Albrecht and his colleagues openly acknowledge the perils of success, and that is why they have been engaged in an ongoing strategic conversation to define the future—a future that remains rooted in the network’s core mission (“It’s not TV. It’s HBO”) while moving it in new directions. They are determined to reproduce their business results without repeating themselves in the marketplace.
“We’re very aware that the biggest hurdle to our success is our own success,” Albrecht says. “Are we ever going to get 124 Emmy nominations again? Not going to happen. That’s fine, so long as we keep challenging our own thinking. We hear the questions: How are you going to follow The Sopranos? What are you going to do after Sex and the City? Those are the wrong questions! We don’t think about staying where we are, and we don’t worry about topping ourselves. ‘TV’ is a finite idea. ‘It’s not TV’ is an infinite idea. Our little slogan is taking on a whole new meaning. Before, it was a kind of rebel yell. Now it’s an organizing principle for our strategy, which is to not limit ourselves by the idea of TV.”
One way to move beyond TV is to move from the small screen to the big screen. HBO is positioning itself to shape the market for great independent films, much as it shaped great TV fare. The network’s recent slate includes the award-winning The Life and Death of Peter Sellers, Lackawanna Blues and Elizabeth I, the Emmy-winning miniseries starring Helen Mirren, along with theatrical releases such as the singular American Splendor, the wrenching Maria Full of Grace, the documentary Spellbound, and Gus Van Sant’s Last Days. In September 2004 the Los Angeles Times surveyed HBO’s offerings and concluded, “There’s new hope for maverick movies, and, in an odd twist, it’s coming not from some new studio or well-heeled cineaste but from TV.” In May 2005 HBO formed a joint venture with New Line Cinema, called Picture-house, to distribute eight to ten films a year.
Colin Callender, president of HBO Films, recalls that when he and Chris Albrecht took over film production in 1999, “we looked at the landscape and said, ‘Everyone is copying us.’ The cable movie, which we invented, was a genre everyone is doing. So we need to reinvent what we’re doing. We had started making movies that filled a gap in the television landscape, and now we saw a massive gap within the moviemaking landscape. No one was making sophisticated, intelligent, entertaining, grown-up movies anymore. So we now look at HBO movies as filling that gap.”
Ultimately, Chris Albrecht argues, the opportunity to maintain the competitive gap with imitation-minded rivals is as much about computer programming as original programming. The new game isn’t merely to create new shows but to find new ways to package and deliver shows in the emerging digital landscape of mobile, personal, disaggregated entertainment choices—a landscape shaped by TiVo, the iPod, and other disruptive technologies that keep much of the TV establishment awake at night, even as they delight the audience.
“Some traditional companies may view these changes as the enemy,” he explains. “We view them as our friend. This new wave of technology plays to our strengths. We got to where we are by riding a new technology with a product that was compelling, groundbreaking, and game-changing. The cable industry was built on the back of HBO. Now we get to do it again.”
So it goes for companies that compete on the originality of their ideas. It’s not enough for leaders to challenge the prevailing logic of their business; they also have to rethink the logic of their own success. Sure, HBO executives would love to introduce another pop-culture TV phenomenon like Sex and the City. But they’re not going to invent the network’s future by trying to replay its past. Their plan is to take the phrase “it’s not TV” literally—to make shows available on a wide range of devices, in all kinds of settings, 24 hours a day. That’s why HBO has pushed ahead with subscription video on demand (viewers in about 8 million households can now watch HBO programs at whatever time they choose), and why it has set in motion a range of other content-delivery experiments.
“We have to be more aggressive and take bigger risks than before,” Albrecht says. “We’re actively looking for new cliffs to jump off. We’re doing things nobody else will do, because they can’t chase us into those spaces. We didn’t get here by playing by the rules of the game. We got here by setting the rules of the game.”
NOTES - CHAPTER ONE
NOT JUST A COMPANY, A CAUSE: STRAEGY AS ADVOCACY
1. Harvard Business School has published a case study on Arkadi Kuhlmann and his colleagues, their strategic formula, and their relationship with the bank’s Dutch parent; see “ING Direct,” Case 9-804-167, revised May 19, 2004; see also “Would You Like a Mortgage with Your Mocha?” by Scott Kirsner, Fast Company (March 2003); “ING Chief Bucks Convention” by Maureen Milford, Wilmington News Journal, May 30, 2004; and “Bare Bones, Plump Profits” by Amey Stone, BusinessWeek, March 14, 2005.
2. For an overview of the legislation and its impact on rank-and-file consumers, see “Sweeping New Bankruptcy Law to Make Life Harder for Debtors” by Michael Schroeder and Suein Hwang, Wall Street Journal, April 6, 2005. For a taste of Kuhlmann’s full-throated opposition, see “ING Head: Bankruptcy Bill ‘Dead Wrong’” by Ted Griffith, Wilmington News Journal, March 5, 2005.
3. Leading the Revolution by Gary Hamel (Harvard Business School Press, 2000). Again, we want to distinguish between the book’s rhetorical excesses and its enduring substance. Hamel’s insights about the emptiness of strategy as mimicry and the power of strategic originality have shaped our perspectives on competition.
4. It’s impossible to write about the power of purpose in business without paying tribute to Built to Last: Successful Habits of Visionary Companies by James C. Collins and Jerry I. Porras (Harper Business, 1994). What was remarkable to us during our research was seeing so vividly, in companies from GSD&M to DPR Construction, the impact of the book’s ideas on how organizations compete.
5. No one explains the ideas GSD&M stands for better than the agency’s cofounder and president. Still, a few articles are worth noting: “Greetings from Idea City” by Gina Imperato, Fast Company (October-November 1997); “GSD&M’s Excellent Ad Venture” by Amy Schatz, Austin American-Statesman, August 26, 2001; and “Ad Libbing” by Marc Gunther, Fortune (October 29, 2001), which is a fascinating account of how the agency, known for its edgy language and humor, dealt with the aftermath of September 11.
6. How does a $10,000 investment become $10.2 million? See “The 30 Best Stocks” by John Birger et al., Money (Fall 2002). For Herb Kelleher’s entertaining assessment of Southwest’s growth and his performance as a leader, see “The Chairman of the Board Looks Back” by Herb Kelleher as told to Katrina Booker, Fortune (May 28, 2001).
7. Our discussion of Southwest’s Eight Freedoms is based on interviews with Libby Sartain and her former colleague Sherry Phelps (until recently director of employment for the airline). For a more detailed description of the “internal branding” process at Southwest and Yahoo, see HR from the Heart: Inspiring Stories and Strategies for Building the People Side of Great Business by Libby Sartain with Martha I. Finney (American Management Association, 2003).