NCUB Annual Lecture delivered by Sky COO and CFO Andrew Griffith

Sky COO and CFO Andrew Griffith spoke about what academia and business can learn from each other at the NCUB Annual Lecture in London

When I was asked to give this lecture I was honoured. But as I looked into it more, I have to say, I became slightly concerned.

It wasn’t the stature of the organisation, or the level of challenge from the audience that troubled me.

It was the history… or to be more precise what has happened to your previous guests.

I read last year’s speech by Sir Leszek Borysiewicz and noticed he had recently come to the end of his term as Vice Chancellor of the University of Cambridge.

Then I looked at Gavin Patterson’s speech… who recently had to step down as CEO of BT.

Ruby McGregor-Smith? Stepped down as CEO of Mittie.

Sir Martin Sorrell.

Danny Alexander.

Hmmm.

Well, I’ve decided to take the risk and to try and break the pattern. I want to be part of this conversation because I believe there is a huge amount we can learn from each other.

“I want to be part of this conversation because I believe there is a huge amount we can learn from each other.”

And that – when you step back and think about it – academia and business have more points of similarity than points of difference.

For instance – we are each large employers. Sky has more than 30 000 employees – 25 000 of them here in the UK. Collectively you have many more.

We all depend on engaging people. Whether students or viewers, we need people to choose to pay attention at a time of ever shortening attention spans. And we are all navigating the same social and technological forces that are rapidly transforming our world.

So, today, I want to frame our conversation by focusing on three things:

• First, the context for the decisions we have to make, namely a world that is moving faster than ever before and is still accelerating;
• Second, the huge opportunities that come with this rapid change;
• And finally, the characteristics that help an organisation renew and thrive in this context – or to put it another way, what it is going to take to succeed in todays world.

A world of change

No one who has watched a child try to make a TV work by dragging a finger around the screen, or sat in an electric vehicle and wondered what sound the engine will make, has any doubt about the scale and pace of change.

When I look at my industry today, change is rapid and transformational.

Sometimes this is painted as a picture of doom and gloom, but I don’t see it that way. Yes, some things are fading away, but so much more is being created.

Take news. The best performing traditional newspaper saw circulation fall by 4% year on year. That’s the best. Most titles saw double digit falls.

But news isn’t disappearing. It’s shifting. It’s not on paper, its on your phone. That raises a huge set of issues, but its wrong to see it as decline.

Or look at traditional TV. People are watching less. In 2011, there were 678 programmes that averaged over 8 million viewers. Last year it was 201.

But on-demand viewing is rocketing.

Over the last six years, on-demand viewing to services like Sky Go, Netflix and iPlayer has increased four-fold.

Half of all viewing by 16 to 24-year olds is now on demand.

That’s not decline. That’s a huge amount of control shifting from the broadcaster to the viewer, and that’s mostly a good thing.

One of the next big transformations is going to be speech.

According to the Reuters Institute, the adoption of voice activated speakers – things like Amazon Echo or Google Home – are growing faster than the smart phone at the same point in their development.

According to IBM, more than 90% of the data ever created, came into existence this decade.

And the change is not confined to media. It is having a huge impact on the environment in which our organisations operate.

In the 1950s, the average company on the S&P 500 had a lifespan of 60 years. Today that has fallen below 20 years.

I’m sceptical of some of the claims made about the number of professions that will be destroyed by AI and how many new jobs will emerge.

It is clear though that that professional services are going to go through epoch-shifting change.

Stepping outside the world of technology, our climate is changing in a way that will have enormous consequences for our whole planet.

And our politics is changing in ways that are making all of this harder to manage.

Despite this – I remain an optimist.

I believe these changes create opportunities.

But to make the most of them, we need to address the profound questions they raise.

Such as our politics and how we preserve the common ground that underpins democracy.

This gets harder when each individual can choose their own media-feed and cocoon themselves away from perspectives they dislike.

It raises questions about our societal model of capitalism.

Wages in this country are still not at their pre-crisis peak, and the economics of pure-play tech businesses only make that situation worse.

It clearly wrong that a few individuals benefit enormously and the gains are not as widely shared as they could be.

What happens when basic tenets of society like regulation and taxes are treated as entirely optional by a handful of global companies who control so much of the technology we use to communicate?

As a country – and as society – we have to figure this stuff out.

These are big issues that I am happy to talk about in Q&A later, but I want to focus now on the questions raised for our organisations by this unprecedented pace of change.

And how we, as leaders, turn these changes into opportunities.

The core point being we don’t have the power to stop change.

The power we have is deciding how to address it. How to step in. How to embrace it.

Driving change

One case study I can offer that has ridden the wave of change is my own experience of Sky.

Sky was built on an idea of challenging the status quo.

We believed that consumers wanted, and would pay for, greater choice.

Before Sky, TV meant four channels and news strictly at 9pm.

We introduced more channels including the first 24-hour rolling news channel to the UK – not because regulation forced us to, but because we believed our customers wanted it.

Before Sky it was hard to watch sport unless you physically went to the matches.

We pioneered a breadth and depth of live sports coverage never seen before.

Film buffs would video-tape the good movies over Christmas so they had a stockpile to last till Easter.

Then Sky came along and offered entire channels dedicated to film.

And whilst – with hindsight – success seems pre-ordained, at the time we took some significant risks.

Sky didn’t make money for its first five years and for much of that time we were living hand to mouth.

I remember more than one Friday afternoon where, in finance, we sat down behind a mound of bills, making two piles – those we could afford to pay that week; and those that would have to wait.

What helped us through that challenging beginning was that none of the big players were even trying to do what we were doing. Instead, the incumbents all tried to hold the line.

I’m glad to say, we succeeded and even more than that we thrived.

As I look at the higher education sector today, I see a huge number of organisations – many of them indeed represented in this room – that are thankfully not behaving as the incumbent media players did in our experience.

But, I also know how hard it to is to marry the desire to preserve tradition with the needs of the future.

At Sky, every day we have to think about the shifting training needs of a workforce that will experience multiple careers over more years of work than ever before.

And yet, the model of formal post-school further education of three consecutive years in your early twenties, remains relatively unquestioned. University science parks are booming, but the reality of people with relevant experience to offer frictionless movement between business and academia remains far-fetched for most.

Renewal of the model is underway, but it can go much further, much faster. Indeed it must go further and faster.

The opportunity of renewal

Often, what holds us back as leaders is fear. Not personal fear of losing our jobs, but a kind of professional fear of actively tearing down the past for an uncertain future.

Some see their organisation defined by a particular type of activity and don’t want to risk losing that golden thread.

That’s what happened to Kodak.

Digital technology didn’t pass Kodak by. They invented the digital camera.

They had the patents. They had everything they needed except the vision to see that they weren’t in the film and chemicals business, they were in the picture business.

The consequence of that Kodak mindset was not the preservation of Kodak, it was its demise.

Someone else filled the gap they could have occupied.

Holding the line is rarely a formula for success.

Whereas renewal is.

And I use the word ‘renewal’ carefully.

The word ‘Change’ can feel directionless.

Renewal to me is different.

‘Renewal’ is thinking deeply about who you are, what you are for, and how best to deliver that core mission even when the environment changes.

It is about preserving your identity and living up to your values, but recognising that the delivery model for an era of AI, global mobility and social media is likely to be different.

It is exciting. It is about relishing the chance to re-invent.

That is what we are doing at Sky.

We didn’t stop at satellite multi-channel TV.

We expanded beyond television to provide broadband and mobile, because our customers wanted the complete package.

In Sky+ we invented a whole new way to watch TV whenever you wanted.

And more recently we introduced services like Sky Go that let you watch on any device you want.

As new entrants appeared, we saw the opportunity to work with them as well as compete with them – which is why you can now watch Netflix on Sky. Actively seeking to disrupt our own business model has not been straight-forward and has required a significant change in attitudes.

Many people worried about it at the time.

Yet we had a clear belief that this is what would help us deliver for a new customer base and therefore we had to embrace it and step into it.

And as a result of this approach, Sky has grown revenues every quarter since inception.

Successful characteristics

I want to finish by sharing some thoughts on four characteristics that I think are particularly important to renewal

• customer focus
• diversity
• employee engagement
• and innovation.

I offer these thoughts knowing that every organisation is different, and that as a company, we have in many ways a much simpler governance structure and set of stakeholders than many academic institutions. But I hope they are useful as you think about how you can navigate change.

Customer focus

The first thing I want to focus on is how we treat customers. In our case that is people who use our platform to watch TV, or connect to the internet, or phone their friends. For universities, it is more complex – students, users of research, commercial partners, funding bodies.

Whoever your customer is, the key thing is to recognise we only succeed if the people who rely on us succeed.

No matter how satisfied we are with our performance, the true measure of satisfaction comes from the people we work to serve.

It is surprising how often big organisations lose sight of the customer. Part of this is about metrics, but it is also about feel.

That is why I expect leaders in our business to get out, listen and learn, understand and embrace what’s going on around then and help the people they lead to do the same.

Two of the most powerful skills we have are the ability to be curious and to listen.

If you want to boost the energy level in your organisation encourage people to get out of their offices and talk to the people who use your services.

People and diversity

One of the great advantages of talking directly to customers is that they bring different points of view.

‘Group think’ is one of the most dangerous traits in any organisation – big or small – and the best remedy for that is to be open to different ideas.

And that brings me to the second trait I want to focus on: diversity of people.

I doubt any of us feel that we have fully ‘cracked’ diversity but I cannot understate how important it is as a business imperative in times of great change.

At Sky we have a range of programmes designed to increase diversity in our industry.

Sky Academy brings people from non-traditional backgrounds into the creative industries, and equips them with the skills to get on in the industry.

And we start younger too.

With Hounslow council and local secondary heads we have founded an academy secondary school next to our campus where 51% of pupils get free school meals, and a quarter have special educational needs.

So our technology team is creating a coding course for their Year 7s, our people are offering 1:1 mentoring for students and we are teaching courses in filmmaking and editing.

Employee engagement

Attracting the right talent mix is a start.

Developing their skills once they are in place comes next.

That means training, and retraining and retraining again. And we are always looking for the right partners to optimise those programmes.

Keeping talent also means looking after the workplace culture.

The entertainment industry has been rocked by the hashtag MeToo campaign, and rightly so.

Beyond that, people need to feel like the place they work doesn’t just do good work. It does good. Full stop.

That is one reason why Sky has focused so much on ocean plastic.

We saw, what our employees tell us: that our platform gives us the responsibility and opportunity to raise awareness of major issues for our country and planet.

Their passion for this issue of plastic blossomed and we backed them.

Today we have a £25 million fund investing in innovative solutions to reduce or remove ocean plastic.

But the thing that has made the biggest difference for our workforce is not the money, it is that they can see their employer focussing on wider issues in

society, taking a stand and of course following through with determination and conviction.

• We have now removed the 7 million disposable coffee cups we were using every year.
• We have taken 24 tonnes of plastic milk bottles out of our offices.
• 20 tonnes of disposable cutlery have gone.
• And by the end of the year over 120 tonnes of plastic will have been saved and all our branded products, operations and front of house will be 100% single use plastic free.
• By 2020 we will be completely single use plastic free throughout all our operations including our supply chain.
• Our experience is that people want to come and work in a place that takes these responsibilities seriously and it is no coincidence that we have seen record levels of staff engagement that in a war for talent, helps us attract and retain the best people.

Innovation

The final trait I want to focus on is how we think about innovation and risk.

No-one wants to fail, but failures happen. As a manager it is my job to ensure that they only happen where they cannot be avoided, but also to make sure that my team is not afraid of them.

Avoid failure, but don’t fear failure.

Sky has grown every quarter, so we have been successful.

But, at times, we have also failed.

Does anyone remember a portable radio device called the Sky Gnome?

No…?

That doesn’t surprise me.

It was such a poorly received product that the Gnome was rapidly put out to pasture at the bottom of a very long garden.

That’s ok – for us, if not the Gnome. We see the occasional failure as an inevitable by-product of risk-taking and renewal. More than that, we see it as an essential part of the process.

Someone once said to me: success breeds confidence, but failure breeds learning.

At Sky, the way we try and ensure no failure is ever a disaster is to make sure we have lots of opportunities to fail.

That means supporting multiple innovation projects, resourcing them properly and holding them to account for performance.

And where we want breakthrough innovations, we try and set them up to deliver breakthroughs: freeing people of the constraints that make sense for day-to-day activity, but slow-down and tie-down efforts to do things differently.

As I was writing this speech, I talked to a colleague who had given one paid talk at a university. He told me it had taken him two years to dis-enroll from that university’s pension scheme.

I don’t know how typical that is, but it does show the importance of thinking through agility at every point in a system.

So, customer-focus, diversity, employee engagement and innovation: those are just four traits I see as important to renewal, and making the most of the change that we all need to step in to – whether we like it or not.

That approach is working at Sky, and I think can be applied beyond us.

I have great admiration for the scale of what the Universities sector does in the UK and world-wide.

That is why despite all the challenges I think that the opportunities in front of us are enormous.

Britain has always punched above its weight – architects, fashion designers, nobel prize winners, lawyers. This is a country known for its invention from Isambard Kingdom Brunel and Ada Lovelace to Zaha Hadid and Jonathan Ives.

The most-studied studied second language in the world is English with more than a billion people looking to this country as a gold standard in education quality.

The next SkyQ or Deepmind, or even a replacement for the humble remote control, begins in your labs and the minds of your students.

I want our business to benefit more from the skills you have, the education for life that you provide and the innovations that you can share.

Which is why I look forward to the future and pay tribute to the important work in bringing business and universities together that NCUB promotes.

Thank you.

 For further information please contact Shivaun.Meehan@ncub.co.uk

Published: 27 November 2018