CASE STUDY: Sesame (B): Celebrating 50 Years of Helping Kids Grow Smarter, Stronger, and Kinder

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Life on Sesame Street

Roger Whaley

University of the Incarnate Word

ORGL 63CS: MSODL Capstone

Dr. Diana Garza

November 8, 2020

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Life on Sesame Street

I remember as a kid watching Sesame Street in school. It was a great show. If anybody

watched the show, they would always seem to remember Big Bird and the rest of the characters.

Sesame Street has been a television show that has been around for over 50 years. It has been

providing education and entertainment to kids all around the world. It also helps kids deal with

difficult issues that air on the news.

Like other organizations, Sesame Street has had to make some changes along the way. No

organization can keep their same strategic focus forever. They have things they have to change and

external environmental things that force them to do so. Sesame Street had to make a revolutionary

change to save the organization. They had to use Lewin’s three step model to change habits and

behavior. One of the major things they did also, was to change leadership. Changing leadership in

a crisis is sometime the best thing an organization can do.

The Writing is on the Wall

There were many signs that Sesame Workshop was in trouble. It was not only in trouble

financially, but leadership was failing, too. We must remember Sesame Workshop is a non-profit

organization. The first reason Sesame Workshop was on a losing streak was due to the

organization’s partnerships. According to Cohen et al. (2020), Sesame Workshop partnered “With

PBS for its distribution and a small amount of funding, but the funding failed to cover operating

expenses” (p.2). The sale they had from DVD sales and licensing could not make up the financial

shortage. Funding is especially important for a non-profit organization. The second sign that

Sesame Workshop was financially in trouble was that they had a huge debt. As reported by Cohen

et al. (2020), “By 2013, Sesame ran 15 to 18 million-dollar deficits off the show alone” (p.4).

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The leadership did not make the situation any better. There was at one point, as Cohen et al.

(2020) reported that, “a group of senior vice presidents, exasperated with the lack of leadership,

started meeting together to solve problems on their own” (p.5). The leadership was not in sync.

Another example of this was when Sesame Workshop decided to make products for schools. The

CEO at the time was Gary Knell and he believe he could make a profit targeting schools.

“According to Cohen et al. (2020) noted that, “CFO Daryl Mintz, that spending decision divided

people at Sesame who didn’t really believe that we could be successful in formal education” (p.4).

We have two things going on here. I think they were totally aware of the external

environment. This issue is that they failed to react to their environment outside of their

organization. They knew cable television was on the rise and there were other kids’ programs

being develop. If they would have correctly done a SWOT analysis (Strengths, Weakness,

Opportunities and Threats) they could have salvaged the Sesame Workshop, before their issues got

too enormous. They failed to see that Disney and Nickelodeon were new choices for kids to watch

and they had different characters that appeal to kids. They failed to see that one generation liked

the program, but their external environment changed.

The law of a few came into effect. That law simply says that it only take a few to deiced on

change for it to happen. This change came from stakeholders. The board of directors wanted new

leadership in 2014. They decided to hire new, CEO Jeff Dunn. Jeff Dunn was about to do a

revolutionary change. According to Burke 2017, “ Revolutionary change—a major overhaul of the

organization resulting in a modified or entirely new mission, a change in strategy, leadership, and

culture—is rare indeed” ( p.1). The first thing he did was bring in new leaders from organizations

that were not non-profit organizations. Then second thing he did was reorganize Sesame

Workshop. He divided Sesame into board business units. Cohen et al. (2020) noted, “The changes

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meant Sesame would no longer be organized by function, nor have multiple and conflicting

research groups” (p.7).

Change is Always Challenging

Whenever an organization decides to change, it always come with challenges. The changes

could be planned or unplanned. The challenges that come with the changes could be big or small.

Even if it is a small change it could still could be difficult to implement changes based on what

challenges the organization faces. Jeff Dunn faced some unique challenges. There were two

challenges that stood out amongst all that he faced.

The first challenge he faced was the deal for broadcasting rights. Sesame Workshop at the

time had a broadcasting deal with PBS and it cost Sesame Workshop 18 million dollars a year to

produce the show. Sesame Workshop paid 90% of the bill. So, Jeff Dunn decided to get another

partner after negotiations with PBS. He decided to partner up with HBO which helped cover the

production cost. The deal also gave HBO the right to broadcast the new episodes of Sesame Street

just on their network.

A second challenge he faced came with making the deal with HBO. The deal had an

undesirable appeal to people. HBO was a paid for channel and HBO was known for having risky

behavior on their channel. One way he targeted this was through marketing. Dunn and at the time

CEO of HBO did targeted press, exclusive stories, and journalist engagement. This dropped the

negative thoughts people had about the merger down by 18 %. The culture was now changing at

Sesame Workshop.

Culture at Sesame Workshop

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Sesame Workshop culture had change if it was ever again going to be profitable. Mr. Dunn

had already started his revolutionary change. According to Burke (2017), “Values, norms, deeply

held beliefs, and attitudes, as well as long-standing historical precedence, constitute primary

aspects of culture” (p.245). Most people would expect a culture change when changing CEOs. The

culture under the previous CEO, Daryl Mitnz was totally different than the one under Jeff Dunn.

The contrast in culture is apparent. Burke (2017) also stated, “Focus on changing an organization’s

culture—“the way we do things”—the most difficult aspect of organization change” (p.245).

The culture under Daryl was not innovative. It was business as usual. According to Cohen

et al. (2020), “Once an innovator, Sesame had become too tied to its past, and unwilling to take

risks in the 2010s” (p.5). The culture under him had meetings where people were walking out of.

Furthermore, Cohen explained that “The organization’s culture favored consensus, so decision-

making frequently stalled in excessive deliberations” (p.5), indicating that they had too many

meetings and they never developed new characters.

Dunn came in immediately made changes to the culture Sesame Workshop. According

Cohen et al. (2020), “To help kids grow smarter, stronger, and kinder” ( p.9). He wanted the

culture of the organization to have more communication across the two different units he

reorganized. He made it so that the CEO did not have to make the final decision on all matters. As

was stated by to Cohen et al (2020), “He made it clear that Youngwood and Westin were

accountable for running their business units” (p.9). He also made it so that the culture of the

organization did not have so many meetings. He also made it a part of the culture where

everyone’s voice could be heard about how the organization was doing and wanted employee

inputs what should change. Not only for himself to be accountable for his action, but everyone’s

actions would be accounted for.

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The New Era

Sesame Workshop New Identity

Sesame Workshop’s identity from the beginning of the show was to educate. It was going

to be an early educational leader. Sesame Workshop, core identity was teaching kids numbers and

letters. It was going to educate kids in low poverty area. This way they could close the gap between

those kids and kids with better education systems. They did this by guess appearances of superstars

using numbers and letters. They also used puppets to get kids’ attention.

I remember watching Sesame Street as a kid. My parents trusted that it was a great show.

Previous said by Cohen et al. (2020) “For millions, Sesame represented authenticity, education,

and trust, and the organization had a long history of staunchly guarding against commercialization”

(p.11). The show never advertising other products. Jeff Dunn came and all that changed. He was

now about to change the identity of Sesame Workshop.

Jeff Dunn made several moves to change the identity of sesame workshop. The first move

he made was partnership with tech companies. So, now you had Sesame character advertising

products. For example, as Cohen et al. (2020) pointed out, “Cookie Monster starred in a

commercial that showcased Apple’s hands-free iPhone capabilities as the puppet baked cookies

and agonizingly waited for them to finish” (p.11). The second move he made was he made

Sesame Workshop a philanthropic organization. He decided to give back, “Sesame launched the

Yellow Feather Fund, a Big Bird-inspired initiative designed to increase smaller individual giving”

(p. 10).

Dunn efforts to change the identity of the organization worked. Cohen et al. (2020) wrote,

“By the end of 2016, Sesame seemed to be everywhere, philanthropically and commercially”

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(p.12). Sesame was everywhere solving social issues and helping kids again. Now, the HBO deal

would take care of the budget. Now, Cohen et al. (2020) said, “Dunn could point to significant

progress made over two years: his new team was pushing Sesame to move faster and in more

organized ways; communication and performance review processes had been streamlined” (p.12).

He also made a partnership with the International Rescue Committee and Sesame Workshop had a

more of a social impact overseas. Dunn made several moves to change Sesame Workshop’s

identity and all his moves worked.

Unparalleled Leadership

Does leadership matter in an organization? Everyone’s answer to that question should be

yes. Burke (2017) stated, “But leaders do make a difference, especially in terms of organization

change” (p. 296). Jeff Dunn in two year as the leader of Sesame Workshops made a lot of

improvements. Jeff Dunn leadership turned that organization around. Jeff Dunn possess 4

leadership skills/attributes that made him successful. Dunn possessed the skill of a great thinker,

effective communicator, problem-solver, and intuitive/creative.

Dunn was a great thinker. He knew that he was about to lead a non-profit organization. He

also knew he needed money to cover production cost. The deal with a HBO was a genius one. He

was able to cover production cost and make money for the organization. He also came up with the

ideal to go commercialized.

Dunn was a great communicator and problem-solver. He knew that he that he needed his

employees’ input to change the organization. Dunn had meetings with all employees within the

organization. This way all employees knew the goal of the organization and what direction the

organization is heading. His problem solving came into play with the billboards and advertisement

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to get the perception with the HBO collaboration to change. He also solved the issue with

leadership in the company, hiring executives from profitable organizations.

Mr. Dunn was intuitive and creative. His intuitiveness saved this organization. He was able

to make the correct decision based on what he believed. His belief in partnership and expanding

made the organization competitive. Dunn hired the correct individuals and took the organization

international. His creativity made the organization philanthropic. This way the organization’s

reputation was not only for educating, but also know for giving.

Transformation for Sesame

Dunn transformation of Sesame is not done. He has made a great turnaround for the

organization. I think with all the partnerships and expansion there is still more to do. I think they

are headed in the right direction with efforts to improve individual giving and generating new

revenue. I think that he has yet to capture the heart and souls of a new generation. They are aware

of their external environment but have to be the choice leader for early childhood education

program.

Lastly, I have not heard any kids talking about Sesame Street from my opinion. Sesame

made the right choice by changing to a new CEO. Sesame is having great success now and they are

growing with expansions. He must come up with a way to keep momentum going. Burke (2017)

stated, “To maintain momentum, then, the change leader must constantly monitor the

organization’s external environment, being alert to changing forces that require adaptation to

ensure survival” (p.344). Dunn must keep coming up with ways to further develop the

organization. He did bring them back from the brinks of bankrupt or possible losing the whole

Sesame Workshop. I think he should continue to make more partnership and maybe a new merger.

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Dunn has changed the strategic focus at Sesame, but there is more to do. I think

Dunn should do a big merger with an organization like Disney or NBA. This way he can still keep

his mission statement the same, but these are the things that kids watch a lot more. Just how Disney

partner with Netflix to give the world Disney plus. That is something very popular with kids now.

This way he could use Disney to cut down production cost using there studios and he could

possibly reach even more kids.

Conclusion

How do we save Big Bird? Sesame Street has been around as long as I can

remember. I grew up watching the show. I never knew they were going through tough times. We

have seen when organizations in the past that were in trouble financially, and they made

revolutionary changes. The changes usually start by hiring a new CEO. We have seen these in

scenarios of Xerox, Apple, and Enron. Sesame did the same thing also, by hiring Dunn, a new

leader. Burke (2017), “Because leadership is such a personal matter, understanding more about the

proper match between the leader’s personality and the desired organizational culture is critical to

successful change” (p.380).

Dunn made the turnaround at Sesame by being an Inspirational motivation leader. He

made changes to the strategic plan, their vision, mission statement, and improved partnerships.

Dunn also clarified the direction he was taking the organization and what the organization goals

should be. During, the prelaunch of his organization change at Sesame he had almost the answer to

what the changes should be. He was given an opportunity by the board of directors to do a report to

see what the issues were at Sesame. So, during his prelaunch of his changes he knew he had to

change the culture at Sesame. He created two independent divisions that operated separate, but

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both work for together to solve issues. During, his launch of the idea of change he created

partnerships and took a big risk doing the deal with HBO. Post launch of the changes his keep

momentum by adding more partnerships and adding the commercial aspect to the Sesame

portfolio. Now, the organization is in the sustaining the change phase. Dunn changed the

organizations culture and generated more funding. Kids today can know who Big Bird is because

of his Dunn’s leadership. Dunn truly brought all the character on Sesame Street back to life,

including bring Big Bird back to health.

References

Burke, W. W. (2017). Organization change. [Bookshelf]. Retrieved from https://full-

bookshelf.vitalsource.com/#/books/9781506378770/

Cohen, J., Kanter, R., & Raffaelli, R. (2020). Sesame workshop (A): Bringing big bird back to

health. Harvard Business School,

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