Reversing the Losing Streak on Sesame Street

When CEO Jeffrey Dunn took over Sesame Street in 2014 and made a licensing arrangement with HBO, many people were skeptical this would take the program in the right direction. But with a new mission to, “Make kids smarter, stronger, and kinder,” and a lot more innovation, it seems the opposite is in the works. Professor Rosabeth Moss Kanter, who wrote the case with Assistant Professor Ryan Raffaelli, talks about reversing a losing streak with new partnerships and in the process determining how to answer foundational questions like, “Who are we if we make this deal?”

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Brian Kenny: If the names Grover, Oscar the Grouch, Big Bird, and Cookie Monster bring a smile to your face, you must be among the tens of millions of people who grew up watching Sesame Street on public television. Since debuting in 1969, the show that blazed the trail for education programming has influenced four generations collecting 159 Emmys, multiple Grammy awards, and featuring hundreds of celebrities along the way. But after 45 years of sunny days, dark clouds were gathering.

Today we'll hear from Professor Rosabeth Moss Kanter about her case Sesame Workshop: Bringing Big Bird Back To Health. I'm your host Brian Kenny, and you're listening to Cold Call.

Rosabeth Moss Kanter is a leading scholar of leadership and innovation who advises CEOs of global firms on change initiatives and turnarounds. She's also Chair and Director of the Harvard University advance leadership initiative which is an innovation that helps successful leaders at the top of their professions apply their skills to national and global challenges and their next life stage and both of those things are highly relevant to the conversation we're about to have. Thank you so much for joining me.

Rosabeth Moss Kanter: It's my pleasure.

Kenny: We were chatting before we began recording about the fact that I remember watching this when I was in kindergarten. I remember my mother plumping me down and saying, you know, "Watch this great new show." And my children watched it and I'm sure their children will too as long as they're successful in their endeavors here--but thank you for writing the case.

Rosabeth Moss Kanter: Oh, it was a pleasure. Nothing is as cuddly as those wonderful dancing Elmos. Big Bird is still an icon, so the characters are one of the greatest assets of Sesame Workshop.

Kenny: And also they were pioneers in educational programming. But if you could begin by setting up the case for us. Who's the protagonist and what's on his mind?

Rosabeth Moss Kanter: So Jeffrey Dunn, Jeff Dunn, became CEO of Sesame in 2014 and we show him at two years into his tenure, reflecting on the difficult changes he's had to make and what still lies ahead and among those challenges is one that's a little controversial. Taking a not for profit public television vehicle and creating an arrangement, a licensing arrangement, with HBO.A commercial cable station.

Kenny: Right, that was a big deal and we'll get into that too.

Rosabeth Moss Kanter: He's reflecting on having done that and what he's doing to change the culture because you can be as successful as Sesame Workshop was for so many years and then get into all the problems of why winning streaks end. They end because you get a little complacent, you take your status for granted, you don't see the competition, you don't see all the changes that are on the horizon and for them, the shift to digital as opposed to TV broadcasting, huge challenge.

Kenny: Jeff was part of the Advanced Leadership Initiative and that's truly important aspect of this story. Could you just tell listeners what ALI as we call it here is.

Rosabeth Moss Kanter: ALI is a year of serious education for people at the top of their fields and professions that are transitioning to their next years of service. And so Jeff came to ALI after a very successful career in broadcast television, children's television, the commercial side of children's television, all those competitors that Sesame Workshop hadn't anticipated…

Kenny: Right.

Rosabeth Moss Kanter: He worked for. He came to ALI, he learned a lot about the mission of what he wanted to do later in life for children and education and part way through the board of Sesame Workshop asked him if he would do a little consulting for them so in the summer it was in essence his summer internship. In his summer internship he collected a lot of information, spent a lot of time at Sesame Workshop and at the end of the summer they asked him to be CEO. Well he hadn't quite finished his fellowship here, but luckily he had finished the bulk of it.

Kenny: Yes.

Rosabeth Moss Kanter: So he did decide to become CEO at the end of September and he said he carried a lot of lessons with him from ALI but one of the big shocks for him was the difference between the not for profit world and the for profit world. They were still working with the same technology around broadcast TV that he was familiar with, and they were even dabbling in digital. But it was the mentality, the culture of a not for profit that struck him and he said without ALI, he would have been bewildered or he would have acted in a more authoritarian way to make changes. He wouldn't have understood.

Kenny: The case very nicely described the evolution of Sesame Street and like many good things this one began at a party. Can you talk a little bit about that?

Rosabeth Moss Kanter: It was Joan Ganz Cooney who started children's television workshop. She was one of the number of women by the way, who were children's television advocates, activists. There was one right in Harvard Square. Peggy Charren who's started Action For Children's Television, and they were pioneers and luckily Joan Ganz Cooney found the Muppets and it's the Muppets that are the cute, fuzzy creatures that are the great iconic symbols but it was also a way to teach math and literacy. Every program was sponsored by a letter and a number.

Kenny: Right.

Rosabeth Moss Kanter: And so, it went on for many years in it's not for profit form and when Jeff came he realized, they're bleeding cash. They need a turnaround on many levels. They needed a financial turnaround, a cultural turnaround, and a strategic turnaround. And they were trying to negotiate with PBS Public Broadcasting to get a little more funds but PBS wasn't a big funder and didn't want to renegotiate terms even though PBS is now today getting Sesame Street for free. And it was at a party that Sherrie Westin found herself sitting next to the head of HBO. Well actually, that's relevant to the case because I find in many mergers that I teach about, it all begins because the CEOs were sitting next to each other in first class on some flight from Europe. And so the idea that a fortuitous encounter could lead to a major strategic alliance.

Kenny: It was just serendipitous but you know, the fit was there.

Rosabeth Moss Kanter: The fit was there so they sit down, have a meeting and the Sesame people including Jeff himself, he had only been there about little more than six months, but he understands you just don't give away this brand to a commercial cable TV system. What's that going to do to the trust the public has in this? And so they negotiated very tough terms. I mean HBO had to agree that Sesame Street episodes would air exclusively on HBO for nine months but then PBS Public Broadcasting would get them for free.

Kenny: And I remember when this hit the news. This was a big deal and you know, there were a lot of people who were quite upset about it as you eluded to. Can you talk a little bit about that?

Rosabeth Moss Kanter: Well externally, the press is saying ... in essence, "Burt and Ernie have sold out. Burt and Ernie have gone commercial. Cookie Monster, what are you going to feed Cookie Monster these days?" Which was always controversial in itself by the way because when they tried to make Cookie Monster into Veggie Monster, it didn't work.

Kenny: It's just not the same.

Rosabeth Moss Kanter: It's not the same. So externally there was very bad press, low approval ratings and internally, people who were loyal and committed because of the mission of this company were rattled. What does this do to our mission? What does it do to our identity? And so the case works around a lot of things my colleague here Ryan Raffaelli has written about organization identity. Who are we if we make this deal? And so Jeff had to think a lot about the fact that organizations have purposes. That would be true of a for profit company too.

Kenny: Sure.

Rosabeth Moss Kanter: But in this case, it's the major reason for working there. I'm sure that salaries were competitive but probably not as good as they could have gotten in their neighborhood. They were in the neighborhood of downtown mid-Manhattan, glamorous TV production and so it was very important. So among the things that he had done, he had already tried to simplify the mission statement and it's a brilliant and wonderful mission statement.

Kenny: What is it?

Rosabeth Moss Kanter: Make kids smarter, stronger, and kinder.

Kenny: Yes.

Rosabeth Moss Kanter: Yeah, so it doesn't say anything about cable TV versus PBS. It doesn't even say they have to do TV, which leads to another thing that we can talk about that he had to do strategically. He has the financial turnaround which means now they can make new programs because what had happened was they had to stop producing new programs cause they're running out of money. Now that also affects your sense of 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. But there were a lot of fears in that case that HBO would make demands, that the neighborhood would have to look upscale.

Rosabeth Moss Kanter: Whatever their demands might be, I think they were misreading HBO because the appeal of the program is it's so intensely urban. And HBO didn't have children's programming at the time so Sesame could set its own terms. But they now aren't bleeding cash, the financial turnaround is there, but what about the cultural turnaround? Jeff came into an organization that had been operating roughly the same way. They had some innovations through the years but the innovations weren't enough, they didn't have a breakthrough the way the original characters and the original shows were breakthroughs.

Kenny: Right.

Rosabeth Moss Kanter: And meanwhile, television was changing all around them because media was changing because it's digital. Shorter attention spans, different formats and they had been wedded to the one hour a day long form.

Kenny: That's unheard of these days, right?

Rosabeth Moss Kanter: Yeah, kids ... Well if you could have them sit an hour you have to be lively. You can make an hour appealing I mean, after all our classes are still eighty minutes and I taught this case over two and a half hours and people seemed attentive but it is that you needed much more flexibility in formats and there was much more competition. There was more children's television competition, often well funded. Nickelodeon for kids. Disney, Dora The Explorer was something that Jeff Dunn was partly responsible for and Dora, an incredibly popular character.

Kenny:

I'm wondering what was the motivation for HBO to do this? They have Game of Thrones, I mean it seems like their programming, their original programming in particular is very adult oriented. You know, why were they interested in the children's programming?

Rosabeth Moss Kanter: Well, we could delve a lot more into strategy but first of all because it's an image thing for them too. I mean, Sesame Infuses them with a sense of purpose but also kids have parents and parents get hooked on a cable package and they want certain cable programming and so this helps solidify HBO's position in that cable package.

The economics of cable are that you have to be in a bundle that the cable providers want to sell and ... But the culture within Sesame had been a little stuck in the past, not entirely. They're still attracting creative people but they didn't have a real breakthrough and what happens to companies that start declining, sliding downhill. I wrote about this in my book Confidence About Losing Streaks. How does a losing streak begin? It begins 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."

And so Jeff, as the turnaround guy had to turn around this losing streak mentality to a winning streak mentality in the same way you do it in any company that's declining or a sports team that starts losing. You need to not only lift up their spirits through pep talks, which is a little superficial. You need to reverse those symptoms of a losing streak. So they needed a lot more innovation. So ironically, one thing he did was shut down an innovation center that wasn't doing very much. It was kind of incremental.

Kenny: Right.

Rosabeth Moss Kanter: It wasn't really adding a lot. And later he replaced that with external investments which is another thing a lot of companies are doing. You can't force people inside who've been doing it the same way forever, to change their habits but you go outside, you get great new ideas and when you partner with those startups and connect them to the people inside, new creative sparks begin. He worked on the silos, he got people communicating with one another. He found an organization with weak accountability, which he attributed in part to the nonprofit form. He said, "They thought if you even thought about the cost efficiency of what you were doing. You were selling out.”

And so he wanted accountability, he partly did that by separating out the charitable side, the philanthropic side of Sesame 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. They need a lot of metrics. The philanthropic side, we now say these days they need metrics too but the truth is the philanthropic side gets grants and works on a different set of issues. So he separated those while creating much more collaboration and all of this was part of a cultural turnaround.

Kenny: And these are, these are lessons that could apply much more broadly to almost any industry, any firm, a new leader coming into this kind of a situation is probably going to have to address, maybe not the nonprofit, you know, piece of it, but all the other things you're talking about sound very familiar.

Rosabeth Moss Kanter: Oh, it's very familiar. It's very familiar. I chose this to teach because it would fit so nicely in the understanding of leading change and transformation which is what I teach. So, the side of Sesame that needs to look the most like the TV producers, the content producers, whoever they are has to think about metrics and discipline and accountability and I think their foundation ought to think a little bit more about that but has the freedom of working on a different scale but they fit together because without that not for profit sense of mission, its rationale for attracting the best creative talent would itself disappear.

Kenny: And we know how important that sort of mission focus is to the millennial generation that's coming up and to recruiting the best talent. Even private firms are going to have to find what their sort of non-profit personality is, and be able to express that.

Rosabeth Moss Kanter: Sesame Street, the program, the main core program, certainly has that “change the world” philosophy. I mean, we all love the characters there. They're so memorable and wonderful but Sesame Street has had huge impact on the world. Studies have shown that it has had more impact in the United States on early childhood education and educational outcomes for children later in life than any other single program, including the government program Head Start. Which is a great success. Sesame Street is an even bigger success so they are doing for pre-school children what we say needs to be done. They're enlarging their brains, they're giving them food for their brains for free. Over broadcast television and hopefully they're doing it across all channels now. They have YouTube. They have some new characters. But at the core are these iconic characters who teach and now they're teaching not only the smarter part and the stronger part, but I love the fact that Jeff has them working on how do you teach kindness.

Boy, do we need kindness. And if this shows us anything for in our HBS Alums, for executives for whoever they are, it is that a company, a business can have an inspiring social mission and be tough-minded at the same time.

Sesame's latest exciting partnership is with IBM for Watson. The Watson cognitive computing. Watson the computer that won Jeopardy. I'd like Big Bird to shake hands with Watson someday. But that's a great partnership and it's a for profit partnership because it says we can develop educational technology that learns from the style of the individual child, and is more tailored to the child. So again, these blurred lines and which is exciting because it says that the business world has lots of room for partnerships with social missions.

Kenny: That's a fabulous case. Thank you so much for joining us today.

Rosabeth Moss Kanter: Thank you, Brian. My pleasure.

Kenny: You can find the Sesame Workshop case along with thousands of others in the HBR case collection at HBR.org. I'm Brian Kenny, your host and you've been listening to Cold Call, the official podcast of Harvard Business School.

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Brian Kenny: If the names Grover, Oscar the Grouch, Big Bird, and Cookie Monster bring a smile to your face, you must be among the tens of millions of people who grew up watching Sesame Street on public television. Since debuting in 1969, the show that blazed the trail for education programming has influenced four generations collecting 159 Emmys, multiple Grammy awards, and featuring hundreds of celebrities along the way. But after 45 years of sunny days, dark clouds were gathering.

Today we'll hear from Professor Rosabeth Moss Kanter about her case Sesame Workshop: Bringing Big Bird Back To Health. I'm your host Brian Kenny, and you're listening to Cold Call.

Rosabeth Moss Kanter is a leading scholar of leadership and innovation who advises CEOs of global firms on change initiatives and turnarounds. She's also Chair and Director of the Harvard University advance leadership initiative which is an innovation that helps successful leaders at the top of their professions apply their skills to national and global challenges and their next life stage and both of those things are highly relevant to the conversation we're about to have. Thank you so much for joining me.

Rosabeth Moss Kanter: It's my pleasure.

Kenny: We were chatting before we began recording about the fact that I remember watching this when I was in kindergarten. I remember my mother plumping me down and saying, you know, "Watch this great new show." And my children watched it and I'm sure their children will too as long as they're successful in their endeavors here--but thank you for writing the case.

Rosabeth Moss Kanter: Oh, it was a pleasure. Nothing is as cuddly as those wonderful dancing Elmos. Big Bird is still an icon, so the characters are one of the greatest assets of Sesame Workshop.

Kenny: And also they were pioneers in educational programming. But if you could begin by setting up the case for us. Who's the protagonist and what's on his mind?

Rosabeth Moss Kanter: So Jeffrey Dunn, Jeff Dunn, became CEO of Sesame in 2014 and we show him at two years into his tenure, reflecting on the difficult changes he's had to make and what still lies ahead and among those challenges is one that's a little controversial. Taking a not for profit public television vehicle and creating an arrangement, a licensing arrangement, with HBO.A commercial cable station.

Kenny: Right, that was a big deal and we'll get into that too.

Rosabeth Moss Kanter: He's reflecting on having done that and what he's doing to change the culture because you can be as successful as Sesame Workshop was for so many years and then get into all the problems of why winning streaks end. They end because you get a little complacent, you take your status for granted, you don't see the competition, you don't see all the changes that are on the horizon and for them, the shift to digital as opposed to TV broadcasting, huge challenge.

Kenny: Jeff was part of the Advanced Leadership Initiative and that's truly important aspect of this story. Could you just tell listeners what ALI as we call it here is.

Rosabeth Moss Kanter: ALI is a year of serious education for people at the top of their fields and professions that are transitioning to their next years of service. And so Jeff came to ALI after a very successful career in broadcast television, children's television, the commercial side of children's television, all those competitors that Sesame Workshop hadn't anticipated…

Kenny: Right.

Rosabeth Moss Kanter: He worked for. He came to ALI, he learned a lot about the mission of what he wanted to do later in life for children and education and part way through the board of Sesame Workshop asked him if he would do a little consulting for them so in the summer it was in essence his summer internship. In his summer internship he collected a lot of information, spent a lot of time at Sesame Workshop and at the end of the summer they asked him to be CEO. Well he hadn't quite finished his fellowship here, but luckily he had finished the bulk of it.

Kenny: Yes.

Rosabeth Moss Kanter: So he did decide to become CEO at the end of September and he said he carried a lot of lessons with him from ALI but one of the big shocks for him was the difference between the not for profit world and the for profit world. They were still working with the same technology around broadcast TV that he was familiar with, and they were even dabbling in digital. But it was the mentality, the culture of a not for profit that struck him and he said without ALI, he would have been bewildered or he would have acted in a more authoritarian way to make changes. He wouldn't have understood.

Kenny: The case very nicely described the evolution of Sesame Street and like many good things this one began at a party. Can you talk a little bit about that?

Rosabeth Moss Kanter: It was Joan Ganz Cooney who started children's television workshop. She was one of the number of women by the way, who were children's television advocates, activists. There was one right in Harvard Square. Peggy Charren who's started Action For Children's Television, and they were pioneers and luckily Joan Ganz Cooney found the Muppets and it's the Muppets that are the cute, fuzzy creatures that are the great iconic symbols but it was also a way to teach math and literacy. Every program was sponsored by a letter and a number.

Kenny: Right.

Rosabeth Moss Kanter: And so, it went on for many years in it's not for profit form and when Jeff came he realized, they're bleeding cash. They need a turnaround on many levels. They needed a financial turnaround, a cultural turnaround, and a strategic turnaround. And they were trying to negotiate with PBS Public Broadcasting to get a little more funds but PBS wasn't a big funder and didn't want to renegotiate terms even though PBS is now today getting Sesame Street for free. And it was at a party that Sherrie Westin found herself sitting next to the head of HBO. Well actually, that's relevant to the case because I find in many mergers that I teach about, it all begins because the CEOs were sitting next to each other in first class on some flight from Europe. And so the idea that a fortuitous encounter could lead to a major strategic alliance.

Kenny: It was just serendipitous but you know, the fit was there.

Rosabeth Moss Kanter: The fit was there so they sit down, have a meeting and the Sesame people including Jeff himself, he had only been there about little more than six months, but he understands you just don't give away this brand to a commercial cable TV system. What's that going to do to the trust the public has in this? And so they negotiated very tough terms. I mean HBO had to agree that Sesame Street episodes would air exclusively on HBO for nine months but then PBS Public Broadcasting would get them for free.

Kenny: And I remember when this hit the news. This was a big deal and you know, there were a lot of people who were quite upset about it as you eluded to. Can you talk a little bit about that?

Rosabeth Moss Kanter: Well externally, the press is saying ... in essence, "Burt and Ernie have sold out. Burt and Ernie have gone commercial. Cookie Monster, what are you going to feed Cookie Monster these days?" Which was always controversial in itself by the way because when they tried to make Cookie Monster into Veggie Monster, it didn't work.

Kenny: It's just not the same.

Rosabeth Moss Kanter: It's not the same. So externally there was very bad press, low approval ratings and internally, people who were loyal and committed because of the mission of this company were rattled. What does this do to our mission? What does it do to our identity? And so the case works around a lot of things my colleague here Ryan Raffaelli has written about organization identity. Who are we if we make this deal? And so Jeff had to think a lot about the fact that organizations have purposes. That would be true of a for profit company too.

Kenny: Sure.

Rosabeth Moss Kanter: But in this case, it's the major reason for working there. I'm sure that salaries were competitive but probably not as good as they could have gotten in their neighborhood. They were in the neighborhood of downtown mid-Manhattan, glamorous TV production and so it was very important. So among the things that he had done, he had already tried to simplify the mission statement and it's a brilliant and wonderful mission statement.

Kenny: What is it?

Rosabeth Moss Kanter: Make kids smarter, stronger, and kinder.

Kenny: Yes.

Rosabeth Moss Kanter: Yeah, so it doesn't say anything about cable TV versus PBS. It doesn't even say they have to do TV, which leads to another thing that we can talk about that he had to do strategically. He has the financial turnaround which means now they can make new programs because what had happened was they had to stop producing new programs cause they're running out of money. Now that also affects your sense of 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. But there were a lot of fears in that case that HBO would make demands, that the neighborhood would have to look upscale.

Rosabeth Moss Kanter: Whatever their demands might be, I think they were misreading HBO because the appeal of the program is it's so intensely urban. And HBO didn't have children's programming at the time so Sesame could set its own terms. But they now aren't bleeding cash, the financial turnaround is there, but what about the cultural turnaround? Jeff came into an organization that had been operating roughly the same way. They had some innovations through the years but the innovations weren't enough, they didn't have a breakthrough the way the original characters and the original shows were breakthroughs.

Kenny: Right.

Rosabeth Moss Kanter: And meanwhile, television was changing all around them because media was changing because it's digital. Shorter attention spans, different formats and they had been wedded to the one hour a day long form.

Kenny: That's unheard of these days, right?

Rosabeth Moss Kanter: Yeah, kids ... Well if you could have them sit an hour you have to be lively. You can make an hour appealing I mean, after all our classes are still eighty minutes and I taught this case over two and a half hours and people seemed attentive but it is that you needed much more flexibility in formats and there was much more competition. There was more children's television competition, often well funded. Nickelodeon for kids. Disney, Dora The Explorer was something that Jeff Dunn was partly responsible for and Dora, an incredibly popular character.

Kenny:

I'm wondering what was the motivation for HBO to do this? They have Game of Thrones, I mean it seems like their programming, their original programming in particular is very adult oriented. You know, why were they interested in the children's programming?

Rosabeth Moss Kanter: Well, we could delve a lot more into strategy but first of all because it's an image thing for them too. I mean, Sesame Infuses them with a sense of purpose but also kids have parents and parents get hooked on a cable package and they want certain cable programming and so this helps solidify HBO's position in that cable package.

The economics of cable are that you have to be in a bundle that the cable providers want to sell and ... But the culture within Sesame had been a little stuck in the past, not entirely. They're still attracting creative people but they didn't have a real breakthrough and what happens to companies that start declining, sliding downhill. I wrote about this in my book Confidence About Losing Streaks. How does a losing streak begin? It begins 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."

And so Jeff, as the turnaround guy had to turn around this losing streak mentality to a winning streak mentality in the same way you do it in any company that's declining or a sports team that starts losing. You need to not only lift up their spirits through pep talks, which is a little superficial. You need to reverse those symptoms of a losing streak. So they needed a lot more innovation. So ironically, one thing he did was shut down an innovation center that wasn't doing very much. It was kind of incremental.

Kenny: Right.

Rosabeth Moss Kanter: It wasn't really adding a lot. And later he replaced that with external investments which is another thing a lot of companies are doing. You can't force people inside who've been doing it the same way forever, to change their habits but you go outside, you get great new ideas and when you partner with those startups and connect them to the people inside, new creative sparks begin. He worked on the silos, he got people communicating with one another. He found an organization with weak accountability, which he attributed in part to the nonprofit form. He said, "They thought if you even thought about the cost efficiency of what you were doing. You were selling out.”

And so he wanted accountability, he partly did that by separating out the charitable side, the philanthropic side of Sesame 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. They need a lot of metrics. The philanthropic side, we now say these days they need metrics too but the truth is the philanthropic side gets grants and works on a different set of issues. So he separated those while creating much more collaboration and all of this was part of a cultural turnaround.

Kenny: And these are, these are lessons that could apply much more broadly to almost any industry, any firm, a new leader coming into this kind of a situation is probably going to have to address, maybe not the nonprofit, you know, piece of it, but all the other things you're talking about sound very familiar.

Rosabeth Moss Kanter: Oh, it's very familiar. It's very familiar. I chose this to teach because it would fit so nicely in the understanding of leading change and transformation which is what I teach. So, the side of Sesame that needs to look the most like the TV producers, the content producers, whoever they are has to think about metrics and discipline and accountability and I think their foundation ought to think a little bit more about that but has the freedom of working on a different scale but they fit together because without that not for profit sense of mission, its rationale for attracting the best creative talent would itself disappear.

Kenny: And we know how important that sort of mission focus is to the millennial generation that's coming up and to recruiting the best talent. Even private firms are going to have to find what their sort of non-profit personality is, and be able to express that.

Rosabeth Moss Kanter: Sesame Street, the program, the main core program, certainly has that “change the world” philosophy. I mean, we all love the characters there. They're so memorable and wonderful but Sesame Street has had huge impact on the world. Studies have shown that it has had more impact in the United States on early childhood education and educational outcomes for children later in life than any other single program, including the government program Head Start. Which is a great success. Sesame Street is an even bigger success so they are doing for pre-school children what we say needs to be done. They're enlarging their brains, they're giving them food for their brains for free. Over broadcast television and hopefully they're doing it across all channels now. They have YouTube. They have some new characters. But at the core are these iconic characters who teach and now they're teaching not only the smarter part and the stronger part, but I love the fact that Jeff has them working on how do you teach kindness.

Boy, do we need kindness. And if this shows us anything for in our HBS Alums, for executives for whoever they are, it is that a company, a business can have an inspiring social mission and be tough-minded at the same time.

Sesame's latest exciting partnership is with IBM for Watson. The Watson cognitive computing. Watson the computer that won Jeopardy. I'd like Big Bird to shake hands with Watson someday. But that's a great partnership and it's a for profit partnership because it says we can develop educational technology that learns from the style of the individual child, and is more tailored to the child. So again, these blurred lines and which is exciting because it says that the business world has lots of room for partnerships with social missions.

Kenny: That's a fabulous case. Thank you so much for joining us today.

Rosabeth Moss Kanter: Thank you, Brian. My pleasure.

Kenny: You can find the Sesame Workshop case along with thousands of others in the HBR case collection at HBR.org. I'm Brian Kenny, your host and you've been listening to Cold Call, the official podcast of Harvard Business School.

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