Leadership Observed – Warner Bros. Discovery
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Observation is essential to continuous learning about leadership. Articles about Warner Bros. Discovery (WBD) over the last several weeks raise important questions that we can learn from regarding leadership. My previous two newsletters included thoughts about WBD in the Chips and Salsa section. The decision to separate WBD into two separate firms provides additional opportunities to learn about leadership – first, the two newsletter mentions.
June 9 Newsletter – Leadership's AI Dilemma
This article raises interesting points about executive compensation. One thing not discussed was the role Zaslav played in setting the strategy and defining success. One solution I would propose is to limit cash compensation to $1 million per year. All other rewards would be in common stock that becomes tradable beginning in year three in equal amounts until year ten. This stock would be giftable and willable on the same sale timetable. This would drive a focus on long-term planning, but it would also drive analysts and traders crazy.
June 16 Newsletter – Leadership's AI Dilemma
In my last newsletter, one of the chips discussed how David Zaslav qualified for his full bonus for meeting “strategic” goals in 2024. The decision to split Warner Bros. Discovery into two separate firms raises another question. How did he qualify for meeting strategic goals when the strategy for WBD when it was formed in 2022 did not last three years?
Warner Bros. Discovery Is Breaking Up. We Have Questions | Vulture
On June 16, Deadline reported that Zaslav’s compensation would be “substantially lowered” as a result of the split. This is appropriate, given the enterprise he will be running will be smaller than WBD. This decision raises an interesting question about what leadership role the Board of Directors is providing. The Board approved a new contract for Zaslav that runs through 2030. Why would the Board retain a CEO for five years who was unable to execute the previous strategy in less than three years?
An insightful article from Forbes, The Streaming Wars: Why Creativity Beats Copycats, focuses on WBD’s rebranding of Max/HBO Max. It traces HBO’s and WBD’s journey as it moved into the streaming arena. This is when HBO lost its way. It stopped being itself and tried to become a combination of the next Netflix and Disney+. They failed to leverage its vast content library as effectively as Netflix. They attempted to create a DC Comics universe hub, similar to Disney’s Marvel. They focused on metrics and benchmarks rather than creating content on a global scale.
In certain areas, benchmarks serve as valuable measures of effective performance. In many others, they lead you down a road to mediocrity. Benchmarks are industry averages. They do not help you understand your secret sauce – what makes you special and unique. Benchmarks do not help you know your customers.
The lessons from WBD are transferrable to any industry. Many M&A deals fail to live up to the original hypothesis because they merge with the buyer’s way of doing business rather than creating something new.
Related Articles
The M&A Failure Trap | Newsweek
We analyzed 40,000 M&A deals over 40 years. Here’s why 70-75% fail | Fortune
M&A in Media and Entertainment: Own the Consumer, Own the IP, or Own Nothing | Bain & Company
David Zaslav Has Admitted Defeat | Puck
Chips and Salsa: Snack-sized news and posts
Faith, or a lack of it, drives us all in ways we do not fully understand.
Hemingway’s Faith: the Story of a Wandering Soul | One Peter 5
Here is another catchphrase to describe something as new that is nothing new at all.
How to Respond to ‘Quiet Cracking,’ a New Workplace Threat | Inc.
This article presents a modern take on an age-old problem. People want to be seen. Today, technology can make people feel invisible. One can argue that workers in the early industrial age felt unseen, which, in many ways, led to the rise in labor union activity.
I wrote about leadership in uncertainty in a previous newsletter.
When to quit: A simple framework for life’s toughest decisions | Big Think
Leadership is a journey. Just as with sailing, the winds and currents are always changing.
How Do I Adapt My Leadership as My Company Grows? | HBR
An interesting discussion about the future of AI and what it will become.
Behind the Curtain: What if they're right? | Axios
Quotes
“The world breaks everyone and afterward many are strong at the broken places.”
- Ernest Hemingway
“No one ever made a decision because of a number. They need a story.”
- Daniel Kahneman
“I just try and avoid being stupid.”
- Charlie Munger
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I write about leadership in business and life. I am a certified M&A Specialist and Leadership coach. My perspectives are based on a 40+ year career working with leaders from around the world at over 100 companies.
My goal is to make this newsletter as interesting and valuable as possible. Please share your thoughts and suggestions for improvement. If there are specific topics in leadership you would like me to focus on in future issues, please send them my way.
You can order The Leader With A Thousand Faces on my website’s Recommended Reading Page. This page also has links to purchase the books discussed in this and previous newsletters.
