Executive Summary
Many organisations only begin transforming when declining performance leaves them with little alternative. Axel Springer chose a different path. While its traditional newspaper business was still profitable, the company made the bold decision to reinvent itself as a digital media group. According to CFO Dr. Julian Deutz, successful transformation requires acting before disruption forces change—not after.
Transformation is often triggered by crisis. Revenues decline, competitors emerge, or technologies disrupt established business models. By that point, however, many strategic options have already disappeared.
Axel Springer’s experience demonstrates another approach. More than twenty years ago, the company recognised that the long-term future of print media was limited. Rather than defending the existing business model, management began systematically investing in digital businesses, international expansion, and new sources of growth while the traditional business continued to generate strong cash flows. Those cash flows became the engine that financed the company’s own reinvention.
This long-term perspective also shaped how transformation decisions were made. Instead of focusing on quarterly earnings, the company evaluated investments according to the value they could create over a five-year horizon. That shift in mindset enabled management to pursue opportunities that might temporarily reduce short-term profitability but strengthen the company’s long-term competitive position.
For executives facing disruption, the lesson is straightforward but demanding. Waiting until change becomes unavoidable usually means transforming from a position of weakness. The strongest transformations begin while companies still have the financial strength, organisational confidence, and strategic freedom to shape their own future.
Key Takeaways
- The best time to transform is before performance declines.
- Strong legacy businesses can finance future growth.
- Long-term value creation requires looking beyond quarterly results.
Continue the Conversation
This article explores one of the key themes discussed with Dr. Julian Deutz, CFO of Axel Springer. The full conversation also examines digital transformation, portfolio management, private equity ownership, M&A strategy, finance leadership, and how one of Europe’s largest media companies reinvented itself for the digital age.