Leadership

Beware of the White Knight Complex

Many organizations in the entertainment industry are failing and shareholders are demanding changes. The solution is simple - it's just not easy.

 During tough times, many entertainment firms have attempted to get their company moving forward by appointing new bosses. But recent reports show this approach isn’t working. Although the new chief may be able to stop the bleeding temporarily, the underlying problems will ultimately return.

I call it the White Knight Complex. Appointing an individual to turn around a bad business or failing organization is like looking for a white knight who will come in and save the day for everyone. The new guy will fix it!  Or, he'll (in this sector it's a guy) know how to get us back on track!

And for a while everyone will be enamored with him. But history shows that executive changes alone rarely make much difference over the long run. That's because just changing the top dogs doesn't address one of the key rules of management. Ultimately, the organization is doomed to continue repeating a boom-and-bust cycle while missing a great opportunity for long-term growth.

The famed management guru Peter Drucker once noted that "No institution can possibly survive if it needs geniuses or supermen to manage it. It must be organized in such a way as to be able to get along under a leadership composed of average human beings."

For those in the entertainment sector, the focus of development investment is new products. Movies, programs, or games are developed, or acquired, to turn things around. However, if this industry is to permanently pull itself out of an ongoing downward trend, a different approach is required. The organizations’ heads of state need to come to grips with the fact that the best organizations in any industry invest money in the people who are responsible for the day-to-day management functions.

Historically, the entertainment sector was comprised mostly of companies that make and distribute movies and television series, such as News Corp, MGM, or NBC. But since the 90s it has expanded and grown to include other types of ventures, such as Electronic Arts or THQ and Internet-based entities that seek to monetize the Web -- like HULU or My Space.

Many arms of the industry are in the toilet or losing money in a big way. And the prognosis isn't great:

- Movie studios are shutting down or dramatically cutting back.

-When one factors out inflation, fewer people are going to the movie theaters now than 10 years ago.

- Broadcast TV continues to lose viewers month over month and year after year.

- And, in a dramatic shift from just a few years ago, big-name game developers are drowning in red ink.

There are some notable exceptions. Think Disney and ESPN, where CEOs like Bob Iger and George Bodenheimer are showing, through example, that leadership development investments can have a great ROI. When an organization’s leader actually invests in the management team, those people become more creative, more disciplined, and more successful. As a result, the entire organization shows significant change. Results become best-in-class. Disney and ESPN are thriving even in this tough economy.

Generally speaking, the entertainment sector underinvests in the long-term development of key team players. The company heads don't seem to "get it,"  so they're not very focused on growing the home team.

And, if the boss sees no benefit in the creation of solid career plans or value from using proven approaches (like annual appraisal and development tools, or the ROI of bringing in outsiders like mentors or coaches to help save a formerly great manager), then nothing happens.

Today's corporate leaders need to increase their investment in the next generation of leaders. This is particularly so in the entertainment sector, but it goes across lines. Otherwise they're doomed to repeat the failures of others, Company values will continue to diminish. Ultimately many of these organizations will get scooped up -- cheaply.  Often, that will be by foreign-owned conglomerates with different rules and intentions.

The solution to that potential outcome is simple, but it's not easy: It takes leadership.

john

About

John M. McKee is the founder and CEO of BusinessSuccessCoach.net, an international consulting and coaching practice with subscribers in 43 countries. One of the founding senior executives of DIRECTV, his hands-on experience includes leading billion d...

17 comments
TheProfessorDan
TheProfessorDan

I find that sports like entertainment has the same issue. You see knee jerk reactions all the time where a coach or general manager gets fired in the middle of the season. the majority of the time the results are negligible but every once and a while like the Colorado Rockies firing their manager midway through last year and hiring Jim Tracy, the change works. Then every team thinks that they can catch lightening in a bottle and managers and coaches get fired in droves. I always marvel how few sports executives fail to see a trend in professional sports. Stability equals winning. Look at the past few champs in each sport most of them have had stability at the player and management (my Penguins are an exception). The Steelers have won more Super Bowls than anyone in the NFL and they've had 3 coaches since I was born.

eternal_life
eternal_life

When it matters the work must be done, and at the best way, to pray for someone like Mary Poppins dropping down is very stupid. Rome was NOT build in one day.

luvwknd
luvwknd

It really doesn't matter what the shareholders do as economical problems on a society have to be corrected by the government. Without a little governmental intervention there is no way to get people out there spending money, now I'm not talking about the socialistic views the Obama Administration is attempting, but some governmental intervention is needed and should be directed towards the middle class sector of people because they make up the largest number of American citizens. Once the middle class starts spending again everything will fall into place.

BaldEagle1996
BaldEagle1996

Which North American company has a "long-term" view? Do they even understand what that is? The furthest that almost everybody looks ahead is the end of the next quarter. And investing in your people surely isn't paying off by that time, so it's not done.

Al_nyc
Al_nyc

While it is true that you don't want a business that requires a genius to run it, you do need a genius, or more, to provide content. Unfortunately many companies are missing that second part. They have non-genius running the company and they don't realize that they need geniuses developing content. They think that they can use a formula to put out content. Yes, that does work to an extent, but it is short lived and the formula will need to be revised on a regular basis. The non-geniuses think consumers are sheep to be led to their lousy entertainment. They are too dumb to realize that the public is not that stupid and get tired of the same formula. The execs then try to blame their poor performance on "pirating" and try to get government to legislate their profits.

TheProfessorDan
TheProfessorDan

I mean they have managed everything else so well, let's just give them control of everything.

NickNielsen
NickNielsen

Lack of consumer spending is not the problem. Too much government spending is. Congress needs to get some 'nads, buckle down, tell the American people the truth and take the consequences: the federal government can no longer afford to spend at its current rate and the only options are to cut spending or increase taxes. Since we all know the one is anathema to Democrats and the other equally repugnant to Republicans, I see no significant chance for the US fiscal situation to improve in my lifetime...or yours. etu

Geek3001
Geek3001

About the only companies with 'long-term" views are privately owned companies that consider their people to be their most valuable asset. They tend to be small companies that occupy niche markets, though there are exceptions.

AOS/VS
AOS/VS

actual White Knites. Most CEO's are not worth what they're paid. Most often the measure of a new CEO success is a return to profitability and a raise in stock price. That usually means cutbacks in spending and layoffs. You don't have to pay someone millions to do that. Most executives are promoted based on personality rather than real abilities.

mcarr
mcarr

It's so unfair. They treat us as though we were sheep and we just sit there on our woolen asses watching whatever drivel they roll out. We are starting to tire of the same old formulas - some of them we've been watching for 40 years now. Maybe we ought to start a lamb-paign to get things changed... next commercial break, okay?

DaemonSlayer
DaemonSlayer

Yepp. They rely on an old formula, and big bonuses, when that starts to go away, it just HAS TO BE "piracy!" THEN they talk to a not-so-tech-savvy Gov't official and get legal rights to treat paying customers as if they are the criminals.

richstgmgr
richstgmgr

In addition to the drivel fed to us by broadcasters, they've developed the extremely shortsighted habit of disrupting viewers' habits by doing "mini-seasons" or having a hiatus in production. So whatever audience they might've built up - WHOOSH is the sound of that fan base evaporating! Talk about dumb! And that's in addition to the devaluing of their most valuable commodity - their employees. As Mark Twain said, "Makes me want to soak my head in chloroform!"

TheProfessorDan
TheProfessorDan

If we look back at people that lived through the Great Depression, one thing most of them have in common was that they died with a lot of money. This was because the Great Depression forced them to save their money and live smarter. There was no there to bail them out. There was no stimulus packages to pull home owners out bad mortgages. I have a wife and two kids and I am not in favor of people losing their homes but I think that all of these bail outs aren't helping any of these people. I have been as low financially as most people out there and I can tell you from experience sometimes the only way to go up is to hit rock bottom. I wonder what they will say about this generation of people in ninety years.

BaldEagle1996
BaldEagle1996

This is sidetracking the original discussion, but I agree. The problem is _not_ lack of government spending - they have no money left to spend. And we can't keep heaping up debt for future generations. There's a very basic principle that you can only violate for so long (and we have violated it for decades and more): Value that is to be consumed must be created _first_. Our whacked-over-the-head society believes it is the other way around; but that works only as long as we can create money out of thin air. Very simple example: If you want to eat a potato, then you have to put some planting effort in _first_ and wait for it to grow before you can dig it out. You can't reverse this sequence, but with manufactured goods we believe we can. Now back to our original discussion: You have to invest in your people first before you can expect them to excel and hatch creative ideas that you then can turn into a product for sale. Same principle - this is how the world has functioned for millions of years, and this is how it will function again after our society has crashed. About the only thing that is for free on this planet is heat from the sun - that's our galactic "cash infusion" (and even that is at the expense of the sun itself). But the sun has to shine first before it gets warm in the morning - you can't go ahead and enjoy the heat, and when you're done, wait for the sun to rise.

CareerCoach
CareerCoach

There are some public companies that are thoughtful and smart about looking ahead for the long term. I named a couple above, and would also point you to Google, Apple, Ford(now), Qualcomm, Genentech.

MikeGall
MikeGall

I second that. Privately held company's often do better. Here is why: there is a disconnect between "maximizing shareholder wealth" and running the best business possible. On the stock market you don't need to be a profitable company, you just have to have a cool name like YouTube and your stock/IPO/buyout will be astronomical even if you have little to no revenue and no model of how you are going to get there. I think both CEO's and investors need to start thinking like business owners. You shouldn't be speculating on the stock you should be making real value that if you were the only one that owned the company and had no market to sell it in it still would be getting more valuable day to day.

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