Editor’s Note: This is part three of a three-part series covering our interview with Hasbro Chairman and CEO Brian Goldner. The complete conversation will appear in the Fall 2018 edition of InnoLead’s magazine.
In the first part of the series, Goldner discusses the importance of storytelling, how to think globally, and taking a “digital-first” approach. In the second part, he discusses employee idea generation, how innovation is structured at the organization, and the company’s “Quick Strike” team.
InnoLead: Every company that implements innovation programs encounters resistance from the culture and “this is the way we’ve always done things.” How has Hasbro faced resistance and what steps did it take to counteract it?
Brian Goldner: There’s always a nostalgic view of the world. As humans, we all want to find that moment to enjoy the successes that we’ve achieved. You’ll always have individuals at the company — and it’s not a bad thing — that will say we should celebrate our successes. But then we have to recognize that for every success and capability we’ve on-boarded, that represents a point of departure, and opportunity to go to the next logical place and to continue to evolve our company. Having said that, that’s contrary to human nature. Human nature is all about points of arrival: When I get to be x years old I can do y. When I get to be 16, I can drive a car and then I can vote at 18, and then eventually at a certain age, I can drink a beer. Whatever it might be, humans are about points of arrival.
Companies have to be about points of departure. So, you always have groups of individuals… who say, “Look, we’ve developed these skills; let’s just play them out for awhile.” And what we all realize is that innovation always needs to come one season sooner than we expect. Because the consumer moves on one season faster than we’d like. We have to stay out in front, and we have stayed out in front. It’s the reason we’re now the No. 1 company in this space, and years ago we were nowhere near that. We want to continue to be first-mover and continue to create the world’s best play experiences. That comes from being out in front and being able to get a view of the horizon line of where consumers and audiences are going.IL: Technology has changed so much—affecting every aspect of games, down to board games. For instance, the game pieces for risk, which used to be geometric shapes are now battle figures. Can you talk a little bit about the logistics of how games have evolved?
Goldner: The big unlock for us in our games business is a good example. For years and years, the marketing and design team of our games business sat on the second floor of a million square-foot factory in Massachusetts. And so, as marketers and designers, a lot of their thought process was informed by what the factory could create. That wasn’t bad; it was probably a really good practice, because of course you had all the capacity in the factory and you wanted to make sure you could fill that capacity and bring people a lot of fun playing games.
However, when we did the research with consumers…we were asking our consumer to step back in time and reimagine their kitchen table like a Norman Rockwell painting. And that wasn’t the way a lot of families see game playing. They wanted to play faster; they wanted to play more expressively; they wanted to get outside of being on a board as a board game. So we moved that team [to Hasbro headquarters to be near other designers and marketers] and added skillsets, and by moving the team and adding skillsets, we began to approach face-to-face gaming as a new endeavor, rather than just looking at it as board games, and our games business has grown substantially since. Because we began to re-evaluate what people want to do when they get together, how people want to be social, how do they want to be able to put down their cell phones and look up and spend time with their friends and family. We realized there was a whole playing field available to us that we could tap into, if we also spent time realizing that we could make games to play face-to-face that weren’t necessarily made of cardboard or two-dimensional.
You now have Monopoly games that play with electronic banks and credit cards. The latest Monopoly game is the Cheaters edition. We realized a lot of people cheat at Monopoly. We actually made a game where people try to get away with the cheating and if you get caught, it’s bad news. And it’s also very topical because obviously the world is a little more polarized, and people do things in different ways, and we wanted to have fun with that.
We have to recognize that for every success and capability we’ve on-boarded, that represents a point of departure, and opportunity to go to the next logical place and to continue to evolve our company.
– Brian Goldner
IL: How are you integrating content and commerce?
Goldner: Let me give you an example. I said this term earlier: “content to commerce.” Now we’re able to play a piece of content for a consumer on any device, and in that content is embedded a capability so that if you scroll over a character that’s seen in a movie trailer, for example, you’re able to stop on that character and in one click buy the product associated with that hero.
You can show a short-form video — a trailer, a gif. It might be a little meme—it could be anything. And you click through that and then sitting behind it in software is the opportunity, with one click, to frictionlessly buy what it is you’ve seen.We did this recently for the “Solo” movie. With Nerf, we had a Nerf YouTube video that ran with an influencer group called Dude Perfect. And they do all the trick shots, highlighting our new products. We made a video with them showing off a unique product that we featured with them for the first time, which was a giant bow and arrow with a foam arrow. And they…showed how it played and did all the trick shots, and at the end they offered people a chance if they wanted to buy it, they could buy it right off the video.
So when I talk about digital-first, it’s not just about product, it’s the whole approach to the consumer and audience ecosystem.
IL: Who is Hasbro hiring or partnering with to win in this digital world?
Goldner: About 50 percent of our employees are new to the company in the last five or six years. Part of that has to do with opening new markets and new territories. Part of that has to do with new capabilities in data analytics and managing replenishment algorithms for online and omnichannel retailers, and then part of it has to do with all these new development skillsets, developing across analog and digital and content to commerce, and so we continue to change the composition of our workforce.
Many new positions have been established—everything from digital marketers to social media manager experts to data analyst and data scientists and replenishment roles, and people making short form content in our Cake Mix Studios. We bought an animation studio in Ireland [Boulder Media], and they’re creating CGI content for a fraction of the price of CGI content. So it’s across the board, it’s really in everything.
IL: What’s on the horizon? Traditional games like Dungeons & Dragons, which is over 40 years old, just had its best year in sales ever in 2017.
Goldner: Dungeons & Dragons is an immersive role-playing game. It’s really a team-oriented game. It’s not really about the winning and losing; it’s about engagement of a group of people together, creating a fantastical story. It’s really having a resurgence because people are very interested in connecting with one another, and it’s a really wonderful format to play together. We give our fans a lot of ways to engage—from our books containing the rules, characters and stories, to mobile games that we’re working on for the future, to immersive PC-based games and console-based games. It’s a full suite of games and it’s all around D&D. We’re also developing a feature-length film for Dungeons & Dragons based on the published material. It’s a brand that’s had dozens of New York Times bestsellers published. We’re tapping into decades of the canon to bring those stories out to our fans.
IL: How far into the future is something like “Ready Player One”?
Goldner: I don’t think it’s that far. …You’re already seeing the viewership of eSports, and people playing online, is bigger than all of the traditional sports-oriented cable networks. [Amazon’s game streaming service Twitch, which allows people to watch and share their game playing, reports it has an average viewership of over 1 million viewers.] Think about that. It’s below many people’s radar, but it’s absolutely front and center for audiences all over the world.
IL: Seismic shifts have reshaped the toy industry this year, with Toys”R”Us shutting its doors and sales of electronic toys continuing to skyrocket. How do you see things shaking out?
Goldner: We’ve grown our business over a number of years, and we view this year as very disruptive — but also temporary. It’s a situation where Toys R Us has clearly gone out of business, not because our industry is not compelling, but because of the structure of their business. Therefore, we’re really focused on our growth beyond 2018. … Not only do we believe we’ll continue to grow, but we’ll continue to expand operating margins as we continue to provide valuable experiences to consumers and audiences and to our global retail customers.
IL: As CEO, do you feel that Wall Street analysts and investors give Hasbro and other public companies enough leeway to invest in long-term innovation?
Goldner: I would say that they do, as long as you’re very clear in communicating how you intend to invest while also making a fair return to investors. Throughout time, what we’ve always said is each and every year, we foremost invest in our business, and then we also return excess cash to our shareholders, [in the form of] dividends and share repurchases. But first and foremost, we’re investing in our business. We’ve invested…over the last ten years over a billion dollars in incremental initiatives, and about $2 billion to create the R&D, the product, and the marketing of the future. So I would say our investors have been our partners and they understand what we’re trying to achieve because we communicated it very clearly.
This is the final part of our three-part interview with Hasbro Chairman and CEO Brian Goldner. Read part one here and part two here. This story is featured in our Fall 2018 magazine.