Case Study From Harvard Surveys Sesame Street Turnaround

Harvard Surveys Sesame Street

Harvard Business School recently looked into a new case study Professor Rosabeth Moss Kanter and Assistant Professor Ryan Raffaelli undertook to figure out how Sesame Street CEO Jeffrey Dunn’s radical bid to take an iconic not-for-profit public TV vehicle and create a licensing arrangement with HBO reversed the show’s “losing streak.”

In her book Confidence About Losing Streaks, Kanter writes that losing streaks begin “because you get a little complacent, you fail to see competition coming, you fail to change. Then you get a little defensive, you stop communicating, you start operating in silos, you get a little passive because you say, ‘There isn’t anything we can do anyway against all these big forces.’”

As the “turnaround guy,” Dunn flipped the script at first through pep talks and then by demanding accountability. “He partly did that by separating out the charitable side, the philanthropic side of Sesame Street from the TV production side or the media production side which has to operate in competition with other media, so they have to be efficient and they have to be audience conscious and count,” Kanter explains.

Entitled “Sesame Workshop: Bringing Big Bird Back To Health,” the case reflected on how Sesame Street bled cash for many years in its not-for-profit form, due in no small part to the digital transformation of media. Kanter explains, “They needed a financial turnaround, a cultural turnaround, and a strategic turnaround.”

After 45 years with PBS (along with 159 Emmy’s and multiple Grammy’s), their internal negotiations with the cash-strapped network became futile. Leery of breaching public trust, Dunn was reluctant at first to give away the Sesame Street brand to a commercial cable TV network.

The show’s deal with HBO would certainly be a two-way street (no pun intended) for the network, who stood to gain access to parents who might have more incentive to order the HBO cable package now that they carried hot-off-the-presses Sesame Street episodes.

Despite the fact that HBO would air Sesame Street episodes exclusively on its network for nine months before handing them off to PBS, according to the terms of the agreement, the new arrangement still generated a lot of internal and external turmoil.

Kanter explains that the new arrangement affected the show’s “identity because if you think of yourself, not just as doing good but as producing programs that educate kids and that are always up to date,” how might an arrangement with HBO tamper with the show’s DNA down the road?

Massive cultural shift aside, what excites Kanter most about the blurred lines of this case study is the potential for the business world to create more partnerships with socially conscious organizations and brands.

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