Business – Page 12 – Jeremiah Stanghini

If I were the CEO of CNN… (Part 2)

In yesterday’s post (Part 1), I went down a bit of a tangent and really focused on CNN’s potential to become the “go-to” network for fact-checking. Today, I wanted to revisit the idea of being the CEO of CNN and take a closer look at CNN from a strategic standpoint.

Yesterday, I mentioned that one of CNN’s resources was its plethora of international journalists. This is certainly something that needs to be considered when developing a new strategy for CNN. Although, also as I said yesterday, Americans are known for not caring about what’s going on in the world.

Another one of CNN’s resources (intangible, mind you) is their brand. I couldn’t find any hard data, but my guess is that CNN has a better reputation for reporting impartial and accurate news than MSNBC or Fox News. (Aside from some slip-ups, of course.)

As some critics have said, CNN grew in popularity when it was showcasing, “hard-hitting investigative reporting.” One could postulate that this strength grew out of the two resources above. By having lots of international journalists, they’re able to report on the day-to-day news, while still researching/developing investigative reports. Similarly, their brand equity gives them an “in” because people around the world recognize CNN as a news organization that is watched by many people. As a result, someone may be more likely to tell CNN their story.

When examined from this perspective, it certainly seems that this kind of reporting is one of CNN’s core competencies. Why is it a core competency? It’s certainly a unique strength and it is embedded deep within CNN. It also allows CNN to differentiate itself from its rivals. Unfortunately, it seems that CNN has strayed from this core competency.

So, in addition to yesterday’s conclusion about CNN expanding its “fact-checking” programming, it seems that CNN would be well-served to, as some critics have said, “get back to its roots,” and bring back the hard-hitting investigative reporting that brought it brand awareness.

[Note: I’ve barely scratched the surface on the tools that one can use to analyze/develop strategy. Notably missing are things like a SWOT analysis, Porter’s 5 Forces, the BCG Matrix, McKinsey‘s 7S framework, and the list goes on. This two part-series on CNN’s strategy was meant to provide a taste into some of the things that upper-level management would need to consider when developing strategy.]

If you liked this paper/series, you might want to check out some of the other papers/series I’ve posted.

If I were the CEO of CNN… (Part 1)

A few weeks ago, I was stuck in traffic so I flipped on NPR. As it was the 6 o’clock hour, Marketplace with Kai Ryssdal was on. To my delight, they were talking about the impending shift at CNN. That is, earlier this summer, the current CEO of CNN announced that he’d be stepping down at the end of the year. Recently, CNN announced that Jeff Zucker would be replacing Walton as the President of the company.

Anyway, on the Marketplace broadcast, Ryssdal was speaking with someone who argued that CNN was going to redefine itself:

But that may be tougher than it sounds. With Fox News cornering the political right, and MSNBC owning the political left, the question is, says Sherman, “How do you define yourself, if not by politics?”

Indeed. Fox News is most certainly known as the network that favors the opinion of political conservatives and MSNBC certainly seems to favor the opinion of political liberals. In today’s cable TV marketplace, that certainly leaves little room for CNN. It would be silly of CNN to try to compete with MSNBC in its market (liberals) and it would be foolish of CNN to try to compete with Fox News in its market (conservatives).

Since I just finished up a course on strategy, I thought I’d use some of the tools I learned about to analyze CNN’s current situation. Keeping in mind that this is meant to be a cursory or 30,000-foot view, as I didn’t do a great deal of research, (which is what would need to be done to have a thorough analysis).

The first thing that comes to mind is one of CNN’s resources: international journalists. I remember hearing at one point that this was one of CNN’s distinct advantages (over MSNBC and Fox News): they have a number of journalists worldwide, whereas the other two networks don’t. This allows them to compete in other markets than the US and probably helps lead to CNN’s extensive name recognition worldwide (over MSNBC and Fox News). This is certainly a resource that CNN should try to incorporate into their strategy moving forward.

Though, I have also read that while this is a key resource for CNN, it doesn’t necessarily help them with the US market. Why? While Americans know that it’s good for them to know what’s going on in the world, a great deal of the population doesn’t care. Since the US is the most coveted market, CNN’s going to have to do something to try to pull away viewers from Fox News and MSNBC — or attract new viewers.

After reading about some of the things that Zucker has said, it certainly seems like he doesn’t want to continue to compete just with MSNBC and CNN. It seems like Zucker might also consider other cable networks like Bravo and TLC competitors of CNN.

I tend to agree with some of the critics who think that CNN should return to the kind of programming that made it successful: “hard-hitting investigate reporting.”

But more than that, I think there’s a real opportunity for CNN to create a new market or at least add-value to a different market: fact-checking. As can be seen from Google trends, searches for fact-checking really seem to peak around the time of a presidential election. My thought: CNN could try to capitalize on this by creating programming (not just around election season, but all the time) where they fact-check other news organizations. That is, they could almost do what Jon Stewart and The Daily Show do, but without the satirical/comedic element. That is, CNN could inform viewers how the other two networks are distorting the facts. I remember seeing some programming like this on CNN recently, but my idea would be for more of this programming. Maybe the majority of its programming would be fact-checking.

It’s possible that the networks have already market-tested this idea and found that it won’t work, so that might be why we haven’t yet seen a plethora of this kind of programming, yet, but it’s also possible that no one had considered it or that it was considered and top management didn’t like it.

Maybe my naïvety and wish for this kind of a public service is clouding my strategic thinking, but something tells me that this could work.

[Author’s Note: When I read through this post just now after having written it a couple of days ago, I realized that I didn’t really talk too much about some of the fundamentals of strategy. Look for Part 2 on Sunday.]

Markets Are Cyclical: Why the Internet Monopolies Don’t Matter (that much)

There was a nice feature on Technology in this past week’s Economist. In fact, there were a number of articles I found intriguing (medical tricorders was a good one!), but I want to draw your attention to one in particular: Battle of the internet giants – Survival of the biggest. The case is made that these internet behemoths are getting too big and that their scope needs to be curbed. Okay, I understand that, but I think that the fear is a bit unfounded. Here’s why.

Remember back to when railroads were the only way to get around? Remember when all commerce and long-distance travel was done by locomotive? Now, I don’t know if this is a perfect comparison, but bear with me for a second. There were at least a few big players in the railroad game back in the 19th century (Union Pacific, Central Pacific, and Southern Pacific). I’m sure that there were people back then who were irked that there were monopolies in the railroad business and probably wanted there to be more regulation (like is being argued in the article about the internet).

However, with the turn of the 20th century, a new form of transportation was starting to emerge: the automobile. It didn’t happen overnight, but the automobile eventually became a much more preferred method of transportation.

There’s another example: television. Remember in the early days of TV, there were just a few channels? If you had a TV (and you watched it), you probably saw the same program that everyone else who had a TV was seeing. Again, I don’t know, but I imagine that some folks were pretty peeved by this monopoly. Although, slowly but surely, there came to be more and more choice of TV channels. In fact, it’s gotten to the point where we’re unlikely to ever see the most watched television program eclipsed because there’s so much choice. Though, some would argue that there still are monopolies in television.

And now what’s starting to breach the monopolies of TV? The internet and online media. There was a slide deck that was passed around courtesy of Business Insider earlier last week that shows the future of digital. There were lots of graphs and lots of data. One of the graphs showed that the percentage of live TV watching has dropped 25% in just the last 4 years. Conversely, recorded TV watching is up over 50%! And a new category has emerged: streaming TV. Whereas there was no streaming TV watching in 2008, it now makes up 7% of primetime viewing in the US.

So, even with all of this choice in television, there is still room for newness and growth.

Tying this back into my argument about the internet behemoths: maybe we can’t see it now, but based on history, I would bet that there’s going to be something that comes along (eventually) and unseats these internet behemoths. Of course, that’s not a reason not to regulate them, but it is something to keep in mind when you see articles like the one in last week’s Economist.

Money Doesn’t Matter, Right?

I came across this short 3-minute clip narrated by Alan Watts and thought you might be interested:

Being in an MBA program, I’m certainly sympathetic to the argument that money does matter, but after watching this video, I was reminded of a story I’ve heard on many occasions. The story’s fame was aided because it was printed in Ferriss‘ “The 4-Hour Work Week“. Without further adieu:

An American businessman was standing at the pier of a small coastal Mexican village when a small boat with just one fisherman docked. Inside the small boat were several large yellowfin tuna. The American complimented the Mexican on the quality of his fish.

“How long it took you to catch them?” The American asked.

“Only a little while.” The Mexican replied.

“Why don’t you stay out longer and catch more fish?” The American then asked.

“I have enough to support my family’s immediate needs.” The Mexican said.

“But,” The American then asked, “What do you do with the rest of your time?”

The Mexican fisherman said, “I sleep late, fish a little, play with my children, take a siesta with my wife, Maria, stroll into the village each evening where I sip wine and play guitar with my amigos, I have a full and busy life, senor.”

The American scoffed, “I am a Harvard MBA and could help you. You should spend more time fishing and with the proceeds you buy a bigger boat, and with the proceeds from the bigger boat you could buy several boats, eventually you would have a fleet of fishing boats.”

“Instead of selling your catch to a middleman you would sell directly to the consumers, eventually opening your own can factory. You would control the product, processing and distribution. You would need to leave this small coastal fishing village and move to Mexico City, then LA and eventually NYC where you will run your expanding enterprise.”

The Mexican fisherman asked, “But senor, how long will this all take?”

To which the American replied, “15-20 years.”

“But what then, senor?”

The American laughed and said, “That’s the best part. When the time is right you would announce an IPO (Initial Public Offering) and sell your company stock to the public and become very rich, you would make millions.”

“Millions, senor? Then what?”

The American said slowly, “Then you would retire. Move to a small coastal fishing village where you would sleep late, fish a little, play with your kids, take a siesta with your wife, stroll to the village in the evenings where you could sip wine and play your guitar with your amigos…”

[source]

When the Data Don’t Match Your Beliefs

By now, you’ve no doubt seen (or at least heard about) Karl Rove — noted Republican strategist — challenging the decision of the network for which he is a contributor (Fox News) to call Ohio for President Obama. If you haven’t, it’s worth checking out. This example is a good display of the data not matching one’s beliefs. While Rove has had experience with networks calling states prematurely, based on the data, all the networks were pretty confident in awarding Ohio for President Obama.

Cognitive biases are not unique to Karl Rove — we all have them. Similarly, there is also a tendency to discount data that does not fit one’s previously held beliefs. This past week, I finally cracked Jim Collins‘ new book: Great By Choice. I really liked Good to Great (and even included the story of the Stockdale Paradox a few months ago!)

Within the first 10 pages of the book, Collins’ writes about “entrenched myths” and “contrary findings.” That is, as part of Collins’ (and his team’s) research, they found that some previously held beliefs did not hold true when looking at the data. In case you’re interested, I’ve included them below. Take a look:

Entrenched myth: Successful leaders in a turbulent world are bold, risk-seeking visionaries.
Contrary finding: The best leaders we studied did not have a visionary ability to predict the future. They observed what worked, figured out why it worked, and built upon proven foundations. They were not more risk taking, more bold, more visionary, and more creative than the comparisons. They were more disciplined, more empirical, and more paranoid.

Entrenched myth: Innovation distinguishes 10X companies in a fast-moving, uncertain, and chaotic world.
Contrary finding: To our surprise, no. Yes, the 10X cases innovated, a lot. But the evidence does not support the premise that 10X companies will necessarily be more innovative than their less successful comparisons; and in some surprise cases, the 10X cases were less innovative. Innovation by itself turns out not to be the trump card we expected; more important is the ability to scale innovation, to blend creativity with discipline.

Entrenched myth: A threat-filled world favors the speedy; you’re either the quick or the dead.
Contrary finding: The idea that leading in a “fast world” always requires “fast decisions” and “fast action”—and that we should embrace an overall ethos of “Fast! Fast! Fast!”—is a good way to get killed. 10X leaders figure out when to go fast, and when not to.

Entrenched myth: Radical change on the outside requires radical change on the inside.
Contrary finding: The 10X cases changed less in reaction to their changing world than the comparison cases. Just because your environment is rocked by dramatic change does not mean that you should inflict radical change upon yourself.

Entrenched myth: Great enterprises with 10X success have a lot more good luck.
Contrary finding: The 10X companies did not generally have more luck than the comparisons. Both sets had luck—lots of luck, both good and bad—in comparable amounts. The critical question is not whether you’ll have luck, but what you do with the luck that you get.

Why It’s Important to Disclose Conflicts of Interest

For the last couple of weeks, I’ve noticed an increasing number of columnists/authors/reporters/personalities disclosing potential conflicts of interests. Firstly — THANK YOU! I very much appreciate it when I’m reading something to know that the information I’m reading may be coming from someone who has a bias. It’s okay to be writing about something/someone close to you, but it leaves a bad taste in my mouth when I later find out that the person writing about topic X has a vested interest in how topic X does and the person didn’t have a note about it in the article.

Part of the problem with people not disclosing possible conflicts of interest is because they may not know or think that it’s a problem. I think that’s a problem, but it can be hard to change someone’s morals.

I wonder if there will be some sort of multiplier effect. That is, the more that people disclose the possible conflicts of interest, the more that other people begin to disclose conflicts of interest. There is the possibility that there aren’t actually more people disclosing conflicts of interest and I just have happened to catch a sample of article that had more disclosures than another sample might have. Regardless, my question about the multiplier effect still stands. If we start to be more open about our affiliations, will that then cause other people to be more open about their affiliations?

I don’t have an answer, but I’d like to think that the answer would be yes. What do you think?

Shutting Pitchers Down Early: A Creative Lesson in Long-Term Sustainability

I’d been meaning to write about this for the last few weeks. In fact, I first got the idea after the Washington Nationals made the playoffs for the first time in a long time. I immediately knew that there were going to be a number of articles written in trying to sway the management of the team to let Strasburg (the star pitcher) pitch in the playoffs. However, management had already decided that this particular pitcher had “reached his limit” and would no longer be pitching this season.

There are pros and cons to this, but I wanted to look at it for: “short-term gain vs. long-term sustainability.”

When we look at companies that have failed, often times, it’s because they sacrificed long-term sustainability for short-term profits. That is, they took a shortcut to make a quick buck without due consideration for how it was going to affect the company in the long-term. Or, maybe they did consider it, and just chose the short-term gains instead.

As I watched — painfully — the Nationals be eliminated from the playoffs a bit ago, I couldn’t help but reflect on this idea of short-term gains and long-term sustainability. Those folks who screamed for Strasburg to pitch kind of have a point. It’s possible that he Strasburg may get hurt at some point next season or the season after or that the Nationals will never get that opportunity to return to the playoffs. And it’s because of this that Strasburg should have been allowed to pitch.

Though, if I think about it from a ‘business’ perspective, the argument can be made that it’s best to “take care of your assets.” That is, if your company had a Ferrari, you wouldn’t necessarily overuse your Ferrari simply because you had a Ferrari. No, you would want to take care of that very expensive (and valuable) asset to reap the benefits over the long haul.

In sum, I don’t know how I would act if I were the General Manager of the Washington Nationals. However, I do think that this is a creative example in illustrating the difference between pursuing short-term gains or long-term sustainability.

How The Heck Does The Economy Work, Anyway?

A few months ago, I wrote a post about an online video series I’ve been following by John Green on world history. A few days ago, I learned that two economics professors at George Mason University were starting an online course in the same vein as Stanford. As they’re economics professors, naturally, you’d expect that the course is on economics (it is). In fact, the two professors (Alex Tabarrok and Tyler Cowen) describe the course as:

This course covers theory and empirics and history for the economic growth of developing nations.

I have to say, I’m really excited for this course and I think you should be, too. Similar to my comment about our need to understand the implications of history and the past, I believe we also should have an understanding some of the basic underlying theory of the economy.

There are a few differences between John Green’s crash course and the course being offered by Prof. Tabarrok and Prof. Cowen. First, as I referred to earlier, the economics course is more in the same vein of MOOC (Massive Open Online Course). Second, there aren’t any fun animations from the Thought Bubble (at least I haven’t seen any, yet). Third, there are multiple videos per lesson. With John Green’s course, there was only one video per week on a given topic. With this course from Marginal Revolution University, there are usually multiple videos for a given lesson. For instance, for the lesson on People (as in, leading thinkers on the economy), there are over 30 videos. Finally, there are practice questions. Practice questions? Yes, practice questions. Meaning, the professors have included practice questions along with the videos to help the viewer interact with the material.

I’ve included the introduction video below.

Why We Lie, Cheat, and Steal: The Truth About Dishonesty

I’ve just finished the 5th week of my 4th year of graduate school. For folks that have been in graduate school this long, there’s usually a development of research interests. Because of the nature of my time in graduate school (1 year in a PhD program, 1 year completing my first Master’s, and now into year two of an MBA), I never really had to declare my research interests or choose a dissertation topic. Though, for my first master’s, I did have to write a final paper. That final paper was on a topic that, if I were asked, would probably appear on a list of my “research interests.” It was on intuition and decision-making. Ironically, I’m working with a professor at George Mason University to test whether or not one can improve the conditions for one’s intuition (in the context of decision-making).

If I were to list another research interest, I’d have to say that it’d be on the topic of ethics or morals. Ironically, during my time as an undergrad, I worked on a research project with a psychology professor where we were examining (among other things) people’s moral judgments. I’ve had an RSA Animate talk bookmarked for about two weeks and I just finished watching it — I think you’ll enjoy it.

It was given by Dan Ariely on the content of his new book: The Honest Truth About Dishonesty: How We Lie to Everyone—Especially Ourselves. Ariely is also the researcher I referenced a few months ago when I was talking about the research on American’s perceptions and misperceptions of wealth inequality. I’ve pulled a few important quotes from the video:

“The magnitude of dishonesty we see in society is by good people who think they’re doing good, but in fact cheating just a little bit, but because there’s so many of them — of us — it has a tremendous economic impact.”

“You can’t go and say to yourselves, chef really want their food to be eaten. And it’s really owned by a conglomerate that is really not that good. Some things lend themselves to a much higher degree of rationalization.”

“At some point, many people switch and start cheating all the time. And we call this switching point the ‘what the hell’ effect. It turns out we don’t have to be 100% good to think of ourselves as good. But if at some point you don’t think of yourself as good, you might as well enjoy. And many people, by the way, report this same thing with diets.”

“Your motivation influences how you see reality.”

Replacing the 40-hour Workweek with a 30- or 21-hour Workweek

This past summer, I posted a couple of articles from The Atlantic to Facebook. They both had to do with vacation — more specifically — the lack of vacation in the US when compared to other countries. As America’s health declines, I can’t help but think that there’s something to the idea of a shorter workweek and taking better care of ourselves.

This morning, I came across a TEDxTalk from one of the prominent members of the New Economics Foundation in London. In the video, she makes a rather compelling case for a shorter workweek. I don’t know that I agree with reducing the workweek to 21 hours, but I certainly think the conversation should be had as to the appropriate length of the workweek, especially in the context of declining health.