Avoiding disaster: a new look at minimizing the risk of crises

When most of us think of crisis in the publishing field we immediately think of the impending financial doom caused by the transition to newer forms of electronic media such as the Internet, television and even e-books. In fact, in a quick Google search for the phrase “crisis in publishing,” the results list dozens of sites dedicated to extolling the massive financial holes in which many major publishers, including Harper Collins, finds themselves.

But under the standard definition of crisis (being a low probability, high risk unpredictable event), I cannot label these financial quandaries as crises. When Harper Collins announced a wage freeze in 2008, it was not the result of a crisis, but the result of necessary contraction due to trend-changes in the technology of the field. The collapse in book sales was, in fact, a high-probability event (I use the term event only to conform to the definition, because ‘event’ implies a one-time occurrence). It makes perfect sense given the approach of a wave of new technologies that are slowly making the entire print industry obsolete. The impending demise of publishing was hardly unpredictable.

But one article published in New York Magazine highlights Harper Collin’s interesting new approach to dealing with the decline of the book publishing industry that reforms the business structure of acquisitions rather than the technology.

According to the article, a small division of the large New York-based publisher is focusing on convincing authors to forgoes the traditional blockbuster advances in return for the guarantee to half of the book’s profits.

While this is probably not the saving grace for the publishing industry, it is an excellent example of how Harper Collins is changing in order to reassess and minimize risks. For instance, by avoiding the enormous up-front cost of title acquisition, the publisher essentially insures itself against legitimate crises. Under this model Harper Collins might not face astronomical losses if an author is involved in a scandal shortly after a book’s release. It might even profit.

Although it has not yet reflected reform in the company’s communication during a crisis, this business model acts as a preventative measure, mitigating the damage that most any stakeholder would endure as a result of a crisis.