What the Zuck is wrong NBC?

Despite the title, this isn't a joke. NBC raises all sorts of interesting questions about why some massive companies have long periods of excellence and others have runs of incompetence, or more specifically a period of excellence followed immediately by a period of gross incompetence (one that shows no sign of abating).

Here's Ken Levine (who knows what he's talking about on the subject) assessing the current state of the network:

But the message is clear. NBC was a disaster last year. It’s hard to build an audience with so many new shows but what choice did they have? Last year they had star vehicles (like Matthew Perry in GO ON), the Olympics to promote their schedule, THE VOICE, and SUNDAY NIGHT FOOTBALL. And still they finished the year in shambles.  

This is what might be called the third period of NBC television (when we go back to the radio era, things get complicated, with what was NBC being split into NBC and ABC, but that's a story for another time). For about the first thirty years, CBS was on top, NBC was in the middle and ABC was at the bottom. In the late Seventies, though, everything went topsy turvy. ABC hit number one and actually started poaching stations from NBC.

The second period starts in the early Eighties and is usually associated with Grant Tinker and Brandon Tartikoff. This was the era of Must-see TV. NBC went from last to first and remained arguably the dominant network for almost twenty years.

Sometime around 2000, we hit the third period. The network went into sharp decline and has mostly stayed at the bottom ever since.

The standard explanation for this is good management/bad management (I've used it myself), but I'm starting to have my doubts. For starters, that relies on both great-man and idiot-in-charge theories and though I find the second somewhat more believable than the first (it is almost always easier to screw up something good than it is to fix something bad), both tend to have their impact exaggerated.

Worse yet, if we extend the data in either direction -- pre-Tinker (i.e. Silverman, who had a long string of successes stretching over two networks before he got to NBC) and post-Zucker -- the theory ceases to hold. We can possibly explain away the Silverman era based on timing, short tenure and expectations (Silverman's run was less of a disaster than most people realize and on some ways even laid the groundwork for Tinker's success*).

The post-Zucker era, however, is not easily explained away. Zucker was an embarrassingly underqualified executive who oversaw what was probably the worst decline in more than six decades of network television,  but he has been gone for almost three years and there does not seem to have been a noticeable improvement or even a significant change in direction.

NBC remains an organization that has no clue about how to do its job: it doesn't know how to develop or cultivate shows; it decided to waste a large chunk of its valuable Olympics real estate promoting arguably the least promising new show it had at the time; developing a new channel for the terrestrial market, it launches one of the most badly thought out ad campaigns you'll ever see and makes programming decisions like pairing Munster, Go Home with a drama about a raped nun killing her newborn baby.

I don't have an explanation for what happened with NBC. I don't even have a good theory. I do however have a different way of framing the question. Instead of focusing on the styles and decisions of different executives, perhaps we should be asking how a company goes from hiring executives like Tinker and Tartikoff to hiring executives like Zucker and apparently many more like him.


* From Wikipedia:

Despite these failures, there were high points in Silverman's tenure at NBC, including the launch of the critically lauded Hill Street Blues (1981), the epic mini-series "Shogun" and The David Letterman Show (daytime, 1980), which would lead to Letterman's successful late night program in 1982. Silverman had Letterman in a holding deal after the morning show which kept the unemployed Letterman from going to another network. ...

Silverman also developed successful comedies such as Diff'rent Strokes, The Facts of Life, and Gimme a Break!, and made the series commitments that led to Cheers and St. Elsewhere. Silverman also pioneered entertainment reality programming with the 1979 launch of Real People. ... On Saturday mornings, in a time when most of the cartoon output of the three networks were similar, Silverman oversaw the development of an animated series based on The Smurfs; the animated series The Smurfs ran from 1981 to 1989, well after Silverman's departure, making it one of his longest-lasting contributions to the network. He also oversaw a revival of The Flintstones.

In other areas of NBC, Silverman revitalized the news division, which resulted in Today and NBC Nightly News achieving parity with their competition for the first time in years. He created a new FM Radio Division, with competitive full-service stations in New York, Chicago, San Francisco and Washington. During his NBC tenure, Silverman also brought in an entirely new divisional and corporate management, a team that stayed in place long after Silverman's departure. (Among this group was a new Entertainment President, Brandon Tartikoff, who would help get NBC back on top by 1985.)  

Peter Principle or Dilbert Principle*

In case you haven't heard, Jeff Zucker has just been named president of CNN. Since we've been discussing incompetent executives lately, this seems like a good time to ask how, despite huge stakes, fierce competition and multiple layers of screening, incompetents still sometimes manage to make it to the top of large corporations.

At first glance, Zucker would appear ot be a perfect example of the Peter Principle, an effective producer promoted past his talents, but when you look closer at Zucker's one big accomplishment, the resurgence of the Today Show, you see less proof of competence and and more evidence that corporate reputations are often built on unrepresentative baselines, delayed effects, external factors and the tendency to embrace appealing and established narratives.

First some background via Wikipedia (as are all block quotes unless otherwise noted).

In 1989, [Zucker] was a field producer for Today, and at 26 he became its executive producer in 1992. He introduced the program's trademark outdoor rock concert series and was in charge as Today moved to the "window on the world" Studio 1A in Rockefeller Plaza in 1994. Under his leadership, Today was the nation’s most-watched morning news program, with viewership during the 2000-01 season reaching the highest point in the show’s history. ... In 2000, he was named NBC Entertainment's president.

Sounds pretty good, but remember two things that happened at the Today Show in 1990 an 1991. The first was a disastrous transition from Jane Pauley to Deborah Norville. You could make the case that Norville was actually better qualified for the job, but that did nothing to soften the viewer reaction. The younger Norville was seen as taking advantage of looks and youth to steal Pauley's position. Saturday Night Live even did a sketch entitled "All About Deborah Norville."

The ratings took a hit from the debacle, but Norville was soon gone, setting the stage for an upturn. That recovery was all but guaranteed by the hiring in 1991 of Katie Couric, a journalist who could have been genetically engineered to host a morning show.

Whoever got the producer's gig in 1992 was almost certain to oversee a substantial rise om ratings as the memory of the debacle faded and Couric started bringing in viewers. Now add in what was going on at Today's significant competitor.

Good Morning America entered the 1990s with its overwhelming ratings success. Gibson and Lunden were a hard team to beat. But Good Morning America stumbled from its top spot in late 1995. Lunden began to discuss working less, and mentioned to network executives that the morning schedule is the hardest in the business. ABC executives promised Lunden a prime time program; Behind Closed Doors would be on the network schedule. On September 5, 1997, Lunden decided to step down after seventeen years on Good Morning America and was replaced by Lisa McRee. Gibson and McRee did well in the ratings. However, ratings sharply declined when Gibson also left the show to make way for Kevin Newman in 1998. With McRee and Newman as anchors of Good Morning America, long-time viewers switched to Today, whose ratings skyrocketed and have remained at the top spot since the week of December 11, 1995.

In other words, Zucker started with an artificially low baseline, was handed a major TV personality on the verge, and saw his competition fall apart at exactly the right time. All of the important drivers of the show's success were things he had nothing to do with.

Just to be clear, many, probably most CEOs get their jobs because they are smart and capable and add value to the company, but there are other ways to  succeed in business. You can:


Fit in with the culture;

Make the right friends;

Couple your career with rising leaders and initiatives;

Fashion a persona that complements the favored narratives;

As for that last one, the legend of the studio boy wonder runs deep in the entertainment industry, from Thalberg to Silverman. When Zucker was put in charge of Today in his twenties and NBC in his thirties, he tapped into something both familiar and resonant.

But Thalberg and Silverman really were boy wonders who had laid down impressive resumes before they were put in charge. Zucker only had the perception of success. Sometimes, though, that's enough.



* Technically not the Dilbert Principle, but close.

Forget teachers-- hell, forget employees, what does it take to fire a CEO?

One of the fundamental tenets of the modern educational reform movement is faith in the private sector. In the last post, I discussed the contradictions in using that faith to justify attrition policies that are pretty much unheard of in the corporate world.

There's a second potential danger in looking to the private sector for answers. Companies are not very transparent. Most go to great lengths to hide incompetence and depict every effort as a success. There's nothing illegal or even unethical about this. If anything, the people who run a company have an obligation to present it in the best possible light.

Though you can't blame businesses for spinning their results, you can get into a great deal of trouble by imitating them. For example, a school system might adopt an innovative system of project management and never know that it was responsible for hundreds of millions in cost overruns.

Occasionally, however, you will run into a corporate screw-up so massive that no degree of opacity, no amount of spin can obscure it. When you encounter one of these, you should take a moment to remind yourself that the snafus that break the surface represent a minute share of the general population.

Which brings us to Jeff Zucker.

Zucker was brought in as president of NBC Entertainment in 2000 after a stint at the Today Show where his most notable accomplishments were moving the studio and introducing the Today Show's outdoor rock concert series.*

His tenure on the Today Show represented one of Zucker's two specialities: making tiny tweaks to a hit then claiming credit for its success. The other speciality was screwing up on an almost biblical scale. Under Zucker, NBC was the first network to ever go from first to fourth place and he came very close to destroying their lucrative late night slate. According to an executive for another network (quoted by Maureen Dowd), "Zucker is a case study in the most destructive media executive ever to exist... You’d have to tell me who else has taken a once-great network and literally destroyed it."

Zucker was grossly incompetent. The cost to share holders is difficult to estimate but it's probably in the hundreds of millions (possibly billions**). His poor performance was widely discussed in the industry.

And yet it took a change of ownership to force him out and he still gets terms like these:

Zucker's contract had been renewed last year to run through January 2013 with an annual salary of $6.3 million and a guaranteed annual bonus*** of $1.5 million. If he leaves by January, he can expect at least a $15.6 million check.

The moral of this story is: next time people tell you that schools should be run like a business, make sure to ask them which business they have in mind.




* Apparently the Today Show has an outdoor rock concert series.


** Here are some numbers from Wikipedia to put things in context:

On December 1, 2009, CNBC reported that a tentative agreement had been reached between Comcast and GE.^[26] The deal was formally announced on December 3, 2009.^[7] Under the agreement, NBC Universal would be 51% owned by Comcast and 49% by GE. Comcast is to pay $6.5 billion cash to GE. Comcast will also contribute $7.5 billion in programming including regional sports networks and cable channels such as Golf Channel and E! Entertainment Television. GE plans to use some of the funds, $5.8 billion, to buy out Vivendi's 20% minority stake in NBC Universal.^[7] After the transaction completes, Comcast will reserve the right to buy out GE's share at certain times. GE will also reserve the right to force the sale of their stake within the first seven years. The deal is subject to regulatory approval.^[7]

Vivendi will sell 7.66% of NBC Universal to GE for US$2 billion if the GE/Comcast deal is not completed by September 2010 and then sell the remaining 12.34% stake of NBC Universal to GE for US$3.8 billion when the deal is completed or to the public via an IPO if the deal is not completed.^[27][28]

*** I just love the idea of a "guaranteed annual bonus."