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How the power players do it - by Fortune senior editor at large Patricia Sellers

How investing in curiosity pays off big at Discovery

April 11, 2014: 8:00 AM ET
Oprah Winfrey and Discovery Communications CEO David Zaslav

Oprah Winfrey and Discovery Communications CEO David Zaslav

At cable TV giant Discovery Communications, believing in a Brand Ideal -- and betting big money on it -- has helped quadruple the stock.

This is Part 4 of a series for Fortune.com by Jim Stengel,  former global CMO of Procter & Gamble and author of Grow: How Ideals Power Growth and Profit at the World's Greatest Companies. In today's Guest Post and in two more over the next two Fridays, Jim digs into the best practices of the best ideal-based companies and explores how they outgrow their competition.

FORTUNE -- "I'm a believer," says David Zaslav, CEO of Discovery Communications (DISCA).

Zaslav professes deep faith in his company's ideal, or purpose, and its core concept: quality content that satisfies curiosity. And he's channeling that conviction into healthy growth.

Since Zaslav joined the cable company from NBC Universal (CMCSA) in 2007, Discovery has doubled its number of TV networks. The channels you know best include Discovery Channel, TLC, Animal Planet, OWN: Oprah Winfrey Network, and The Hub. But branding itself "the world's No. 1 non-fiction media company," it reaches 2.2 billion subscribers worldwide through an ever-expanding portfolio. Meanwhile, Discovery's stock-market value has more than quadrupled.

Zaslav's job, he says, is to lead a "a belief system" that was created by founder John Hendricks. The belief? "Content can educate and inspire." One reflection of that is Oprah's Lifeclass on OWN. Winfrey's network is a joint venture with Discovery, and when her Lifeclass premiered on OWN in 2011, "it got almost no rating," recalls Zaslav. "But there's nothing like that on the air, and we stood by it. Now, that and Super Soul Sunday are two of the most successful things on OWN because from a values perspective, it wasn't about near-term dollars. We believed."

After Discovery invested close to $500 million in OWN, the network turned cash-flow positive last year and has started  to pay off for Zaslav's company.

Of course, creative leaps can result in misses -- and Discovery has had its share. But leaning into its Brand Ideal has led to hits like Planet Earth and Whale Wars on Animal Planet, and new channels like Destination America and the popular Investigation Discovery.

The missionary mentality also gives rise to "blue ocean" innovation -- that is, leading a trend instead of following rivals. Discovery recently identified a new opportunity space, lifelong learning, and launched Curiosity.com, a platform that aggregates cool learning experiences from across the web. The company also made an investment in Lumosity.com, a brain fitness application. In placing these bets, management relied on Discovery's Brand Ideal -- quality content that satisfies curiosity -- as a strategic filter.  "It's a sort of north star in our investment approach," says JB Perrette, president of Discovery Networks International.

Seven years ago, Discovery invested $500 million on content. The company is spending almost three times that today. "So, when I say we believe," Zaslav notes, "I mean, we believe."

For seven years until 2008, Jim Stengel was the chief global marketing officer at Procter & Gamble (PG), where he oversaw an $8 billion advertising budget and 7,000 employees. Now heading a consulting firm/think tank aptly called The Jim Stengel Company, he advises companies on how to grow globally by driving ideals. He's the author of Grow: How Ideals Power Growth and Profit at the World's Greatest Companies, which uses a 10-year study involving 50,000 brands to show how at the best companies, financial performance relates to an ability to connect with fundamental human emotions, values and greater purposes. Stengel, 58, is also an adjunct professor at the UCLA Anderson School of Management and on the board of directors of AOL (AOL). He's writing this series for Fortune.com with Chris Allen, the Arthur Beerman Professor of Marketing at the University of Cincinnati.

 

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