Relaxed and engaging in person, Barry Diller's no-nonsense reputation as a manager preceded him to HBS.
What about the time he allegedly hurled an object at his office wall, sending it straight through to the other side? It's true, Diller confessed. The projectile was not aimed at anyone personally, he explained, and the walls were thin. (The colleague next door hung a frame around the resulting hole.)
And how about the time, as a young man just getting his start as a cameraman, when he allegedly and accidentally dollied straight into a top executive, knocking the man down along with the lectern he was standing behind? Also true, said Diller, who was new at the job and had misinterpreted the cue in his earpiece. In any case, the incident was captured on tape. "They knew my name after that," he said.
As a keynote speaker at the HBS Media Conference on April 14, Diller discussed management experiences good and bad in a Q&A format with Katherine Liu, a Harvard MBA candidate, before a crowd of business students. He talked about his move from the entertainment side of business, where he was chairman and CEO of Fox Inc. from 1984 to 1992, and prior to that, head of Paramount Pictures Corporation and VP for ABC Entertainment, to the media side, where he is now chairman and CEO of IAC/InterActiveCorp, an interactive commerce company whose many properties include Hotels.com, Match.com, and LendingTree.
His career began as a mailroom clerk at the William Morris Agency. Diller offered the students at HBS his advice with the caveat, "All I have is the sum of my experience."
Consolidation of media seems inevitable today, Diller said. Five or ten years ago there was still room for independent production companies and entrepreneurial energy.
"That's virtually gone now," he said. "In fact, independence is no longer really practical. …You can't really start any kind of play and not run into these very, very integrated companies. So the loss of independence is the worry. People say, 'Well, there are more voices than there have ever been,' and that's all true... but in fact real independence is, I think, in danger.
"What to do? The only thing I think you can do, because you're not going to stop consolidation from happening, is to put in rules and regs. I think 30 percent of everything that goes through these big distribution pipes cannot be owned by any of them, either by buying from each other or by a direct process."
| Don't ever use that word synergy. It's a hideous word. |
Asked why he was initially attracted to QVC, the shopping network, Diller said he was curious about interactivity and enjoyed the high-speed cycle of action and reaction between buyer and seller. He also thought the retailing model had a lot of merit—"to sell for more than you pay"—for extension into the Internet arena.
Diller agreed with one student's observation that he now seems to be operating his businesses fairly independently, despite apparent connections among, say, Citysearch.com, a guide to entertainment, hotels, and restaurants, Ticketmaster, and Match.com, an online dating site.
"Don't ever use that word synergy. It's a hideous word," Diller told the group. "The only thing that works is natural law, I think." Given enough time, there will be natural relationships between IAC's existing property and those it wants to develop, he said. Until then, nothing should be done that could possibly kill an existing business.
"We're in the very early stages of this radical revolution. So our take on this is not to manhandle it."
A tough boss
Diller disagreed with his interlocutor's suggestion that he is tough to work with. Although he may appear tough to some, Diller said the bottom line for him in any discussion with colleagues is to get at the truth of the matter.
"Rarely in business do you ever get enough facts to make a decision that's got a factual basis. It's usually a minute or a mile short. Neither of them make any difference, just that it means [the solution is] not obvious. Well, if it's not obvious and you can't find it factually, you've got to find it someplace—you've got to find it in the air, ...you've got to hear it, you've got to find it in a way that makes sense to you. The process of doing that, for me at least, is filled with creative conflict."
Creative conflict can be "noisy," he said. "I think you have to pull barriers down to get at what people really think." Although some people don't like that kind of frank give-and-take atmosphere, "it's totally fair," he said. "We have a rule that there is no stupid idea—even though we may say, 'This idea is the dumbest thing we ever heard.' Nothing you say, no matter how stupid it is, is stupid. That leap of illogic is vital to the process."
On the plus side, business people stand a chance of making a mark in the Internet-media-interactivity arena in a way they never can in the entertainment business, Diller said. Entertainment decisions—between, for example, movie A or movie B—must be made by a few individuals at the top of the hierarchy, just like any effective editorial process, he said.
At his company, however, "the meshing of gears" of goods, services, and distribution involves many people at many levels. From a pool of 25,000 employees, there are probably 5,000 "critical people" in the enterprise, he said. As a manager, he has had to learn to place authority and responsibility at the lowest possible organizing levels.
"There are no lessons or rules except to know that while certainly people get paid lots of money at different levels in the entertainment business, I think that unless you are up for an insecure, dicey existence—unless you must do it—you shouldn't do it," said Diller.
| I think you have to pull barriers down to get at what people really think. |
As a manager, the switch from entertainment to media has not been an easy one for him, he added. He brought a lot of what he had learned from the entertainment side to his new career, but he had to "unlearn" a lot as well.
"In the entertainment business you don't really have to be a good manager and some people would even argue you shouldn't be a very good manager because it won't do you any good. In this [interactive] world, you've really got to think about management. You've really got to set time and thoughtful care to it. I had very, very little experience."
Of course, technology is integral to every part of media, and Diller said he enjoys the creative challenges "because there are no rules." Part of the enjoyment carries over from his entertainment days. He still has to listen and ask: What's the idea, and what kind of resources can the person bring to that idea, meanwhile "keeping the walls safe enough" so investors don't get too upset waiting for a return.
In sum, he said, success is always based on the experience a person has earned before. "But if your experience is any good, everything is fresh," he added.
A team of MBA students organized the 2004 HBS Media Conference on April 15. 