ESPN The Company E-Book

Anthony F. Smith

• Herausgeber: John Wiley & Sons
• Kategorie: Fachliteratur
• Sprache: Englisch

Seitenzahl: 387

Veröffentlichungsjahr: 2009

Beschreibung

A fascinating look at ESPN and its success as a brand ESPN The Company reveals the inside scoop on the biggest business story in sports, detailing the creative and innovative spirit and practices that drove the programming, products, and services of the most powerful and prominent name in sports media. The authors provide a behind-the-scenes perspective on how ESPN dealt with their many partners and how they handled mistakes and missteps along the way-from the humble beginnings of ESPN as an underrated startup to the pinnacle of their success as a major industry player. ESPN and other great organizations invest in their people. They train them. They believe that if you spend the time and resources turning talented performers into leaders, you're going to get better organizational performance and engender higher levels of commitment and sweat. ESPN The Company * Explores the dedication to excellence that makes ESPN the "Worldwide Leader in Sports" * Reveals how the steps ESPN has taken to excel can be applied to whatever type of business you're in * Shares the lessons learned at ESPN about launching and growing a wildly successful enterprise Engaging and informative, this entertaining guide reveals how any company can benefit by embracing the best practices of ESPN.

Leseprobe

Table of Contents

Praise

Title Page

Copyright Page

Dedication

Acknowledgements

Introduction

“Welcome to Bristol, Dr. Smith”

Fasten Your Seatbelt

Chapter 1 - TURNING FANATICS INTO FANS

Ready When the Red Light Goes On

Yes, But We’re Also a Business

Digging the Moat

On the Hiring of Fanatics

The Astoundingly Simple Principle

Chapter 2 - THINK LIKE AN INCUMBENT, ACT LIKE A CHALLENGER

Insecure Overachiever

A Beacon in the Sky

The Ultimate Road Trip

Fast, Cheap, and (Occasionally) Out of Control

When the Model Doesn’t Work, Turn it Over

Happy Accidents

Chapter 3 - THE RIGHT LEADER AT THE RIGHT TIME

The Pioneers and the Settlers

The Calculating Strategist

The Programmer-in-Chief

The Kinder, Gentler Leader

Myths of Leadership

Chapter 4 - CREATE YOUR OWN GAME

Serving the Underserved

Cheap and Under Control

Crashing the Party

Paying to Play

Create Your Own Outlet

Stick with the Knitting

Chapter 5 - EXPAND THE BRAND

When in Doubt, Ask the Brand

ESPN Goes Abroad

ESPN Opens the Books

Keeping Down the Number of Freight Cars

When You Get Big, Go Humble

Leveraging

Stepping into the Change

Chapter 6 - PLAYING WELL WITH OTHERS

Playing Well with Owners

Playing Well with Business Partners

The Battering Ram and the Velvet Glove

Chapter 7 - BLOW THE WHISTLE, SPOT THE BALL

Adjust and Make it Work

Take a Chance, and Make it Happen

Remain Friends and Have a Short Memory

The No Blame Zone

The Don Hurta Rule

Chapter 8 - ARE YOU HAVING FUN?

The Perils of Market Leadership

The Perils of Keeping and Losing Talent

The Perils of Unexpected Competition

For the Fun of It

Notes

References

About the Authors

Index

Additional Praise forESPN The Company

“If you love the business of sports, or the sport of business, you will love this book!”

—Larry Probst, Chairman, United StatesOlympic Committee, and Chairman, Electronic Arts

“Tony Smith’s captivatingly insightful story of how ESPN defied convention in its pioneering journey—having fun all along the way—is a must read for sports, entertainment and brand marketing aficionados.”

—Jon Katzenbach, Founder, Katzenbach Partners,.Former Director, McKinsey and Company, bestselling authorof several books, including Peak Performance andThe Wisdom of Teams

“Most sports fans are “fan”atics. ESPN has become the public face of this devotion. But ESPN is more than a sports channel or a media company; it is a brand. This readable, engaging, and interesting book shares the story behind the brand. Like being in the huddle or locker room, we learn about how ESPN leaders made choices that turned sports fanaticism into business results. The principles in the ESPN story apply to a broad spectrum of companies and leaders. A wonderful business read of a sports journey.”

—Dave Ulrich, Partner,The RBL Group, Professor,Ross School of Business, University of Michigan,Ranked the #1 Management Educator andGuru by Businessweek

“Leading a business through a fast-growth cycle has its challenges and Dr. Smith has captured not only the interworkings unique to ESPN but also broadly applicable lessons for anyone either starting, running or growing a major enterprise.”

—Thomas Ryan, Jr., President & CEO, PODS Inc.

“Leadership is about visualizing an exciting future, and making it happen by combining the passion of true believers with the power of core values. Nothing brings this idea to life more than the ESPN story, and no one could have told it better than Anthony has in this very instructional and inspirational book.”

—Rajeev Peshawaria, Chief Learning Officer,Morgan Stanley

“Knowing first hand the excitement and the challenges of leading a company, particularly in this environment, I found Dr. Smith’s account of ESPN to be both inspirational and instructional. The authentic leadership throughout their history combined with the intense passion of the employees were obviously key to ESPN’s success, and are key to creating enduring brands forever. I am a big fan of learning from the best, and no one can argue with the fact that ESPN is the best at what it does, so enjoy the learning—I certainly did.”

—Carl Liebert III, CEO, 24 Hour Fitness Worldwide

“Dr. Smith has been a valued advisor to ESPN for over 20 years. In fact, he became a Board member of the V Foundation based on the strong recommendations from ESPN. He has had a front row seat on watching ESPN grow, develop, and become the incredible company that it is today. His account of their evolution combined with his expertise in leadership and organizational science has culminated in this fascinating and compelling book. ESPN has become enormously important to the world of sports and media, not to mention a great business story. I, along with my brother Bob, are honored to be associated with such a wonderful company, and I know my late brother Jimmy felt the same way. Both ESPN, the “actual” company and Dr. Smith are tremendous supporters of the V, and I am touched that he is giving a large percentage of the profits from this book to our foundation to support our mission to find a cure for cancer.”

—Nick Valvano, CEO, The V Foundation for Cancer Research

“American companies have done a lot wrong in the past few years. It is great to learn from one that has done a lot right! The greatest sports story of the decade is not about a game or a player—it’s all about a company—ESPN! Smith’s book is filled with great lessons on leadership and team work from this American winner!”

—Marshall Goldsmith,New York Times andWall Street Journal #1 bestselling authorof What Got You Here Won’t Get You There andSuccession: Are You Ready?

Copyright © 2009 by Dr. Anthony F. Smith. All rights reserved.

Published by John Wiley & Sons, Inc., Hoboken, New Jersey. Published simultaneously in Canada.

ia a registred trademark of ESPN, Inc.

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Library of Congress Cataloging-in-Publication Data:

Smith, Antony F.

ESPN : the company : the story and lessions behind the most fanatical brand in sports/Antony F. Smith, with Keith Hollihan.

p. cm.

Includes bibliographical references and index.

eISBN : 978-0-470-56400-4

1. Television broadcasting of sports—History. 2. ESPN (Television network)—History. I. Hollihan, Keith. II. Title.

GV742.3.S528 2009

384.55’5—dc22

2009023147

I dedicate this book to the wonderful people who introduced me to ESPN,trusted me over the last 20 years to be their partner, and allowed me to share inthis incredible story with them—a story which, by the way, is far from over.Thank you, Michael Gorman, for providing me with the initial opportunityto work with you in the early days at ESPN. I still remember the day I drovewith you from New York City to Bristol over 20 years ago,anxious but excited about this small cable company.

Thank you, Rick Barry and Jim Allegro, for trusting me enoughto introduce me to your new CEO, Steve Bornstein,who had an enormous impact on my thinking and approach over the years,which in turn made me a better consultant.

Thank you, Steve, for letting me work with youand your talented and dedicated team over the years,including your successor, George Bodenheimer.All of you have been wonderful clients, and have become dear friends,cherished by me and my family.

Finally, thank you, George, for trusting and allowing me and LRI to continueto work with you and your gifted team of leaders, many of whom I met morethan 20 years ago, including Sean Bratches, Ed Durso, Christine Driessen,Rosa Gatti, John Walsh, Steve Anderson, John Wildhack, Chuck Pagano,Ron Semiao, David Pahl, Len Deluca, Chris Laplaca, Norby Williamson,John Skipper, Russell Wolff, Jed Drake, Al Jaffe, and the many otherwonderful ESPN employees who continue to build the legacy of the mostfanatical brand in sports!

Acknowledgments

As you will read in this book, ESPN is a company that is about the fans and their sports, not about themselves.Therefore, having someone write about “them” is not part of their corporate DNA. However, as a student of organizations and leadership, I felt compelled to share this incredible business and leadership story of this company that most only know because they love what they do, not because they love who they are; just as sports are inspiring to the fans, ESPN’s story is inspiring to anyone who is interested in starting, developing, growing, leading, and institutionalizing a phenomenal business enterprise; so thank you, ESPN!

I would also like to thank several people who gave up their precious time to be interviewed for this book: Steve Bornstein, Mark Shapiro, Rick Barry, Jim Allegro, Mark Quenzel, Roger Werner, Bill Creasy, Michael Gorman, Howard Katz, Geoff Mason, Lee Ann Daley, and Dick Glover. I would also like to thank Rosa Gatti, who gave up so much of her precious time to help support me with last minute details in the frantic last hours of the editorial process.

Thank you B.G. Dilworth, my wonderful agent, Patti Judd, my talented PR consultant, and the great and talented team at Wiley. Debra Englander, Jocelyn Cordova, Adrianna Johnson,Todd Tedesco, and Kelly O’Connor, your heroic efforts to get this book out on ESPN’s 30 year anniversary was truly inspiring.

I would be remiss if I didn’t thank my family for all their support while I wrote this book.Writing is a labor of love, but it did take me away from spending precious moments with my true inspirations—my sweet daughter Estelle Rose Smith and my wonderful son, Dominic Thomas Smith.

Lastly, I would like to thank Steve Bornstein (President/CEO, 1990-2003) and Jim Allegro (CFO, 1990-1995), who introduced me to the V Foundation for Cancer Research; I proudly serve on their board, along with Steve, Jim, George Bodenheimer (President, 1998- present), and many other ESPN family members. ESPN supports the V Foundation in many significant ways, and I will continue to support The V Foundation by donating a significant percentage of the profits from this book. Knowing that we have all been touched in some way by cancer, I would invite you to look into, and perhaps support, The V Foundation for Cancer Research, where 100 percent of your dollars go toward finding a cure for cancer. As Jimmy Valvano stated in his inspiring speech at the ESPY awards, “Never give up. . . never ever give up!”

Thank you.

Anthony F. Smith

The V Foundation for Cancer Research was founded 15 years ago by ESPN and Jim Valvano. The V Foundation has earned a top four-star rating from Charity Navigator, America’s largest charity evaluator. The V Foundation can be contacted at their headquarters:

The V Foundation for Cancer Research 106 Towerview Court Cary, North Carolina, 27513 Phone; 1-800-454-6698 www.jimmyv.org

Introduction: The Biggest Business Story In Sports

The headline read, “25 Years Ago, The Biggest Story In Sports Didn’t Even Make The Sports Page.” Today, sports coverage is a 24-7 media phenomenon and ESPN is the brand and the sports outlet synonymous with nightly highlights, morning updates, athlete interviews, must-see games, and major sideshow events like the ESPYs and the NFL draft. When ESPN put its full-page twenty-fifth anniversary ad in the New York Times on September 7, 2004, it was calling attention to the impact the organization has had on changing the nature of the sports media game. As Chris “Boomer” Berman stated in the foreword to ESPN 25 (a book of 25 years of sports highlights), “History now tells us that the television sports landscape was forever changed. Funny though; those of us who worked at ESPN back in the fall of 1979 and the beginning of the 1980s weren’t so sure.”

At first it’s hard to remember how incredibly different the business of covering and broadcasting sports was before the arrival of ESPN in 1979. Remember when ABC’s Wide World of Sports (. . . The thrill of victory, and the agony of defeat. . . .! ) was the weekly outlet for sports fanatics? Remember when the best you could do for a recap of the night’s games was watch the scores and highlights crammed into a few sparse minutes between news and weather on your local television channel? Thirty years ago, sports coverage was produced as though the topic was a sidebar unworthy of serious news time. That mindset shifted when Bill Rasmussen, an unemployed sports announcer, and a group of committed sports junkies in Bristol, Connecticut decided to lease unwanted satellite transponder space to broadcast Connecticut college sports and New England Whalers hockey games. Before the Entertainment and Sports Programming Network even launched, the dream of sports coverage broadened and went national. Fans who loved sports—the types who watched prime time games, late night games, pro games, college games, amateur events, and anything else that involved uniforms and competition—couldn’t get enough.

Today, ESPN is the most powerful and prominent name in sports media.The Bristol campus—and who could have envisioned Bristol as the center of the sports world?—has 27 satellite dishes feeding more than 97 million subscribers as one of cable television’s biggest networks.The channels, which have multiplied fourfold and gone international, putting them in more than 200 countries, include ESPN2, ESPNEWS, ESPNU, ESPN Deportes, and ESPN Classic. Piling on, ESPN The Magazine, ESPN the store, ESPN Radio, ESPN Zone Restaurants, ESPN.com, ESPN Books, ESPN Original Entertainment (Movies and Shows), the X Games, ESPY Awards, and many other brand extensions that feed the fans’ insatiable hunger for sports stories, statistics, communities, and memorabilia.

But, ESPN is not just impressing its fans and customers, it’s impressing the media analyst on Wall Street. Although parent company Disney reports on the revenues of their media group and cable groups, it does not report the economics of ESPN per se. The consensus view of Wall Street analysts, however, is that the combined revenues of the ESPN enterprise, conservatively speaking, totaled roughly $5 billion in 2007, with profits in the range of $2 billion. At a New York conference in 2007, UBS announced that they had determined ESPN’s value to be $28 billion. They went on to say that ESPN accounted for 40 percent of Disney’s $70.7 billion market capitalization, based on prevailing cash flow multiples in the industry.

While the appetite for sports and the suitability of cable television as an outlet strike most of us as self-evident now, the traditional networks completely missed the early opportunities ESPN scooped up. In part, that innovative vision explains the early success of the organization in staking its large claim on the sports wilderness, but it does not explain the sustained growth over three decades or the ability of ESPN to maintain market leadership in the face of new and heavily backed competitors. If jumping into the game early was the primary requisite for long-term success, then Starbucks would be only one of many globally recognized coffee shop chains, and ESPN would be just another jumble of letters providing sports entertainment. There were other ESPNs around the country, known by other initials. For example, there was Ted Turner and Time Warner’s CEO, Gerald Levin’s attempt at Cable Sports—CNN/SI, which closed down after six years of operation. So, how did the ESPN we know today succeed? Thirty years ago, ESPN may have been the biggest sports story not to make the front page, but the even bigger story, a story that remains untold, is how ESPN managed to sustain its growth, its strong and special culture, its innovation, and brand in a highly competitive and rapidly evolving marketplace. That’s a business and leadership story, not a sports and media story, and I tell it in this book.

Through my 20 years of consulting at ESPN, not to mention interviewing many of the top executives for this book, I have come away even more impressed about what they have accomplished.

It was probably 12 years ago that I mentioned to Steve Bornstein, who was president at the time, that someone should write a book about ESPN. “Steve, what you guys are doing here, not to mention what you have done, is an inspirational and instructional lesson for all big and small companies alike.” He quickly agreed, and said that I should be the one to write it: “You are the perfect outside ‘insider,’ Dr. Smith” (as he would always say with a grin). As you will read in the forthcoming pages, when Steve “mentions” something, you take it very seriously. Well, surprise, surprise, I started taking notes and documenting the many best practices of ESPN that day!

Based on my observations, experiences, and research, I have organized the book to first give you, the reader, an inside look and feel for the type of organizational psychology and culture that exists internally at ESPN, both from a leadership perspective as well as an employee’s. I then focus on the external dynamics, describing their creative and innovative spirit and practices, which drove the programming, products, and services. I conclude with the lessons of how ESPN dealt with their many partners, and how they handled mistakes and missteps along the way. And finally, the old professor in me attempted to distill each of the core lessons throughout the book, which you will find at the end of each chapter. But, before I get started, I want to further explain my relationship with ESPN.

“Welcome to Bristol, Dr. Smith”

As you will discover in this book, I love working with ESPN, and like many of ESPN’s “older” viewers, I am a sports fan, although I haven’t worn a uniform since Little League in lovely Santee, California and I know as little about television as the average father who needs to Tivo Sponge Bob or Hannah Montana for his children. And although I have now spent several years consulting at sports and media companies, I do not consider myself a “sports or media expert” per se. My field of expertise is corporate leadership, and I am a consultant who considers himself a lifelong learner and teacher in the field of organizational behavior and psychology.

My relationship with ESPN began over 20 years ago when Roger Werner was president of the network. Initially,Werner was an outsider who came into the media industry through consulting. He was a McKinsey consultant and ABC executive who had impressed the leadership at Getty Oil (the original investors) with his entrepreneurial spirit and visionary and strategic acumen. After spending several years in various roles at ESPN and ABC, he was asked to take the helm at ESPN and make this start-up profitable. So, he took the plunge. Although Werner had followed a few men who had been president since Rasmussen (Chet Simmons, Stuart Evey, who actually held the title of CEO, and Bill Grimes), it was Roger and another ex-McKinsey consultant who introduced me to this incredible company.

Replacing the founder Rasmussen so early may have surprised many, but the management advisors at Getty understood that, although Rasmussen and his team loved sports and had learned enough about satellites and transponders, if ESPN was going to live up to its rapidly growing potential, a business leader with vision and robust operational capability would have to be in charge.

As these things go, Werner looked to his old colleagues at McKinsey for some help overhauling ESPN’s functions. One of the members on that team was a young finance jock named Michael Gorman, who impressed Werner so much that he asked him to stay on as the new CFO. For Gorman, there was only one problem. While he could run numbers as well as anybody, he had no managerial experience whatsoever. Now he was being asked to lead a function with a staff of 60 through a difficult transition period.

I knew Gorman from my own days serving McKinsey. He asked me to come in and help him manage his team, get the right divisional structure in place, coach him on leadership issues, and essentially be a thought partner in navigating his team to success.

Across the leadership team, Gorman’s experience and his development needs were not unusual. If you’ve ever enjoyed the privilege and the pain of working for a start-up that’s on a heady skyward trajectory, you know what it means to learn on the run and grow into a role. At ESPN, people with terrific technical skills—whether in cost accounting or camera angles—were being asked to take on leadership roles all over the organization. One year, you might be managing a single remote team at a college basketball game; the next year, you could be the VP of production, managing 50 camera crews all over the nation. Of course, start-ups aren’t alone in facing this challenge. In business, you typically get promoted for your technical ability and character. But it’s rare that anyone has prepared you with the leadership skills needed to manage people—whether that’s a group of 200 or a global organization of 50,000.

My knowledge of leadership and my experience with the challenges of management and organizational structure became highly valued within ESPN over the years to follow, and I was asked by a number of different Michael Gormans to help them grow into their new roles. Guys like Ron Semiao, who created the X-Games, would say to me, “Tony, I know how to produce a competition in which people fly 80 miles an hour on skateboards down Nob Hill in San Francisco, but now I’ve got to manage a wacky and creative staff of over 100. Can you help me?” Keeping up with the promotions in the programming and production area, as well as on the business side, Gorman and other executives basically became my full-time job.

After spending a little over a year working with several executives besides Gorman, Steve Bornstein, an executive whom I had only known by reputation, not personally, was named president of the company. Bornstein was a sports nut who had gone to the University of Wisconsin, where he’d covered sports as a cameraman. He then became a programmer at a sports affiliate in Milwaukee, and made his way to Bristol on an invitation from ESPN executive Bill Creasy, who was hired from CBS, and later became a dear friend and mentor of Steve’s.

In the media world, programmers are the people who come up with the best menu of program offerings, in particular developing shows and scheduling shows that feed into one another strategically to keep you watching. There are those in the industry who consider Bornstein one of the best programmers ever, but when he was appointed head of ESPN, he had some rough edges. While Bornstein was clearly bright, creative, and hard-driving, he was also extremely tough, brash, and intimidating—qualities that could paralyze people and, in turn, not always bring out the best in others.

Jim Allegro, an ABC/Cap Cities guy who had been recruited to oversee the finance function as a kind of technical mentor, encouraged me to work with Bornstein so that he could fulfill his incredible potential as a CEO.The only problem was that brash, tough, and intimidating Steve Bornstein didn’t know who I was, or understand why he should be working with me.

The three of us and another executive, Rick Barry, who I worked with on several HR initiatives and who became a great friend and supporter of mine, went out for dinner at a restaurant in Westport, Connecticut. The goal of the meeting was to convince Bornstein that I was a consultant worth listening to. Bornstein was as blunt and gruff as I had been led to expect, and the meeting had its uncomfortable moments. Allegro said I’d be a good guy to give Bornstein a little support in his new role. I remember a few of Bornstein’s polite inquiries about my qualifications:“Who the hell are you?” “What qualifies you for such a role?”“If I do need an advisor, why in the hell should it be you?”

I told Bornstein that if he hired me as his consultant, I’d look him in the eye, be up-front and honest about every aspect of his leadership, study the organization vigorously, and tell him the tough things he didn’t want to hear. If my memory serves me, I think Bornstein leaned back in his chair and yawned. I knew the meeting wasn’t going well when I noticed that both Jim and Rick were sweating profusely, with pained looks on their faces.

That’s when I noticed the watch Steve was wearing. I’m a watch nut and Bornstein was wearing a beautiful Patek Phillipe. With enthusiasm, I asked him where he had gotten it. Bornstein said it had been his father’s. Like the commercial says, you don’t own a Patek Phillippe, you look after it for a while and then pass it on to the next generation. We talked about my collection of watches for a few minutes and forgot about business and leadership development. Then, at the end of dinner, Bornstein shook my hand and asked me when we would begin working together. From the looks on Jim and Rick’s faces, you would have thought they had just witnessed one of their kids graduating summa cum laude from an Ivy League college.

Fasten Your Seatbelt

“Where do we start?” Bornstein asked me when we met in his office a few days later. I told him that every great leader begins with the question, “Where do I want to take this organization?” Coming up with the answer means formulating the vision, mission, and values of the enterprise. But as I said to Bornstein, “If you’re going to be the messenger and the one articulating where you’re taking ESPN, and what others need to do to realize the vision, we need to make sure that your credibility is as strong as it can be; and given that leadership is a receiver-based phenomenon, we need to figure out what people think about you, and what you need to do differently to have as much impact as possible.”

So, one of the first things I did with Bornstein was to develop the Mission and Values of ESPN. For other clients, such a project could take several months to complete—multiple meetings, whiteboarding, drafts, soliciting input from key executives, and so on. Although we went through these steps, Steve had a very clear sense of ESPN’s mission and what people, particularly the leadership, needed to value and embrace to grow the organization at an unprecedented pace. This phase took a few weeks to complete; a pace of change and completion that one learns quickly working with Bornstein (for the record, he developed and launched the NFL Network in a matter of months). Once we finalized the Mission and Values statement, and incorporated input from the other executives, we developed a 360 feedback instrument (an assessment that surveys direct reports, colleagues, managers, etc.) to reinforce the values and assess and develop the company’s top leaders.The first leader we used it on was Steve Bornstein.

I asked the top 15 executives at ESPN what they thought of their new leader. They had all worked with him before when Bornstein was head of programming. “What were you happy about? What’s going to make him succeed in his new role? What can he leverage even more? What’s going to trip him up? Where is he most vulnerable?”

The messages were incredibly consistent; “He’s as bright as they come, and he’s the right guy to take us to the next level,” “he knows the business cold, and he needs to share his vision with all of us,” but there were also tough criticisms. When I met with Bornstein, he told me to skip all the good stuff and just give him the things he needed to work on.

To his credit, Bornstein took the tough stuff as well as anyone I have ever seen. I gave it to him as straight as I said I would when we had dinner in Westport. I won’t go into the personal details but the essence was clear: Bornstein was so critical and brilliant that he could strip people down in a New York minute, often in meetings when the entire executive team was present. He intimidated them so much that they were reluctant to challenge him, and if they had opposing ideas, they would rarely bring them to his attention. He needed to soften that impact while still maintaining the demanding qualities that made him a very effective and hard-driving leader.

We came up with some ways to work on that, and I promised to keep my ears and eyes open on his leadership interactions and let him know what I was picking up. Bornstein grinned and said, “Okay, let’s make sure all the other top guys get their feedback, too.” At this time, I feel it is appropriate to point out that Bornstein was a great student as well as a wickedly smart leader and teacher. Although I may have been considered Bornstein’s organizational consultant and teacher, I learned a lot from the standards and example that Steve set. I witnessed the positive impact he had that resulted in the tremendous growth and development of the other senior leaders at ESPN.

As both a teacher and a student, I’ve devoted my career to trying to understand what leadership is all about, what great leaders do, how they create strong performance cultures, and how successful organizations are structured and run. I was able to share some of that knowledge with ESPN over the past 20 years, and hopefully played a minor role in their success. Along the way, my experiences with larger, more established organizations in mature industries were consistently valuable. I’d introduce leadership and management ideas I’d seen work at large financial institutions or professional service firms. Inevitably, Bornstein would complain,“Tony, we’re not American Express.We’re not McKinsey.We’re not a big company.” And I’d reply, “Yes, but I think you can learn from those organizations, and I also believe they can learn from you as well.”

The lessons of ESPN are applicable to whatever type of business you are in, and yes, the story is probably a bit more entertaining than that of a bolt company—but even bolt companies can benefit by embracing the best practices of ESPN. For instance, the best organizations invest in their people. They train them. They believe that if you spend time and resources turning talented performers into leaders, you’re going to get better organizational performance and engender higher levels of commitment and sweat.You want employees at all levels to believe in your company if you’re going to succeed. I told Bornstein that a key predictor of that kind of loyalty was how staff felt about their immediate boss. Bringing leadership awareness to all levels of the organization, and coaching managers to become more effective leaders, was critical for long-term performance. I spent the next 18 years working with other talented executives to implement that kind of systematic leadership development at ESPN.

Along the way, I saw a wild start-up become an industry threat and finally the industry leader. I got involved with ESPN at a crux moment, when the company was scrambling with the transition to achieve the scale and capabilities of its future self. I saw how they managed that shift, and how they maintained it. I mentioned that I consider myself a lifelong learner as well as a teacher. What I’ve learned firsthand at ESPN about growing a great company I’ve written down in the chapters that follow.

For one thing, I learned that ESPN had one consistent priority when they hired someone, whether that person was the head of human resources or a production assistant. They wanted people who loved sports first and foremost. It didn’t matter whether you were a Baker scholar from Harvard Business School like Michael Gorman. The main concern ESPN had was whether you were a sports junkie, too. What’s your favorite team? How much did it hurt when they lost the big game? What is the first section of the newspaper you read? How many stadiums have you visited? How many times do you watch SportsCenter in a day?

For sports fanatics, those answers come quick and clear, without hesitation, straight from the heart. Being a fan—being a fanatic—may set you apart from your families, your loved ones, even your spouse, but it puts you into select company with other fans.You know how the others think, you feel sports in the same way, you get it, and you want it all the time.

Those are the kinds of people who launched ESPN and those are the kinds of people who were brought on board and groomed over the last 30 years. Is it any wonder ESPN has a visceral connection with its customers? What’s more, that same connection extends to many of the athletes they cover. Inside a lot of professional athletes and coaches is an obsessed fan, juiced up on the game and on competition and the drama of winning and losing. I can think of few other companies that do as good a job of creating an atmosphere of fun and excitement for its people and its customers—maybe Southwest in the airline industry, Starbucks in the consumer goods space, or Apple and Google in high tech. But it’s hard to surpass ESPN.

I learned a lot from ESPN. I learned about people and expecting the most out of them, being aggressive about new ideas, grabbing a market, giving leaders room to run, and rewriting the rules of the game by making the most of the opportunities that are available. I became convinced that smarts combined with passion (skill and will) accounted for 99 percent of the variance when it comes to performance. I saw strategies and approaches that made me shake my head in amazement, sometimes at the audacity, sometimes at the sheer brilliance. Imagine watching Ford Motor Company invent the assembly lines and mass production of automobiles, grow like crazy, and then transform into Toyota, constantly innovating and leading the market.That’s the kind of evolution and success ESPN has experienced in the media industry. I’m not claiming that ESPN’s story is over, or that they’re the perfect company without any failures on their record, or that there isn’t treacherous terrain to come, but what they pulled off and how they did it is a story worth telling.

My friend and mentor Mac Stewart, who retired as a senior director at McKinsey and Company, says that consultants provide the bumblebee function in the business world. We go from company to company, picking up a little bit of knowledge here, spreading it elsewhere, bringing other best practices or management innovations back. In this book, I want to share the lessons I learned at ESPN about launching and growing a wildly successful enterprise. This is my raison d’être—to first learn and then teach others how they can create and grow phenomenal organizations by creating opportunities for people to grow and have impact, all while enhancing economic and human value. I hope you find the lessons here to be rich and applicable anywhere. They were a lot of fun to learn, and if you’re a fan of business, competition, or sports, I bet they’ll be a lot of fun to read, too.

Chapter 1

TURNING FANATICS INTO FANS

You arrive in Bristol, Connecticut, and you think ESPN.This is the epicenter of the known sports universe. The corporate headquarters are approached by highway, but when you near the gate you are greeted rather quietly by a small sign in simple letters reading “Welcome to ESPN.” The sign looks as though it hasn’t changed much since the organization was founded 30 years ago, utterly subdued compared to ESPN’s often boisterous shows, hosts, and guests.Very subtly, this is an important part of ESPN’s message to its people every day when they come to work: It’s about the fans and the sports, not ESPN.

Inside the gate, there are a myriad of parking lots and sprawling buildings, and a forest of satellite dishes, like a field of giant white mushrooms tilted skyward. Twenty years ago, when I first drove to ESPN, there were only a half-dozen satellite dishes, a couple of finished office buildings, and rows of temporary trailers—everything in flux, everything growing. Now, instead of giving off a corporate vibe, like stalwarts such as IBM or GE, the grounds of ESPN have the big-time aura of an Ivy league campus, but the look of a state-of-the-art high tech company. The rank-and-file employees are dressed casually and look about as young and diverse as undergrad students anywhere, though they are always in a hurry. The managers are often dressed more formally, a bit like professors at a business school, and the older executives could pass for top administrators and deans. There is often an expression of pride and—dare I say it—happiness on the faces you see. I’m not claiming ESPN is a utopia, and I describe its ways of doing business with candor and curiosity in this book, but the giddy energy always strikes me. This is the place to be if you are engaged by sports and television. Just by being here, the young people have achieved something special. The older hands who have been around for many years are noticeably proud of what has been accomplished, the growth of the business reflected in the number of buildings and satellite dishes. Before we get started, it’s worth considering how much that accomplishment means.

Now, the achievements of ESPN seem self-evident. Why wouldn’t a cable sports channel offering sports news, sporting events, and sports-related entertainment 24 hours a day be an incredible success according to all conceivable measures—spectacular revenue, intense brand awareness and loyalty, market supremacy, and consistently strong year-after-year growth? Sports consumers, after all, are fanatics. Like addicts of less savory fixes, they can’t get enough of what they desire. Throw more product their way—additional channels, new formats, a magazine, a web site, even sports they’ve never cared about before—and those fanatics will continue to consume whatever you’re offering while their needs and numbers grow.What business, given such an easy sell to such an eager market, wouldn’t be a success?

You could assign the achievements of ESPN to luck—the right place, the right time, the right untapped market—but that only brings to mind a quote from golf-great Arnold Palmer: “The funny thing is, the more I practice, the luckier I get.”1 Certainly, there was luck behind ESPN in terms of timing, opportunity, the right leadership at different stages, and the decisions made at several critical junctures. But nobody who learns the full arc of ESPN’s story will evaluate all that and dismiss the amount of stamina, discipline, intelligence, hard work, risk-taking, and blood, sweat and tears that went into generating such luck. That’s why the lessons of ESPN’s rise to institution status and brand dominance are so rich.

The truth, of course, is that ESPN didn’t stumble fortuitously onto an untapped revenue stream and then work like hell to develop its claim. Rather, the market for 24-hour, dedicated sports coverage on television didn’t exist before ESPN created it. ESPN’s founders, leaders, backers, and key employees generated that market by understanding the desires of people who follow sports like addicts and striving to fulfill those wants. They identified loose and disorganized fanatics—people with an unchanneled passion for the sports experience in many different forms—and turned them into loyal fans—customers focusing their eyeballs, water cooler conversations, and cable dollars on what ESPN is offering.

One reason the people behind ESPN were able to do that successfully is because they are fanatics themselves. That’s the two-sided lesson I explore in more depth in this chapter. In my experience, other successful companies have also turned fanatics into fans—on the customer and employee side—but those organizations are as rare as they are noteworthy, and few have done it as well as ESPN.

In the interviews I conducted for this book, it was often said by the people who experienced the ESPN story firsthand that the company has gone through four distinct steps in development. I describe those steps so that ESPN’s business decisions and accomplishments can be understood throughout this book in the context of the situation at the time. The nuances and details of the ESPN story are expanded on in later chapters, but here’s a brief overview to establish the people, events, and time line we’ll be following.

Ready When the Red Light Goes On

Every organization goes through very distinct, and often predictable, stages of development. What many have labeled ESPN’s start-up began when it was conceived in 1978 and launched with venture capital funding in 1979. Those early, arduous years could be characterized as a constant scramble to patch holes in a leaky rowboat on a vast and unfriendly ocean while simultaneously endeavoring to discover an actual destination (and pretending all along that the rowboat is an ocean liner.) An ungainly metaphor, I agree, but one that anybody who has ever enjoyed the exciting, raucous, anxious, exhausting, sickening, inspiring, and rewarding time working at a start-up enterprise can probably appreciate, and may even fondly remember.

The vision and early energy for ESPN came from its founder, Bill Rasmussen, his son, Scott, and a few key backers and supporters. Rasmussen was a true sports fanatic who had worked in advertising before landing a patchwork of dream jobs in sports that combined sales, management, and play-by-play broadcasting.While working as the communications director of the WHA hockey team, the New England (Hartford) Whalers, Rasmussen gained experience producing sports television and events. Then, after a falling-out with Whalers ownership, Rasmussen found himself unemployed and anxious to see if the tickle of an idea he’d been carrying around for a couple of years could be transformed into a viable media business.

Rasmussen’s original business concept was to fill the need for more local sports coverage in Connecticut. The Whalers had few of their games televised, and NCAA sports involving UConn (University of Connecticut) were popular statewide, but rarely available on TV. Technology, distribution and cost turned out to be problematic. A few conversations with local cable operators gave Rasmussen an awareness of how complicated and expensive it was to distribute original programming in discrete blocks of time. It was through those initial inquiries, however, that he stumbled onto the idea of broadcasting via satellite—still an extremely new and barely understood technology in 1978. Investigating further, Rasmussen learned first that satellite signals could be broadcast all over the country to local cable operators, and that this made more sense than distributing within a single state like Connecticut. The idea began to expand. In addition, Rasmussen was told that it was actually cheaper to broadcast for extended hours than in limited time slots. That data ingested, the opportunity it represented must have jolted Rasmussen with a sped-up heart rate. The vision of a dedicated national sports network was suddenly obvious and tantalizingly possible.

The satellite system Rasmussen encountered (more in Chapter 2) had only been commercially available for a few years but the channels HBO, Showtime, and TBS were offering movies and network TV reruns that way. In discussions with local Connecticut cable operators, Rasmussen learned that cable companies picked up those signals and distributed them to subscribers in a mild and not very effective way of competing for viewership with the big three networks—CBS, ABC, and NBC. Fox, you will recall, was not a player back then. In an example of one of those periodic moments when the dominant power misses the emergence of the next ferocious competitor, executives at the big-three network channels did not see cable or satellite as a threat; indeed, they hardly noticed the existence of this parallel system of broadcasting. Rasmussen made his pitch for an all-sports network to cable operators with all this in mind. Although the cable operators were skeptical of Rasmussen’s idea for a dedicated sports channel and indeed skeptical of Rasmussen himself, he believed that if he could get his sports programming onto the air using a satellite, they would be willing to distribute those events to households with cable connections. This viewership was still a small market in 1979—only 20 percent, or 14 million, households in the United States had cable connections then—but the timing was absolutely right. Entrepreneurs who believed in the growth of cable—men like Ted Turner, John Malone, and Charles Dolan—were about to become moguls.