Tech Elephants & the State of Change at SSP 36

Photograph by William Albert Allard

With each new software release, what's possible grows. With each new company that comes online, or new resource or material that's created, what's imaginable expands. This is simply the state of play; Heraclitus' river is now grade-5 whitewater.

For those who grew up under Moore's law, not only are more things possible; they're inevitable. Whatever you see, briefly, as missing or desirable in any device, service, product, or feature set will be corrected or added to the next build, because if you've seen it, someone is already working on it and since they will naturally have faster and faster processors and more and more code at their disposal, the problem will fall.

It's a funny thing to grow up like that, or at least it's funny to those that didn't grow up like that; the outlooks and world views to come out of such an evidently or presumptively self-ameliorating iterative environment are fundamentally different from those outlooks that came before.

NASA saw the change/s and adapted to them early on. (This I have on the very good and entirely irresponsible, second-hand hearsay authority of a mother of a precocious college graduate who was snatched up to work in NASA labs in Texas a decade or so ago.) Older design engineers used to take lead in design-direction decisions on their teams because they were the most knowledgeable. They knew what worked and what didn't work, what would and what would not, and could guide the younger engineers as they 'came online' out of dream-filled days of school, learned those hard lessons, and caught up with reality. Later, as the pace of change increased, they saw that increasingly younger engineers -- who didn't know any better -- were able to try things that hadn't worked a few years ago, or even a few months ago, and get those things to work, delivering different results faster in rapid iterations. Silicon Valley and other tech centers saw this trend too, back in the late nineties, and regularly "poached" young elephants from computer labs.

It's always tempting to suggest that younger folks are smarter (especially for the less than superannuated among us); but perhaps it's worth while too to consider the case in less debatable terms, that they are less knowledgeable of the river that flowed before; ignorance isn't just bliss, but at times of rapid change, it is alternately enabling. Or to put it another way, when you step into rapids, regardless of your comfort level or experience with whitewater, you're going to go for a ride; it's your experience with the rapidity of the rapids, if you will, that determines whether the trip will be a happy and productive one for you or for your doctor.

Growth

In Erik Brynjolfsson's TED talk on the future of innovation The Key to Growth? Race with the Machines, (TED, February, 2013) he shares stats from the second industrial revolution a hundred and twenty years ago. He notes that the real advances in productivity did not happen when the factories electrified; in fact, it took another thirty years for workflows and processes to be reimagined, based on the flexibility of those new eFactories, for the greatest growth to be realized. That's time enough, as Brynjolfsson points out, for a human generation to turn.

In comparison with our age, he underscored that simply applying new technology wasn't what brought the greatest returns. Redefining who we were and what we set about to accomplish in light of the capabilities of the new technology is, and while we have seen great advances thus far, in our age of the computer, we will see more still if, when, and as we shift from the external focus of applied technology to this more existential and categorical focus of redefining the enterprise itself; i.e., not just replacing traditional processes and products with computers and digitally-built alternatives but in a sense "teaming" with the new technology to imagine what it is capable of in order to define new systems that aspire to do more and entirely new things than did the systems that were in place before.

The State of Change

Rick Joyce of Perseus Books delivered a rousing Keynote address to start the 36th annual meeting of the SSP last week in Boston. He shared many adventures in new marketing approaches at Perseus and its imprints (e.g., Basic Books), including the first ever Publishing Hackathon, from May of last year, and a thoughtful review of future implications of mobile-publishing and content delivery; e.g., work/s regarding famous landmarks delivered or offered to visitors as they pass by. The talk was rich with suggestions for scholarly presses -- such as finding new ways to leverage the inherent value in and expertise of our scholars/authors -- and as soon as slides/video are available, all scholarly publishers should check them out.

via niemanlab.org

Throughout Joyce stressed the growing need for publishers to stretch their definitions of their roles from producers of products such as books and eBooks to deliverers of value and wonder in new forms -- a sentiment that resonated well with the now famously leaked NYT's Innovation report from earlier in the year. Now, if we take a step back and consider the innovation discourse of just a few years ago, back when people were discussing mobile cheese and talking mice (can you imagine?), the argument was more externally focused. The cheese, she is moved; let's go find the cheese. Then, for a time, we heard messages about the pace of change and how the pace of change was accelerating; everything was about keeping up and reacting faster: be nimble, pivot to avoid disaster.

These suggestions that we're hearing today, from Joyce and the Innovation team at NYT and elsewhere, are more organizationally and internally focused (less cheesy). They foreground the need to rethink and radically restructure what we're doing not just how we're doing it (e.g., developing new software programs to deliver our own B2B services, finding new ways to leverage the expertise of our authors). I'd say that this shift in the focus of these strategic suggestions (from how can we react to a sudden change, to considering what else we can do entirely -- taking change as a given) places us somewhere down Brynjolfsson's productivity curve; we may not be running with machines, quite yet, but some of us are choosing up teams.

The 36th annual meeting of the SSP in sum

It's true to say that the SSP 36th annual meeting was, as it usually is, packed with new technology and creative uses of new platforms and practices, but from Rick Joyce's shared vision for new marketing and new programming, to Delta Think's tutorial on contextual inquiry-bassed product development, and on to the closing sessions on new product releases and on augmented reality via Google Glass and via other devices yet to be imagined, it was clearly more than that; it was a proving ground, heralding things to come not only for presses but from presses in the next digitally expansive era that's beginning to open up for us upstream.

Morag and others will of course tell you that there is absolutely no reasonable possibility for successful, meaningful change in the models for publishing, not yet, and they're as right as can be, in retrospect; an elephant never forgets the waters that it has stepped in. But as Joyce and others suggest, the opportunity to change, for the moment, is only the greater for it. 

Who re-Moved My Chains - the way change has changed, taking change as read

Photograph by William Albert Allard

Winston the elephant was still just a baby, so he hadn't yet learned. Long exercises each morning at the hands of the elephant trainers were exhausting and strange, but they never tired him out enough to stop him from trying to escape. The ground in camp was brown and bear, and all they had to eat was soggy grass that came in dirty buckets. He pulled on his chains every afternoon, working to get free. He longed to run in the meadows across the river from the circus camp. The grass and leaves there were rich and deep and looked so delicious!!!

     Gaspar and the other adult elephants watched Winston with patient sympathy. Burdened with perfect memories of every pull, every failed attempt and all the wasted energy, in every afternoon, through the weeks and months of their first years in camp, they knew. Winston wasn't strong enough to break the chains around his leg. In time, he'd learn.

© 2014 Peta.

     In the afternoons, the elephants were chained along the edge of camp, facing the river and the jungle beyond where it was said that packs of elephants roamed free. Small chains held even the largest of elephants in line, because of their perfect memories of the truth of the way things work: when a chain is around your leg, you cannot break free. Many weeks passed, many long afternoons of wild, youthful commotion and elephantine sighs: Winston pulling on his chains to exhaustion; the adult elephants watching with slightly less and less patience at having their quiet afternoons rendered unquiet.

     Morag was an old bull elephant next in line on the other side of Gaspar. He didn't like the constant disruption of Winston and his pulling. Several times Winston had upturned their buckets of dinner, leaving half of the herd to go hungry. He complained loudly to Gaspar that this nonsense must stop. Gaspar tried to argue that the matter would run its course in time, once Winston learned; but siding with Morag, the other elephants in line weren't satisfied to wait. Gaspar realized that it was time.

     "The chains are too strong, Winston."
     "Why don't you break them?!" Winston asked. "You are huge!"
     "Elephants can't break the chains that hold us."
     "You knock me aside with your leg, when you are not looking."
     "I'm sorry for that, Winston."
     "But, you must be strong enough to break your chains."
     "No, like you, we've tried. We could not."
     "But, try now."
     "There would be no point; we know what will happen when we pull on the chains."
     "Try just once; show me!"
     "No, Winston."
     Winston thought on this. He knew there would be no budging an elephant when it came to his memory. He'd have to think of something.
     "What if you and I pull on the chains together? Have you tried that?"
     Gaspar grunted somewhat angrily. He didn't like frustration in the ranks and could feel Morag growing surly next to him.
     "We can't break the chains, Winston. Others have tried that. I've heard many stories..."
     "But have you tried that? Have you tried pulling on the chains? ...with another elephant?"
     Gaspar had to admit the truth. "No, I haven't."
     Winston put his foot on top of the chain on Gaspar's leg.
     "We can pull together then."
     "Gaspar..."
     "Just once more. Try once more. Then, I'll stop."
     Morag trumpeted loudly and knocked Gaspar sharply in the ribs.
     "No, Winston! Stop this!" Gaspar said. "It's time for the elephants to sleep."
     "But..."
     "We must give the others peace, Winston!"
     Winston began to complain again, but Gaspar quickly pulled him in closely with his trunk and disciplined him sternly in hushed tones. He released him again.
     Gaspar's counsel seemed to work, as Winston looked defeated at the ground, kicking it several times and scraping it with his trunk.
     "Now go to sleep, Winston. Tomorrow will be a new day."
     Winston circled some, eyeing Gaspar, but then lay down his head and finally gave up.
     "Al last," Morag said, triumphantly.
     "We will have our afternoons of quiet returned to us!" the other elephants trumpeted.
     "Yes," Winston said. "I told you all, it would run its course. We can all get some sleep now."
     The elephants fell in line, one after the other, and slept content that quiet would return to the edge of camp, in the days, weeks, and months to follow.

via funpic.hu

     But in the morning, all woke a strange and unfathomable sight. As news spread of not one but two sets of broken chains at the end of the line, they saw silhouettes of two elephants in the sunrise's light, one large and one not so large, running in the meadow across the river, heading for the jungle beyond. How did camp elephants get all the way over there? the adult elephants thought, that never happens. Morag and others were even more confused by what they found at their own feet. They had never seen that before and didn't know quite what to make of it.
     Soon the trainers would awake, they decided. They'd know what to do.

...

Scholarly Publishing 2.0: The Wrath of Khan

Scholarly presses and u presses in particular have at least two great (macro) strategies open to them to change the game in their favor. One, I'll call the Wrath of Khan strategy (discussed herein), and the other is exploring beneficial network effects and that thing called scale of partnering on non-core infrastructural needs and services and on delivering core and neo-core D2C products and services (elsewhere discussed, though touched on herein). Both strategies are enabled by the web, but herein, we'll just consider the Wrath of Khan strategy in broad strokes (not examine its wiring).

The Wrath of Khan Strategy

Pretty simple: in Star Trek II: The Wrath of Khan (the first one), Kirk defeats Khan in a final battle between two space ships. How? Kirk, or really Spock, realizes that Khan is stuck in the past; his reality is defined by his "life on Earth" and ancient history where battles ranged across a physical landscape -- defined in terms of longitude and latitude, 2D. Space is 3D. In fact, from any point in space, your options are global. Yes, not unlike the web. Kirk wins by "turning around, vertically," rising up and then dropping back down -- which is far more detail than you need, but you get the point; or, you get enough of the point to smile politely, mumble "Geek," and let me continue to say: The future and the web enables 3D publishing products and services for u presses. To which, you might say: Why do I say this and what does that mean, Geek? For starters, we can consider OA.

(c) Paramount Pictures

OA & 3D

Recently, "access" to research/scholarly written output has been a hot topic in scholarly communications; specifically, Open Access or OA. Discussions around OA often center on the "pay wall" and on which side of the pay wall things reside. Two dimensions. Binary opposition; physical landscape of u presses to date: "pay-per-view" to the left of them and "OA" to the right of them. ...Rode the one hundred. OA is about "access," as is implied in the name, and yet access isn't "understanding." Therefore, OA would leave positioning on "understanding" wide open to u presses, and delivering understanding is, for my money and for most people's money, far more valuable than simply granting access (and is largely what publishers do, when they make thinking into a book; so, it's a core competency). However, if you think of summarizing and abstracting or distilling out the essence of arguments (and/or applying them to current events), i.e., derivative, tangential, inspired-by works for new age groups, new occasions, and new markets or modes & nodes of access, as resting above or below primary works of scholarship (the outputs from research), you can see these transformative acts as opening up a 3D space in which to operate and develop new products or create new value far above and far beyond scholarship. The research is foundational; but, if you take it as what is given or as a leaping off point, what can be made of it from there? Or, what else can researchers be tasked to do with their thinking for us as a society?

The 800-kg. Stakeholder in the Room

Am I the only one that has found the "OA" moniker just a little awkward? Maybe after explaining it to friends and having them say: "You mean 'public.'" "Yeah, isn't that just 'public access,' like public media; free for everyone in the country or online: smart-stuff produced by noble, dedicated people for the general good?" Yes, I've had to admit on many occasions that we've had a word for this kind of thing, for decades, and it's public access -- like public access tv of old, but different. Really different. Yet, we don't seem to call it that, and we don't tend to hear the public interest much represented in these discussions, beyond our imagining that everyone is better off if scholars have access to scholarship for their work, and if students have access to it too for their work, without paying for it ...and the public should have access too. Is this the best we can do for the public? Given all our access to the best minds and current thinking in the world? If serving them and raising their understanding were the goals, is access the best that any of us can do?

Speaking for John Q. Public

I am an evil capitalist, by training and inclination; but, speaking for John Q. Public, I could see wanting a little more. Were I JQP, I'd want works that are built on top of (3D) this research and these nuanced intra-dsciplinary arguments, to teach our kids and lead intelligent debate in the public sphere -- actively -- not just on a shelf, and not just in classrooms and academic conferences, and not just for those who are motivated to access and take part (i.e., the 'converted'). For my money, I'd want media that undertakes and completes the higher-order communications objective or raising "understanding" in the country and the world (www) by direct actions and interventions of publishers and editors; that complicates and disseminates what they are given. More plainly put, I'd want content generated for me and mine: where I want it and in forms that I want to access when I feel like accessing it.

I just downloaded an info-graphic from NPR, related to a video I saw, elsewhere on NPR, for a band they talked about on Morning Edition three weeks ago that I'm currently streaming in a podcast from my phone in my pocket.

25 years ago, that's an ambulatory schizophrenic talking. Now, what we "see" synthesized on or download/stream from NPR is taken in stride. What comes next?

If u presses are allowed to continue to stretch beyond traditional academic functions of effecting scholar-to-scholar communications and minting coins for tenure accounting, to the higher-order cultural global value of advancing public understanding directly, actively (as engaged participant agents; i.e., co-creators and engaging readers to be the same), they may continue to discover and build new forms, new models, and vistas for that thing called publishing that used to require glue and sutures.

E.g.,

More media - maybe presses working together can field a networked online news magazine, blog, or other digital 'source' that applies the best thinking and the best writing by the best minds to current events. There's an app in that.

More popular - maybe the web is license to make scholarly research and conclusions OA; but then, maybe it's also mandate to do more besides to create new, expanded, premium/trade derivative titles/value.

More public - maybe there's room for something transformative, synthetic, and diversely engaging like NPR/PBS (i.e., public programming). SPOILER ALERT: Take multimedia mixed with digital delivery, evolve it, and whether paid for or free or both, we may see emergent roles née editors functioning not unlike producers. ...if we're fortunate.

More funding - to the enabling crowds of scholars and libraries add: everybody in the country. Network effects apply to funding global/public projects. "The needs of the many outweigh the needs of the few or the one." (That's Spock and/or Kirk, depending on which reel and/or timeline you're in.) Maybe public-centric programming and/or centralized functions of any kind will win the hearts and pocketbooks of more hearts and pocketbooks. Centralized, concentrated presence in space often results in increased [critical] mass and with it an enhanced attractive force of gravity.

More SALES - u presses have unique products and unique, premium markets of consumers, yet they rely on third-party strategies, leaving customers to navigate the wilds of maddeningly crowded third-party vendor sites to find their content, and worse: abandoning the best behavioral, conversational, and market-intelligence gathering (data resulting from said navigating) and chances to engage and collaborate with the world of interested consumers to said third-parties. They could capitalize more on and deliver more value to consumers based on what they have to offer with a networked D2C all u press site.

The 3D and Wrath of Khan analogy and attendant e.g.s are only delivered mildly tongue in cheek; they are in earnest framed around freemium and premium thinking that the u press network should feel leave to "go digital" not only in form but also in function, and such new functions could be at the title/book/project level or at the institutional level of the u press/u press network itself, to continue to invigorate and to explore the multiple ways the united federation of u presses can generate and receive value in society. ...to boldly go where no one has gone before.

A collective presence on the web furthers such new revenue and new value generating interests and building one or more virtual networks to effect such a presence (or presences) is a smuggled presumption herein. In other words, and to be clear, having a unified u press presence on the web will be beneficial to all presses and align with both enhanced sales and content development goals. As far as funding the societal enterprise of making the most of university-based textual ideation transfer goes, this certainly applies: We don't need a university press; we need all of them. However, such a centralized presence or space (the final frontier) does more: as an umbrella, it will allow presses to "get vertical" to create new, living value for the public and for scholars, on top of the world-class scholarship that they already deliver, it will explode the sales and marketing potential for their rare and wonderful products and services therefrom derived (in ways Joe Esposito regularly brilliantly describes and more), and throughout it will enable u presses's own "research" and development of this expanding new space between authors and readers, to continue to refine, experiment with, and improve the ways in which we access and reach ideas and the ways in which these ideas reach us to the greater benefit of our collective understanding.

Google & University Presses: On U Presses Cashing in on the Potential of the Web, Potentially

“My company and I would like to give folks a nigh-infinitely scalable digital map of every street in the world that they can 'fly' around in like a video game, and after that we’ll build eyeglasses that surf the web and self-driving cars.

“So, naturally, our first step will be to put a new search algorithm up on the web, in a single framed search box, so folks can find webpages better.”

Google had a good idea and a fine algorithm. But, no one short of shaman-grade crazy saw web-enabled eyeglasses and self-driving cars as likely later/next steps–or as their ultimate goal when first they set out.

Do what you can do now; find out what you can do next, after. Then, do that.

It’s how we learn to walk, run, and build unimaginable things like driver-less cars.

When considering U Presses building a collective immersive online environment, folks often ask "key questions" that only focus on one aspect of what might have been a partial near-term goal (back in the days of the newness of the web); e.g., how will that succeed in selling books (i.e., specifically on such a site that U Presses might build; because all we can imagine are real-world things reconstituted online, such as an "online" bookstore).

However, key questions of strategy depend on what strategic intent/s and ends might be in the near term, in the long term, and beyond. And, in so far as some of those goals may be open ended or a matter of positioning for an unknown future, key questions of strategy can be manifold or moot, in current terms.

For now, I’d suggest that raising customer awareness (no matter where the purchases of those things called books take place) would bring value to the U Press network. Purchase intent is constrained by lack of brand/product awareness; by similar measure, it is often enhanced by increased brand/product awareness. Down the road, being in position to build new models, set new goals, expand into a web-based world (in ways no one else will for presses); that may well be priceless.

In sum: for talented folks in a swiftly changing landscape, landmarks may be less helpful than they used to be; direction may be key. The web is a good direction.

{this is a shameless rehash of a comment, I posted originally on Scholarly Kitchen; but, I like "shaman-grade crazy" so refurnished it here.}

University Presses have the world by the tail - twice: outside-the-books thinking

I'm going to put you in business. I'm not going to tell you what that business is, or what you sell, but, I'll describe some moving parts, and ask you how you like your chances.

It's a not-for-profit business (NFP), but one that engages with customers in open, global retail space to generate revenues in multiple streams; so, market returns are important and good for business: good^2. Your business is well established, not a new concept. You work in media. Your customers are uniformly well-heeled, all earning fine salaries, some extraordinary salaries, they go to live theater, attend museum openings, visit art galleries, they hold respected places in society, they consume mass quantities of media like yours, and they are required to work with your offerings and your competitors' offerings, under penalty of death (publish or perish), for the rest of their professional careers. How do you like your chances?

Before you answer, let me add that some of your expenses and infrastructure will be paid for/provided by a nearby laurelled institution (a university), and, because you're a NFP, you will be held exempt from paying taxes. How do you like your chances now?

Wait: In addition to this customer pool, thanks to your NFP status, you can fund raise to support operations. How do you like your chances now?

The answer to everything in business is, of course, That depends... It depends on what you're selling and if anyone is willing to pay you for it. But, before you get your 'depends' on, you have to stop and take stock of the moving parts described above: that this is a freakishly favorably stacked deck. No entrepreneur gets a play like this, to that kind of customer base, with that kind of support. Most would say, it really doesn't matter what your product is (or are), with a stable bid for the rapt attention of folks like these, you can't miss.

VANS

I've said before that folks contemplating the future of the university press network, branding, and revenues "slash" sustainability should have a look at Vans, in the period described in the Harvard Business Review case study, VANS: Skating on Air. And I'll say it again here:

...Folks contemplating the future of the university press network, branding, and revenues "slash" sustainability should have a look at Vans, in the period described in the Harvard Business Review case study, VANS: Skating on Air.



In brief, it describes Vans' decisions to produce the skateboard movie, Dogtown and Z-Boys, to sponsor myriad extreme sporting events, and develop a line of video games. None of which are shoes. Vans is a shoe company. The answer, for Vans to continue to grow, however, lay outside the shoes.

Monetizing on scholarly content alone is fraught and fragile these days. If a publisher is a book company, with "book" understood broadly as all content the company produces, then maybe it's time to think outside the books.

Profitability for scholarly books - overhead allocation in the world of small numbers

How much overhead does each project (or product) at a small press consume relative to other projects, and how many sales are needed to reach break-even? Why would a scholarly press, in its right mind, ever consider doing a distribution deal (for 40-50% of net revenue), when it can do an original publication (for 90% of net revenue); isn't that roughly half as much money?

I adapted an activity-based costing approach (ABC) to model "average" list dynamics at a fictional press to explore rough answers. After looking at them and living with them in the realm of small numbers (a.k.a., today's sales figures), and as applications of new capabilities advance into the new century, next questions may also include: "What comes next?" I.e., post content-monetization alone; what new products and/or services can be added to a firm's offerings to cover overhead?

ABC is used in high-overhead or high-fixed-cost industries to examine performance across product lines to inform R&D, pricing, and production. I added per-product and total contribution and sales figures to model front-list contribution and Return On Assets (ROA) for the year.

Method: For illustration purposes, I used four "product lines" as examples of titles with different "financial footprints" in a press: 1) Average, 2) Complex, 3) Distribution, and 4) FTPB (first-time paperback). Average is a basic monograph or edited volume; Complex might be a coffee table book or a photography or textbook; Distribution is an inventory-only title, for sale in territory; and, FTPB is a paperback edition for a title that came out in hardback in a prior year. Co-pubs could be added, but four types are enough for illustration purposes. Electronic editions are accounted for by lowering the average per-unit variable costs and adjusting average sales and revenue figures for the line. What we're after here is changes in developmental overhead to publish the list.

Each product line spends more or less time on different desks in a press (on average); so, each will consume more or less overhead at different stages. Which are more profitable; which less; and when?

When scholarly presses sold thousands and thousands of copies of any given text, almost any set of choices was financially viable. These days, a press needs to be mindful at a more granular level. So, after modeling ROUGH list dynamics, I take a look ROA and break-even for sales of 200 copies to 1,500 per product type. Additional charts are on the attached.

Numbers for a real-world press will have slightly different break-even points for each product line, but the relative stature of these categories will be consistent; e.g., a chart of data from our mock press shows that Distributions have higher ROA than original titles, all sales being equal. It also reflects the greater ROA of FTPBs, relative to other products; both Distributions and FTPBs are "in the money" at lower sales volume than other titles. These trends suggest answers to our initial questions.

To estimate average ROA per product line, the sheet linked to above apportioned overhead as a measure of fixed assets consumed by each product, and so shows average overhead per project and per product line, or just how "expensive" one project is relative to another.

This can be an important consideration as a press reaches capacity; with resources stretched thin, adding an "expensive" project that will consume many internal resources could overtax capacity and that could result in delays in times to market across all projects. When a press is at or near capacity, it might be time to add a few "inexpensive" projects in order to add revenue without driving [as many] costs. It is also time to consider which projects tax resources specifically in pipeline departments (EDP) where delays can have the greatest enterprise-wide effects.

However, ROA and margins alone don't tell the whole story. A firm needs volume to cover costs. It also needs original publications, before it can offer FTPBs.

On a tool like the attached, a press can see that projects can have a higher contribution margin but be less profitable than other projects with lower margin (they can deliver lower sales volume, less revenue, and/or have lower return on the assets they consume).

Publishers can also note that Distribution titles have small and fixed contribution margins (fluctuation of contribution margin is largely a result of including a fixed cost like copy-editing in COGS), and yet Distributions deliver very high ROA and have a low break even. These figures in aggregate contribute to the ROA for the front list.

A firm needs to look at all the above when considering profitably of a portfolio of product lines: margin, sales volume, project volume, project compliment (how many of each kind of project), and of course overhead.

The sheet linked to herein, includes measures of per title and total contribution and overhead, and so shows several of these "moving parts" of profitability at a glance for planning purposes. With real-world data and structural enhancements to such a sheet, similar ABC approaches can help model impact of changing "product mix" and sales targets to achieve optimal gains for stakeholders.

That said; at a glance, the current mock-up does provide some insight to questions above and shows that various product lines at a given press can have their own metrics and margins contribute their own value to front-list success. Lines can be sub-divided for greater analytic clarity, and new lines and services can be added to deliver new Rs for the Is.

Caveats:

1) Changing numbers of titles published at the fictional press in the mockup would impact total overhead, and visa versa; so these numbers should not be altered in the attached independently. Sales figures, on the other hand, can be; variable costs are set at an average rate and so will adjust with changes in sales. The attached includes sales-figure data tables and charts like the above.

2) The attached has only four, gross categories (Average, Complex, Distribution, and FTPB); product lines and metrics can and should be added/subtracted to reflect a current portfolio at a press.

3) The attached has grossly simplified numbers, as it is for illustration purposes only; more detail would be added in any real-world analysis.

4) One very important thing that this sheet does not model is the impact on the pipeline or on time to market for adding or subtracting certain titles; as suggested above, adding/subtracting some products has more impact on average time to market than it will for others. E.g., Average and Complex titles drive workload in EDP. Distributions and FTPBS do not. So, as the EDP pipeline fills, opportunity costs rise for each Average and Complex title added; delays increase and sales revenue lost would be accounted for as added costs. These costs could include delays in time to market for all front-list titles. Additional Distributions and FTPBs, on the other hand, largely "skip" EDP and could have other resources such as marketing "spread thin" to cover their launch/soft launch. Another tool would be needed to model relative "next title" impact across product lines at or near capacity.

5) Most importantly: best practices for activity-based costing is to utilize a cost driver to allocate overhead in each department. The most common cost-driver is line-worker hours. Herein, one product was used as a baseline "single-unit" of work. Experts familiar with a process can do an excellent job of "ball parking" relative workload for major product lines, compared to a baseline product; however, data reveal more granular detail, and this detail can be surprising. The adapted model attached will reveal trends in list dynamics. It is also advisable to collect data on hours worked on various products (on average) and re-run the analysis to confirm and explicate trends.

Disclaimer:

This sheet, linked to herein, merely models relative product-profitability dynamics for a MOCK company; this in order to demonstrate a managerial accounting approach to overhead allocation by product line for strategic purposes. A bona-fide tool for an actual firm can be built for any company; however, this sheet is for entertainment and illustration purposes only. Please contact me if you have quesitons on the limitations of this sheet.