The Big Lesson for All Managers in ‘Tonight Show’ Feud

The unsuccessful hand-off of a business from one owner to another is so common these days that its mere mention likely brings an extended yawn to most people.  Many of the failures have been attributed to too-little or too-late succession planning. 

But the failed hand-off from Jay Leno to Conan O’Brien has not only become fodder for business school case studies but headline news on Entertainment Tonight and The National Enquirer. 

What’s the big deal about a TV show with a declining audience? Even after 70 years on the air, daytime's longest-running soap, "Guiding Light," was canceled. And CBS recently announced that "As the World Turns" will air its final episode soon after 54 years.

Times change and so do entertainment tastes.  So what then makes "The Tonight Show" fiasco so fascinating?

As the Wall Street Journal pointed out last week, ‘Leno-Conan Mess Offers Management Lessons.’  The article points out two critical missteps made by NBC: “It's a bad idea to promise someone a promotion in order to retain him … and so is naming a successor too far in advance.”

While I agree these are blatant mistakes, the article misses several inherent landmines management keeps tiptoeing around.

Leno, like many other Baby Boomers, wasn’t ready to leave. Unlike Traditionalists (born before 1946) and older Baby Boomers who aspire to retire, many Boomers are just launching new careers or getting a second wind. When they were 45 or 50 years old, retirement at 60 sounded good. But for a variety of reasons, retirement in the traditional sense of “stop working” is essentially dead. Compare this to the hand-off from Johnny Carson to Leno. Leno’s first year was no picnic but Carson remained silent and stayed away. Carson retired — period.  That was then — this is now.

I saw the same phenomenon 30 years ago in my prior career when dentists and physicians brought in associates to initiate a succession plan. They promised ownership and equity but just could never let go, get out of the way, or make room at the top. Today this trend is epidemic. Baby Boomers promised Gen X the opportunity to move up and take over but as the due date neared, they wanted an open-ended invitation to stay. Since they owned the game ball, Gen X is expected to play by their rules or leave.

Many Gen X (born 1965-1979) have and will choose the latter. Fed up with these shenanigans, their Gen X successors and future source of leadership talent are deciding they had enough with this artificially imposed “gray ceiling.” The Leno-Conan feud is a classic inter-generational conflict with grave consequences for NBC … and a huge lesson for anyone managing a business. While NBC had the best of both worlds for 5 years, they now are losing Conan anyway plus paying him along with his staff millions as part of severance. 

Leno, the ultimate Baby Boomer, is taking the helm again. How many times has this scenario been repeated in real-life? How many times has a business owner announced his retirement to allow the next generation to move up only to renege on the deal or jump back into the business at the first sign of trouble? With nearly 8,000 Baby Boomers turning 60 every day, this abortion of succession planning is being repeated with a frightening frequency… and only to get worse since most businesses have no plan at all.

NBC also ignore the demographics and the way different generations use media. In effect they ignored the demographics completely. Leno has a Baby Boomer following. Conan’s largest audience comes from Gen X and young Baby Boomers. Just like with any transition, you can’t dictate change. NBC’s plan was to tell Baby Boomers they can still watch Leno… but be forced to change their viewing habits. When has that strategy ever worked? 

They then allowed Conan to make his mark without any consideration to the viewers. Yes, Conan retained the Gen X  audience but lost many Baby Boomers. Did NBC even bother to consider that there are only half as many Gen X as Boomers? How did they expect to maintain or grow market share if Conan didn’t adapt his show?

The underlying lessons in this failed succession plan have much more to do with demographics and generational values than succession plan timing as the WSJ article pointed out.  NBC ignored the gray ceiling and miscalculated miserably the impact that generational difference will have on business.

The resentment between Gen X and Baby Boomers is heating up.  The recession kept the conflict on simmer for the past two years. But I predict that the failed succession of Leno to O’Brien is only the first sign of a generational melting pot ready to boil over.

Source: Workforce Trends


Ira S Wolfe