The Change Artist

For Anne Sweeney, the high-powered president of the Disney-ABC Television Group, an uncertain future and the inevitability of change present endless opportunities, not obstacles, to business.
The Change Artist

Anne Sweeney’s soft-spoken manner and quiet energy belie her status as a powerhouse in the entertainment industry. She has been named the “Most Powerful Woman in Entertainment” by The Hollywood Reporter, one of Fortune’s “50 Most Powerful Women in Business,” and one of Forbes’ “World’s 100 Most Powerful Women.”

Ask her about this recognition, however, and she immediately defers to her team and to the “up-and-comers” in the entertainment industry, whom she values for their energy and ideas. “It’s wonderful to be recognized, not just for my accomplishments, but for my team’s accomplishments,” says Sweeney. “But it begins and ends there. I’m more impressed when I look at new talent, when I see who’s coming up in the spotlight.”

Sweeney began her own business career unconventionally. She earned a bachelor’s degree in English from The College of New Rochelle in New York and a master’s degree in education from Harvard University in Boston, Massachusetts, planning to be a teacher. Her plans began to change when, at 19, she landed a job as a page for ABC, an experience that sparked her passion for the entertainment industry. After she completed her master’s program, she was hired by Nickelodeon, then a brand-new cable network for children’s programming. Starting as an assistant, Sweeney eventually became its senior vice president of program enterprises.

In 1993, she worked with television executive Rupert Murdoch to launch the cable network FX and served as its CEO. In 1996, she moved to The Walt Disney Company, where she served as president of the Disney Channel and executive vice president of Disney-ABC Cable Networks. She was promoted to president of Disney-ABC Television Group in April 2004 and also serves as the co-chairman of Disney Media Networks.

Most recently, Sweeney headed a deal that is part of what she has called a “seismic shift” in the entertainment industry. In May and June, ABC.com offered episodes of its most popular television shows, including “Lost” and “Desperate Housewives,” via an ad-supported, free-streaming model on the Internet. The company was also the first to offer viewers the chance to purchase episodes after their airing on television for $1.99 on Apple’s iTunes online music store. These moves represented a break in traditional program delivery—and a threat to the status quo. But now that new technologies are emerging and younger audiences are seeking out alternative delivery of content, the entertainment industry can’t afford to “cling to old models or old ways of thinking,” says Sweeney.

That’s true for businesses in all industries, Sweeney emphasizes. To serve business well, she says, today’s business graduates must be able to embrace change with a passion for innovation, an ability to think creatively, and an unbridled enthusiasm for “what’s coming next.”

We want students who are ready to put aside the way they watch television and think about television. They need to be able to view television in new ways, because it’s constantly changing.

You took a nonstandard route to the executive’s office, earning degrees in English and education, rather than business. Did you ever consider earning your MBA or seeking additional business training? 
I’ve taken business courses along the way. I took the Harvard Negotiating Seminar, which I found extremely useful, and I’ve taken accounting courses for people in creative fields. I’ve had some excellent mentors in business. But for me, my business education was mostly about learning on the job and working with some smart MBAs. 

When you look at the latest MBA graduates who are sending your company their resumes, who gets the interview? 
I really look for people who have a passion for what they do, people who are truly interested in the future of media and the future of our company. 

What qualities get them the job? 
I’m looking for true leaders, not people who are focused on being No. 1 among a finite set of competitors. I focus on the people who have a bigger idea of where we can go, whether in entertainment, in technology, or in our international sphere. I look for people who are brave and who are willing to get behind big ideas. I need people who are unafraid of change, who are willing to break some china to try out a new idea. Then, they have to be willing to live with the consequences.

How important is a business degree’s pedigree to your company when it considers whom to hire? Do students with degrees from top-ranked business schools or specialized “entertainment MBA” programs have an advantage over those from general MBA programs? 
No, they don’t. It’s really about the interview. It’s about their passion and excitement about what they want to achieve and where they want to go in their lives and careers.

What do you most want business schools to teach these new hires before they come to your company? 
The message I have for business schools is to make sure their students are ready for change, ready to think out of the box. For our company, we want students who are ready to put aside the way they watch television and think about television. They need to be able to view television in new ways, because it’s constantly changing.

In a recent appearance at Pepperdine University’s Graziadio School of Management, you noted that it will be “internal entrepreneurs” who keep companies relevant. How do you define an internal entrepreneur? What skills do business schools need to impart to students to create that mindset? 
I was talking about people who value innovation, who focus on being leaders instead of maintaining the status quo. All the big corporations were built by entrepreneurs. For Disney to continue to be successful, it has to be run by people who are internal entrepreneurs, who think differently. I’m fortunate that my boss, Bob Iger, the president and CEO of The Walt Disney Company, is one of those people. He has imparted to me the three goals of our company—developing creative strength, leveraging technology to support our content, and emphasizing international growth and expansion. Those are the goals of an entrepreneur. Those are not the goals of the person who is just trying to keep things going.

You entered into a decidedly “intrapreneurial” venture when ABC began to offer episodes of some its shows via the Internet and through iTunes. What has been the most difficult aspect for you as you experiment with these new models of delivery? How do you try to step ahead and anticipate future trends?
When we decided to work with Apple and iTunes, we just felt that there was enough “there there” to take the risk. Disney had spent so much time talking about the future, so much time talking about the opportunities digital had to offer, but nothing had happened. When this opportunity with Apple presented itself, we came to the conclusion that it was the smart thing to do. Whether it works or not, we know we’ll learn a great deal from this experience.

In May and June, we also conducted a two-month test in which we offered our shows on ABC.com. Viewers couldn’t download the shows, but they could watch them. We wanted to see what we would learn about this mode of delivery and how it would work. We set it up so that we had one sponsor per episode, and we learned a lot about advertising and how it lived in this kind of format. We learned the average age of the viewers who accessed these shows on the Internet, and whether this experience worked for people. Again, this was a test, because we were thinking and feeling that this was a venue for our programming, but we first had to find out.

Whether it’s educational content for business schools or media content for the entertainment industry, the key question to ask is, “What’s the appropriate technology for the content I want to deliver?”

What did you learn that was most helpful?
In that two-month period, we had 5.7 million streams of our shows. The average age of the person accessing these programs was 29, while the average age of viewers watching the program on the broadcast network is about 46. Already we’ve found that we are responding to a younger audience, and we know where they are. We also learned that 87 percent of people who watched the shows online, and who responded to an exit review, correctly identified the sponsor of the program and had a good opinion of the sponsor. That was critical knowledge, not just for us but for our advertisers as well.

By offering shows on ABC.com, ABC angered many local affiliate stations, who fear that they’ll be cut out of the loop if online programming takes off. In the long term, as technology advances, their worries could become reality. How do you manage the painful aspects of these changes, especially as they affect traditional mainstays of your market? 
We worked very hard this summer to engage our affiliates in this exercise. We were able to reach an agreement with them so that the new player could launch in September, not only on the network’s Web site, but also on the 215 local affiliate sites across the country. This is as much their future as it is ours; they’re confronted with exactly the same challenges that we are. So, it was important to me for them to be a part of ABC.com. For example, viewers could come to the ABC.com player through affiliate Web sites. Our affiliates remain part of an important delivery system, but they also must confront these changes, as people have access to more and more technology. It’s something that we’re all going to have to monitor very carefully.

Business schools also are experimenting with alternative delivery methods, such as podcasting, for educational content. What have you learned about serving a younger demographic that demands more choices in the way content is delivered?
Whether it’s educational content for business schools or media content for the entertainment industry, the key question to ask is, “What’s the appropriate technology for the content I want to deliver?” Not every technology works for every type of content. That’s part of what we’ve been testing with both the iTunes deal and at ABC.com. In June, we also launched DisneyChannel.com, which is a broadband service aimed at 2- to 14-year-olds. While we had 5.7 million streams in our two-month test at ABC.com, we had 34 million streams in June and July on DisneyChannel.com. That told us a lot about the differences between today’s 2- to 14-year-olds and today’s 27-year-olds. It’s important that you understand your constituents—your viewers, your consumers, your students—and learn exactly what technology they’re using to access what types of content, Then, you can better figure out which one works best for what you’re trying to do.

Risk-taking is a big part of your job. Do you think business graduates who come to work for your company know the basics of risk management? How have you learned to differentiate between risks that are worthwhile and those that are reckless? 
To be fair to recent graduates, it’s more about their first one or two jobs out of school than it is about their education. I was so lucky. I walked into a “brave new world” after graduate school when I signed up at Nickelodeon. I think I was its tenth employee. I remember that every year when we created our budget, we also had to write a shutdown scenario. I knew then that I was working in a startup where everything was possible, but nothing was a sure bet. 

In retrospect, that was a defining experience for me. It helped me learn to enjoy taking risks and look forward to figuring out what was next, because nothing was a given. We were never assured that our business would be around the next day or the next week. It was all about being more relevant to the industry in that moment. 

Do you think your outlook on risk would be different had Nickelodeon failed?
I really have no way of knowing, but I did discover early on that I loved the challenge of the unknown. When I went over to Fox to start FX, I had never started anything from scratch by myself without an infrastructure that I knew and trusted. Having to put all of that together reaffirmed the fact that I loved the hard jobs. I love the jobs that I don’t know how to do. I love getting in there and figuring it out and making some good, big, noisy mistakes along the way, which is really part of the learning process.

Students need to view learning as a lifelong pursuit. It doesn’t stop when they get out of school.

What would you say has been your most educational mistake along the way? 
In the early days of Nickelodeon, we ran a show that was about almost superhuman kids who had achieved unbelievable things, either in sports or music or science. We learned very quickly that our audience felt absolutely no connection to these kids. If anything, it made them feel bad; it didn’t make them feel that they were connecting to people just like them. That show’s failure was an important lesson.

About knowing the audience you serve?
Absolutely. And when you make a mistake like that, you need to get even closer to your audience and listen even harder. That’s the only way you’ll understand your mistakes and avoid making them a second time.

When you speak to business students, what do you most want to emphasize as they prepare for their careers?
My theme song is, “Think outside the box.” Students should know that they can’t always put things through traditional filters, and they should understand that business has to change to survive. It’s very important not to try to model everything they do after something that has come before. 

The iTunes deal is a perfect example of that. There wasn’t a model that we could follow to determine whether or not we should agree to the deal. But we did know that delivering shows via iTunes would be groundbreaking. When I held the iPod for the first time, I saw our content through a new lens. I saw something that could make our product more convenient for people to access, and I saw an opportunity to protect our content from piracy, which was critical to us. I knew it was important to take the risk. 

As you look to the future of the entertainment business, what worries you the most?
I think what worries me most also gives me the most joy. I love not knowing what’s going to happen next. I don’t have a crystal ball. I don’t know the next great technology that will impact us the most, but I love the challenges and the potential for growth that change presents.

If you were to teach a business school class on the most important lessons you’ve learned over your career, what topics would be on your syllabus? 
At the top of the list would certainly be innovation, the value of startups, the value of problem solving, and the value of teams.

Are business schools doing a good job of teaching those skills?
I think business schools are teaching these skills, but these skills are also learned on the job. Students need to view learning as a lifelong pursuit. It doesn’t stop when they get out of school. Students also have to know that mentors who can teach them are everywhere—not just people who have gone before them, but the people they’re working with today. 

You’ve emphasized how important mentors have been to you in your career. How important do you think mentors are to success in business?
My mentors have come from inside and outside the company, and over the years I’ve found that mentorship is incredibly important. It comes in many different forms—it’s not always a formal process. Sometimes your mentors are your bosses, sometimes they’re the people who inspire you by their actions. I think students really have to go into their first jobs looking for people who inspire them, looking for information, looking for opportunities to learn.

We have a wonderful mentoring program at ABC, and I’ve been fortunate enough to be a mentor over the last couple of years. I can honestly say that I’ve learned as much from my mentees as I hope they’ve learned from me. It’s very likely in any conversation with them that I’ll put my problem of the day on the table with them and see how they would solve it.

Besides seeking out mentors to inspire them, what do you think is most important for students to know as they embark on careers after business school?
Students should know that their success depends on lifelong learning. No one arrives at a job knowing how to do it perfectly, and no one really should. They should arrive with a lot of trepidation, a lot of energy, and a great desire to learn. That’s where the good ideas come from.