April 27, 2017 By FTI Consulting
ESPN’s reshuffling of its staff this week – laying off roughly 100 employees including much of their on-air talent – was uniquely public. The network’s experience was one that all employers would be wise to watch, as the drivers, decisions, and fallout all illustrated how technology will change companies’ relationships with their workforce in the coming years.
First, let’s understand the specific dynamics for ESPN, where changing technology and consumer demands have combined with mounting pressures to cut costs – and employees have been caught in the middle. ESPN’s pressures have included incredibly pricey contracts that were negotiated at the peak of the sports TV rights bubble, excessive subscription costs, and the advent of cord-cutters and “skinny bundles” excluding the network, all leading to an exodus of subscribers. Technology has intensified each of these cost pressures, not to mention sparking the shift across the media industry toward 24-7, digital and mobile content “experiences” tailored to increasingly diverse audiences.
ESPN may occupy a very niche space in sports and entertainment, but the pressures it faces in remodeling itself to a changing customer base and ushering in technological improvements cut across almost all sectors. In some cases, jobs will need to be cut; other times, remaining colleagues will need to take on new skills and responsibilities.
Either way, change is coming, and executives need to be prepared to lead their people through it.
Indeed, ESPN’s struggles reflect the delicate balance between investing in talent and keeping up with the technology curve. A recent report found that two-thirds of global CEOs now say technology is a greater asset to their firm than their people – and should therefore become the primary focus of investment. There are two related risks here: first, that leaders begin to view investments in people and technology as “either or;” and second, that leaders are perceived to believe as much, by their people.
As many analysts have noted, rather than replacing investments in the labor force, in most cases, technology will call for new kinds of people improvements. After all, with new digital platforms and data will come new strategies, which in turn will require people with new skills, proficiencies and passions to implement them. ESPN is changing its strategy because consumers are using new screens, but its remaining talent will become no less prominent on those screens. They simply need to be trained to adapt to them.
The personal and organizational changes that technology sparks will in turn call for new forms of leadership. After all, the task of asking people with distinct competencies and desires to buy into new digital strategies is one job that will likely never be handed off to a computer.
This is why the tone leaders adopt is so critical. Take ESPN’s announcement to employees, which was chastised in media as “a buzzword-filled memo that otherwise said very little.” The need to control the message was high for the network, as nearly every laid-off employee took to Twitter to comment on their departures (although, notably, most comments were gracious). President John Skipper’s announcement was surely well intended, and was clearly crafted with change management best practices in mind, including reiterating the “strategic vision” and business case for the move. However, many media stories and viewer comments suggested his letter felt impersonal at times, seeming overly positive and almost dismissive of the “limited number” of positions affected. The criticism has been a reminder: at a time when technology is causing career concerns for so many employees, when those people hear from their leaders, it is essential they feel there is a real human on the other end of the line.
The minute employees believe they are less important to their leaders than a computer, is the minute they will begin to disengage, and eventually look elsewhere.
With competition and turnover for top talent still ranking among one of the top threats to U.S. businesses, the time is right for all executives to reinvest in connecting with and empowering their people.
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