 2022

Reinventing Your Business Model to Fuel Growth, with Kevin Turpin

Episode 186 of The Innovation Engine podcast.

Kevin Turpin is President of National Journal, where he has overseen a remarkable transformation of the business. Under his leadership, the company has gone from being a traditional print publisher that drove more than 50% of revenue from ads in 2012 to an information services and advisory company with next to no revenue (less than 3% by 2017) coming from ads. How has he done it? By delivering a steady stream of new, revenue-generating products that help their customers grapple with some of their biggest problems. The trust Kevin and his team have built with customers has allowed them to gain a deep understanding of — and even anticipation of — their customers’ “up at night” problems.

Listen To The Episode

When considering this discussion with Kevin along with the core components of the Product Mindset, these are a few key takeaways that can help ensure your business is nimble enough to solve your customers’ biggest problems:

The Market’s Challenges Don’t Stay the Same. Neither Can You.

  • Around 2008, National Journal had a decision to make. They could continue to compete with aggressive newcomers in the space like Politico and Bloomberg, or they could make the bolder, riskier decision to be “different in kind, not degree.”
  • Kevin and his leadership team took the road less traveled. They reinvested in and reinvented their company. National Journal shifted to provide an entirely different kind of information and advisory service to their customers, and the shift has paid off handsomely.

In a Noisy World, Never Underestimate the Power of Listening and Asking the Right Questions

  • When they’re at the front end of innovation and in the early stages of product development, without fail their first steps involve listening and questioning rather than whiteboarding and prototyping. Those important steps do quickly follow, but they’re never the first steps.
  • Kevin says, “We always start with asking our members questions like, ‘What new things are you investing in that you didn’t invest in a year ago, that you didn’t invest in five years ago? What’s the number one priority that your boss is asking you to complete this year? What are you on the line for this year? What’s your job on the line for this year?’”

Customers Have an Abundance of Choice in the Digital Age

  • National Journal’s successful transformation came from a place of understanding the imperative to continuously provide value to their customers, or they may well lose them. It’s a lesson they’ve continued to carry with them in the years that have followed.
  • “You can quickly get shifted out of a budget line if you’re not understanding how customer challenges are changing or what challenges are driving your members at a given time,” Kevin says.

Resources:

About The Innovation Engine
Since 2014, 3Pillar has published The Innovation Engine, a podcast that sees a wide range of innovation experts come on to discuss topics that include technology, leadership, and company culture. You can download and subscribe to The Innovation Engine on iTunes, Stitcher Radio, Spotify, and SoundCloud to listen online, via Android or iOS, or on any device supporting a mobile browser. You can download The Innovation Engine’s dedicated iOS app from the Apple Podcasts App store, and you can listen to all previous episodes on the 3Pillar website.

Transcript

[0:00:03] This is the Innovation Engine Podcast from 3Pillar Global, your home for conversations with industry leaders on all things digital transformation, platform modernization and corporate innovation.

Chris Hansen: [0:00:24] Welcome back to the Innovation Engine. I’m Chris Hansen, your host for today’s episode. And I’m pleased to be talking with Kevin Turpin.

Kevin is president of the National Journal, where he’s overseen a complete overhaul of the company’s business model from a traditional media advertising model to an information services company with an ever-growing number of digital products and services.

Kevin, welcome to the Innovation Engine and thanks for being with us today.

Kevin Turpin: [0:00:43] Thanks for having me, Chris. Really looking forward to the conversation.

Chris Hansen: [0:00:47] Kevin, you’ve overseen a remarkable transformation at the National Journal. For listeners who might not be as familiar with that shift, how has your business model changed in the last few years?

Kevin Turpin: [0:00:58] Yeah. So actually, I would answer that by saying the change started 10 to 15 years ago where we were a traditional print media publication and that was our business model.

We generated revenue through advertising within those print periodicals, as well as selling subscriptions to them. And today, we are an information services company that is powered by digital subscription products as well as research and consulting products.

So, it’s a total I would say 360 on the type of business that we are. But again, that change started I would say about a decade ago, little over a decade ago. And now we’re really a completely different business.

Chris Hansen: [0:01:46] Yeah, there was an article on the transformation in 2017 and it said that in 2012, which you mentioned about a decade ago, 50 percent of your revenue came from ads.

Not surprising if you’re a media organization, that’s the business model. In ’17, it was down to three percent. That’s crazy. That’s such a massive change in five years.

Was there like a single event in the current lightning bolt that led to this shift away from the sort of traditional media business advertising model to digital products and information services?

Kevin Turpin: [0:02:19] Sure, absolutely. And I would say it was a combination of events that got us to that point. The first being the Great Recession, right.

So, we’re, we’re thinking 2008, there was a recovery in ‘09, but everyone has written the recovery certainly wasn’t as strong as we had hoped. It was a slower recovery from what we lost in that recession. So that definitely affected our business, right.

And at the same time of the recession, we actually got more competition, not less competition. So, we had more organizations coming into our market, some very well-known ones now, organizations like Politico and Bloomberg. So big names like Bloomberg coming in.

And we were looking at our business and we were looking at a marketplace that got more competitive in a marketplace from an Internet perspective. That the information that we’re providing at least in our print publications was certainly more readily available just by going to Google or going to really advent of the many digital publications that were being created at the time.

And we had a choice, our choice was one, okay, let’s buckle down, let’s make the investments we need to make, and let’s be as competitive as we can be. And that was certainly something that was very interesting.

On the other side of it, we have a chairman who had created a business — his name is David Bradley — he created a business in his life before Media called Corporate Executive Board, an advisory board. And the lesson that he took from that business was always make the investment to be different in kind, not degree. And he kept on hammering that into us, that we’re thinking about strategy at the time.

Are we being different in time, not degree? And the more and more we looked at, well, let’s really invest on the digital media model for National Journal. We kept on saying, “Wow, there’s just a lot more competitors. We definitely can do things better than everyone else but we’re just going to be different in degree. We’re going to be covering the same thing. We can do it faster, we could do it more in depth, but it’s still going to be covering the same thing. What would our business look like if we really started to push ourselves to be different in kind?”

And that’s really what started the transformation. And it was through his leadership. It was his leadership saying, “I want us to be different in kind, even if we have to make a drastic shift. I would prefer being different in kind for the long-term future of the business than being different in degree.”

So, we made the decision mostly driven…and it wasn’t Politico, it wasn’t Bloomberg, it wasn’t some of the great competitors. They do great stuff. We respect their publications and they have great reporters and great products. But it was really looking at where the digital media ecosystem was going, where we were looking at Google and things like Facebook coming online. And it was going to be harder and harder to be successful in that ecosystem, especially if you’re producing something that was only different in degree.

So, our decision was let’s make the hard — let’s choose the hard road and let’s recreate. Let’s create anew what National Journal is and that really pushed us to certainly the more aggressive approach, which was totally transforming what our business was.

Chris Hansen: [0:05:54] Yeah, they would say follow the puck and it’s a lot easier said than actually done. So, it looks like you guys chose that harder road. And clearly, it’s paid off. I mean I know that you have launched several, there were several revenue generating products like Presentation Center which I was on even this morning. Really cool. And more recently than that.

But I know having been a reformed product person, how challenging that is. So, from concept of like, “Hey, we’re going to go and change our path here,” actually creating one of those products and putting it out into the world, what’s that process like, what’s the time frame? Are we talking months, years, what’s been your experience?

Kevin Turpin: [0:06:38] You know, I found it depends on what you’re doing. So, I think our typical process that we try to go through is it always starts with listening to our market, right.

So, listening to our, what we call members, members and clients are the same thing, but we call them members because we created a membership business or membership business model…really listening to what’s hard for them and how is that changing.

So, we are very intentional about always wanting to know, “How are your challenges evolving?” because we come from the belief that a market’s challenges do not stay the same year over year, five years over five years, 10 years over 10 years.

And if your business isn’t evolving with that, it’s very easy to become susceptible to disruption from other businesses coming in your market or your member base or your client base deciding that your product isn’t best fit for them, that it was the best fit for their problem a year ago or five years ago. They need something else now.

And especially when people have to look at budgets and they’re looking at what they’re spending on, you can quickly get shifted out of a budget line if you’re not understanding how challenges are [changing] or what challenges are driving your members at a given time.

So, that’s where we always start. We always start with listening. We always start with asking our members questions like, “What’s keeping you awake at night this year. What new things are you investing in that you didn’t invest in a year ago, that you didn’t invest in five years ago? What’s the number one priority that your boss is asking you to complete this year? What are you on the line for this year? What’s your job on the line for this year?”

So, asking those questions is where we start. And then once we get a good idea of a challenge, then we move to testing products. So, we want to test different ideas with our members or with our potential members that could be solutions to the challenges that we feel that we understand at that point.

Once we get products tested and if there’s one that really spikes — and we have a whole methodology to try to understand what truly is spiking and how we support things, et cetera — then we’re ready to prototype, where we’ll build a prototype on a specific product. And that prototype will help us take that back out to our members or potential members and give them something to react to.

“Would this be a solution to the challenge that you’re stating? How would you use this? What would you do with this in your workflow, et cetera?”

And then finally, once we get there, then we’re ready to start what we call self-testing. We name our self-testing period our charter launch period, where we’ll go out to usually members or potential members that are friendly to us that we have a good relationship with.

We will test call scripting. We will ask them to join or buy the product that we want to launch, but they will buy it at a reduced contribution. And then they will make the foundation of what would be a new business or a new product.

And then when we’re able to work out the kinks of the product, how we’re serving it, we’re able to get direct feedback. And then once we go through that process, that’s when we’ll get to a formal launch and we’ll put marketing behind it, we’ll hire salespeople, et cetera.

That process I would say — typical six months, can take a year depending on if you’re wrestling a little bit about what a challenge is or you’re wrong on what your potential product solutions are.

However, I’ve run processes lately, actually, in the last couple years, I’ve run processes that took three months from the idea to us having a product that we’re actively selling in the market.

The thing that reduced that time is it’s because we had members come to us with a challenge that was strongly felt. We weren’t going to them. They are actually coming to us because we built up so much trust by going through this process of product launch, that they brought new challenges to us to say, “You actually apply your process to this.” And I can tell you that this is a big challenge and that allowed us to skip some of the at least problem-solving steps.

Chris Hansen: [0:11:10] It’s remarkable to me what you just described sounds so much like I’m on a call with our UX and CX teams talking to clients. It sounds very much like the approach we would take, talking with clients about how they should be thinking about their end customer members, readers, subscribers.

You just described the perfect process and it’s pretty remarkable. It clearly shows that you’ve moved from a media company to an information services company that supports digital products.

So, so well done. I mean it’s very impressive the approach that you take and I could see why it’s been successful. It’s exactly what we direct to our customers as well. So amazing.

So okay. So, you got existing products out there that you have to support. Again, I’m a reformed product person, so I know the sort of pull of “We got to create new innovative products out there as well,” and it’s like you don’t – you have a finite amount of resources to do both.

How do you balance that? It seems like your customers are coming to you saying we want more. And how do you balance that with what you already have? Curious how you handle it?

Kevin Turpin: [0:12:25] Such a good question. You just hit my awake at night issue.

Chris Hansen: [0:12:30] I’m sure. I’ve been there.

Kevin Turpin: [0:12:32] Yeah. I think that’s a tension that we live in all the time because we’ve made this commitment to innovation and product creation and we’ve become known in our market to be a company that is constantly seeking to innovate and creating new ways and contributing new solutions to the workflow of our market.

You know, we don’t have this perfect yet. This is something that is a priority of mine — that we get better at this. But the one thing that I am learning or have learned is really how you live in this tension is you need to really seek to understand, after product launch, are you actually meeting the challenge that you intended to meet?

And also, with that and connected to that, is the challenge the same? Or is it slightly nuanced? Even a slight nuance can matter. Is it nuance in a way where you need to shift the product just slightly to be right on challenge, right?

You got 85 percent of the challenge, right, but that last 15 percent that you didn’t get or you didn’t understand at the time of launching the business really is making a difference between having a business that is successful or not.

So, we spend a lot of time after launching product then going back out and really hearing how our early partners, our charter partners as I said, the test sales period, how they’re using the product, how often they’re using it, what they’re using it for, really getting a depth of understanding on is this a real solution to the challenge that you stated? And then holding ourselves accountable to continue to sharpen the product, post-launch.

And then there’s the understanding, okay, when do we need to add something new in because that – it’s organizational attention, organizational energy. We have – we do not have unlimited resources. So, that’s a big decision when to say, okay, we think this product is up and running, it’s going to keep growing and it’s at its scale point, and we think we want to add something else into the portfolio.

That timing typically is, do we think there’s a new challenge that we’ve identified that will be additive to what we already have, or is there a new challenge that actually stretches the business into an entirely different market or arena? And that usually will drive the decision.

If it’s a new challenge, that, you know, yeah, this is a challenge, but this isn’t a top priority for our market or the market that we can serve, we can do this and we’re hearing it from a couple customers, but it’s a very small group that wants it and we can’t see a path to scaling it across market, et cetera, we try to hold ourselves accountable to don’t just move to new just to do new.

So, just more concisely than that, I think the first side of it is not leaving a launch product too early and really doing the work to confirm that the product that you’ve launched, the business that you launch is something that is set up for long-term success and it’s solving a challenge that’s going to be here to stay and it’s really being integrated into the workflow.

And if you haven’t gotten there yet, then you should really keep organizational attention on making sure you’re perfecting it to that and also being willing to admit that you’re wrong. We’ve had products that we launched that we were wrong about and we had to shift them or we had to close them down, et cetera.

I found it’s a lot better if you get to that answer earlier in the process by sticking with it than letting it languish for two years and then coming back in and having it make sure it fits your decisions.

So, that’s the first side of it. The second side of it is not moving into something new unless confirming that again, it’s allowing you to expand in your current market, it actually is something that’s strongly felt across your market or at least in a big enough group that you’re like, “Okay, we want to solve this challenge,” as well to add it to our portfolio and/or it gives the business an opportunity to expand into a different territory or different market.

Chris Hansen: [0:16:56] You hit some notes that are really important to us here. So, there’s – we have this concept of the Product Mindset. One of the concepts is that products are never done. And I think that’s something that, you know, of course they’re never done. But what you just described is the reason why they’re never done.

You’re trying to make sure that you’ve solved for the issue and if you have solved the issue, you have to make sure that you continually improving the product for the market.

And then the second part is making sure you find product-market fit which is a really, really important step. And the other thing that you described earlier about prototyping I think is really important as well.

Early prototyping is really important in figuring out whether or not the product you’re building is the product that your, in your case, your members are asking for. So, it’s almost as if the stars have aligned in terms of the way that we approach things, in the way you approach things at the National Journal. So really impressive.

So, I’m sure with everything going on, you’d mentioned the change in strategy based on the recession in the late aughts, how has Covid impacted your business? And I’d say maybe more broadly all the sort of macro, the broader macroeconomic climate that we’re in, the geopolitical climate that we’re in. It feels like there’s a lot going on in the world right now. How has that impacted things?

Kevin Turpin: [0:18:16] You know, so just from what Covid did, I’m taking myself back to March 2020 and all of the scenarios that myself and our CFO started building based on what we thought would be the effect of that moment when the world was shutting down.

I’d say we actually were blessed in a way that – and I don’t want to say that in a cavalier way, because Covid and its effect on the world was so significant. But as far as our business and the market we served, it actually created more demand for government affairs.

So, our business serves government affairs leaders and has traditionally served government affairs leaders and it serves key government and public policy influencers, right? So, like the House of Representatives and the Senate and the EOP, et cetera.

During Covid, they became the center of everything. So, we actually did fine during that period from its effect on our business. And that’s mostly because the market we serve became in high demand within their companies and within their industries, et cetera. But, I’ll put that aside.

As far as the opportunities that the period opened up, we actually used the switch to a more virtual world to our advantage, right. So, we’ve actually launched a couple new businesses during this period that I don’t know if we would be able to – we would have been able to do as efficiently as we did in a non-Covid period because we were able to meet with all of the potential members virtually, and still are.

I think people still haven’t necessarily opened up their offices and we launched into different leaders within corporations where we’re serving Heads of Government affairs. And now, we have a business that is growing, and growing Fastly, that is serving heads of corporate affairs and chief communications officers who are in the headquarters offices of major corporations.

So, we were able to at least use the time where we were all kind of stuck in our homes to our advantage in that we started seeking to reach out to folks and learn about their needs and learn about their challenges and we’re able to respond to some different markets’ needs, where I don’t know if that would have stopped us if we weren’t in Covid in going into some of the clients we’re going into, we definitely would not have been able to do it as quickly as we have been.

So, I think that’s the second thing I’d say. And the third thing I’d say Covid has a hundred percent changed the way that I manage my staff, right, and I have to lead.

Being virtual for the past two years, we’ve recently come back to the office for two days a week. So, now being in a hybrid environment that I think is here to stay, quite honestly, we never go back to five days a week in an office.

And I think most businesses are going to have employees all over that at least all over the country if not all over the world, even if you do not have locations all over the world and that is here to stay as well. And that has created a lot of challenges. How do you connect with staff? How do you build culture, et cetera?

And certainly, has gotten me to a lot of creative thinking with my staff and with my closest executive, senior executive partners on how are we going to manage the team, how are we going to motivate our company, how are we going to get people really rallied around a central vision where everyone kind of is in an individual silo? So Covid has totally changed how you manage and lead a company.

Chris Hansen: [0:22:13] Yeah, it’s definitely created some interesting scenarios. I think all, you know, from a work perspective for the positive, everything you just described and we are a global organization so you know, I think it’s helped us at least realize the power of having that global team. And I think other companies are learning that as well as an unintended consequence of the pandemic.

Just given that sort of focus of change, like it’s created maybe opportunities for innovation, anything to preview? Anything you have coming up that’s interesting, exciting, that people listening would be interested in?

Kevin Turpin: [0:22:49] Absolutely. I mean we’re always innovating. That is something that we’re speaking to. But you know, we’re really excited about some work that we’re doing now as I mentioned in response to the last question, where we’re expanding the markets we serve.

We serve the Washington, D.C. government affairs and public policy market for the better part of the 50-plus years that we’ve existed. And over the last year and a half, we are now successfully taking the business out and expanding the business into corporate headquarters.

And we’re doing that with research and advisory services, and our hope is that the research and advisory services will turn into something that will be a platform. I don’t know if you’ve seen these business models that are both part man and machine?

Palantir is one, where your clients can derive insights from a platform while also being able to talk to humans and receive insight and direction from humans. So, I think that is what we’re seeking to build, what we’re definitely at the human insight part of it right now.

And the focus of it is on societal issues which – so that is something that has happened within Covid. There’s certainly been a much bigger focus on societal issues, especially in corporate America. And societal issues are everything from reproductive rights to racial equity, to LGBTQ+ issues, global conflict, immigration.

All these things are things that corporations now have to engage with, they have to think about. Corporations have to think what is their strategy when it comes to these issues? How are they going to engage? Are they going to engage, et cetera?

And we certainly are seeing opportunities where our research can help corporations really think about what is their place within these societal issues and think about their different options on engaging and what are the risks and opportunities with the different options. So, we’re excited about the business that we’re building.

Chris Hansen: [0:25:06] Yeah, it’s clear from your answers and just the sort of flow of the answers, this is not your first rodeo with respect to podcasting.

So, I know for folks who want to hear more from you, you know, can you tell us about the Gracenomics podcasts that you started?

Kevin Turpin: [0:25:26] Oh yeah. You’re so good to ask me about that. Yeah, the Gracenomics podcast is something that I started actually with my pastor. And it was something that came about, at least the content of it came about over the pandemic where he and I were just in conversation and we decided that we were just going to seek to live out.

And I should note, it’s a religious podcast that, we’re followers of Christ, and it’s just us trying to live out what we were reading in the Bible on loving your neighbor and serving others and caring for others.

And we were looking to, both through prayer and just being responsive to needs around us, helping others, and being generous and providing resources for people who were in those pinch points of life.

And the more and more we did it together, there are all these rich stories that were coming out of it, and the individuals who we were sent to help, their responses and also the blessing that we got out of it.

So, we decided to start telling the stories over a podcast. And Gracenomics, that terminology is the term that my pastor came up with, which is really seeking to be generous to others without impetus, right. There’s no exchange. Just seeking to be generous because that’s what you’re supposed to do.

So, if you live a life of Gracenomics, you’re constantly giving and constantly sharing the things that you’ve been blessed with.

So, it’s a cool little podcast where we’re able to tell some life-changing stories and both lives that we were able to impact and how our lives were impacted through those exchanges.

Chris Hansen: [0:27:20] Amazing. And I love the concept and the sentiment. So, definitely, listeners, please go. Clearly, Kevin’s got really good perspective, so please go over there and listen.

So, a little transition here. So, we do this with every one of our podcast episodes. We do a speed round. Just ask some rapid-fire questions. Don’t have to think long and hard about it. Love your answers, especially with the perspective you’ve given us this far.

So, this one I think is really important given the conversation. Is there any advice that you’ve gotten at some point in your career that might be helpful to our listeners?

Kevin Turpin: [0:27:57] Oh, absolutely. This is something that I’ve started to live by and anytime I’m asked by folks that I’m mentoring or new staff, I get this question a lot. This is my answer.

And it’s, care more about your verbs than your nouns. And what I mean by that is I think we live in a world where we all chase, especially when we first start our career, we’re all chasing, I want to be a manager, or I want to be in strategy or I want to be a president. Those are all nouns.

And what I found is if you care more about your verbs, I can do market research. I want to learn how to build relationships so I can be a good relationship builder. I want to learn how to run a market research call, et cetera, et cetera, et cetera.

You care more about those verbs, the things that you do, the skills that you have. The nouns will get attracted to the verbs. So, I always give young people, and old, the advice that if you care more about the verbs, if you focus on the verbs, if you focus on sharpening the things you can do and adding as many as possible to your skill set, your nouns will naturally come to you.

Chris Hansen: [0:29:20] I’ve done this a few times and I think that’s the best advice I’ve heard so far. So, thank you for that. I think it’s wisdom. As an old person, it’s been imparted on me, so thank you. I love that answer.

How and where do you get inspiration for, you know, the products and ideas that you’re generating at the National Journal?

Kevin Turpin: [0:29:40] You know, I really – and this is something that I love to do and I learned it early in my career. I love just spending time with our members, with our clients, with our customers. And they give me inspiration, right?

I love learning about their jobs. I love learning about what they worry about. And often, out of those conversations, I get the inspiration on, “Wow, that seems like a really big challenge. Tell me more about that.”

And so, I just love listening to our members. I do a lot of hosting of group conversations with senior leaders where I call it group therapy where they kind of can just come together and talk about their roles and what’s hard about their roles and how their roles are changing. And I often walk out of those conversations with inspiration.

Chris Hansen: [0:30:29] I could not think of a more customer-centric answer than that. And we do the same, host round tables for some of our clients and prospects, and that’s the same answer I would give. That’s where I get inspiration from. It’s talking to the people that you’re either going to support or you support now. So totally aligned for that.

What’s the best business book, what’s the best book that you’ve ever read?

Kevin Turpin: [0:30:53] So, I’ll answer business book. Best book I’d have to think about more. I really like Zero to One by Peter Thiel. I love the concept that when you’re launching a business, even if it’s just a small contribution of something new that you’re building the business on, you have so much of a better chance to be successful and create something big.

It really follows what my mentor and our chairman and my boss David Bradley says, really be focused on different in kind not degrade. So, I would say Zero to One.

Chris Hansen: [0:31:29] Right. And other than The Innovation Engine and Gracenomics, what’s your favorite podcast that you would recommend to somebody listening?

Kevin Turpin: [0:31:39] You know, I have not been as consistent in my podcast listening. It’s so funny when you start doing one and you listen to things like The Innovation Engine. But the one thing I will say – I love sports so I’ve always tried to stay consistent with The Bill Simmons Podcast, which I know is a lame answer because it’s probably one of the more popular ones. But I do listen to that one.

Chris Hansen: [0:32:02] Well, I know you went to Georgetown and I went to Syracuse. So, we can talk about at least basketball for some period of time and have a healthy conversation at least back in the Big East days.

Well, Kevin, thank you so much for joining us. This has been amazing. Really enjoyed the conversation, a really thoughtful construction. Appreciate you joining.

And everyone, please go out and listen to Gracenomics. But thank you again and can’t wait to reconnect in the future.

Kevin Turpin: [0:32:31] Thank you, Chris. I appreciate you having me.

[0:32:35] This has been an episode of the Innovation Engine, a podcast from 3Pillar Global. If you have questions, comments, or guest suggestions, e-mail us at info@3pillarglobal.com.