The ABCs of Leadership

We’ve grown accustomed to the depictions of the winner-take-all mentality of media moguls like Logan Roy in Succession. Still, there is a less volatile, more values-driven way to lead a media company, evidenced by the storied career of Jeff Dunn ’72, former executive chairman, president and chief executive officer of Sesame Workshop, former president and chief executive officer of HiT Entertainment, and former chief operating officer of Nickelodeon and the president of Nickelodeon Film and Enterprises.

 

Following his retirement from Sesame Workshop in 2021, Dunn volunteered at Harvard’s Graduate School of Education to mentor students and professors on using media to improve educational access and impact. Starting in January 2022, Dunn serves as interim president and chief executive officer of the Boston Symphony Orchestra.

 

In our Q&A, Dunn shares his experience leading Sesame’s s turnaround and shepherding companies through turbulent times.

 

 

What were the conditions at Sesame Workshop when you first arrived?

 

 

Sesame had eight years of operating losses before I got there, so the question was, how will we change that? One of the big reasons we were losing money was because we weren’t getting paid for the TV show. The costs of Sesame Street weren’t being paid by PBS, the network we were carried on, so we had to figure out how to pay for it in another way. 

 

Historically, Sesame made money by licensing its characters and brand to toy companies and distributing its programs via cassettes and DVDs, but the world had changed. When Sesame Street first came out in 1969, there really wasn’t that much competition. There were only four networks, and there weren’t that many kids’ shows, so we really had the licensing business to ourselves. But now, there were hundreds of kids’ shows, all trying to compete for the same dollars. Additionally, over the last 20 years, kids had gotten older, younger. That is, they were aging out of things at an earlier age. Girls were no longer playing with dolls for the same length of time as they were before. People were getting into electronics earlier than before. We no longer had the same age range to sell to, and the fact that more people had to eat from the same pie meant that each business had to take less. Sesame Street’s licensing business was down by 50 percent in the last eight years, and the CD and DVD business was down by 70 percent, as people moved to streaming. 

 

I had to change the staff’s point of view to acknowledge that people no longer watched media and television in the same way. We needed to get paid for the programming somehow. Streaming is no different in a way than DVDs, and streaming had eroded the DVD business. The goal was to stay on PBS because it was free, but we would somehow have to get paid. We did a deal with HBO so that we were on HBO, and HBO paid for the programming. Then, we gave it free to PBS as we had always done. That combination turned around the economics. Now we were actually getting paid to make the programming. 

 

Did you get a lot of resistance to instituting these changes?

 

Within that series of decisions, I had to bring many people along. There was tremendous resistance. First and foremost, there was resistance from PBS because this was a big change for them. They would be moving from what is called the “first window” to the “second window.”

 

In the media business, a window is when content appears. Historically, movie content first appeared in movie theaters, then it migrated to DVDs in stores like Blockbuster, then to broadcast television, and then to cable TV.  Each one was a window that the movie earned money on. In television, the first window was on broadcast and the second window was on cable. In our case, what we were proposing was going to be a first run on cable, which was historically the second window, and then go back to PBS, who was going to get the programming for free. They were no longer going to be ahead of the cable window. 

 

That decision was hugely controversial at the time. When we did this, we caught the zeitgeist in the media business. There was cord-cutting. Netflix was taking off. People were unplugging from the cable. No one had ever done this before where there was going to be a first broadcast on cable, and then it was going to go to broadcast. The story made the front page of The New York Times, The Wall Street Journal, The Financial Times, and the L.A. Times because people wondered if this was a seminal moment in the history of television again where all the prior rules were collapsing. But it did save the organization. 

 

Some members of Congress had concerns. They were like, “OK, what’s really going on here?” People look at Sesame as a national treasure. Many people thought that PBS owned it, which wasn’t true. There were definitely people within the company itself who thought we were commercializing Sesame in some way.

 

 

How do you bring the employees along? How do you let them see your vision?

 

I think life-threatening situations tend to clarify peoples’ minds. Some people said, “Sesame should die a noble death. You’ve been there for 45 years, and it was a good run, and no TV show lasts forever.”

 

Well, I did not come there to have that happen. The board didn’t feel that way. The board felt Sesame had to evolve with the times and reflect the realities of the marketplace. That’s always hard, but when your very existence is threatened, and you’ve been losing money for eight years, you can say, “We can keep doing it the way we’re doing it, in which case, this is what the future looks like.  Or, we can acknowledge the reality of our situation, and say we have to change.” That doesn’t mean there doesn’t have to be a lot of conversation about the change because there does. You have to get people to understand and feel that whatever change you’re going to make is mission-related. 

 

There was some controversy about HBO. HBO was not a kids’ network and had a lot of different fare on it, but I did think they offered us some compelling things that no one else did. They were willing to let PBS have a free second window so kids could always see the show as they had before. They were creatively driven, which we valued tremendously, and it didn’t feel to us that they were just trying to make a buck. They were headquartered in NYC, as we were, which made it much easier to partner with them. HBO also had marketing dollars to put behind shows that PBS didn’t have in the same way. It was a combination of things that made it feel that HBO was the right partner.

 

It worked out, and it revived the economics of the organization and the brand. As a result, the show’s ratings on PBS grew. It was a win for them. For us. Everyone won.

 

How was morale when you started?

 

It was pretty bad because, before I got there, every year for eight years, the company would lay off more people. By fixing the economics, I could change that and not have to lay anyone off. It took a long time for people to get used to it. People were suspicious for three years and then got used to it. They got paid more since many people hadn’t had a raise in eight years. We ended the layoffs. We gave bonuses. Our employees had a lot more job stability. 

 

 

Change is hard on people even when they know it’s in their best interest. The only constant in life is change, but that doesn’t lessen the difficulty of it. People get settled into what they know and like. People were worried about changing the culture, and my answer to that was, “How good a culture is it for a company to lose money for eight years? Do you think that’s a good culture?” I have found that some people who grew up in the non-profit industry really don’t understand what a nonprofit is. They thought being a nonprofit means you don’t make money.  Being a nonprofit is a tax status that the U.S. government grants, meaning you don’t have to pay taxes on your profits. It can also mean that it can be tax deductible if I give you money. But, if you spend more than you take in, at some point, you will go out of business. It’s just as simple as that. Being nonprofit doesn’t mean that you are supposed to lose money. The goal of a non-profit is to break even or make money. Many people at Sesame had lived with these losses for so long that they thought it was normal.

 

When you first started at the company, how did you tackle the job? Do you observe first and see the lay of the land?

 

Often when you get searched by a head hunter and the board, they ask, “Tell me what you’re going to do in the first 100 days.” If you think you’re going out of business in the first 100 days, then you really need to move quickly. But if you are new to the organization and it is relatively stable, you need to listen, ask questions and learn and try to understand the organization’s culture. How does it make money? Where does it lose money? You need to reserve judgment until you’ve done enough listening and learning so you can make intelligent choices. Six months is not an unreasonable time frame for that. I think it’s impossible before three months. 

 

How do you build buy-in from the staff?

 

Buy-in doesn’t come instantaneously. You need to get people to understand: “Why do we need to change?” If people’s built-in defense mechanism is no change, the first thing you need to do is to get people to understand why we should change. What’s the benefit of change? You don’t change for change’s sake. We’re here because there are benefits to change, and there also may be real issues with staying where we are. 

 

You do have to have trust. People have to feel like they are heard. Even if they don’t want to do what you are proposing, they have to feel that they and their concerns were heard by you. And, so you can say, “I hear you, but here’s my rationale for why we have to do it.”

 

There’s a time when you must listen, learn, build trust, and lay out the reasons and rationale for the decision. There are so many ways that people can thwart you, even as a CEO of an organization. If people don’t want to do something, they can make it very hard for you to accomplish something. Accomplishments only happen by people who want them to happen. If people pay you lip service or are not energized by your plans, there are many different ways, they can block it. You’ve got to work on that. I’ve said to people when they are becoming leaders, “One of the things you will learn is that, when you are making decisions, it’s a lot easier to say “no” to something people want to do than it is to say “yes” to something they don’t want to do. If the people don’t want to do it, and you want to do it as the leader, you have a lot of work to do.

 

President Lincoln worked with a team of rivals. Is that something you ascribe to – that you enjoy that kind of pushback?

 

I do. It turns out that two of the people I had on my senior staff were the other two finalists for the job. 

 

I’m a big believer that you want people who will speak truth to power. It’s not always easy to find those people, but you need people who speak truth to power and encourage them to do so because otherwise, you won’t get all the information you need. 

 

One of the things I’ve learned in my career is that if I’m trying to turn something around or lead fast growth, I need to tell people, “I can’t do it without your help. I will only be as good as the information you give me. I need you to tell me the problems so I can fix them. I need you to make sure I don’t do something stupid. If you think it’s the wrong thing, tell me.” We don’t want to do something we shouldn’t because no one had the courage to tell me I was wrong or my thinking was wrong. I try to be somebody who changes with the data. I’ve worked for people who never let the facts get in the way of their stories. They had a point of view, and they dug in. I’m not that way. If you tell me I have the facts wrong or if the situation changes, I’ll change, too. I’m not going to pursue something that makes no sense. 

 

What frequently distinguishes people who can really grow and advance and become leaders is their ability to talk truth to power. And if you can’t – or if you’re too insecure or you can’t figure out how to say it in the right way – your career might top out. Really good leaders want people to tell them the truth so they can make good decisions, and no one is always right. You depend on people pointing it out when you are wrong. 

 

Recently there was a video that made the rounds on the Internet of a CEO telling her staff that they wouldn’t be getting a bonus this year and chastising them about visiting “pity city.” However, she received a sizeable bonus. How important is it for a leader to have empathy and social-emotional skills?

 

Empathy is hugely important. Character is hugely important. At times, leadership in our country is sadly lacking in character. You see it in government and business that people are almost taking what they can because they can.

 

I think leadership is the most naked thing you can do in public. What I mean is that you are out there for all the world to see, and you are the result of all your decisions. Everybody can see those decisions, and eventually, your brand becomes the summation of the decisions you’ve made. If you say, “suck it up while I take a huge pay increase or bonus,” that is now your brand now, that’s who you are. When I was at Sesame, I declined to take my full pay because it was a non-profit. I gave back because I believed it was the right thing to do. I cannot imagine why any CEO or board member would take a bonus for laying people off. You’re going to lay people off and then get a bonus for that? Are you kidding me? Where is your morality? 

 

I do think empathy is important for the job. At the end of the day, you have to make tough decisions at times. Some of the toughest decisions you have to make as a leader are the personnel decisions. Some decisions might be right for the person but wrong for the organization. Those are always tough. As an empathic person, I would like to do this for you, but as the organization’s leader, I have to say, “If I do this for you, will I do it for everyone?” That’s where it gets really hard. There are times when I have done it and justified it because I try to live by the golden rule. As an organization, most people want to know that they have been treated fairly, and it’s not because of who they know or how they argued. 

 

Do you have to be an optimist as a leader?

 

You have to be appropriately optimistic. I have another saying: “Have your passport to reality stamped frequently.” What that means is that you have to acknowledge the reality of your situation. Your job as a leader is to level with people and be honest with people, and if that means delivering tough news, that means delivering tough news. My leadership has been well-regarded and well-liked, but I didn’t achieve that by pandering to people and being inappropriately optimistic. I did it by being transparent and honest and saying, “This is where we are.”This is the reality of it, and here’s where we are going.” More than anything, people want to be told the truth. 

 

How did the company fare during the pandemic? Had you experienced anything quite like that in all your years in business?

 

I thought I had in some way. I’d been through the 2008 financial crisis when I was hired to take a company out of a financial crisis. There were a number of companies in 2008 that were profitable and fine but not making as much money because of the recession. They started cutting their costs and laying people off to maintain profitability. Many companies did that, and it made the world worse. The more people that were laid off, the worse the economy became.

 

When it came to Covid, many people said, “We’ve seen this movie before.”  Companies started laying people off instantaneously. I was the exact opposite. I said to the staff, “I’m not laying anyone off. We have money in the bank for a rainy day, and the rainy day is here.”

 

In the television business, most production people are “work for hire” and work independently. They go from show to show in production. We had almost finished production for the season when Covid happened. These production people had nowhere to go. For a lot of them, being unemployed for a month was going to be a big deal. I told the freelancers who weren’t even our employees, “We’re going to pay you for the next month.” We carried those people who weren’t working, which bought us enormous goodwill.

 

Throughout the pandemic, we never laid off a single person. I had two things driving me. The first was the mission. The second was the staff. My goal was to get through this together. It was an existential crisis for all of society. Laying off people doesn’t do anything for anyone. I told our employees to put their families first and watch their health. We got 90+ percent employee satisfaction ratings while other companies went to the floor. That goes back to empathy. In leadership, you want people to know you have their back. You’re going to do the right thing for them and for the company.

 

I went to the board and said, “We’re not going to lay anyone off. If you want to fire me, you can fire me.” I was grateful that the board thought it was the moral thing to do, and we kept everyone all the way through. Surprisingly, our business went through the roof. In retrospect, it was understandable. People were home. They were watching more TV, and there was a flight to comfort brands. We sold a lot of pajamas. Our Covid years were some of the best years of the company economically.

 

How do you feel about remote work and building a company culture when not everyone is in the office?

 

It’s really hard if you have only remote work, but the pandemic proved it could be done. We did it. The horse is out of the barn. The workforce, for the most part, has changed. Some services have to be delivered in person. Regarding other jobs with no in-person delivery component, I think it will be a hybrid world from here on in. 

 

It’s much easier to build culture and relationships if you see someone in person every day. Everything on Zoom has to be rescheduled, nothing is by chance. You can’t go out after work for a drink. I do think it’s harder to live in a place with long commutes. The hybrid environment is here to stay, but I think it’s important that people have similar in-person work days. If you have people coming to work and no one is there, then it defeats the purpose of it. 

 

During the pandemic, I asked all employees to keep a diary about their experiences, feelings, and learnings. At the time, we thought it was going to be a month. When we returned, I wanted to collect that data and see our learnings. This was the first real nationwide attempt to be remote, and I wanted to understand what we learned from it.

 

We found that initially, in the pandemic, the most impacted were moms and young people because moms were bearing a disproportionate burden of child care, and young people’s social life revolved around work. They were now isolated and felt alone. As time went on, it reversed. The older people craved to get back into the office and socialize, and the young people adjusted to the remote digital world and built new ways of connecting socially. That is a fascinating thing about it.

 

In business, is incorporating a multitude of people and perspectives and diverse voices important?

 

In terms of diversity, I think the best decisions are made when you have a diverse group of people. The murder of George Floyd ripped me up inside and was a turning point for me, and it was a turning point for the Black community. 

 

At that time, our leadership team was gender-balanced, and we had people of color on it, but I thought we needed more people of color. One thing we were completely missing was young people. In an organization, the senior team is the senior team because they hold the senior positions. But the biggest role of the senior team is to advise the CEO in their decision-making process. I want the best minds in the room arguing it out. After George Floyd, I felt we needed to hear from a wider range of voices, including more people of color and more young people. The workforce was changing so much, and different generations are very different in their aspirations, their feelings, and the way they want to work.

 

I reached down into the management team, and it improved the quality of the discussions and how people were thinking about the issues. For an organization whose role was to educate kids, we went from 50 years of simply modeling good behavior to talking about racism. We have to talk to kids about what racism is and how to deal with it and confront it explicitly instead of just modeling good behavior. Those were very difficult conversations because it was a big evolutionary step in what we did.

 

What lesson did you learn at KO that has stayed with you?

 

What I left with that changed my life meaningfully was that KO taught me how to write, and in learning how to write, I also had to learn how to think. It has been my writing skills that have made my career as much as anything else. I’ve written myself into college, I’ve written myself into graduate school. I’ve written myself into jobs. During Covid, I started, out of managerial necessity and leadership, to write to the staff every night. I was terribly concerned about isolation and chaos. I didn’t stop writing. Over time, the tone of it changed. It went from being practical to musings on life in some cases. I would comment on what was happening in public and what I thought and felt. I wrote about making my lunch for the first time in decades and what that meant, and what did that feel like. I talked about grilled cheese, and I got a lot of feedback. I wrote every night for nine months. When I left, the staff published a book of my writings. Some of them sent it to their families and friends.