A conversation with Professor Sonia Marciano on her career, Lean In, and the future of television – Part 2

Brett Baptist, MBA Class of 2013
Conducted on April 2, 2013

SM: I think this is a fair question: Do genders exhibit proclivities in one direction or another?  I believe the research is pretty confounded – but I like the question.  Perhaps there is justifiable gender bias – I think if we each perform the jobs in which we exhibit above average ability in key success drivers for that job, everyone is better off.  This conversation could be read all wrong, so let me be clear – I don’t know if there are gender-based proclivities.  But if there are – it’s better to know this than to ignore it.  People should exploit every opportunity to excel and if some of those opportunities are dealt to you by nature – take ‘em.  There are also plenty of ways to excel that are unrelated to gender – I know what I do much better and much worse than most others.  Knowing this has always given me clarity on what I want to do – and also made me comfortable asking for the jobs I want.  For example, many years ago, I wanted to work for the dean of faculty at the University of Chicago because he was involved in developing curriculum for executive programs that Chicago at the time was putting overseas. I wanted to travel and I wanted this job and felt that I would be really good at curating content. When you come to a good understanding of where you can outperform I think you tell a clear story and then you just walk up and ask. Knowing your sweet spot is a good way to avoid being subjected to bias.

BB: And I’m assuming you got this job and the dean of faculty became a mentor?

SM: Yeah, I worked for the dean of faculty and then I discovered early that I wanted to orient my academic career towards teaching and not towards research, even though I highly value it. I’m a clinical professor but I would never diss research, and I don’t like the dissing of research because even though I think much of it is not world-changing, a small amount of it is world-changing.
Sometimes people might think that the term “mentor” implies a one-way street. Any relationship has to be a two-way street, and I think Sheryl Sandberg understands that. It’s a shame when someone can’t easily answer the question: “In what way are you an outlier?” or “Where is the potential for being an outlier?” Once you have an answer for that question [she snaps her fingers], it becomes much easier to narrow down the list of matching mentors, because they would benefit from your skills while you would benefit from the experience – there’s reciprocation.

BB: Turning to your experiences in academia, you briefly touched on a topic in class one day about the differences between Chicago, HBS, and Stern in terms of diversity of opinions and backgrounds among professors and I’m wondering if you can expand on it for those who do not take your course.

SM: Stern is not overwhelmingly tied to a school of thought. Among the faculty and among the courses you will find a healthy variance of opinion and interpretation of facts and I think that it’s good to have that variance of conclusions sit out there and a student body that says I have to take countervailing information and learn to make a decision with it. I can’t have an expectation of neat and tidy answers handed to me. At HBS I felt that there was a cult-like aspect to it. They wanted to say “this is what a leader chooses when faced with a dilemma” as if there’s some clarity. And I think that clarity of thought sounds good, but, isn’t that also what a cult is? I don’t feel that here.

BB: Clarity is fine, but doubt can be very healthy.

SM: If you really do a pathology on what clarity is, it’s not an entirely good thing. I like that we are messy in some ways. I think Stern should market it.

BB: We don’t really market to prospective students a “Stern approach” to the world.

SM: We should almost make the point that it’s a good thing that we have a noisier view, because the world is noisy and you need to make a decision with the appropriate amount of insecurity that should come with it. Here’s the set of factors that lead to this decision, here are the countervailing factors that still sit there and bug the crap out of you.  I really hate platitudes such as “at the end of the day I make the decision that helps me sleep at night.” Anything like that I just think “ew” because it implies that there is some single arbiter of what is morally righteous. That is a slippery slope.
There’s compliance with the law, which I think everyone would say is a given. Then I also believe there is something called Morality 101, there are certain things that we should not debate even though the law might give us the latitude. Beyond that I think the world is way too messy to hand everyone a pair of rose-colored glasses and say you’re going to be given the latitude to not just go for Morality 101 but the full on elective, Morality 301. Come on! If you take the collective set of firms that our students go work for and they can spread Morality 101 that is a huge service to our world. And that is not muddled.
So I like that we’re messy and I think that the varied voices here at Stern make for a very interesting place. No one would ever make you feel out of place for thinking differently here, and I think Harvard is a place where you can be made to feel very bad about not being in the majority and believing a certain thing. I felt bad there a number of times, and felt it was inappropriate to be made to feel bad because it’s not supposed to work that way in an academic institution. And I can only imagine how non-uniform the students are and how silenced some may end up being because they can’t push back. [Harvard] feels like its service to you is to let you not feel confused. And that’s okay, it’s nice in a way, but on the other hand maybe it’s a little scary.

BB: How would you characterize the push in MBA education toward thinking more broadly about the concept of value creation? Is the theme of “MBA’s as do-gooders” a reaction to the financial crisis of 2007-2008?

SM: It’s the Alex P. Keaton point of view that if you’re interested in business you’re shallow and short-term. But the truth if you pay attention in business school is that the source of all prosperity is enterprise, and the net contribution of enterprise is overwhelmingly positive. But that truth exists coincident with the fact that has been recognized and true for a very long time: that this big net positive generates some unnecessary negative externalities, or negative spill, that has more to do with the imperfection or thoughtless choices that people have made executing their businesses. And that’s a shame. Why generate negative externalities that also aren’t wealth generating? These exist, and so that’s something that business is culpable for and I think the recognition of that happened well before 2008. And a lot of insightful professors have tried to say: “Why not approach it with the mindset that you want to minimize the negative spill?” Eliminating the negative spill might be implausible. There are ways to do things smarter, and probably the wrong governance was put in place where firms didn’t tap into the right kind of creativity. If we are oriented towards caring about returns in the short-run it of course orients us towards making these more narrow choices.
I started teaching strategy in 1996 and even then there were meetings about how to inculcate a socially responsible point-of-view. At the time it felt eye-rolling to me but over the course of time you start to see examples of things that are just a definitively better way of operating. To use the most boring of all examples: office buildings not turning out all of the lights at the end of the day. Why? Why would you leave the lights on? Why not have the lighting system in the building automatically setup?

BB: Switching gears, you do not speak often of CEOs in your course even though we do read cases that are protagonist driven. Why is that?

SM: I don’t have a leadership orientation in my teaching; I have a market orientation. I defend my lack of being specifically informed about individuals running top companies because mostly I believe that it’s the horse more than the jockey. It’s the nature of the business. So to credit or critique somebody when there are such big exogenous factors not under their control… we do have a tendency to credit the CEO for what is inherently good about the industry.

BB: One area where I see a lot of press coverage that focuses on CEOs rather than industry dynamics is in media, which is an industry you cover in your Advanced Strategy course. Can you discuss some of the fluid elements in that industry that you’re watching that will affect industry structure and profitability?

SM: In television, there are distributors that now enable producers of content to bypass some pretty expensive infrastructure. The infrastructure matters a lot when you don’t know how likely the show is to succeed, because that infrastructure affects the success rate through tent-poling and creative advice. So if I’m doing something completely original, the interaction I got from the network really mattered because it affected my probability of succeeding. But say I come up with this “Aha! moment”, and – have you read the Katzenberg memo?

BB: No, I have not.

SM: You should, I can send it to you. [Editor’s note: this is in reference to a famous memo that Jeffrey Katzenberg wrote while at Disney.] But anyway, here’s something somewhat obvious. Pick a homerun success somewhere in the world. House of Cards with Kevin Spacey was based upon a U.K. series and the British have pretty good taste. Pick something that is a homerun there and adapt it for the U.S. market. Then you don’t need the creative infrastructure. What we’ll see for the next few years is this creative plagiarism trend. If you are going to creatively plagiarize you can now bypass the big expensive infrastructure. But if this happens a lot and if the most watched content circumvents the traditional infrastructure, now the beast we need – the networks – we need them for creativity. If you create an idea that does not have a precedent, you need risk pooling.

BB: Seinfeld paid for most of NBC’s new shows in the 90s.

SM: And something before paid for Seinfeld. The whole idea behind the networks and risk pooling in general is that real creativity requires a thousand failures and one success can be something special or iconic. You might not get something iconic out of this possible new model because you’ll get more and more skillful repetition. As this happens it will essentially kill off the risk pooling model and worst-case it leads to this giant nadir for creativity for a while, until somebody has the nerve to build up a new risk pool. Unless the capital markets can get involved.

BB: It’s interesting because I read often that we live in a renaissance period for media, especially television. Individual auteurs are able to create novelistic masterpieces and essentially bypass the broadcast networks. I’m thinking about Matt Weiner and Mad Men and countless other examples.

SM: Mad Men probably would not exist if there hadn’t been over 500 channels and a behemoth risk pool.

BB: Right, yet I get the sense that consumers assume the changing model will allow for more direct distribution of content, and that can only be virtuous. Creative people can get together and produce what they’ve always wanted without network meddling and send it directly to the consumer.

SM: It’s like Mozart; creators might have to find a benefactor. If a risk pooler goes away, then where creative content will come from is where it came from before media conglomerates existed – rich benefactors. And then all of a sudden, will creative influence come from the robber barons of today? The perception is that media conglomerates are “The Man”, but the fact that they are driven by financial success makes them ideologically more democratic than a benefactor would ever be. It’s very hard to find a benefactor who will say “I don’t care what you say politically, I just want people to watch it.”

BB: Do you see any chance for creators to tap into the capital markets as an alternative?

SM: I should say that I squarely don’t know. Here’s what’s bad for creativity broadly – if everyone  has to go out and find a benefactor. Then the wealthiest people on the planet get to decide what us minions watch. So you can develop a fund, but then do you lose the benefit of the creative influence [from networks]? You need some way to cut through the noise. And I don’t know what the new way of cutting through the noise would be. Would we depend upon curation through the Netflix’s of the world? I can’t see past the near-term, and in the near-term I think we will see a lot of recycled content.

BB: It’s already happened in film with comic book superhero properties.

SM: I think it would be interesting to document the amount of recycling that has occurred and show that the portfolio of recycled content wildly outperforms the portfolio of original creative content. It’s the second-mover advantage! So the fear is: What is on the other side of this trend for original creative content?

BB: On a related note, a lot of content relies upon advertising support. In class you’ve shown the famous PowerPoint slide displaying the gap between advertising spend on mobile versus the time people spend on their mobile devices. Personally, I am not a bull on mobile advertising for several reasons but would like to hear your thoughts on the topic.

SM: It’s a giant question mark because it only makes sense in terms of return on invested capital because the key is this: using mobile advertising has to do something for the seller of goods that no other platform can do. You can’t just move television commercial spend onto people’s computers, then to mobile phones. Mobile ads will have to exploit something unique to mobile.

BB: Do you think that ad dollars previously spent on print, rather than shifting to mobile, will instead shift into more spending on television advertising?

SM: The heyday was when conglomerates were able to risk pool and have a positive effect on the commercial viability of a product. Whether you think the contribution was tasteful or tasteless, either way it made more people want to watch it, and you need a certain structure for support. So if what you need is capital plus influence all in one place, we have those entities now. And when we move the eyeballs to recycled content, sold and distributed through something like Netflix, we’re going to starve these conglomerates. They could potentially go away and the question that I can’t even begin to answer is: What replaces them? Let’s face it, that’s ten years away, so for the next 10-15 years we are going to see smart producers follow the Katzenberg memo, find evidence of stories that people want to hear, and bring them to markets and dress them in American clothes, or French clothes. We’ll have a House of Cards for France. Did you ever watch it?

BB: I did.

SM: It’s so obvious that it was easy to make contextual. Can you just picture it in the context of French politics? Italian politics? That’s what will happen. Let’s not ignore the fact that they started with a guaranteed good story. They started with a story that had already been told. People might say: “Oh, every story has been told.” No, this story was told in the exact same context! Get serious.

BB: And Netflix in particular utilized its big data repository to figure out how many people watch Kevin Spacey movies, or David Fincher titles.

SM: It’s very Katzenberg-esque because they casted it well, but it wasn’t casted in way that made you say: “Oh he’s the only person on the planet who could have played that role.”

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