- Learn how the WWE used KM to save the organization from bankruptcy and build it into the powerhouse that it is today
World Wrestling Entertainment (WWE) is a publicly-traded organization (NYSE: WWE) that primarily deals with professional wrestling, and it is currently the largest professional wrestling promotion in the world. However, this wasn’t always the case. In the early 1990s, the company experienced a setback. In 1994, Vince McMahon, the WWE’s owner, was tried and acquitted of distributed steroids, and in 1993, a group of employees accused 3 WWE officials of sexual harassment, which was reported by numerous news outlets. Between the scandal and the criminal trial, the company began losing revenue, forcing McMahon to cut staff and wages by up to 50%. In addition, his main competition, Ted Turner’s WCW, began overtaking his product in television ratings and revenue. By 1996, the WWE was near bankruptcy. McMahon realized that his current formula wasn’t working anymore, and he had to do something fast or he would lose his company. How did Vince McMahon take his company from near bankruptcy in 1996 to a net worth of over $1 billion dollars in 2000 to a publicly-traded company today? By using knowledge management.
What KM Practices Were Used to Save the Company?
Collaboration with ALL Employees and Contractors
Vince McMahon, Chairman and CEO, World Wrestling Entertainment
In the past, Vince McMahon and a small team of individuals who were experienced with promoting wrestling events designed and developed the product, which included: marketing, talent casting and storyline development. WWE employees and the performers (who were considered contractors by the WWE) had no say in the direction of the company nor did they have a say in the product development (ex: character development, storylines). McMahon realized that what he and his team were developing was no longer working by looking at the drop in ratings and sagging revenue from live event attendance and product purchases.
McMahon had a meeting with his staff and contractors (wrestlers) and told them that the formula that he used in the past was no longer working, he didn’t know what to do, and he was open to ideas on how to fix it. Some of the ideas that he received that helped improve the company’s fortunes include:
- A magazine writer on his staff proposed ideas directly to McMahon on ways to improve the product. He proposed that: the product should start skewing to a different audience; performers should have a say in their character development and storylines; the publication should start writing stories as if it is entertainment and not as “real life” (ex: cartoon character-type wrestlers aren’t really like what they are on TV); and the company should start paying attention to the current pop-culture trends (ex: increased Internet usage) so it can stay relevant.
- Wrestlers proposed ideas on how they want to be portrayed and marketed. As long as it didn’t violate any FCC or copyright rules, McMahon let them try it to see if it would work. (Note: One of the most successful character development ideas that came from a wrestler was “Stone Cold” Steve Austin)
- In the past, McMahon never watched shows from his competition. He never really had to because he didn’t have to go to the competition to recruit performers – they came to his company to try to get work. Staff members encouraged McMahon and his senior staff to watch the competition to help better his own company. By watching the competition, McMahon was able to learn what the competition was doing right to get the audience and what the competition was doing wrong (or not doing at all) so the WWE can take advantage of the competition’s weaknesses.
Using Social Media to Gather Intelligence and Gain Fans
We already know about the impact of social media today, such as Twitter, Facebook and Pinterest. Before there was Facebook and Twitter, the Internet had message boards and chat rooms for social media. Wrestling fans from around the world were using these tools to communicate with each other. Fans would express their opinions about the wrestling product (and other interests), and some fans would use these tools to write their own storylines and ideas.
Technology-savvy WWE creative staff saw the potential with using these tools to gauge opinion about their product, gather ideas for storylines, and gain fans by getting the performers to participate on message boards and chat rooms.
For intelligence gathering, staff would pretend to be wrestling fans and join the boards or chat rooms to get information and ideas. If there was an overwhelming amount of praise or criticism for a direction or a performer, the staff would use that information to either continue with what they are doing or change course.
The company also set up their own web site and set up a chat room to encourage fans to communicate with one another. In addition, the company sponsored events where they scheduled chat sessions with their performers to allow fans to directly speak to that performer via the chat room. This helped build a fan base since the fan felt that he or she was personally connected to a particular performer because he or she was able to talk to them.
Knowledge and Resource Sharing with Other Organizations
Before the WWE began improving, McMahon and his executive staff took notice of a trend that was happening at the WWE’s live events and television broadcasts. A healthy percentage of his audience were holding up signs and chanting “ECW!” at WWE events. ECW (Extreme Championship Wrestling) was a small organization that was beginning to build a large fan base and television audience due to word-of-mouth advertising and fanbase advertising through message boards and chat rooms. Rather than ignore the people or eject the people chanting another organization’s name, McMahon and his staff started paying attention.
McMahon reached out to the owners of ECW to collaborate with them on ways that both organizations can grow their audience and increase their television market. McMahon also used it as an opportunity to find out how ECW was growing a fan base on a shoestring budget (ECW marketed their product where the fans felt like they were actually part of the organization, and as a result, the FANS did all the advertising for ECW).
Besides adding another factor to gain a fan base, it also gave him another perspective to help him make strategic decisions on his company’s direction. He was able to learn about how to get fans more involved in the product, and he was able to get tips on low-cost marketing.
Using Technology for Knowledge Sharing
In the 1990’s, the Internet was growing in leaps and bounds. Using the Internet as a marketing tool was a low-cost alternative to television, radio and marketing ads. The WWE used the message boards to advertise upcoming pay-per-view events, and they started experimenting with streaming broadcasts of events typically not found on television to help pique people’s interest in the product. The WWE also used their Internet site to market their performers to help get fans to connect to them. For example:
A successful Internet marketing campaign that the WWE implemented was they marketed one of their female performers as a sex symbol. That campaign ended up reaching outside of the wrestling market, and the woman ended up as the most downloadedcelebrity off the Internet and featured on numerous non-wrestling programs.
One of the other things that the WWE did to help their business operations was they used their Internet site to publish company information (such as financial information, attendance figures, and viewership figures). This helped the company in the following ways:
- This gave television networks from around the world an idea of what the WWE could bring to their network. A highly-rated show on a network equals more advertising dollars since companies are more apt to spend money on a show watched by 5 million people versus a show watched by 500,000 people.
- This gave companies an idea of whether advertising their product on a WWE television show or live event would get a good return on investment. Companies had an idea of who was watching the programming and attending the events, and how many people were watching the programming and attending the events.
Knowledge Management by Mwalimu 