When former Viacom chief financial officer Wade Davis agreed to buy a majority stake in Univision Communications Inc. this week, one task moved to the top of his to-do list: Learn Spanish. ASAP.
Davis’s investment firm, ForgeLight, with backing from Searchlight Capital Partners, will acquire 64% of Univision, which has been searching for a buyer since July. (Televisa will retain its 36% stake.) Univision is struggling with all the normal afflictions facing a TV broadcaster in the era of streaming—cord-cutters and increased non-broadcast competition—with the added disadvantage of carrying a hefty debt load.
But Davis has faith. In an interview with Bloomberg on Tuesday, he said Spanish-language programming still has a huge market in the US. “Language is incredibly relevant to them from an identity standpoint, from a cultural standpoint,” Davis said. “And I do think in totality, this audience prefers watching content in Spanish.”
That makes it slightly awkward that Davis doesn’t yet… speak Spanish, though he told Bloomberg—however improbably—that he hopes to learn before the deal closes.
Do outsiders help or hurt?
Davis is far from the first CEO to take the reins with a learning curve or language barrier. For every John “Papa John” Schnatter—a man who loves pizza so much that he claims to consume it daily—there are plenty of C-suite execs whose biggest asset is their ability to run teams of people who are themselves experts, and plenty of examples of CEOs from one company or industry jumping ship to take a leadership role in another.
Research is mixed as to whether an internal or external CEO is better for company performance. One study, of hospital CEOs, found that outsiders make their organizations more productive. Another, of public companies, found that outsider CEOs who lack domain expertise invest less in innovation.
More clear is the relationship between leadership expertise and employee morale. “If your boss really understands the nature of your work, then that predicts your job satisfaction,” Amanda Goodall, a senior lecturer at Cass Business School in London, told Harvard Business Review. In looking at survey data for 35,000 US and UK employees, Goodall found three responses that were strong predictors of employee satisfaction: those who said their bosses were competent, had worked their way up through the organization (or founded it), and could still do the job of a regular employee.
Technical skills vs. culture
It’s hard to argue that Davis doesn’t know television. He spent 14 years at Viacom—a company whose roster of channels appeals to a wide variety of demographics—before leaving amid the recombination with CBS. He was also on the board of Roku for three years. In discussing the Univision acquisition with the Hollywood Reporter, Davis said he plans to capitalize on the network’s advantage in the competitive landscape.
“When you look at the asset base that Univision has—whether you start with the brand, the power of the brand and connection with this audience—it has this huge audience and the fastest growing demographic in the US,” Davis said. “And it’s culturally relevant, and Univision is the leader with that audience.”
Davis said he plans to continue Univision’s focus on its core audience—the company has divested itself of all English-language channels—and on finding sports and entertainment offerings that appeal to that demographic. In an interview with Variety, he called Univision “the most attractive traditional media business today.”
But despite Davis’s familiarity with the industry, there is something untoward about a middle-aged white man touting the moneymaking potential of Spanish speakers while not yet having learned Spanish. Moreover, Univision isn’t any old business. Its key product is culture, which makes Davis’s outsider status a particularly significant vulnerability—both for Univision as a business and for its role as a cultural institution.
In the world of corporate leadership, there are few lessons to be taken from Papa John. (Among them: Don’t be offensive and bigoted, and minimize the number of people who know you ate 40 pizzas in one month.) But living and breathing your company’s chief product, including by speaking its language—that’s good guidance for Wade Davis to chew on.