Strategic leadership in the media industry
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The Ashridge Journal Strategic leadership in the media industry Autumn 2007
Lucy Küng is a research fellow at Ashridge. She has extensive
experience of the strategic, management and organisational
challenges facing the media industry,
having worked with numerous organisations including
the BBC, Swiss Broadcasting Corporation and Discovery
Networks Europe.
Email: lucy.kung@ashridge.org.uk
Strategic leadership in the media industry
Autocratic, manipulative, power hungry, perhaps even deranged –
the media mogul as portrayed in the press is one of history’s more
enduring figures. What are the strategic approaches and leadership
traits that make for success in this fast moving, often turbulent
industry? Lucy Küng combines recent thinking on leadership in
creative environments and makes some recommendations for
leaders in the media.
1. Decode environmental turmoil, Leaders must therefore be able to update
check your assumptions and find their operating assumptions – Schein1 terms
the business opportunity this “learning leadership”. In such conditions
The media industry is experiencing double loop, or second-order, learning can
extreme environmental change, arising be required. This involves questioning the
from contiguous but unrelated changes governing operating norms, unlearning prior
in technology, regulation, and consumer assumptions and developing new ones2.
behaviour. As chief strategist and ‘official
interpreter’ of the environment, the leader Rupert Murdoch is perhaps not the first
must perceive changes, puzzle out their name that would come to mind when
importance, and then decide how the searching for a learning leader, let alone a
organisation should adapt. double loop one, but there is much evidence
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Ashridge Business School http://www.ashridge.org.ukAutumn 2007 Strategic leadership in the media industry The Ashridge Journal
to show he can be categorised as such. such decisions has grown also. Content
Murdoch is particularly skilled at identifying is an uncertain business (why was Titanic
the rules of the game in emerging contexts, a winner and Waterworld a loser?) Heavy
and using these to create a new business investment in content that fails to resonate
model which frequently sets the game rules with the market can have disastrous
in ensuing years for all players in the sector. consequences as the music industry has
These business models often involve the found to its cost.
simultaneous exploitation of an emerging
commercial opportunity, advances in Thus increasingly, content decisions are
technology and a regulatory gap3, as well as high stake gambles that ultimately fall to the
the objectives of governing politicians. This leader of the media organisation, since such
approach was evident in his transformation decisions are simply too risky for executives
of the UK newspaper sector, the editorial lower down the food chain. Therefore the
approach of Fox News, but is perhaps most leader of the media organisation needs
neatly exemplified in the creation of BSkyB, to be comfortable with risk and be able
the UK pay-TV platform. to gamble well. This aptitude, combined
with an ability to decode the strategic
2. Get comfortable with risk environment, can provide a strong basis for
The harsh reality of the media industry is strategic advantage.
that success is supremely unpredictable,
and there are no guarantees. In the famous
Murdoch, it is claimed, has built his entire
words of screenwriter William Goldman,
empire by defying convention and taking
‘‘Nobody knows anything”. For decades,
risks5, and Turner’s appetite for risk is said
the standard response to this situation was
to be insatiable6. In his words: ‘‘If you are
what has been called the ‘mud against the
going to try to change things in a big way
wall’ formula: if enough different products
you have to be willing to go against the odds
are ‘thrown at the market’, sooner or later,
and sacrifice everything.”7 These reports
something will stick. Essentially, a portfolio
suggest that a sophisticated facility with risk
of products – books, CDs, films etc – is
is a trait shared by some high profile leaders
made available and the media company
in the field.
then waits to see what sells. This has
given rise to an alarming waste of
creative investment. For example, during 3. Make your company creative
Katzenberg’s decade at Disney, of the one over the long term
thousand plus projects he oversaw, just ten The strategic relevance of creativity for
percent accounted for 91 percent of the organisational performance in the media
studio’s operating income. industry is beyond question. In the words of
Scase8: “Without their employees coming
In recent years however this model has been up with ideas that can be turned into
replaced by the ‘hit’ or ‘blockbuster’ model. commercial, saleable commodities (media
This occurs when a few media products, firms) are dead.”
bestselling books or blockbuster films,
capture ever larger markets and generate Theories of organisational creativity have
the bulk of revenues. Products which are demonstrated how relatively prosaic
seen as having the potential to become aspects of the work environment affect
hits receive the lion’s share of investment levels of creativity in all individuals.
and attention. In such contexts it makes In essence, high levels of creativity require
strategic sense to pay high advances and high levels of intrinsic motivation, and
royalties to top content creators and then intrinsic motivation is strongly influenced by
spur demand by spending aggressively on context, in particular by five specific aspects
promotion4. But the risk associated with of the work environment9.
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Ashridge Business School http://www.ashridge.org.ukThe Ashridge Journal Strategic leadership in the media industry Autumn 2007
1. Encouragement. If creativity is sub-culture. Homogeneous teams can limit
required from staff then this needs to made creativity since too much social cohesion
clear. This involves more than paying lip can inhibit the exchange of ideas and
service to the idea of creativity: it must be diminish creativity.
demonstrated through management action
(how priorities are set, which projects are It falls to the leader to ensure that an
viewed as most important, what kinds of organisational architecture conducive
behaviours are rewarded, etc) that creativity to creativity is present. If we look at
is central to current operations and future the cases of BBC News Online, HBO’s
success. Creative contributions need to be Original Programming Division and Pixar
publicly celebrated. Feedback on new ideas Animation10, we see that in these three firms,
is also important. If these are disregarded which have enjoyed unusually consistent
or handled clumsily staff can feel that the track records in generating creative
interest in creativity is only cosmetic and products that please audiences and critics
experimentation will be discouraged. alike and are also financially successful, all
the contextual components identified as
important for creativity: encouragement,
2. Autonomy. Staff required to produce autonomy, resources, challenge and team
creative results require autonomy, but the
composition, were present and stemmed
level of autonomy needs to be carefully
directly from the firm leadership. Again,
gauged. There should be freedom around
this confirms that one role of a leader is
the means by which the goal is to be
to engineer a work context that ensures a
achieved (process), but not concerning
steady stream of novel products11.
the nature of the goal itself which should
remain clear, constant, and unambiguous Disney’s Eisner perceived himself as a
throughout. creative leader. In an intriguing interview
in the Harvard Business Review in 2000
3. Resources. These should be he describes how he institutionalised an
sufficient to allow the task to be achieved, environment for creativity. The creative
but not over-generous since resource slack challenge was established in “regular
can reduce project focus and discipline. Monday staff meetings where people
If deadlines are too unrealistic staff will are not afraid to speak their minds and
have no time to ‘play’ with concepts and be irreverent... an environment in which
solutions and there is a risk of burnout. people feel safe to fail [where] criticism for
submitting a foolish idea is abolished....
We like to think we have fun here –
4. Challenge. Creativity is enhanced by
we’re loosey-goosey, with a freewheeling,
clearly defined overall project goals. These
spontaneous exchange of ideas. At the
need to be mobilising but not demotivating
same time discussion is brutally honest.’’
and there needs to be a good match with
This, he felt, was “confidence building.’’
expertise and creative-thinking skills. Should
the creative task be too extreme, staff will
Others’ perceptions of Eisner’s creative
feel overwhelmed and threatened by a loss
leadership paint a different picture and
of control.
underline that in creative organisations it is
not what leaders do, but how their actions
5. Team composition. Teams working are perceived, that is critical. Accounts of
on creative projects should encompass a Eisner’s leadership describe him of being
diversity of perspectives and backgrounds. ‘‘such an oppressive force that creative
There needs to be a constructive challenging talents felt muzzled.’’12 The talent agent
of ideas and shared commitment, which in Michael Ovitz, who for a short time was his
time can allow the development of a strong second in command, was struck by the fact
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Ashridge Business School http://www.ashridge.org.ukAutumn 2007 Strategic leadership in the media industry The Ashridge Journal
that at the weekly staff meetings that were in two relatively recent schools of
“the focal point of [Eisner’s] management leadership theory: transformational and ‘voice’ on the emerging medium of
of the company, extolling the freewheeling, charismatic leadership. Through vision, a the Internet.
spontaneous exchange of ideas and the transformational leader exerts extraordinary
‘synergy’ that he was so proud of, there was influence over followers, who then internalise Birt’s vision fed directly into the intrinsic
actually very little exchange if ideas. Most of the leader’s vision and unite them around motivation of the individuals working
the lunch was a stream of consciousness the new goal. In this way the leader’s vision on the project and thence to levels
monologue by Eisner. No one disagreed has a powerful effect on individual and of creativity. Birt framed the Internet
with anything he said.’’13 organisational performance.17,18 as a natural extension of the BBC’s
historical mandates as public service
Charismatic leaders are also exceptional media provider and news provider.
4. Get the vision right individuals who use vision to influence This resonated with existing cultural
“Vision serves the function of providing others to act in certain ways. While assumptions concerning the importance
the psychological safety that permits the transformational leadership is normally of the BBC’s role in these two areas and
organisation to move forward...’’14 understood as a positive concept, ensured that the goals of the new project
charismatic leadership has a shadow side fitted the deeper internal aspirations of
A clear inspiring vision is central to strategy that can express itself in narcissism and a its staff. By describing the Internet as an
and leadership. Vision is central to creativity blinkered single-mindedness19. And while opportunity not a threat, it also ensured
also, since no new product or service can charismatic leaders improve employee an open-minded attitude on the part of
be created without a clear vision that is satisfaction, motivation and performance, those working on what was for the BBC
simple, achievable – but also stretching they can also underestimate threats in the a radical departure from their standard
and inspiring. The underlying mechanics organisational environment, screen out range of activities (in psychological terms
are that the ‘right’ vision will resonate with negative information and have an inflated this avoided a phenomenon known
pre-existing, intrinsic motivation and lay the sense of their own importance. Further, as threat-induced rigidity, which limits
seed for ultimate success in that it sparks the success of charismatic leadership creativity). In terms of the News division,
off both a creative response to the core idea is particularly dependent on context20. Birt’s vision resonated positively with
and a deeper sense of commitment to its Charismatic approaches tend to suit the strongly internalised commitment
fundamental goals. strategic crises but be counter-productive to public service news. This, coupled
once an organisation has mastered an with the journalistic potential of the
A prime example of a leader who emergency situation. medium, which in turn energised
has mastered ‘the vision thing’ is the professional commitment of the
Steve Jobs. His vision, to build “insanely journalists working there, combined to
great’’ machines that will “make a dent in BBC News Online boost intrinsic motivation and created
the world’’, swept away rational objections BBC News Online provides an example an attitude of intellectual playfulness
based on Microsoft’s overwhelming market of transformational and charismatic which encouraged creative risk taking
dominance and technological hurdles. leadership at work, and also of the inter- and resulted in greater creativity.
An Apple employee describes how: relationship between leadership, vision
and creativity. The second leader at work was
“We really believed in what we were doing. Bob Eggington, the project manager.
The key thing is that we weren’t in it The vision for BBC News Online came Eggington provides evidence of the
for the money. We were out to change from BBC Director General, John Birt, overlap between the concepts of
the world.’’15 who as early as 1995 decided that the transformational and charismatic
Internet was likely to become the third leadership, since, while his style can be
Vision and charisma go hand in hand. Jobs’ broadcasting medium after radio and described as transformational, it also
charisma is fascinatingly described: television, and that to maintain its rightful exhibits traits typical of charismatic
“(It) drew people to him even when they position as national media leader – and leadership. Eggington advocated a
knew he might attack at any moment, and news leader – the BBC must have a vision – not perhaps in terms of the
created a degree of loyalty few executives strong Internet news service. His vision product concept, but certainly in terms
ever match.’’16 therefore was that BBC News Online of how the unit should function – that
would extend the BBC’s unique news was highly discrepant from the status
Vision and charisma are key elements
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Ashridge Business School http://www.ashridge.org.ukThe Ashridge Journal Strategic leadership in the media industry Autumn 2007
at Disney during Michael Eisner’s most
quo in the BBC at that time. This was successful years, when he was CEO, Frank
essentially, in the words of those working Wells handled the complex administrative
on the project, that News Online were and financial side of the business, and
‘‘pirates under the radar screen of the Jeffrey Katzenberg ran the studio.
BBC’’ and operating in ‘‘the Wild West’’.
This gave rise to high levels of 6. Exit gracefully
commitment, a sense of urgency, Eisner’s is just one in a long procession
creativity and flexibility. of clumsy exits by leaders in the media
industry: Gerald Levin, Thomas Middlehof,
Eggington’s style of achieving this Jean-Marie Messier, Steve Case, Greg
vision – encouraging staff to ignore the Dyke, Conrad Black, and of course, Robert
strictures of BBC policies, procedures Maxwell all spring to mind, but the list could
and bureaucracy – was unconventional be far longer. The ability to make a graceful
for the BBC, highly successful, but exit – knowing when to move on and leaving
involved a high personal cost. a good successor when you do – might
be described as the ultimate leadership
skill. The issue of leadership exit has been
5. Don’t go it alone – collaborate exhaustively studied, but diversity in terms
The strategic rationale for this of research contexts, methodologies, basic
recommendation is that the challenges definitions and research fields make it hard
facing the leader of a media organisation to draw general conclusions from this work
straddle both responding to the external for the media sector.
environment and managing the internal
ecosystem. It is very unlikely that a single What is clear is that entrepreneurs and
individual will possess the capabilities founders (both are prevalent in the media
necessary to master both of these spheres sector) have particular difficulty in giving
of operation. up what they have created, and that the
preparation for succession is psychologically
Multiple leadership structures are relatively challenging for founder and successor21.
common within high performing media They may officially be grooming successors,
organisations. For example, as we have but unconsciously they may be preventing
seen above, BBC News Online was powerful and competent people from
launched with a dual leadership structure. functioning in the successor role, or they
In this case the role division was that John may designate successors but prevent
Birt, the BBC’s Director General, developed them from having enough responsibility to
the initial vision, followed the unit’s progress learn how to do the job.
closely, but never actually visited the
operation. Bob Eggington, the project Conclusions
manager, realised Birt’s vision, by shielding So what defines good leadership in
the venture from the bureaucracy of the the media industry? Without doubt,
parent and establishing a positive culture in view of the current climate of ongoing
and an environment conducive to creativity. turmoil, good leaders will be need to be
He provided day-to-day leadership. entrepreneurial and constantly attuned to
This complementary leadership structure environmental change. They will provide
combined to create leadership that was their organisations with a credible but
exemplary: visionary, motivating, supportive inspiring sense of direction. Their strategy
and accessible. will synthesise intuition and experience and
expertise, involve an active search for new
We see a similar structure at Pixar, which opportunities and, in the current climate,
is led by a combination of John Lasseter, generate dramatic leaps forward in the face
Ed Catmull and Steve Jobs, as well as of uncertainty22.
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Eisner’s leadership era at Disney also
underlines the context-dependent nature of References
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www.ashridge.org.uk/360 6
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