A version of this article appeared at Inc.com
Jeffrey Katzenberg, chief executive of DreamWorks Animation SKG Inc. has declared 2015 a year to ‘reset’ the company’s vision. It isn’t going to work, whether with Shrek on his side or no. Why? Two main reasons.
1. Delusion doesn’t scale.
2. Superheroes don’t scale (and I don’t mean the sort Mr. Katzenberg features in his movies).
Consider this 30-second, 2-decade recap of the history of DreamWorks:
1994: Katzenberg leaves a storied career at Disney to found DreamWorks SKG with Steven Spielberg and David Geffen (hence the ‘SKG’). The industry is a-twitter (albeit before Twitter) about how transformative the new studio will be in overhauling the then-moribund studio model of picture production.
2004: DreamWorks Animation is spun off and goes head-to-head with Pixar in the battle to take over the world of successful animated movies. By many measures, it wins (Shreks 1 through 3; sundry Madagascars; endless Monsters V Aliens; a zoo full of Kung Fu pandas, etc.)
2014: After a series of massive flops, including “Turbo”, “Rise of the Guardians” and “Penguins of Madagascar”, Katzenberg initiates two sets of takeover discussions (with Hasbro and Softbank), both of which come to nothing. The company makes a loss of $263m in the final quarter of the year. Katzenberg subsequently cut 500 jobs (a fifth of the workforce) and instituted a significant management shakeup.
So, what’s going on here? How can such a formerly high-flying, iconic organization come so close to crashing and burning?
The answer comes in a couple of easily missed observations in a recent lengthy article on the subject by the Wall Street Journal (and in much more detail, if you like gossipy business books in Nicole LaPorte’s lively account of the history of DreamWorks, ‘The Men Who Would Be King’). Notice these observations by people who worked closely with Mr. Katzenberg from the WSJ article:
“I would read his blog and get exhausted,” says a former DreamWorks production coordinator… She noticed a pattern: The busier Mr. Katzenberg was, the more off-track the studio…seemed to her and fellow production managers. “The creative confidence wavered because of his absence.”
“His peripatetic itinerary reflected a desire to branch into multiple platforms and industries—from television to publishing, theme parks to YouTube, mall attractions to children’s toys.”
“Evidence Mr. Katzenberg was overtaxed showed …[H]e was there “when he could be,” says one. “He was spread in a thousand different directions. He was basically running an empire. When ambition and capacity began to hurt each other, it might have happened around that time”.
Essentially, Mr. Katzenberg has a Howard Schultz problem (and, not coincidentally, a Michael Dell one), which is that heroic leadership doesn’t scale.
The answer? Jeffrey Katzenberg can re-org all he wants, and he can somehow find an extra two days in the week to do everything he wants to do, but until he learns to de-personify his vision and drive it deep into the company, he’ll still be pushing a rock uphill.
Sound familiar? Have you started to institutionalize your vision? Or are you still trying to scale your superhero powers (and your self-delusion)?
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