Advent of an era? Corporate America finally gets contemporary culture?

Freston Abstract: Freston got his job as a CEO of Viacom because he was deeply informed about contemporary culture and lost it because he was not informed enough.

The whole essay:

Corporate America doesn’t get it.  It has never got it.  And until yesterday this didn’t seem to matter.

Then the Chairman of Viacom fired the CEO of Viacom, and Tom Freston was out of a job. 

This might herald a shift in corporate American.  I think it is now possible that that not knowing about contemporary culture is now a career liability for the senior manager and a problem for the corporation.

My first proposition is, I think, pretty clear.  Corporate America doesn’t understand contemporary culture.  There are lots of examples.  Gatorade buys Snapple after the  trend has passed.  (Three years later, it sold Snapple at a $1.3 billion loss.)  Levi-Strauss missed hip hop and lost $1 billion in sales.  There are lots of examples of corporate America making bone headed moves because no one in senior management has a clue what is happening in music, film or culture. 

Some of this is due to the appalling illiteracy of the business school.  Most b-school faculty are stuck in a time warp constructed out of Bob Seeger’s CDs and the Die-Hard retrospectives.  Not so the b-school students, most of whom have a clue.  There are no courses on contemporary culture and the marketplace (unless Rob Kozinets is teaching a course at York I haven’t heard about).  There are no courses on the theory and method with which one read contemporary culture. 

This was seen to be OK.  Then Redstone fired Freston.

My second proposition, that the firing of Freston is a leading indicator, this is less clear.  Here’s my argument.  Tom Freston began his professional life as an ad guy.  Ad guys are generally pretty well informed about contemporary culture.  (Ad guys are the way the corporation "cheated" on this issue.  As long as the agency knew what was going on, it didn’t have to.  This was foolhardy but possible in the early days.  But now that the corporation is an innovation machine, and now that contemporary markets and cultures constantly interact, it is, as a policy, still less well advised.)

On the strength of the ad work, Freston became a founding member and head of marketing of MTV: Music Television.  Eventually, he rose to become the head of MTV Networks.  I think there is a chance that it was this deep training in contemporary culture that qualified him for the job as CEO of Viacom. Freston’s reputation grew.  The WSJ calls Freston "a man long regarded as one of the most successful executives in the entertainment business."

So what brought him low?  Why did Redstone fire his mighty CEO? Comments circulating in the business press (some of them from Redstone in the FT) suggest that the reason has to do with Viacom’s failure to acquire MySpace (which went instead to News Corporation and Rupert Murdoch). This seems a little unfair.  At the time, as I recall, everyone thought News Corporation paid much too much for MySpace.  Only now (following a deal with Google) are people now insisting that Freston was outplayed. 

In sum, Redstone hired Freston because he knew a thing or two about contemporary culture and its markets, and fired him because he did not know enough to spot the MySpace (and social networking) opportunity. 

Now there is no question that Redstone continues to play the diva on this issue.  Anne Thompson in today’s Hollywood Reporter makes this clear, quoting Merrill Lynch analyst Jessica Reif Cohen who says: "The change is unexpected and not likely to be well received by the Street or the creative community."

Still and all, there is perhaps a "pattern recognition" moment.  It may be that Freston got his job as a CEO because he was deeply informed about contemporary culture and lost it because he was not informed enough.

There is a still deeper, and more chilling pattern here: that senior managers will have a brief window of culture competence. Without constant refitting, this competence may expire, as when an executive of one technology (Freston as a TV executive) is supplanted by the rise of a new shift in contemporary culture (social networking) enabled by a new technology (the internet).

Maidment pointed out in Forbes today that Wallstreet

has not been over-enamored with traditional media’s attempts to come to terms with the media consumption of the iPod generation.


Could this be because the managers of tradition media don’t actually know very much about the media consumption of the iPod generation.  When do we put this right?   When does the corporation get in touch and build a system for staying in touch?  Naturally, this will happen when senior managers decide that it is in their best interests that it happen.  Perhaps the Tom Freston story will sound an alarm.


Chaffin, Joshua.  2006.  Freston removed as chief of Viacom.  Financial Times.  September 6, 2006, p. 1. 

Karnitschnig, Matthew.  2006.  Ouster of Viacom Chief Reflects Redstone’s Impatience for Results.  Wall Street Journal.  September 6, 2006.

Maidment, Paul.  2006.  Why Viacom can’t win. media newsletter.  September 6, 2006.

Thompson, Anne.  Par’s Grey loses patron: shake-up unsettles studio regime.  The Hollywood Reporter.  September 6, 2006. 

19 thoughts on “Advent of an era? Corporate America finally gets contemporary culture?

  1. Candy Minx

    You have more faith in suits than I do. Frankly, I can’t see how rich corporate lackeys can know anything about passion, art and mythology (or as you call “contemprary culture” which I can agree to call those things that too for the purpose of this topic). This morning on tv I heard something about Freston being a pal of Tom Cruise…and this played a role in his departure. Cruise was fired while Freston was on holiday or something.

    Contemporary culture comes from the ground up. How can a corporate lackey manage to hang out with cool people? We don’t want squares harshing our mellow.

  2. Grant

    Candy, characteristically insightful, thanks, but I would resist the idea that contemporary culture only belongs to cool people. I think it has to belong to everyone and let’s be done with the avant garde, too cool for school, pretensions of a self appointed elite. Of course, as a geeky, middle age anthropologist, I would say this. It’s not about cool, it’s about depths of knowledge and a certain finesse in understanding. Cool can actually get in the way here. (If only because cool people are much interested in anything that isn’t.) It’s the new snobbery. Thanks, Grant

  3. dilys

    I like Grant’s comment. Mastery is “Cool”-Plus — cool + a position in reference to the cool high points as they pass. It is in the grammar of the leverage that executive acumen will manifest.

    The possibilities for the blind leading the blind are immense. In the land of the uncool, one meme can call itself king. As generations roll ever-more-speedily on, there will be increasing emotional and professional “cost” to admitting one’s passion, art, and mythology is not on the leading edge of Cool.

    Unfortunately, executives’ flailing to find a sequential series of interns as informants is not a very robust solution for even the savvy corporate type, who will otherwise be reduced to quoting unquantified items of kewl from his/her kids. Grant’s Future Institute may be just the ticket, teaching the Cole Haans to dance.

  4. debbie millman

    Hey Grant! Interesting that you referenced pattern recognition. Too bad Freston didn’t read Gibson’s Pattern Recognition when it came out three years ago. It all but predicted MySpace and YouTube…remember the footageheads?

  5. Grant

    dilys, nice phrase making, and yes, a series of interns is one of the ways the problem is solved now, which means that some of the intelligence most crucial to the corporation is being sourced from kids who are not trained and often not paid. It’s like marketing at the turn of the century (19th-20th), complete amateur. Thanks, Grant

    Debbie, Oh, there are so many books to read (and movies to see, and CDs to listen to). I sometimes think it is the sheer scale of this intellectual investment that puts some people off. Thanks! Grant

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  7. Irene

    It’s interesting that you used the phrase “deeply informed about” as opposed to “able to forecast” contemporary culture. Maybe it’s not age-related or cool-related (Rupert Murdoch is 74 freaking years old.) I just read a Vulture Droppings interview with Rob Walker and he has this great quote: “My thing isn’t predicated on the idea that I have amazingly great taste and that I know what’s cool. I don’t really know what’s cool. Instead, what I’m doing is trying to look at what has an audience and ask: why does it have an audience, what’s interesting about that audience, what’s different about that audience?….if you’re always going for what’s cool right now, well, the only thing people love more than declaring that something’s ‘next’ is declaring that it’s ‘over.’ ….the fact that something is over with ten people in downtown Manhattan isn’t terribly relevant to me.”

    It’s the focus on the audience I thought was important. The full interview is here:

  8. steve

    Using MTV as an example for all corporate executives biases the discussion because MTV depends on the tastes of young people, which are naturally fickle and fad-driven. I sure hope Amgen execs aren’t spending too much time worrying about MySpace or whether Lindsay Lohan is still popular. It might be relevant for them, but it has to be a low priority.

    I think developing some degree of cultural competence in B-School is a good idea, but it better focus on methods and recurring patterns and not the particular trends at the time of attendance. Nothing is worse than wasting time in graduate school on ephemera that will never be useful again.

    Finally, please do not look at Sumner Redstone, in the winter of his career, as a harbinger of future trends. The man seems to be losing it. He’s going back to a couple of trusted advisors and I won’t be shocked if he ends up trying to get his kid to take over when he’s gone.

    BTW, Freston was not previously successful because he knew what was cool; by all accounts, he was successful because he was good with the artistic talent that constitutes the raw material of MTV, and who themselves have to figure out what is cool. Presumably those relationships have less value if the Internet is the future of entertainment, so sacking him is not per se crazy, but the man barely had nine months in office and his golden parachute ain’t cheap.

  9. Candy Minx

    As usual I am not as eloquent as other comentators here. Always inspired by Grants visitors! Thanks guys. Um, I took a chance using the word cool-regret that decision now, but no matter seems we have sorted out a couple things…but my aim was to approach the issues that Rob Walker makes, quoted by Irene, and Steve I am with you “BTW, Freston was not previously successful because he knew what was cool; by all accounts, he was successful because he was good with the artistic talent that constitutes the raw material of MTV, and who themselves have to figure out what is cool. ” This was what I was attempting to express.was that executives and producers in entertainment feilds need to harbour and allow artists to express their visions. It is not the job of anthropologists or executives to create or monitor art…but to observe it and support it so it may continue to grow, transform and express itself.

    Any self respecting scientist may dedicate themselves to the discovery and articulations of intangibles……but a smart scientist knows no matter how hard they try, poets have so far been the professionals who have nailed the intangible.

  10. Christopher Hastings

    I hate to be too optimistic – but what if the executives hang out with their kids and grandkids more? What if they were focused on the moment their grandkids were in and actually lived there with them – great role models and understanding the customer. How many executives kids could have seen MySpace coming?

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  12. Graham Hill


    As Steve quite rightly points out, it would be highling troubling if the heads of companies more concerned with the nuts & bolts of contemporary business than with the bits & bytes of contemporary culture, suddenly started to follow every fad & fashion.

    Ditto for the b-school graduates who will likely go on to become the heads of those contemporary businesses.

    I think it prudent to largely leave contemporary culture to those whose business it is to slavishly follow fashion.

    Graham Hill

  13. kevin r.

    I kind of get the feeling that hiring someone from MTV was the first problem. To older people, MTV = up to date and hip, but to younger hipper people, MTV = a badly done caricature of what is cool. MTV is a step behind what is actually cool and when it catches onto cool it kills it dead.

    …but maybe i’m just a cynic.

  14. Grant

    Graham, to accuse those with cultural literacy of being slaves is really to accept the only terms of the debate, that fashion is so much froth, that to follow trend is to be mesmerized by them and finally taken captive. I sometimes think that a CEO who doesn’t have a nodding acquaintance with contemporary culture is like a CEO is just isn’t keeping up with the major business trends. At some point, I think we are entitled to say, that’s what we pay you for. Thanks, Grant

    Kevin, I couldn’t agree more. MTV enjoyed a monopoly position and was only sometimes a conduit for things that were genuinely innovative. But still as you say, compared to Wall Street and most CEOS, it was well informed, and I think that must have helped prepare Frston for the Viacom assignment. Thanks, Grant

  15. steve

    MTV really has been cutting-edge in televised entertainment. Running a video jukebox was a pretty clever idea when it was new. The Real World wos the first reality-drama and paved the way for all the rest. Now they’ve had some success with The Hills and The Real OC: Laguna Beach with a very weird scripted/verite approach. They’ve extended this to the world of high school football with Two-a-Days; it will be interesting if the soap-opera reality format works in that environment. So I wouldn’t say that the network is purely a trend follower.

    That said, I sense they’re running into problems when they have to fill up their schedule with lame game and dating shows and derivative makeover shows. It’s a content company, and if they can’t come up with compelling content, they’re toast.

  16. Candy Minx

    Yeah, I know this is a few days old this topic…but I’ve been thinking about it, and a couple more points/ideas come to mind. Again, it is the difference I feel of confidence of marketers and CEOs being so trusted…and Grant you and I very much differ on this. In fact, I have serious doubts about the relationship of observing anthropology/economics and being a marketer. But that is another story and another set of ethics. I mean, I realize we all have to make money…so I understand, but it seems a little desperate…the association.

    In the meantime I must reinforce my feelings with a little anecdotal evidence why I think CEO’s and marketers are out-of-it “predicitng and profiting wise” and best suited as secondary creatives for their clients-artists.

    One is this quote…

    “The artist is always engaged in writing a detailed history of the future because he is the only person aware of the nature of the present.” Marshall McLuhan (Understanding Media)

    and two is the actions of Billy Bragg with myspace. My Space and it’s bosses are out of it here and there, it is the consummer and artist who always choose the way the current flows. Bragg has his stateemnt about pulling out of MySpace and then rejoining at his weblog below…you need to scroll down to find it though.

  17. Grant

    Candy, funny I was just thinking about this topic last night while not sleeping in my Beijing hotel room. Artists, intellectuals, that avant garde suffered a displacement sometime in the last several decades. They are no longer the alternative to bourgeois fixity, cowardice, and convention. The bourgeois busted out, capitalism embraced certain of creativity and variation, and increasingly the arts carry on a self absorbed conversation that sustains itself with rank prejudice and a refusal actually to examine what is taking place in the mainstream. And, yes, there is an ethical issue? What does it mean to take make yourself the community of obfuscation, that continues to turn out arguments and mythologies that prevent the mainstream from a clearer more profound understanding of itself. But as you say this is a larger debate that we should probably not negotiate with mere comments on a blog. Thanks, Grant

  18. Candy Minx

    Okay, let me see if I can say this is a different way, maybe even feeble-ishly…clearer. I agree completely that “artists, intellectuals and avand garde” were displaced…and I blame them completely. They segregated themselves with their silly “oneliner art pieces” and hot air theories. They deserve their own tepid voices. The most out of touch people you can find are most of the well heeled art mafia crowd and intellectuals, especially academic intellectuals. But see, you and I differ…because I just don’t see a heck of a lot of wisdom around ANYWHERE in any so-called professions. And I don’t hold out a lot of trust in the idea that CEO’s or marketers are sitting on the pulse of the planet either. Culture competence? Well, see, I have a kind of sicko attitude towards management struggling to understand iPod generation(whatever that is supposed to mean, it’s that kind of association that makes me laugh as I add another song to my iPod.) I love it when corporations and marketers fumble around trying to understand peoples trends. It’s kind of like watching a bad psychic(I am open to the idea that maybe there is a good efficent accurate psychic out there…more than a corporate suit). I guess I would prefer to see this kind of desperate grappling at prediciting the future used for something more…well altruistic. I care as much about an artist who drops ping pong balls down a flight of stairs as some guy who forgot to buy mySpace. As far as I can see they are both as out of touch with the human condition as each other. They are the butt of jokes for us regular folks out here. Heh heh…I’ve seen Syrianna the few people who run the world don’t give a shit about mySpace or art. They have predicted the future because we let them own the
    future. And they let us play with iPods and monitoring pathetic little CEOs…keeps us out of their hair.

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