BBC Journalism College

ORGANIZATIONAL TRANSFORMATION AT THE BBCGroup 5

BBC TransformingMr Mark ThompsonMr Greg DykeReal and Radical ChangesRestructuring of BBCs executive committeeThe Executive Committee:CreativeJournalismCommercialCost cutting and improving efficiencyBBC Journalism CollegeAnalyst were confident about Thompsons capabilityBig range thinker and not a short one

Inside BBCOur missionTo enrich people's lives with programmes and services that inform, educate and entertain.

Our visionTo be the most creative organisation in the world.

Case HighlightsCreated on Oct 22nd 1922 as British Broadcasting CompanyMission : to inform, educate and entertain1927- BBC with a Royal Charter under UK Govt. ( objectives, powers and obligations)12 member Board of Governors and Executive Board led by a Director General No competitor; had a license fee of 10 Shillings set by the British parliament and paid for by radio owners1932- started broadcasting outside Britain (BBC Empire Service) ; no commercial activities like adsNov 1936- BBC Television Services and issued 8.5 million radio licenses (98%)1946- Television Services commenced after II World WarBBC Empire/External Service 40 languagesIts news was impartial and authoritative

Contd..1946- The Third ProgramCombined license fee of 2 for radio and TVWireless Telegraphy Act for TV usersTill 1950s radios dominated 12 million licenses for radios and 350000 licenses for TVCoronation of Queen Elizabeth II royal ceremony 20 million viewers (estimate)Sept 1955 Independent TV (ITV)- not funded through licenses- first commercial channelMarket Share of BBC fell 28% in 1957BBC came up with a lot of innovative programs1964- BBC2 to provide experimental and new kinds of programs1967- Color broadcasting1971- Radio licenses were abolishedBBC saw its popularity and income increase subsequently

Need for RestructuringUntil 1982 BBC1,BBC2,ITV and Channel 4Terrestrial BroadcastingEarly 1980s Satellite broadcasting1982- News corporation purchased it and re-launched in 1984 as Sky ChannelMarch 1990 British Satellite Broadcasting(BSB) ; both companies lost huge amounts BSkyB to compete against BBCCable Television end of 1990 124 licenses to independent cable operatorsBBC faced pressure to reduce cost of operationsSir John Birt was appointed as Director GeneralReduced workforce, merged the news divisions, expanded overseas by JV, sold home transmission division, offered BBC News 24 without and subscription fee, imported hit serials from US, etc.Late 1990s- Digital Technology in UK far superior in terms of picture quality and number of channels, accessing internet, etc.

Contd..1997 BBC Online website & BBC Worldwide (involved in global channels, content and production)1998- BBC Choice (complete digital broadcast)1993 criticism for Producer Choice concept- abysmal act of vandalism by media and industry observersIn another effort to restructure Birt separated the production and Broadcasting divisionsHe felt that audience views was not considered (producer controlled organization)Birt made BBC bigger with 190 business unitsNew department called Corporate Centre to provide key strategic services (legal, planning,personnel)Used services from around 5 management consultancies (22m)No cooperation between the various departments

Contd..Audience share fell from 51% in 1981 to less than 38% in 2000Employee morale was at a real lowAnalysts cautioned about the huge effect on corporates revenueThe insisted on abandoning the license fee Take up commercial advertising, privatization through share holding, etc to fund BBCAnalysts felt that BBC should generate more revenues through advertising rather than through license fee

BBC Under Sir John BirtMeasures, McKinseys 7S Model and Criticism of Birts measures

Measures Taken by Sir John Birt

7s Model for Birts Measures

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Criticism Of Birts MeasuresProducer ChoiceProducers favored outsidersDescribed as Abysmal Act of VandalismSeparation of Production and Broadcast DivisionBroadcast Commissioners had little faith in in-house productionStarted Corporate CenterTo provide key strategic services to BBCLack of Cooperation between various departmentsRevenue Model

BBC Under Greg DykeMeasures Taken, McKinseys 7S Model & Criticism

Measures taken by Greg DykeGreg Dyke became DG on Feb 1, 2000Organizational structure extremely complex with too many layers and bureaucracy.One BBC program was launched with the ideology that everybody should enjoy their job and are inspired and united to make great programs and delivering outstanding services.

One BBCThe Rational Goal ModelThe Managerial Process ModelOrganizational Development ModelStructural Functional Model

7s Model for Dykes Measures

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BBCs Org. Chart under Dyke

Criticism of Dykes MeasuresHutton Report- Editorial system at the BBC was defective- The BBC management

Critics from various newspapers - The Times Blizzard of blame chills BBC- The Guardian Crisis cuts through the BBC

Decrease in number of listeners

Committee led by Neil

BBC Under Mark ThompsonMeasures, McKinseys 7S Model and Criticism of Thompsons measures

BBC Under Mark ThompsonA British media executiveEditor of broadcasts (Newsnight,Panorama)Director-General of BBC from 2004 to 2012

BBC, a more creative and efficient digital broadcaster

BBC's Digital Media Initiative Aimed to modernise the corporations production and archiving methods. A big move to reform the 82 years old BBC and get ready for a completely different world. Project partly outsourced (Siemens and Atos). It lasted 5 years with a spend of almost 98 M.

http://www.youtube.com/watch?v=ok7wIkdgfIY

CHARTER MANIFESTO

BBC Journalism CollegeLaunched in June 2005, 5 million investmentInteractive e-learning sessions, seminars, workshops across the globeFive editorial principles mentioned in the Neil reportTraining passports after completion of trainingTraining mandatory for promotionIn-house course material, except for material used in external training activitiesEthics and value at the editorial level

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CriticismBBC Journalism CollegeCore journalistic skills improved amidst the employeesValues and Ethics imparted to the employeesHelped journalists to get accustomed to the growth in new technology

Creative Future Strategy

Creative Future Strategy

CriticismTo deliver public service content in whatever media and on whatever device, whether they are at home or on the moveWebsites directly targeted commercial websites like MySpace to draw the attention of the youth69.2 million into the bbc.co.uk website although a colossal investment, proved to be worthwhileThompson foresaw the interests, the likes and the dislikes of the next generation audience

Organisational Structure Under ThompsonFuture media and TechnologyMarketing Communication and AudiencesJournalismAudio and MusicBBC Vision

SWOT ANALYSISSTRENGTHS

Leader with a Strategic frame of mind, attacked big issues in television.Framework to assess quality and value of programs before launchBBC Website ensured transparency of informationBBC Journalism College training for journalists to impart accurate, world class newsIn 2006, Creative Future Strategy made content more appealing, easily available to the young audience.

WEAKNESSES

Hutton Report exposed BBCs vulnerable editorial processCriticism of being a copycatSize of the broadcast channel was huge, which threatened jobs of employees in both program development and other activities leading to poor employee moraleCriticisms on over-payment to top executives beyond salary norms

SWOT ANALYSISOPPORTUNITIES

Sir John Birt 1990s - Popularity of daily soaps, serials ER, X-Files etc. which were popular world overTo overcome the worst crisis in BBCs 80 year old historyOpportunity to expand to new genres education, cultural, and other activities & appeal to young audiences

THREATS

Digital Technologys superiority compared to analog in terms of picture quality and number of channels offered

Poaching of BBCs employees by independent production agencies and other television channels.

7s Model for Thompsons Measures

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THE ROAD AHEAD

Compensation of Top executivesConflict with cutting costsRemained same or increasing every yearTelevision viewership decreasing2004-05, 20 30% hike in Basic pay, responsibilities Thompson waived his incentives(135,000P in 2005)Reduction in size of Executive board(546,000P in 2003-04 to 320,000P in 2004-05)Reduction in incentives - 30% to 10% of Basic payLater increased to market standards

License fee & BBC TrustAnalysts, politicians, competitorsCries to reject BBCs proposal to increase license Overstating of cost, while understating savings, overplay funding requirements

Not different from Board of GovernorsConflicting roles of governing and regulatingElaborate, complex and more expensive to run

Re-Telecast & Employee poachingRe-telecasts increased by 88hrs in 2004-0524,000hrs of re-telecasts across BBC channelsRe-telecasts(15k to 30k pounds) while Original series(500k to 600k pounds)Rejection of BBC proposal, Cost reduction

Poaching by independent production companiesChannel controllers, producers, directorsHigher pay, share in profits

Creative FutureLaunch websites of high quality audio and video in sports, music, etc for attracting youthAgainst commercial websites MySpaceQuestioned rationale of using public moneyCommercial website would hit online and regional newspaper industry69.2 million pounds spend in 2004-05 on bbc.co.uk License money meant for television operations

Appreciation for ThompsonEarlier never targeted young audienceFunding of advertisers for the new generationAble to see a world where all media products will be delivered and accessed by internet Changed the old mind set into new Clearly understood what needs to be done

Kotters 8 Step Change Model