The client
A leading North American cable television network with a worldwide viewership of 1.5 billion faced declining growth after two decades of double-digit expansion. It was grappling with large-scale shifts in the media industry and a complex global organization spanning more than 100 channels.
The situation
The network’s CEO and CFO turned to McKinsey to help them think through where their industry was headed and spot new areas for growth. This work revealed that upheaval across the media landscape made it unlikely the network could grow as fast as it once had, no matter how strong its programming. In response, we recommended the client consider focusing on its operations, an area creative organizations usually overlook.
McKinsey's contribution
Our relationship with the client’s senior team dates back to the early 1990s. We understand its people, culture, and industry and quickly grasped the big challenge it was facing. From our intimate knowledge of its organization, we realized the client, not us, had to drive this project for widespread change to take hold.
Because we operate as one firm, we were able to assemble colleagues from across the firm to address the client’s challenge. We brought together experts in media production, marketing, procurement, as well as lean manufacturing, an unconventional choice.
Bringing manufacturing principles to media production turned out to be a successful experiment. Applying the best practices of lean manufacturing—which makes processes repeatable and predictable in order to reduce waste—to an organization fueled by creativity proved essential to changing how the client worked.
Impact
This project made an immediate and material difference in the client’s performance. Short term, the network saw dramatic gains in efficiency and productivity by eliminating unnecessary activities and coordinating others.
More broadly, the client is in a position to fundamentally transform the way it works, freeing up people and revenue to take advantage of new opportunities and develop new programming. Specifically:
- The client reorganized its network operations, production operations, and channel groups to separate management of creative activities from noncreative activities. The projected gain: $10 million by the end of the first year.
- The client cut the lead time for content development from 9 to 7 months while lowering overhead by 20 percent.
- The client reduced labor requirements by 50 percent with no drop in productivity.
- By eliminating inefficient processes, the client freed its creative people to spend more time doing what they enjoy—being creative.