Soft vs. hard

Way back in the day I was an entertainment and media analyst for about a half a second in my career. But my official opinion of the industry was that I didn’t like any of the companies that occupied the entertainment space…other than Electronic Arts, but shares in EA were never on sale – and I love bargains. But the point of today’s post is to study the entertainment industry to see what happens when there is an overemphasis on hard skills (vs. soft skills) when managing any business, not just an entertainment business.

If we were to hold a gigantic fire to the entertainment industry and burn off the superfluous we would be left with its quintessence: artists and their art. The general public has a deepening appreciation for artists and art. I’m not talking about abstract, modern painting. I am talking about video games, movies, information, stories, music, television shows, well-designed electronics, well-designed and stylish clothes, wonderful interior design, sleek automobiles, etc.

It used to be that good art and good design were the exclusive purview of the wealthy. Now good design is everywhere and accessible by everyone. Look at the packaging on products, look at the shape of the toilet, look at the lamp options at Target, etc. The public loves what they love. And that comes courtesy of an artist. In short, art is everywhere.

The Question: So if the public has a deep and deepening appreciation of art, artists and good design then why are the majority of the media companies suffering and nearing death?

An Answer: It’s my opinion that media companies lost sight of the fact that their core essence is giving artists space to make art and then to sell that art to the public. That is, they lost sight of the soft skills.

Not all media companies are failing. Apple is succeeding hugely and so is Google. And there are others. But most media companies are near death because they took their focus off of artists and their art. Why did they do this?

Again, it’s my opinion that media company managers got tired of trying to distill the ephemeral essence of artists and art (the soft skills) into something tangible and measurable, and thus manageable. Because of the elusive nature of art, most media company managers began managing the tangible aspects of their business. So the focus became to manage distribution channels and distribution relationships. The focus became finding inexpensive manufacturing facilities. The focus became trimming the headcount. The focus became on drafting contracts that removed the media company’s risk out of the media company-artist relationship. The focus became how to produce the art as cheaply as possible. The focus became how to make the packaging sexy. [This latter point is interesting because sexy packaging involves utilizing an artist. However, the media companies could control the look of the packaging. They can’t necessarily control an individual artist’s output. So the latter issue highlights preference to control rather than surrender.]

In short, the media companies focused on everything but the artist and art. In fact, when they would choose to focus on the artists it was to find a way to reduce the risk of having to represent “iffy” and “weird” artist product. That is, they found ways to put risk on to the artist’s shoulders. For example, music and books work this way. These products are sold on consignment and unsold product falls on the musicians’ and authors’ shoulders to buy back and pay for out of royalties.

None of this would have been a problem if the media companies had also retained an expertise in identifying, nurturing, cultivating and marketing talent. But those scouting talents are also difficult to manage. The Old Lion media companies lost their soft-skill mojo. Thus, the media businesses became all about the hard skills, rather than the soft. That mode works as long as the hard-skill-arenas of the media companies don’t rapidly change. But unfortunately, that is exactly what happened. Media companies became manufacturing, distribution and marketing companies. Now distribution is all digital and on the Internet. Now communicating with the public about artists and art is all digital and on the Internet. The companies that have recognized this are THRIVING.

Apple and Google are great identifiers of talent. But more importantly, relative to the dying Old Lion media companies, they are doing a better job in the “hard skill,” tangible reality arena. The manufacturing, distribution and marketing of their product is super inexpensive, digital and on the Internet. Why? Because that’s where the people are.

The more general point in all of this is that our culture is obsessed with the tangible and the measurable. But what moves people is that indescribable beauty of great music, movies, television, design, architecture, art, etc. People buy what moves them in preference to what is merely convenient. Provide both and you succeed hugely. The problem for the Old Lions is that a retail outlet is not as convenient as firing up the computer. Oh, yes, and they abandoned their real competitive advantage: identifying, cultivating, nurturing and marketing talented artists making moving art. Why?

The soft skills seem to involve risk. It’s my opinion that the perceived “risk” is not based in reality. We all respond to great artists and art without having to engage the analytical faculty. We just know that we like it. So the soft aspect of life is just as real as “net profit and loss.” What is missing is a cultural appreciation for the soft skills and an educational system that teaches us how to identify and appreciate soft skills. In particular, business skills barely teach the importance of soft skills as applied to artists and art. The soft skills, if touched upon at all, are taught as sociological/psychological oriented management and organizational behavior classes.

This is the huge opportunity for business and business schools in the 21st Century/3rd Millenium: emphasize the soft skills within your organization for larger profits and greater renown. A shift in corporate culture has to occur for this to come to fruition. Yet, this is raw and a new frontier to explore so there is very little competition. Thus, the soft skills are well worth pursuing and mastering.

Jason