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.