success Archives - Adam Leipzig

Business Lessons for 2014: You Are a Media Company

“Don’t Become as Obsolete as the Sears Catalogue”

Of the business lessons you may apply in 2014, here’s the most important: You are media company.

What kind of company did you think you were? Practically everything we do today is media: social, personal, or commercial entertainment. We all walk around with mobile devices in our pockets, devices that are really mini-movie studios, capable of creating, editing and distributing content worldwide.

Of course you are a media company. This is true whether you employ 100,000 people or you work for yourself.

In case this surprises you, here is a history question.

Why didn’t railroad companies become the airline industry? After all, the railroads had the financial capacity, and knew about aircraft technology. They should have, could have, become airline companies, instead of being superseded by them.

What stopped the railroads from transforming? A failure of imagination, their own limited definition of what they did. In short, they believed they were in the railroad business. They should have said they were in the transportation business. This is one of the most common business lessons taught in business schools.

A similar challenge faces every business today, and every creative entrepreneur. If you define yourself within the limited framework of your discipline or industry, it is likely that you will become as obsolete as the Sears catalogue. But before you ask yourself “Why didn’t Sears become Amazon.com?” you should simply redefine your activities and embrace your media-company reality.

How do you become a media company?

Do what media companies do: Empower others to share their stories and information through you. Give your customers/audience/consumers the tools with which they share, articulate and improve their lives.

In other words, if you make trench coats, think like a TV channel, not like a clothing company. If you are a journalist, think like a publisher, not like a writer.

Existing media companies are, of course, well positioned to take advantage of the concept. But, ironically, they don’t always think like media companies, in the way I am defining them. Movie studios and television networks won’t endure for another decade if they don’t listen to their fans and embrace their creative partnership. Traditional publishing companies, with their slow turnaround-to-print process and myopic view of how audiences seek their content, are already witnessing a defection of high-profile authors.

In this decade, a media company needs to provide mechanisms by which all customers are audience members and also co-creators.

What should you do?

1. Get over your blocks, your feelings that you don’t have the time or ability or skills to do media, social media or video. It isn’t that hard.
2. Create content that people love and want to share
3. Focus on storytelling, because the best story always wins. If your company doesn’t have a narrative, it cannot be a viable company.

Likewise, when creative people tell their own stories, they give their work extra value. For example, have you ever walked into an art gallery and had the artist explain her work to you? The artist’s story always makes the work more interesting and valuable.

In her new book Blockbusters, Harvard Business School professor Anita Elberse recounts her interview with Angela Ahrendts, the CEO of Burberry, the company famous for its trench coats and outerwear.

Images from Burberry’s Tumblr page

In the interview, Ahrendts surprisingly describes Burberry as a “digital-media company.”

Burberry has been so active in social media that it now has more followers than any other luxury brand. “And the company has launched several online destinations,” Elberse writes. “At artofthetrench.com, for instance, consumers can submit photos of themselves in its iconic rainwear. ‘Nothing is for sale; it is just a site to connect people,’ explained Ahrendts. At Burberry Acoustic, which falls under Burberry.com, people can find songs recorded exclusively by British artists who have been handpicked by Burberry’s chief creative officer.”

The strategy has worked. Burberry’s sales have tripled during Ahrendts’ tenure—which just ended when she got an offer she couldn’t refuse from another company. This month, she is moving to Apple, where she will lead strategy to grow sales Apple’s online and retail stores worldwide.

Whether you are a giant corporation or a sole proprietor working alone in a garret, your future as a media company is inevitable. If you haven’t embraced it already, now is the time. This simple mind-shift will transform what happens this year.

Top image from Audi’s YouTube channel. They’re a media company, not a car company.

The Power Paradox In Leadership

In leadership, just because you have the power, does not mean you should use it. And even when you don’t have the power, sometimes you must act as though you do

As a CEO, how should you exercise your power of leadership? Should you govern by consensus? Make people tremble in fear? Be tough but fair?

We confront the same questions every day in Hollywood when we’re working on movies, because each movie is its own start-up entrepreneurial venture—we craft the business plan (the script), hire a bunch of people, and then make the product (the movie). Along the way, those of us who finance films and run studios need to decide what kind of leaders we are and what kind of power we will wield.

This issue comes into play at every step in the process, and nowhere more so than at the end, when we have to decide how the movie will be finished. We call that “final cut.” The “final cut” is the final version of a film, the moment where we stop tinkering with it and say it’s done. It’s also a moment where emotions can run high, because most of the time the director does not have “final cut”—that power is reserved for the motion picture studio or financial investors. While I know this seems strange to people in many other parts of the world, the United States has no tradition of droit morale or “moral rights” given to creators of intellectual property. If someone else is paying the bills, everything, even a movie, is a “work for hire,” which means the filmmaker, in the last days of a movie, holds precious little power.

On one film I supervised, our studio found the ending unsatisfying. We had an instinct, borne of our experience, that if the ending were better—in fact, if the last two scenes were reversed—audiences would leave the movie much more up-beat, which would translate into better word-of-mouth and more ticket sales in the future. The director didn’t want to make the change. She liked the ending the way it was, but she agreed to a test, so one Sunday afternoon we went to a cinema and screened two versions of the movie in adjacent rooms for test audiences. The versions were the same except that two scenes at the end were in a different order. After the screening, a research company did an audience survey, and it turned out we were right: the version with our ending had a higher approval rating.

You’d think that would be the end of the story. We, the studio, had “final cut,” and the director didn’t. But, even with the audience results in hand, she didn’t want to budge. She made an artistic plea, stating that the film was simply a better film with her ending, and that we should support quality and artistic integrity.

That evening, we executives at the studio caucused among ourselves. We reached a surprising decision—we agreed to let her keep her ending. We had done our job, and showed her that a different, more commercial ending was possible. She had done her job, and fought back to preserve her vision. Why did we make the decision as we did? Because, at the end of the day, we recognised that our role was to be financiers, not movie-directors, and even though we had the power to change the movie, it would overstep our role and imperil our relationship with this director and other directors we may work with in the future.

The outcome of that film was an even further surprise, because its box office turned out to be double our expectations. The director had been right all along; the audience appreciated her mark of quality.

Then I worked on another film with the opposite result. This time, we had engaged an extremely powerful director, one of the few who commanded the power of “final cut” himself. When we screened the film for a test audience, it tested poorly. The fixes were obvious to all of us, including the director. But he knew the film’s star would not want to go along, and this director told us, in confidence, that the only way to get the changes made would be if we played a charade, so he could claim we were forcing him. Here, too, we played our role, and he played his. The film got changed and became a moderate success.

What’s the lesson of these two stories, and what does it tell you about the kind of leadership that you should practice? Think of it as the Power Paradox. Just because you have the power, does not mean you should use it. And even when you don’t have the power, sometimes you must act as though you do.