You Won’t Believe BuzzFeed’s One Weird Trick To Be a Better Company

Image composite: Keiko Zoll

No sooner did we hit publish about interconnected teams as the future of organizations than we saw it play out in the real world. On Tuesday (8/23/2016), media behemoth BuzzFeed announced a major shift in its organizational structure. BuzzFeed will split into two divisions: BuzzFeed News, under the direction of current BuzzFeed editor-in-chief Ben Smith; and BuzzFeed Entertainment Group, with Ze Frank, current president of BuzzFeed Motion Pictures.

In a company-wide memo, CEO Jonah Peretti noted that the changes were in an effort to simplify the company’s current structure to incorporate video into all aspects of its digital media content:

In this new structure, video won’t be the job of just one department. Having a single “video department” in 2016 makes about as much sense as having a “mobile department”. Instead, it will be something we expand and embed across the organization… This structure will allow us to be better at entertainment and better at news. It will also complete our shift to becoming a cross-platform media company…

As Smith noted in an interview with Fortune, BuzzFeed’s organizational restructuring isn’t about pushing the news aside in favor of video content — quite the contrary: “For us, it doesn’t really matter what format the news comes in,” Smith said. “We just want to tell stories in the best way possible.” BuzzFeed’s reorganization is an example of yet another company that has abandoned the traditional model of function-based organization in favor of an interconnected, aligned approach to further its vision and enhance its product offerings.

What Matters Most at BuzzFeed

Peretti’s approach to management and organization is closely aligned with Daniel Pink’s 2009 game-changing book, Drive: The Surprising Truth About What Motivates Us. In a company profile this past March for Fast Company, Peretti shared some of the heart and vision behind BuzzFeed: “With BuzzFeed, I always felt like, let’s have as big an impact as we can. Let’s grow this into something giant.” It’s a purpose-driven vision that has proven almost incomprehensibly lucrative: With seven billion monthly views, the 10-year-old company is currently valued at $1.5 billion.

Autonomy has always been a fundamental aspect of BuzzFeed since its inception.

Peretti told Fast Company that strict organizational structures stifle creativity: Freedom and autonomy are essential to the creative process at BuzzFeed. But Peretti understands the challenge that this can present to an organization as massive as BuzzFeed: “How do we create structures where there’s lots of local autonomy plus some global coordination?” Global coordination is key, given that BuzzFeed publishes 11 different international editions, has five different mobile apps, and streams content on every major social media platform you can think of.

But for all of this to work — pushing out original, timely, viral content across the globe — Peretti believes that these divisions and units must be given the autonomy to succeed.

Mastery is yet another motivational foundation within the company.

Immediately after the restructuring announcement, BuzzFeed promoted Todd Levy as its new CTO; Levy is also the VP of engineering for the company, and was co-founder and CTO of Bitly. Levy’s promotion shouldn’t come as a surprise in the wake of such a major organizational restructuring: that’s the modus operandi for BuzzFeed. Emily Fleischaker, a creative director for the Food vertical, described the company as “this insane morphing rocket ship.”

Organizational restructuring aligns BuzzFeed closer to its purpose.

Splitting into two major divisions — with video as the connecting thread between each — enables BuzzFeed to be better at both entertainment and news. As BuzzFeed shifts their content towards video, Peretti has given both its news and entertainment the autonomy to shape that video content to their unique audiences within each vertical. Peretti has recognized that a mission-oriented approach — by establishing two divisions with a purpose integrated into each division and level within the company — empowers BuzzFeed to become the “#1 global news brand for a new generation.”

Restructure or Get Left Behind

According to Deloitte’s Global Human Trends 2016 report, 92 percent of companies believe that organizational redesign is important; Peretti, too, sees the value and importance of an interconnected teams approach over outdated functional strategies at BuzzFeed. After revenue fell $80 million short of its 2015 projection, BuzzFeed cut its 2016 projections in half — from $500 million to just $250 million.

The writing is on the wall: Flexible, autonomous teams have become the new gold standard of organizational structures.

If companies can’t adapt to the new normal, they’ll be left in the dust chasing behind their competition. BuzzFeed’s ability to adapt to an increasingly crowded content market had been what’s kept the company at the forefront of digital media. By restructuring the company into two divisions with a common purpose — exceptional video content — it very well could prove to be the organizational advantage BuzzFeed needs to stay ahead of the pack.


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