and vowed to “lead Americans back to savings.” GSD&M’s Roy Spence, an unapologetic Texas progressive, urges clients not just to sell products but to express the “higher calling” of their business.*
But disruptive points of view come in all shapes, sizes, and sentiments. Advocacy is about strategic clarity, not the business world’s version of political correctness. The make-or-break issue isn’t fighting for the little guy. It’s fighting the competitive establishment with insights that challenge its me-too mind-set.
In their no-nonsense competitive manifesto Hardball: Are You Playing to Play or Playing to Win? strategy experts George Stalk and Rob Lachenauer urge executives to stop pussyfooting around with “softball” issues such as corporate governance and stakeholder management and to focus on what matters most in business—“us [ing] every legitimate resource and strategy available to them to gain advantage over their competitors.” Stalk and Lachenauer celebrate tough-as-nails companies that “focus relentlessly on competitive advantage” and “unleash massive and overwhelming force” against vulnerable rivals.9
We admire hard-charging companies too. But we’re convinced, based on the cast of fiercely competitive mavericks we’ve come to know, that the most effective way to play hardball is to build an agenda for growth around a strategic curveball—to prosper as a company by championing fresh ideas about the future of your business. Originality has become the litmus test of strategy.
Nowhere is the power of strategic originality more evident than at the West Coast headquarters of HBO, the powerhouse (and super-profitable) cable network that is the most original force in the numbingly me-too world of mass entertainment. HBO headquarters is anything but a place of populist pretense. The building, near the beach in Santa Monica, is a potent mix of Hollywood power and a laid-back California lifestyle. The eager valet attendants and the phalanx of headset-wearing receptionists provide visitors with a tingle of celebrity. In the cavernous lobby, young actor-writer types fidget on boldly patterned furniture. Gleaming white walls, green glass, and splashes of hot pink give the space a futuristic feel—in sharp contrast to the beige-toned inner sanctum with its views of palm trees, tennis courts, and lush green lawn.
The calm of the executive suite is ruffled only slightly by the daily turmoil of show business. In one corner office, Nancy Lesser, HBO’s high-powered publicist, is finalizing seating arrangements with the producers of the Golden Globes award show for a delegation of celebrities, including Sarah Jessica Parker, Matthew Broderick, and Mark Wahlberg, who are flying in to attend the gala. (HBO’s programs and stars were nominated for 20 Golden Globes in 2005, more than twice as many as any other network.) Meanwhile, in another corner office, Chris Albrecht, HBO’s chairman and CEO, is finishing a call, headset on, eyes focused intently on the middle distance: “Fifty million?” he asks. “Sixty million? Okay, if it has to be sixty million, it’s sixty million.” Click.
Wrangling for prime seats at an awards show or haggling over big-budget productions comes with the territory in Hollywood. But almost everything else about HBO breaks the mold. Indeed, the company announces its maverick status right at the door. A giant LED display marks the entrance to the lobby. The words on the screen, which run in a continuous loop, may be the most disruptive message in recent television history: “It’s not TV. It’s HBO.”
Television—has there ever been an industry that’s so glamorous and so desperate for fresh thinking? This is a business where strategy is based almost entirely on mimicry. Think back to June 1994, when NBC’s Today show unveiled its new-look broadcast from a glass-walled studio in Rockefeller Center. Within a year or two, virtually every morning show had a windowed studio somewhere in New York City. A decade later, when Donald Trump attracted big ratings for NBC with The Apprentice, rival networks raced to sign their own billionaires, from Internet bad boy Mark Cuban (ABC) to British magnate Richard Branson (Fox). And so it goes in the vast wasteland: Survivor begets Big Brother, which begets I’m a Celebrity, Get Me Out of Here! Or The Osbournes begets The Simple Life, which begets Growing Up Gotti. All of which beget a sense of resignation among viewers and an air of desperation among TV executives: how does anyone win when everyone is playing the same game?
And then there’s HBO. There’s no denying the network’s glittering financial performance over the past decade. With a subscriber base of nearly 28 million households, HBO dwarfs any and all of its pay-cable rivals. Its parent, Time Warner, doesn’t break out detailed financial results for the unit, but Wall Street analysts report the company’s average earnings growth at 20 percent per year since 1995, and estimated profits of $1.1 billion in 2004 (more than any other network, cable or broadcast) on roughly $3.5 billion in revenue. HBO alone has an estimated market value of some $20 billion.
What has truly distinguished HBO is not its profitability but its programming. As anyone within reach of a TV clicker knows, the network shaped the pop-culture conversation of the early 21st century with a trio of hits: Sex and the City (an antic mix of sex, shoes, restaurants, and relationships that ran from 1998 to 2004), The Sopranos (David Chase’s unstintingly original series about an angst-ridden New Jersey mob boss debuted in 1999), and Six Feet Under (the darkly comic chronicles of a dysfunctional family of undertakers from Oscar-winning screenwriter Alan Ball that ran from 2001 to 2005). The “3S’s,” in HBO parlance, drew prime time–sized audiences to a network that reaches only one-quarter of all TV households, planted fear in the hearts of broadcast executives, and won universal acclaim from critics. At the 2004 Emmys, the highpoint of HBO’s hold on pop culture, it received an unprecedented 124 nominations and won 32 awards.
Even with the retirement of two of the three S’s, HBO’s lineup has remained without peer in its invention, emotion, and overall excellence. In addition to its new-generation weekly series (including Entourage and Big Love), HBO has produced a stream of miniseries, made-for-TV movies, and theatrical releases. The network’s $120 million miniseries Band of Brothers (produced by Tom Hanks and Steven Spielberg) premiered on September 9, 2001, and drew a total audience of nearly 59 million people in the weeks following the September 11 terrorist attacks. The network has committed more than $300 million to two more mega-projects: Tom Hanks’s series about John Adams and a Pacific war series from Band of Brothers producers Spielberg and Hanks. Meanwhile, HBO’s much-acclaimed documentary group, run since 1979 by Sheila Nevins, has won 15 Oscars, 81 Emmys, and 25 Peabody Awards.*
HBO’s track record isn’t just a matter of commissioning smarter scripts or landing better actors than its rivals. It’s rooted in a distinctive point of view about how to create value in the entertainment business—the strangely disruptive proposition that quality and originality, not mediocrity and mimicry, drive long-term prosperity. With HBO, what you see on the screen reflects what the company stands for in the marketplace—ideas that reset the expectations of the viewing audience and set the network apart from decades of conventional wisdom in New York and Hollywood.10
Technically speaking, of course, HBO and the networks are not competitors. HBO sells itself to viewers; the networks sell their viewers to advertisers. But broadcast networks, pay channels, and basic cable are all clamoring for attention in an increasingly cluttered, competitive, and fragmented entertainment marketplace. In a business where originality is often viewed as a risk rather than an asset, HBO’s ability to connect with a big audience, elevate its expectations, and keep pushing cultural boundaries is more than a breakthrough for the network. It changes the game for everyone.
“The name of the game [at the broadcast networks] is whatever gets the largest number of people to watch,” says Alan Ball, a self-described refugee from the network TV “gulag” and the creator of
