ost a polished and integrated analysis that answers this question: If you were on the board of directors at The Weather Company in 2013, would you approve the proposed strategy? Why or why not?

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Professor Rosabeth Moss Kanter prepared this case. It was reviewed and approved before publication by a company designate. Funding for the development of this case was provided by Harvard Business School, and not by the company. Professor Kanter was a speaker at a Weather Company conference. HBS cases are developed solely as the basis for class discussion. Cases are not intended to serve as endorsements, sources of primary data, or illustrations of effective or ineffective management. Copyright © 2014 President and Fellows of Harvard College. To order copies or request permission to reproduce materials, call 1-800-545-7685, write Harvard Business School Publishing, Boston, MA 02163, or go to www.hbsp.harvard.edu/educators. This publication may not be digitized, photocopied, or otherwise reproduced, posted, or transmitted, without the permission of Harvard Business School.

R O S A B E T H M O S S K A N T E R

The Weather Company

Everybody talks about it. David Kenny was wondering what to do about it. As Chairman and CEO of The Weather Company, he had heard nearly every metaphor and pun about the weather and used many himself. Since forecasting was the company’s core competence, in early January 2014, almost two years after coming on board, he was taking stock of his own forecasts about the climate in the company and grappling with some tough decisions.

Kenny had led the privately-held company through massive strategic change, from a primary identity as a cable television channel with ancillary services to a multi-channel, cross-platform digital company with an emphasis on weather forecasts as the product, science at the center, and cross- platform communications to reach consumers and industry customers. He saw that location information—where someone wanted weather information—was the new digital prize, and weather data could target people for alerts and promotions without triggering individual privacy concerns.

Since Kenny’s arrival, about one-third of active employees were new to the company, but there were also nearly half who had been with the company more than 5 years including one-quarter who were long-standing veterans of over 10 years with their own ways of doing things. And for a company with only 1200 employees, there was great diversity in backgrounds and professional cultures—scientists, TV producers, advertising salespeople, software developers, to name just a few.

The company was getting in position for growth opportunities ahead. The industry took note— Digiday named Kenny Person of the Year in June 2013 for leading digital transformation linking ads to weather conditions. Joint business plans with Twitter, Google, Facebook, and Apple were presented to the Board at a retreat in San Francisco. Now the challenge was execution—the right people and culture to tap the opportunities with innovation and speed, especially as rivals known and unknown were seeing the Big Data potential, and partners could easily flip into competitors. How could The Weather Company be fast and agile enough?

In early August 2013, Kenny and his team had a busy week. On a Monday, he used The Weather Channel’s main TV studio on the lower floor of the Atlanta building to rehearse his portions of Lightning Round, an internal closed-circuit broadcast he would deliver live from the New York studio on Thursday at “30 Rock,” NBC’s famous home base. In the afternoon, he led a 4-hour session for the top 12 executives in a nondescript 4th floor conference room, with a delivery of Skittles and M&Ms substituting for a break, followed by a slightly larger group for a high-end restaurant drinks

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and dinner. The executive session was also a rehearsal of sorts, to discuss unresolved elements of a three-year strategic plan to meet growth aspirations (see Exhibit 1). On Tuesday and Wednesday, Kenny kicked off a management conference previewing the plan for the top 130 managers at Atlanta’s W Hotel, the first time this whole group had been together. Then on to New York City for the live broadcast featuring the headlines from the plan, done as professionally as any of The Weather Channel broadcasts, complete with human interest segments on the Make a Wish Foundation child that had just visited and the company’s National Volunteer Day activities, including participation with New York Media Cares on a Hurricane Sandy cleanup. On Thursday and Friday was a day-and-a-half Board meeting, at which Kenny and top officers discussed the strategy and three-year plan in full detail.

The Board endorsed the direction but questioned the amount of investment required, putting a brake on some plans. In October 2013, the board met again and endorsed a one-year budget. But financial investment was only part of the challenge. How to become cross-platform was a major shift of mindset and organization. Where to invest to stop traditional businesses from eroding while competing effectively in new ones. And how to move from primarily U.S. to truly global while acting on the company’s societal purpose—to ensure safety for people everywhere affected by severe weather events.

The Weather Company claimed the world’s best and most accurate weather forecasts. Kenny wondered what else he should do to ensure that his business forecasts would produce results.

Company History

The Weather Company’s origins were in cable television. In 1982, under the leadership of Frank Batten, who was CEO for nearly 50 years, Landmark Communications, a privately-held Norfolk, Virginia-cased newspaper company that had assembled assets as a cable operator, launched The Weather Channel, an all-weather 24/7 cable television channel, using a newly-acquired cable transponder. Landmark’s first idea, an all-news broadcaster, was taken—Ted Turner, a sailing friend, had launched CNN in 1977. Batten was receptive when John Coleman, a respected meteorologist from ABC’s Good Morning America, offered the idea.

The idea of all-weather programming was met with extreme skepticism, Batten reported later.1 The National Weather Service (NWS) gathered weather data but left distribution to the private sector companies given free access to NWS reports. NWS, which liked the proposed channel’s capability to beam NWS’s severe-weather alerts almost instantaneously to affected locales, agreed to standardize its forecasts nationwide and adopt protocols that would make the data usable. Local information— generally a text crawl across the bottom of the screen—could be augmented by local ads, national advertising could be sought, and, if successful, the channel could get subscription fees from cable operators. All of these revenue sources were soon tapped.

Long-time employees of The Weather Channel, based in Atlanta, and subsidiary companies, recalled a benign organization that looked after employees but was also financially conservative. Landmark was also early to the Web with the launch of Weather.com in 1996. After converting a money-losing operation into a solidly profitable business, in 2008 Landmark Communications sold The Weather Channel for $3.5 billion to a consortium of NBCUniversal, Bain Capital, and the Blackstone Group, which also included subsidiaries Weather.com and Weather Services International (WSI), a provider of weather information services to businesses.

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By 2013, the company had operations in Atlanta, New York, San Francisco, Madison, Wisconsin, Andover, Massachusetts, and Birmingham, England. It was still Atlanta-centric, with the lunch menu on the intranet showing what was served in Atlanta.

Competition

For the first decades, competition involved traditional broadcast television channels which also featured weather information on their news programs. National broadcasters and local stations competed with cable channels for viewers and advertisers. In addition, cable channels had to find their place in the bundles that cable operators offered to consumers; they were dependent on viewership numbers for their bargaining power. The Internet grew in fits and starts through the mid- 2000s, following the dotcom boom and dotcom crash, but then became a preferred source of information and even entertainment. Then, with smartphones added to the Internet as sources of weather information, the rise of social media, and lines blurring between industry players, there were numerous existing and possible competitors in new media channels and applications.

According to spring 2013 data for the U.S., The Weather Company had about 2/3 of the 81 million unique visitors to the Web and about 40% of the 98 million unique visitors to mobile apps. Accuweather, WeatherBug, Yahoo!, Google, and major media companies’ sites were competition (see Exhibit 4 Leader in Weather Information). But competitors posed a particular challenge on mobile as well as the Web, where AccuWeather, for example, focused on preload deals with smartphone manufacturers, integration with broadcasters, and a 30-day forecast, Dark Sky offered real time weather updates with alerts, innovative data visualization, and user participation, and WeatherMob raised funding to build a user-generated weather engine. Outside the U.S., competition included MeteoGroup, a pan-European private business focused on weather, expanding also into China.

Competition was rising from app developers and weather-based startups. When Weather Co developed its first mobile weather app, there were only a few, but by 2013 there were many thousand. A new firm with two people could provide a forecasting product that wasn’t envisioned today.

Competition in the digital space was also growing from giant corporations with deep pockets. Google was a classic “frenemy”—a best partner and also potential ferocious competitor, because Google had the science; an R&D agreement with National Oceanic and Atmospheric Administration (NOAA); and fast processing speed. “Weather Underground took about two years to download all historical archives, while Google can do it in 8 seconds,” a Weather Co executive said. Twitter, Apple, Facebook, GogoInflight, Flipboard, and Yahoo! were also considered strategic partners. Was Weather Co’s source of advantage proprietary, volume, or velocity/agility? Its new turbulence product for airlines, which moved data from an airplane into a weather product and back to the plane in real time, was an example of a proprietary product that integrated data. IBM was also a competitor moving toward Weather Co space, as it applied Big Data to an increasing number of related areas. Unexpected players could emerge too. In October 2013, Monsanto bought Climate Corporation, which focused on data science for the agricultural sector, for which weather was vitally important for planning and operations. Monsanto called this the next big breakthrough.2

One of the questions raised in Kenny’s August Lightning Round internal broadcast was this: “Others are spending billions; we are spending millions. How do we add value?”

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David Kenny Steps In

David Kenny became Chairman and CEO of The Weather Channel Company (TWCC) in late January 2012, shortly before its 30th anniversary. He replaced Mike Kelly, formerly at AOL, who remained an adviser and friend. Observers speculated that the Board was not removing Kelly so much as seizing a chance to get Kenny. TWCC was active in new media but moving slowly.

Kenny had left his position as President of Akamai, was serving on the Yahoo board, and considering a variety of opportunities for CEO posts at companies held by private equity firms. Kenny, a believer in convergence, could use his experiences in digital advertising (he built Digitas into a leading digital marketer and oversaw international expansion and its sale to Publicis Groupe, where he co-founded digital agency VivaKi3), and his knowledge of advances in data transmission from his time at Akamai. He anticipated that TWCC would continue to be advertising-supported with particular opportunities in weather-dependent products and local forecast services, as well as global expansion. He paid homage to the scientists, whom he called some of the world’s best meteorologists, while acknowledging the challenges of melding scientific and creative cultures.

Kenny recalled, “When I got into it, I thought it was a chance to learn the TV business. I didn’t realize the full extent of the assets. I found a wealth of opportunities.”

The Core Product—How Good Is It?

When Kenny arrived, TWCC was already more than television; for example, it had the second most downloaded app on the iPad. His insight: people use weather information, which is inherently local, to plan their day. What if they were surrounded by more content to help them?

Kenny commissioned a look at the core product, weather forecasts and their accuracy. This was led by chief meteorologist Dr. Peter Neilley with the help of an external firm. The investigation found that forecasts were generally more accurate if generated by computers processing the data. Human intervention tended to reduce short term accuracy, defined as temperature and precipitation forecasts for the first few days, except under rare circumstances. Kenny thought that if forecasts were better without people touching them, then let the machines do it, and put the people where they can add value, such as longer-term forecasts, trend-spotting, and creative tasks.

Among his early moves was recruiting Andy Miller and Gail McGovern to the Board. Miller had sold Quattro Wireless to Apple in 2009 and stayed for a stint as Apple’s head of mobile advertising; McGovern was CEO of the American Red Cross and a former Harvard Business School professor. In March 2012, he lured Chris Walters from Bloomberg to be COO. He embarked on other high-profile hires, turning over almost the entire top executive team. Kenny attracted digital stars such as Eric Hadley (former Microsoft/Bing marketer), Curt Hecht (former VivaKi leader with whom Kenny had worked closely), and later Vikram Somaya (former Thomson Reuters), David Clark (former Viacom), and others. Among those remaining in top posts were Cameron Clayton, president of digital (a former water polo star from New Zealand), in place for 8 years; Mark Gildersleeve, president of WSI, the professional services division, a 22-year veteran; Shirley Powell, executive VP of corporate communications, who had come from Turner Broadcasting; and Jennifer Dangar, president of distribution and business development, who had come from Discovery Network.

Acquisitions

Within a few months of becoming CEO, Kenny reshaped the company dramatically by acquiring two companies—Weather Central, a supplier of professional services based in Madison, Wisconsin,

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that would join WSI, TWCC’s professional division, based in Andover, Massachusetts, and Weather Underground, based in San Francisco. The integration of Weather Central was fast and straightforward. Weather Underground was more problematic.

Weather Underground was founded in Ann Arbor, Michigan, in 1995, growing out of the University of Michigan’s online weather database. The founders had a fanatical devotion to data drawn from thousands of independent weather stations. The name was a tongue-in-cheek reference to radical student protestors of the 1960s, and remnants of that flavor lingered in team members and passionate weather devotees who wanted to democratize weather—weather for all.

At the time of the acquisition, Weather Underground had 10 million unique visitors a month on line, according to ComScore, while Weather.com (TWCC’s online brand) had 50 million. A competitor, WeatherBug, was in the middle at 21 million unique visitors. Weather Underground had rejected similar offers in the past but now founder and president Alan Steremberg indicated that growth necessitated getting help from a bigger company—more resources to do fun things.4

To many devoted fans of Weather Underground, TWCC was the antithesis of the bottoms-up development and spread of weather information that they sought. The announcement on July 1, 2012, was met with howls of protest on social media. Some objected to The Weather Channel’s commercialization of weather, saying that ads on the website interfered with finding historical data. There were references to selling out to the “plutocrats’ filthy lucre” and to the “forces of darkness” phasing out any serious discussion of climate change. But the promise was to keep the brand, and continue Wunderground.com as an independent site under the new umbrella. Indeed, Kenny and the meteorologists saw the value of Weather Underground’s network of thousands of personal weather stations for providing local information to improve forecasts.

Corporate Reframing and Re-branding

In September 2012, Kenny proposed to the Board that the company name drop the word Channel while retaining it for the TV unit. He likened this to Apple dropping Computer from its corporate name, freeing minds to roam further in developing products.

At a larger management offsite in early October 2012—the first time this new team including people from Weather Underground and Weather Central were together—Kenny faced the challenge of how people from various legacy companies felt about one another, and whether there could be a combined vision. He sought commitment to the theme of The World’s Best Weather, defined around scientific leadership. He announced that the company name would change to The Weather Company. (It will be referred to here as Weather Co)

He later noted the differences in style between the more buttoned-down scientists of The Weather Channel Company and the more bottoms-up weather enthusiasts from Weather Underground, and how exciting it was to see them mixing.

A Framework for the Business—The 4S Themes

In early August 2013 Kenny convened his second all-management offsite at the W Hotel in Atlanta. By now he had an even clearer vision of the business direction and the best opportunities for leveraging the core asset of data. To ensure that everyone bought into the mission, rather than thinking that just scientists owned it, and also to make visible the scope of the business, Kenny

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unveiled a new framework that he had developed over several months that identified key business drivers and made sense out of the business– the 4S’s: science, stories, services, and safety.

Science

Weather Co aspired to be widely recognized as the most accurate and timely weather service. To improve the precision of near-term forecasts and ensure quality in an extended 3-15 day outlook, Weather Co consolidated its weather science activities in a central forecasting group. The forecasting services group envisioned eventually creating a Center for Forecasting Excellence Research Lab, partnering with higher education and research institutes, and the National Center for Atmospheric Research (NCAR). One goal was to speed the time between academic research and application. There was also a desire to apply advanced technologies and analytics.

Putting science at the center was a part of the Kenny-led transformation happily embraced by the approximately 200 meteorologists (informally called “mets”), who felt empowered by the change. Simply delivering forecasts on-camera was becoming hard to differentiate, as basic weather was being commoditized. Application of science was their specialty and outlet for creativity. They worked on conceptualizations that would communicate specifically to consumers, such as identifying and naming 108 different kinds of weather—e.g., snow showers vs. steady snow—that would help them understand the future implications of current weather patterns.

One important feature of Weather Co was that it didn’t own all of the input to its core product of weather forecasts, since much of the input data is sourced from national government agencies in Europe, Canada, and the National Weather Service in the U.S., in addition to proprietary or private sources. Analysis, deployment, communication, and application of data were the scientists’ value- added. Weather Co products rested on a unique joining of science (the data analysis side) and art (the communications side). But it also involved two different kinds of science—atmospheric science (meteorology) and computer science.

Data that the mets worked with included 20 terabytes and more of temperature readings, wind speeds, barometric pressure, satellite images from thousands of locations every day. They combined this with historical data for real-time analysis. They used multicolor maps of the path of storms with images created from the numbers via proprietary software, TruVuMax and Windstream maps. National Weather Service data represented a centralized, top-down source. Weather Underground’s 30,000 personal weather stations provided bottom-up information spread through social media.

Bryan Norcross and Bruce Rose, two of the most senior mets, commented that the scientists never worked harder. Interest in science had grown throughout the company since Kenny took the helm, and the need for a renewal of legacy weather systems was clear. It was just a matter of turning on the cash spigot to make it happen. But they also attributed some of the time-consuming work to having to describe repeatedly how the old system works, given the large influx of new people since Kenny’s arrival. They had to explain things to managers, business analysts, and marketers who don’t know meteorology. Mets complained that having to hold someone’s hand was a distraction.

Science and marketing were joined through Big Data. The sweet spot was not simply to provide accurate forecasts to consumers but also to use data about the weather consumers faced to help them get what they needed, which could permit highly targeted advertising and a different way of working with advertisers. “For 2 years the company had been selling a rudimentary version—buy simple media against weather info. Buying sunshine in 10 states and advertising against it,” an executive said. Now the proposition could be more sophisticated and targeted.

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In December 2012, Vikram Somaya was recruited from Thomson Reuters to upgrade the weather analytics function. He was based in New York, reporting to Curt Hecht, chief global revenue officer. A marketer with a degree in the history of architecture and a self-taught data scientist, he joined after a fast ten-day recruitment. Kenny spoke to him by phone from London. It was a good match. Somaya had already thought about using weather data in new ways.

The WeatherFX division was launched in early 2013 under Somaya’s leadership. The analytics were highly discriminating, e.g., analysis of micro-climates for 500,000 locations worldwide, later subdivided into another 3 million. Somaya and the small group he attracted through personal relationships sought to mine the data for value to commercial customers. “The old paradigm of business and weather was cope and avoid. With technology, the paradigm is now anticipate and exploit,” he said. Historical data on consumer purchases could be joined with weather data to predict behavior. Algorithms could consider time as a variable, use long-term consumer buying patterns, and add weather-sentiment analysis—how the weather makes people feel in particular locations at particular times. For example, on the first day of above average heat in Chicago, air-conditioner sales surge as consumers rush to buy, but in Atlanta consumers wait 2 days before purchasing.

Home Depot was Weather’s first partner on a Twitter ad program, which integrated weather data, historical sales data, and geographic and seasonal information. This required great sophistication in computer science as well as atmospheric science. Procter & Gamble targeted Pantene promotions by weather in a zip code—if hot and humid, show Pantene Smooth, if low humidity, offer volumnizer— with the potential for coupons for specific stores. According to a Wall Street Journal reporter, a representative college student interviewed didn’t find that creepy because she often checked the weather on her mobile to determine how her hair might look.5

A major challenge was how to get companies so enthralled by these possibilities that they would provide their data. Somaya recalled that for the first 3 meetings with a major U.S. retailer that said there was no way would FX get access to their data. About 10 weeks later, after a meeting with big media companies at which Somaya recited lines from Julius Caesar Act I Scene 2 about tempests, the major U.S. retailer’s data was in Weather Company servers.

This required a shift of internal mindset, to value technology in a company where content (weather data) was king, and to integrate systems with customers. The statistics and data science were there; now the challenge was the creativity to innovate with speed and agility.

By 2013, the digital business generated half of the company’s advertising revenue. The potential for growth was enormous, especially on new platforms. Some of Weather Co’s mobile team moved to San Francisco to be closer to developers on the operating systems.

Stories

Television continued to be 50% of overall revenue, but TV was an evolving proposition, challenged from all directions. As The Weather Channel faced competition from mainstream broadcast and cable channels and then disruption by the Internet during the late 1990s and early 2000s, it had tried to move to a weather entertainment focus. Vivian Brown, on-air meteorologist who started with a science degree in hand close to the Weather Channel’s founding and went on camera 3 years later, remembered when things began to change, to move away from reporting the weather to provide entertainment in competition with other cable channels, such as the Discovery Channel. But in late 2013, she expressed satisfaction with the shift back to science and the additional tools available to her as machines produced the forecasts which left her to determine how to tell the story. Of course, she was now expected to be active on other platforms. Towing a rollerbag of makeup after finishing

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her mid-day TV show one day in late October, she described the increasing time she had to spend on social media asking and answering weather questions.

To renew the television platform, David Clark was hired in October 2012, starting just after Hurricane Sandy; he watched the coverage at home in New York before moving his family to Atlanta. He had worked in both TV and digital in both established companies (Viacom) and startups, and was fascinated by the intersection. He took a desk in the lower floor newsroom rather than the 4th floor management level to be close to the people. He soon saw that TV needed a fundamental reset, as it was losing viewers faster than gaining them. He said, “Reach, frequency, and length of tune lead to ratings. Reach is somewhat down, frequency is down, length of tune is the same. People are not turning to us as frequently to check the forecast. Or because the system we rely on to deliver the local forecast hasn’t been upgraded, they are getting the forecast near them, not where they are. The Weather Channel is the number 1 most trusted network on TV, we have trust, credibility, authority. But we are last in personality—people reporting that ‘it is my favorite,’ that ‘I love it.’ I want to attract a 25 or 30 year-old who loves it because it feels fresh and modern and engaging. We want to be insanely great at the weather.”

Clark kept some veterans while attracting experienced management and production talent from CNN, MSNBC, Bloomberg, and Turner Sports. He also wanted on-air personalities to be a differentiator, forming a personal bond that could set TV apart from digital, and to bring outside voices that could support a new brand contention—Tesla and SpaceX founder Elon Musk was an example of a desired external on-air contributor. In early December 2013, The Weather Channel announced a big catch; star anchor Sam Champion had been lured from ABC’s Good Morning America.

The challenge was to overhaul everything while honoring the legacy. A year was spent investing in local boxes that connected national feeds to local areas, which had been neglected, so that people could get their local weather where they are. Clark mobilized more than a hundred people from various functions throughout the company and outside, to update the look and the tools—to use data visualization, to capture both the practical and mystical sides of weather and make it look beautiful. There was help from IT, business development, ad sales, a long form (long program) team, a broadcast design firm involving graphics, wardrobe experts and set designers, and the WSI professional division to reprogram thousands of charts and maps. On November 12, the re-launch featured a new look and slogan “It’s Amazing Out There,” a tag-line for the whole company which had learned that the word Amazing multiplied clicks on digital platforms. “We made at least $50 million off the word amazing this year,” Kenny told his executive team in August 2013.

Weather forecasts alone could not fill an entire television broadcast schedule nor attract viewers beyond the peak times of severe weather events when viewership spiked. The Weather Channels on- the-scene live reporting in severe weather attracted big audiences—Bryan Norcross was on the scene, for example, after the devastating typhoon in the Philippines in October 2013. The TV channel needed to develop and tell stories that attracted and held audiences.

Cross-platform collaboration had been increasing to build stories. In April 2013, at NewFronts, an event in New York City at which digital publishers pitched to marketers with ad budgets, Weather previewed short form shows for The Weather Channel, the Web, and mobile devices—in short, cross- platform content. In the works were Virus Hunters (about super viruses that could threaten humanity), Alive (survivors of treacherous weather), and Grid Breakers (explorers in extreme weather). This built on series such as Hacking the Planet, launched in February 2013, featuring stories at the cutting edge of science, engineering weather to diminish devastating effects: for example, slowing hurricanes by using ocean spray, or harnessing the force of tornadoes. Three-minute videos

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from the Web such as Brink—eco-heroes saving species—would run on TV during news blocks, and longer expansions of Web stories were being commissioned for prime time TV, such as Live to Tell, with big characters on big journeys surviving extreme weather. Unlike previous forays into entertainment, weather itself, or a related nature theme, had to be the centerpiece, with solid science embedded in the story. The company identified seven weather-related lifestyle categories as the basis for digital and on-air content—safety and security (how to take shelter), travel, outdoor activities, sports, fashion (what to wear), health (allergies), and home and garden.

While no longer trying to be like Discovery Channel, the Weather Channel found ways to compete. During Discovery’s August Shark Week, Weather offered Hurricane Week, including a spoof showing a hurricane causing a shark to drop the fish in its jaws. While not as successful as hoped, it caused one Weather Co manager to muse about adding Apocalypse Week next year—10 ways the earth can die. Sensationalism was considered a way to get audiences for serious science.

Like David Clark, Neil Katz was attracted to Weather Co soon after Hurricane Sandy by the potential he saw to build something big. Katz, who had come from Huffington Post, headed editorial for the digital side reporting to digital president Cameron Clayton. He developed a symbiotic relationship with Clark for story-telling. When Katz joined in 2012, he found a huge digital audience (60 million on the Weather.com website) but the absence of a big content play—the site relied heavily on curating partner content, e.g. wire services. There was freedom for reinvention. He said, “Here was a software company that had functional content but they (emphasis) didn’t use it. Cameron said lets work out a budget, you tell me the vision. My idea was to make it the Homepage for Mother Earth and move it from Practical to Spectacle.”

Katz found that if consumers visit just for the forecast, they consume 3 ½ pages per session, but if they come for content, they consume 10 to 11 ½ pages per session. To create compelling content, he sought original writing and visuals, rather than using stock agencies supplying everyone, and he was willing to test many things and fail, because it was easy to adjust and repackage content on a website, and there was real data about what people like—whether they click or not—available to the whole editorial team at the same time, rather than focus group self-presentations. “In my first 60 days I didn’t know what worked, so I failed terribly,” Katz said. Sexy, such as exercises for a bikini body, didn’t click well, but weird animal mating rituals did, reinforcing the exploring nature theme that seemed to appeal to the core audience. The nature theme encompassed climate change, pollution, poaching, species and habitat protection. Still, the content piece that performed the best since Hurricane Sandy was a slide show of historical pictures of what people wore to the beach.

The results a year later were strong. Page views were up 100% and video starts up 800% on Weather.com. Social shares were up 900%. For example, a successful story will have 20,000 Facebook shares vs. 500 a year earlier. The real test of content was holding viewers beyond severe weather. Hurricane Sandy in October 2012 had the largest audience, and traffic peaked again with winter storm Nemo in February 2013 and the Moore, Oklahoma, tornado in May 2013. But after the changes Katz and his team instituted, viewership remained at high levels between severe events. (See Exhibit 8. Digital Traffic with Severe Weather Events.)

The aspiration was that by 2016 TV ratings would be high and rising rather than declining, there would be 21 billion page views (mobile and desktop), 2 billion video starts, and 3 million followers on social media. With consumer trends showing mobile devices starting to swamp all other platforms, there was a question of how much to invest in TV.

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Services

The services provided by Weather Co’s professional division applied atmospheric science and, increasingly computer science, to provide solutions for business and government entities.

WSI, the B2B professional division of The Weather Company selling weather products to business, was founded in 1978 as a division of a private forecasting company, to provide radar data from the National Weather Service (NWS) to TV channels by phone, after NWS stopped doing this and created a private market for weather data. The original owners didn’t anticipate the amount of capital needed for software for real time data. It was sold to The Analytic Sciences Corporation, a contractor for the U.S. Department of Defense, which sold it to Landmark in 2000. Although it was a stretch to go from a commercial business inside a defense contractor to a media company, it was also a better fit to work for a company whose TV channel had weather as its core business. But although WSI supplied value- added data and graphics to the TV channel, it was managed as a standalone company in Andover, Massachusetts, let by Mark Gildersleeve, a 22-year veteran, and not integrated with the rest. In fact, some at WSI felt it was swamped by the focus on the TV channel, and serving consumers at home. Disconnected from the rest of the company, the WSI team rallied around themselves and set their own direction. When David Kenny arrived, WSI represented about 10% of revenues. Kenny and COO Chris Walters told Gildersleeve that they thought it could grow two- or three-fold in a few years.

WSI offered weather-driven business solutions to professionals in aviation, energy, insurance, and media, and government agencies. By 2013, it had an office in Madison, Wisconsin, after the acquisition of Weather Central in 2012, an office in Birmingham UK, a partnership with Climate Central, an independent organization of leading scientists and journalists researching and reporting climate change data and graphics to local meteorologists, and a smaller partnership with TOA systems for three lightning networks to track and monitor the approximately 8.6 million lightning strikes that occur globally each day. In mid-2013, insurance services were up 670% over the previous year. Imap consumer services (such as pollen-casts) were considered promising applications.

Aviation solutions were a high-potential focus. Airlines were the top 4 of the 6 biggest clients (the Federal Aviation Administration and NBC-TV were the other two). Weather was a crucial issue for air transportation and also an area that the public cared about, so success in this space could signal weather superiority to consumers. The company provided some services to more than 130 commercial airlines around the world and the Federal Aviation Administration (FAA). WSI’s share of the market was still relatively small, especially internationally (only 25% of largest airlines based outside the U.S.), so there was room to grow, and new developments in Big Data analytics presaged enormous opportunities for innovation. Weather could be a platform for aviation decisions.

The iconic aviation product, recently rolled out, was Total Turbulence. Air turbulence is a major cost for air carriers. With fuel as one of the largest fixed cost, airlines seeking to avoid turbulence make suboptimal route or altitude changes that require, and often burn, extra fuel. Turbulence affects comfort, safety, injury claims, and aircraft maintenance. Weather-related delays increase carbon emissions due to extra fuel burn. Delayed, cancelled, or diverted flights also raise airline operating costs in staffing, maintenance etc. There are associated economic spillovers to supply chains and product costs. WSI estimated, from U.S. government data, that the total impact of weather-related delays to airline operations is $13.0 billion plus 5 million metric tons of CO2 emissions. Additionally, there are associated passenger and economic spillovers including impacts to supply chains and production costs estimated at $14.7 billion. And the FAA estimates that two-thirds of weather-related delays are avoidable. Without good forecasts, for example, flights may have to divert because they did not carry enough contingency fuel to account for increasing delays or reductions in airport

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capacity. “Uncertainty always equals more fuel, and erodes already slim profit margins,” said Mark D. Miller, WSI SVP and general manager for aviation and government.

However, with accurate forecasts for pilots, control towers, and operations centers, airlines could, for example, carry less contingency fuel due to higher confidence in available routes and altitudes. Better forecasts could help anticipate ground holds, de-icing, or capacity changes; predict available airspace and route availability; and predict delay minutes, diversion and tarmac risk. A connected platform could alert dispatch, crew, and station to potential impacts, enable collaboration between dispatch and crew to assess options and take optimizing action sooner, and reduce costs. Potential cost-savings could include about $25 per minute fuel burn rate in taxi, $15-100,000 per aircraft diversion cost, and $27,500 per passenger tarmac penalty.

WSI’s Total Turbulence product derived from a NASA innovation developed via a grant to a private venture, Aerotech. After a period of negotiations starting in the summer of 2009, WSI licensed the TAPS® turbulence detection and reporting software, a key element of the Total Turbulence solution from Aerotech. In April 2011, the first aircraft flew with TAPS software. It was time- consuming to get the system operational because putting software on the avionics of commercial aircraft takes great deal of coordination. It involved getting the taps—actual reporting code—coded for avionics, tests on avionics, verification, then a green light to production. It also required learning on the part of WSI to put its software into avionics.

By using Total Turbulence, American Airlines projected significant savings estimated in the low 7 figures, most of this from a reduction in turbulence injuries. Total Turbulence, which combines TAPS with several other WSI capabilities, could automatically detect and report airborne turbulence, automatically alert impacted aircraft and pilots including those in the trail, deliver information to WSI Forecaster to continually refine alerts and forecasts, leverage WSI Fusion to alert dispatchers, and leverage WSI Replay for post-analysis and reporting.6 By the fall of 2013, American had already deployed to the 737, 757, 767 fleet—about 340 aircraft out of roughly 700—and was starting on the 777 and new A319 and 321 fleet. “Everyone sees WSI Total Turbulence as a game changer,” said AA’s manager of flight planning and weather support.

WSI upgraded from just weather forecasts to systems integration with other airlines. For example, United Airlines was seeking one weather provider with global reach for on-site weather forecasting, data services, and web portals. WSI also helped United migrate to a paperless cockpit, utilizing tablets to promote fuel efficiency and identify situational hazards, WSI customized its products for the tablets. For both United and American, WSI meteorologists were embedded in the airlines’ system operations control centers with dedicated desks, and they participated in conference calls with the FAA. Other airlines also used specific WSI services. For Jet Blue, the issue was where or not to delay or cancel flights at select airports 24+ hours in advance, especially in areas where Weather Co’s winter and tropical storm expertise was essential. In order to integrate data into enterprise-wide solutions, Southwest Airlines used WSI as the single source of weather for all applications, “providing one view of the truth for pilots, dispatchers meteorologists, and ground operations,” an internal newsletter said.

Potential game-changers from technology-based weather solutions had promise for other barely tapped transportation sectors. Weather information was embedded in some new Toyota models via Clear Channel Media and Entertainments Total Traffic Network, which has a 3-year deal with Toyota USA to bring real time traffic and information from Weather Co into the dashboards, delivered via an HD radio signal from more than 350 stations nationwide. Could weather data be integrated with other aspects of a car, such as engine efficiency anticipating the elements the car might be driving through—rain, snow, ice? But as of the end of 2013, this was put on a list of Weather Co “non-goals.”

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For all the promise of services, revenue growth was not as strong as in the other business sectors. This was field in which the competition was do-it-yourself—that is, get the weather data and build it into a company’s own systems. In aviation, Delta Airlines, the largest in the U.S. until the American- US Airways merger, was a classic do-it-yourselfer. The challenge was to build high value-added scalable services packages that could be sold globally. Global was a natural for WSI. The most desirable large customers worked across borders—including airlines, retailers with multi-country operations, media companies, and new platform companies such as Apple, Google, Facebook, and Twitter. But business customers were an arena where WSI intersected with WeatherFX. WSI sold its suites of technology to competing companies and wanted to keep the revenue stream, whereas Vikram Somaya wanted to shut this down.

Safety

Safety was sometimes combined with another S for Severe in Kenny’s list of Ss. Severe weather made weather salient. It was the reason most consumers and business users turned to Weather Co information sources—18% of total TV viewing and 12% of page views came on the 5% of days that are weather event days. This was at the heart of the societal purpose that leaders articulated on behalf of the company. Helping people prepare for, and avoid, the consequences of severe weather helped them feel and be safer. To some in the company, Safety was the first S.

To take a much bigger role for Weather Co in disaster preparedness and relief, Kenny developed a cross-sector partnership with the American Red Cross and the National Oceanic and Atmospheric Administration (NOAA), the parent of NWS. Weather Co and the American Red Cross wanted to work with NOAA to jointly develop preparedness and relief information, available across devices, apps and social platforms, along with donation options via Weather Co. In November 2012, shortly after Hurricane Sandy devastated the Greater New York City area and beyond, Weather Co announced a $1 million matching donation to Red Cross from the company and its owners for Sandy relief. This was in keeping with a community service ethos embedded in company traditions and reinforced by volunteers, such as the ones mentioned earlier that joined New York Media Cares for a post-Sandy cleanup, but it was at a much larger scale and core to the business.

The aspiration in 2013 was to build the leading global mobile/social network for safety communications during severe weather and expand safety/recovery partnerships to the international Red Cross, some governments, and perhaps the UN. Partnerships were managed by a 6-person team under Jennifer Dangar, president of distribution and business development—mostly business partnerships with media companies. Partnerships in the U.S. and globally could go in many directions that could multiply the complexities and need for management resources e.g., non-profit partners might include the American Humane Association; people die in storms because they won’t leave their pets. On the public sector side there also were opportunities. In the U.S. only 5% of weather events are handled at the federal level by the Federal Emergency Management Authority (FEMA); 95% are handled by state and local governments. How could Weather Co, a national player, embed data in all those jurisdictions? Localization was a priority for Dangar’s media partnerships too. The challenge grew in magnitude outside the U.S., where countries differed in disaster readiness; Weather Co, still a largely U.S. player, was not yet a trusted partner to government. Senior meteorologist Bryan Norcross saw this in the Philippines when he traveled there after the devastating November typhoon.

Kenny and colleagues also felt a responsibility to communicate accurate information about global climate change. He brought scientists to the World Economic Forum in Davos in January 2013, speaking at sessions exploring the evidence and policy considerations around climate change.

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Safety + Science + Stories = Naming Winter Storms Connected to safety but also involving science and stories was Weather Co’s efforts to communicate about winter storms by naming them, just like tropical storms. This was a public sign of accelerated creativity and marketing savvy, as well as migration to social media and new digital platforms. But safety was the underlying purpose.

This began as a stealth effort in the winter of 2012-2013 as the brainchild of Bryan Norcross, senior meteorologist and storm specialist at The Weather Channel. Drawing from futurist Marshal McLuhan, Norcross felt that the medium is the message; if communicating about an unusual situation, do it in an unusual way. 2011 was the year of Twitter as a source of breaking news. In Europe, the Free University of Berlin had been naming winter storms since 1954 and a TV station in Connecticut did it for a dozen years. But it had never been done on a national scale in the U.S. Improved data analytics and modeling improved the forecast sufficiently to make it possible. Severe storms could be identified based on NWS thresholds for winter-weather warnings and the storms expected impact on large populations or areas. By creating a dialogue around a named event using hashtags for the storms, people could be better informed and better prepared. Norcross called it an ideal demonstration of the intersection of social media and television.

A storm name could efficiently and systematically convey storm information, as had long been the case for tropical storms and hurricanes. During winter storms, many people are impacted by freezing temperatures, flooding, power outages, and travel disruptions. Kenny and other Weather Co leaders felt that storm naming could raise awareness and reduce risks, danger, and confusion. “We did it because we understood that social media saves lives,” Kenny said. “It helped people understand the story. We think it helped the government organize, and in this area we can move faster than the government.” Others echoed that their job is to save lives.

The company had already been using names informally internally to help track storm patterns. Norcross sent the idea down from his 4th floor office to the first floor editorial people and the mets about how to get names that couldn’t be confused with a hurricane and could get some buzz. An executive producer suggested names from Greek and Roman mythology. (2013-2014 names came from lists compiled by students in a Latin class in Bozeman, Montana.)

The names were announced in November 2012 and burst into public view in early February 2013, during an especially fierce New England blizzard that the company had dubbed winter storm Nemo (which also echoed a popular Disney character). The National Weather Service disclaimed plans to name winter storms; some weather editors called it silly, arbitrary, and meaningless; others said it was presumptuous; and an official from competitor Accuweather called it not good science that could mislead the public. The public embraced this approach. Winter storm #Nemo was mentioned in more than a million tweets. Airlines, governors’ offices, media outlets, and New York City Mayor Bloomberg issued advisories or tweets with the name. Severe-weather information was easy to find on all media. The naming was accompanied by a new tool, a Winter Impact Index called STORM:Con, that put the potential impact on U.S. cities on a 1–10 scale. That also elicited initial criticism along with some begrudging praise from meteorologists and weather professionals. Weather Co actually preferred that an academic center or government pick up winter storm naming. For now, Weather Co was the only naming game in town.

The use of weather data reached the national agenda. In late July 2013, Kenny met with newly installed U.S. Secretary of Commerce Penny Pritzker, under whose authority fell NOAA (National Oceanic and Atmospheric Administration), and hence, weather. Secretary Pritzker wanted to know

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how more NOAA data, if made available to Weather Co and other private sector enterprises, could be used for better science and communication. Kenny and colleagues continued dialogue with NWS as well as the American Meteorological Society and were invited to a White House data summit planned for 2014. Meanwhile, Kenny held about 50 meetings on Capitol Hill in October and November 2013 with Senators and Congressmen/women to discuss the role of private sector weather entities and how they could work with federally-funded researchers and NOAA.

Weather Co’s safety efforts and partnerships gave it a significant public presence and responsibility, much larger than the small employment size or geographic scope of the organization itself. It was a good example of thinking bigger than you are,7 but it also posed dilemmas of focus.

A Three-Year Strategic Plan

The strategic plan presented to the board in August 2013 was a vision and a proposal for growth from about $600 million in revenues in 2012 to $1billion or more by 2016. The meeting was held in the boardroom of NBCUniversal at 30 Rock, but the NBCU owner Comcast’s three board members recused themselves during the discussion of TV distribution. This was one of the challenges of a board in which Comcast owned 25% and was also a cable operator and buyer, although otherwise NBC was generally helpful to the TV division. The private equity owners had long since stopped asked for numbers monthly and even daily, since performance was improved.

The proposal covered over 220 pages of PowerPoint with financials and specific plans from Digital, TV, Professional, and International, as well as central services. The division plans were delivered individually and covered a very broad array of initiatives, although there were efforts to focus. The plans included Non-Goals—promising initiatives that would be put on the backburner, such as wearable technology, 3D printing for personal weather stations, auto and traffic applications, and audio. A few current activities were curtailed or did not receive further investment, such as lifestyle sections in content areas. Mark Gildersleeve commented, “There are challenges when an executive team has smart ambitious people, and each wants to make his or her mark on the company and the world. The challenge is that there are more opportunities than the company can afford to pursue. How should we determine what to focus on, what to let go?”

The Board endorsed the direction but wanted to get there without such a big investment. A few big issues were left that presented managerial as well as strategic challenges.

The digital direction By January 2013, there were over 100 million downloads on mobile phones, tablets, computers of Weather Co information, putting Weather Co in the top 20 and by some measures the top 10 digital properties. It was the second most downloaded app on the iPad, second only to Apples iBooks. Mobile advertising, up 40% in 2012, continued to grow dramatically through 2013 but was still underexploited compared to TV considering its strong and rising consumer use.

Cameron Clayton, president of the digital division, was also the global chair of the Mobile Marketing Association, which sought a single voice and standardization of formats and metrics. The global in the name of Clayton’s MMA position was significant, because while 80% of the top ten most-visited Internet sites were from the U.S., 81% of users were from outside the U.S. (as of February 2013 data). Global growth was a next frontier for Weather Co. The mobile focus was also significant. The digital division was designing all products with a mobile-first philosophy, including responsiveness to different screen sizes, participatory features to drive up mobile engagement, and new ad formats, with digital video as a major revenue focus across platforms. Clayton presented data

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to the board in August 2013 showing that in overall US digital ad spending, mobile ad revenue would catch up to the Web in five years, and both were under-tapped.

The rapid rise of digital in a company with a TV legacy presented classic newstream/mainstream tensions.8 The newstream digital platform units danced to different rhythms than the mainstream TV business. In fall 2012, Clayton had initiated agile development methods to speed time to market, modeled after the best technology companies, for design, data visualization, user experience, and participatory features, areas in which competitors were racing in and competing for talent.

The mainstream TV channel in Atlanta was still the biggest revenue producer and concentration of employees, and many corporate assumptions were still geared to it, from salaries based on Atlanta standards to a process orientation that some on the digital side perceived as bureaucracy that constrained them when they couldn’t wait for the next budget cycle to jump on an innovation or risk losing a sought-after engineer because of recruiters who didn’t understand digital culture. (However, the H.R. department was considering a modest free snack food experiment.) Many on the digital ad sales team came from TV, where the work was much more cut-and-dried, and thus much less likely to attract creative innovators with can-do entrepreneurial spirit. On the mainstream met side, the company attracted people with a lifelong fascination with weather for whom Weather Co was a dream job, one of very few places to pursue their passion. But on the digital technology side, it was a different matter. Digital designers, developers, data analytics experts were in great demand in numerous industries by startups and the best established companies.

The cultural divide, and aging back-office infrastructure, left the TV mainstream wondering about their fate. An executive (not in TV) observed, “There is a sense on the part of the TV people that the focus has shifted to digital. The people in TV are still working on old computers. Until David Kenny came, they weren’t getting investment, while digital people got new Mac books. In TV, there is lots of hiring in management but not on operational level, and the cuts during the recession of 2008-2008 were filled in with freelancers and less experienced people.”

The TV mode was still broadcast, a one-way communication that could take place at arm’s length. The newstream mode was partnering, not just in the sense of contracts but actual embedding inside someone else’s operations. Some had concerns that weather data could become commoditized, so it was no longer effective to simply throw it over the network, any network, and hope someone saw it. The new opportunities moved the company from products to solutions. Whether it was systems integration work like WSI in aviation or digital partnerships like FX was creating with retailers, Weather Co representatives had to be capable of creating a relationship of trust and bringing all of their company’s capabilities to the relationship, so a customer or a partner would let Weather Co inside their system to use their data and run their analytics—the virtual equivalent of a Weather Co meteorologist embedded in an airline control tower. This was the mode for many of the most promising new areas, including global disaster preparedness opportunities.

As industry convergence continued to be the norm, competitors sprung up in all directions, and Weather Co had opportunities and appetites greater than its resources, execution required teamwork and collaboration. A divided company could not prosper.

Building Collaboration

In his first year, David Kenny had assembled a group of stars. But they started out playing an All- Star Game, he said, not behaving as a team. Practically all of them scored red for ambitious and hard- driving on a personality exercise he included in a management off-site. They were high achievers

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accustomed to winning, but they were not achieving all of their stretch goals, as Kenny candidly told them with his performance ratings. They expressed high motivation, invigorated by the challenge. But they couldn’t succeed working alone.

The distributed locations posed a variety of challenges. “The company wasn’t designed for being aggregated,” an executive said. WSI had long been isolated and was accustomed to walking down the hall in Andover for what was needed rather than counting on centralized services in Atlanta. In San Francisco, engineers sometimes seemed to work on what they wanted to, Silicon-Valley-style, regardless of project assignments. Those based in New York needed easier access to weather data, requiring the assistance of IT and travel to Atlanta plus using every digital communication mode.

Collaboration without co-location requires strong common understandings and relationships. For the top executive team, Kenny conducted weekly virtual meetings monthly face-to-face meetings for about three hours, with dinner the night before. An executive commented in August 2013, “Forcing everyone to be in same place at same time has benefits. When you’re there in person you feel the most connected—you get aligned, see the pieces, know what to prioritize. The core theme this week was to wipe out last vestiges of duplication. There must be a single platform. We talked through how we could trim expenses or function differently. And we all got the tough love from David.”

In addition, a Growth and Development Council composed of managers just below the top was appointed to see how to bridge gaps and get more efficiencies. And the large management off-sites of the top 100+ that Kenny convened twice as an annual event were a chance for common strategic understandings and team-building conversations, with outside speakers reinforcing messages.

Down the organization, Kenny sensed a confidence problem. One person sent him a book about introverts—a not-so-subtle message to the exuberant CEO that not everyone was like him. He worried that they withheld information. He wanted his top managers to become better leaders of people. “People are moving their pieces but they can’t win unless they do it together, at the same time,” he said. But it took balance. Kenny didn’t want a “group grope with no accountability.”

One example of pulling people together from different parts of the company were the micro- forecasts during the 2012 London Olympics. The TV re-launch in November 2013 had benefited from the work of many collaborators, especially from IT, business development, ad sales, and meteorologists.

By 2013, there was one integrated forecast group for the entire company, a single R&D director and set of systems, and a common weather data platform, even though data itself differed by end user. The Forecast on Demand project used resources from across the company to develop a system to constantly update forecasts for users’ locations, rather than periodic resets. Launched on Wunderground.com in November, it was slated for Weather.com the following April.

A big organizational challenge was the International group, a matter of great controversy and contention. It was set up separately, based in Birmingham England, and developed its own three-year plan. The executive in charge was dependent on groups headed by Cameron Clayton and Neil Katz for products and wanted dedicated “swim lanes”—teams within each product division—devoted to development for international markets segmented by country. Or else, he would create his own products, he told the executive group in August. But there was no question that David Kenny saw weather products as inherently global, and there should be no separate development. International was a set of sales regions similar to sales regions in the U.S. The question was what to sell and how.

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David Kenny’s Leadership

One iconic story told about David Kenny was his actions during winter storm Nemo. He took coffee to on-camera meteorologist Mike Seidel, who was covering the story on Revere Beach just outside of Boston, and stayed with him all night. Other comments included:

Mark Gildersleeve: “He pushes you really hard but makes you want to be better. He exudes a sense of confidence, direction, and energy—the pure energy, pace of decisions, breadth of what he is managing are impressive. The drive to move fast is striking when you first meet him.”

Mark D. Miller: “David is brilliant. He got us back to our core. If we win in weather, we can find ways to scale it and monetize it. This became a rallying cry for those of us passionate about the weather. Now everything is aligned around a clear vision.”

Shirley Powell: “David is the most accessible CEO I have worked with in my career.”

Bruce Rose: “No one thought this big for The Weather Channel before.”

Entering the New Year

As 2014 started, the legal department was already thinking about options that might include an IPO. Kenny ticked off in his head what he knew about where he was in the change process.

In early November 2013, the executive group held their quarterly management meeting in the Boston area. They visited the Verizon Innovation Center in Waltham, an idea suggested by an HBS professor, and then convened in Andover at WSI. The tour reinforced the focus on mobile and additional distribution partners—Verizon had not been on the radar screen as a potential partner when the group met in August until Kenny mentioned it. Compared with three months earlier, the meeting featured a more focused set of plans produced more collaboratively by the business unit heads, reflecting a collective sense of priorities and investments across all enterprises. At the Board meeting that followed on November 7, the Board approved the budget for the following year. This time it was Kenny who had to tell the Board that they couldn’t do everything.

By December 2013, the international division was about to be disbanded in favor of global marketing groups for digital consumer and professional services. The first thought was that global expansion would be mobile-led, inspired by the visit to Verizon, via mobile device partners such as Apple. The first deal was with Huawei, a large manufacturer in China.

Even with greater focus, there was a great deal to do, and not enough resources to do it. Kenny and his executive group wanted to sequence the transformation in phases to be self-funding but knew that might leave them vulnerable.

Big questions remained. Should they bet $20–$30 million on TV, get more stars like Sam Champion; or should they invest in R&D, digital, international? Could they both globalize and localize? Could they tap new opportunities and innovate while enriching the traditional business? Was there an inherent conflict between TV and digital, or could they find creative synergies by being smarter organizationally? And what else should be done about talent, capabilities, culture, and organization to support the direction?

Kenny knew that dreams meant nothing without execution.

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Exhibit 1 The Weather Company Financial Trend, 2009–2015

As a privately held company The Weather Company does not disclose specific numbers.

* Includes acquisition of Weather Central and Weather Underground in 2H’12

Source: Company documents.

$ Tens of millions

$ Hundreds of millions

6% 3%

10%

75% (14)%

55% 19%

$ Billion

2016 goal

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Exhibit 2 Aspirations for 2016

Source: Company documents.

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Exhibit 3 Typical Industry Revenues by Product

Cable distribution fees (source: KAGAN):

News and Outdoor Lifestyle Networks category distribution fees $0.22 to $0.62 per sub/household per month

Television Advertising:

A25-54 CPM range for national cable networks (average for all day-parts) $6 to $16

Digital Advertising (source: OPA (Online Publisher Association))

Direct Sales Display Web CPM market average $4.57 - $4.69

Direct Sales Display Mobile CPM market average $1.27 - $2.13

Direct Sales Display Video CPM market average $16.77 - $24.27

SaaS subscriptions for data businesses:

Blended rate across segments average subscription fee around $15,000 per year

Source: Company-generated data.

Exhibit 4 Audiences for Industry Competitors

Source: Company documents.

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Exhibit 5 The Weather Company Businesses as of 2013

Source: Company documents, August 2013.

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Exhibit 6 Weather Forecast Accuracy—The Weather Company overall and with/without Personal Weather Stations

Absolute gap in 1-3 day % correct vs. competitor avg

Inclusion of PWS (personal weather station data) from WeatherUnderground raises accuracy—lowers errors in current condition estimates

Source: Company documents, August 2013.

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Exhibit 7 Storytelling as a Driver of TV and Digital Engagement

Source: Company documents.

• 41 long form episodes have rated 150+, 46% higher than 2012

• Length of tune is up 10% in 2013 • In digital content verticals, monthly visits are up 110% and

page views are up 1044% (driven in large part by stunning photography in slideshows)

• Travel visits up 222% vs 2012 to 33.6M • Health visits up 39% vs 2012 to 19.6M • News climbed +9% on visits and +137% for page views (also

helped by slideshows) • Video visits are up 65%

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Exhibit 8 Feature on The Weather Company Viewership during Major Weather Events

Source: Company documents.

Exhibit 9 Digital Traffic Trends including Severe Weather Events

Source: Company documents.

content

page

views

millions

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Exhibit 10 Annual U.S. Weather-Related Air Travel Delay Cost

Source: Company documents.

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Exhibit 11 Scenes from The Weather Company

left: U.S. Senator Barbara A. Mikulski (D-MD), chair of the Senate Appropriations Committee, with Jim Cantore, lead anchor for The Weather Channel, fall 2013 (tweeted by Senator Mikulski); middle: CEO David Kenny; right: The Weather Company Board giving Red Cross a check after Hurricane Sandy

David Kenny in winter storm Nemo with The Weather Channel TV meteorologists Mike Seidel and Jim Cantore

left: David Kenny with Jim Cantore and Stephanie Abrams and some of the TWC team at an ad sales event; middle: Sam Champion (r), formerly of ABC’s Good Morning America at announcement of move to The Weather Channel with TV president David Clark (l) right: Make a Wish Foundation girl, who got her wish to be on The Weather Channel, with on-air TV talent

Source: Company documents.

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Endnotes

1 Frank Batten, “Out of the Blue and into the Black,” Harvard Business Review, April 2002.

2 Bruce Uppin, “Monsanto Buys Climate Corp for $930 Million,” Forbes, October 1, 2013, http://www.forbes.com/sites/bruceupbin/2013/10/02/monsanto-buys-climate-corp-for-930-million/, accessed December 2013.

3 Rosabeth Moss Kanter and Matthew Bird, “Publicis Groupe 2009: Toward a Digital Transformation” Harvard Business School Case 309-085, February 2009. (Revised March 2009.) ; Rosabeth Moss Kanter, Supercorp: How Vanguard Companies Create Opportunity, Profits, Growth, and Social Good. (New York: Crown Business, 2009), Chapter 2.

4 John Schwartz and Brian Stelter, “A Weather Site Buys Its Rival, To the Distress of Devoted Fans,” New York Times, July 4, 2012.

5 Catherine Rosman, “Weather Channel Now Also Forecasts What You’ll Buy,” Wall Street Journal, August 14, 2013.

6 Mike Bettes, “American Airlines Presents,” Morning Rush, The Weather Channel, November 27, 2013, http://www.weather.com/video/american-airlines-presents-41674, accessed December 2013; Stephanie Abrams, “New Total Turbulence Technology,” Morning Rush, The Weather Channel, November 27, 2013, http://www.weather.com/video/new-total-turbulence-technology-41675, accessed December 2013; Omar Villafranca, “American Airlines Unveils New System for Pilots to Avoid Turbulence,” NBC News Coverage, December 11, 2013, http://www.nbcdfw.com/news/local/American-Airlines-Unveils-New-Systems-for-Pilots- to-Avoid-Turbulence-233568731.html, accessed December 2013.

7 Rosabeth Moss Kanter, “Act Bigger than You Are,” (blog), Harvard Business Review, July 17, 2012, blogs.hbr.org/kanter/2012/07/act-bigger-than-you-are.html , accessed December 2013.

8 Rosabeth Moss Kanter, “Teaching Old Companies New Tricks: The Challenge of Managing New Streams Within the Mainstream”. Harvard Business School Background Note 303-083, December 2002.

http://www.forbes.com/sites/bruceupbin/2013/10/02/monsanto-buys-climate-corp-for-930-million/

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