Wharton Alumni Roberts and McGraw Assess the Future of Media CEOs Discuss Digital Media and Family Businesses on PBS TV Show
"The computer has crashed into the television set," said Brian Roberts, W'81, Chairman and CEO of Comcast, at a discussion of "Media and the Digital Age" held at Penn's Annenberg Center on November 22, 2005.
Moderated by newsman Jeff Greenfield, the taping of the PBS series "CEO Exchange" also featured Harold McGraw III, WG'76, chairman and CEO of the McGraw-Hill Companies. It will be broadcast on PBS stations in early 2006.
It included questions from Wharton students and faculty, as Roberts and McGraw primarily addressed two topics: the future of their media businesses in an age of digitization and customization; and the nature of a family business.
Modern Media Need Speed and Customization
In reflecting on how digital and internet technologies have changed the media business, both Roberts and McGraw focused on changes in speed and customization. "It is a bit of a race," observed Roberts, which will be won by "whoever makes it easier for the consumer and gives you what you want when you want it."
Noting that Comcast's On Demand service has received a billion orders between January and October of 2005, Roberts emphasized that "personalization is upon us" but that customers "want to do business with someone who can make it work, make it simple."
Comparing Comcast’s potential services to the personalization of My Yahoo!, Roberts asked: “Why not replicate that in the video world? When you digitize a signal, why restrict it to just a TV set?” Nevertheless, he stressed, "we're in the relationship business. It's an experience. We have to execute well or all the technology is out the door."
Along similar lines, McGraw, whose company has diversified from traditional textbook and magazine publishing into new media around the world, emphasized that "technology is pervasive in everything that we do, even if it's a print book."
Like Roberts, he feels that his company's products have "to be able to customize a lot of data to a specific individual." Moreover, increases in speed provide new opportunities to improve productivity. "You have to keep re-engineering your processes and find ways to do things differently. It's a different mindset of constantly rethinking how you do things."
For McGraw-Hill, this process has meant not only digitizing its resources but also expanding into emerging markets around the world, especially small developing countries. McGraw noted that large developing countries – such as China, Brazil, and Russia – have been the "hardest to crack" but that economies of speed, productivity, and customization are bringing those possibilities closer every year.
In this environment, observed host Greenfield, a business like Comcast may find itself "competing and collaborating at the same time" as it develops its own content yet also transmits content developed by others. "That's the schizophrenia that is the modern age," Roberts replied. "I don't subscribe to a theory that we should stop time. You're not going to change technology. Am I proud of every show that's on cable TV? Absolutely not. I do think we have tremendous benefits with some negatives."
Going Into the Family Business
"I wanted to work for my dad," Roberts stated simply about working for Comcast, recalling that he would have done so even if his father had sold belts. "It was just a chance to hang out with my father." Also naming his father as his greatest hero, Roberts praised family businesses as sources of both entrepreneurial drive and corporate stability.
He noted that Comcast has been able to recruit major executives from other firms because they like the stability of leadership provided by a family business when there is "so much politics in big corporations." Family businesses can also "keep growing without fear" and form “a huge part of the entrepreneurs driving forward the economy."
McGraw, who worked at GTE after getting his Wharton MBA, initially "had no intention" of joining McGraw-Hill. He first came in to help the company in 1979 when American Express launched an unsuccessful hostile takeover bid.
He returned a year later, and stresses that you should join a family business only if "you have a purpose and you have your own well-thought-through reasons why you're doing it. I needed to do some things to build my capabilities so I could bring something to the company." As Roberts similarly remarked, "You've got to earn your way into the perception that you deserve to be there."
McGraw also pointed out that his company – unlike Comcast, in which the Roberts family still controls the majority of the stock – is fully public, with an outside, independent board of directors. "If you're a public company, it begins and ends with performance. We all know what the name of the game is."
So what advice do Roberts and McGraw offer to would-be CEOs?
McGraw emphasized the importance of constant learning: "You've got to put yourself in the position where you're learning all the time. Be a constant, forever student. Things are happening so fast that you could be out-of-touch and get your company in trouble real quick."
Roberts suggests that you "pick people that you think have character" in both your professional and personal life. Recalling his father's advice about marriage, he advised, "If you get that one decision right, a lot of things take care of themselves."
