2008 Leadership Award: Ron Meyer

Management approach puts people first

At 5:00 a.m. on the first Sunday in June, waves from the Pacific Ocean lapped against the beach outside the Malibu home of the longest-serving head of a Hollywood movie studio. As his phone rang, Ron Meyer grabbed the receiver without panic. He often got early calls: During his 13 years as president and COO of Universal Studios, the executive had always insisted on being notified whenever something significant occurred.

Earlier that morning, a fire had broken out on the 415-acre studio backlot, right where the historic New York Street set was located. By the time Meyer reached the studio 45 minutes later, "the video vault and King Kong were also on fire," he recalls.

How Meyer handled the situation was characteristic of his steady hand. He didn't throw his weight around, didn't hog the credit -- but, surrounded by trusted staff, he was at the epicenter of every critical decision related to the fire and its destructiveness: analyzing every action with the fire chief, discussing when the theme park would reopen, holding a press conference.

"I've never believed in generals who give orders from some barracks in a safe place while they send their troops out to fight," says Meyer. "Corny as it sounds, the General Pershing/General Patton example of getting in front of our troops and charging with them is what we should be (doing)."

Meyer has been charging with his troops for years. Subtly, often invisibly, he has been pivotal to his studio's victories. If it seems strange to hear Meyer, the most laid-back of studio executives, speak of Pershing and Patton, the contradiction is just one facet of a man more complex -- and more capable -- than has often been recognized.

A high school dropout with no formal education, he has become a connoisseur of modern art, with a minimalist office that boasts a celebrated triptych of Mao portraits by Andy Warhol.

Easygoing and un-authoritarian, he is also a Marine Corps veteran who served a two-year stint in the military.

He rarely wears a tie and is hardly ever seen in a suit, yet he's a masterful corporate insider who has made himself invaluable to one of the most buttoned-down businesses in America, General Electric, the parent of NBC Universal.

Most startling of all, even though he runs a modern empire, he doesn't have a BlackBerry, doesn't use e-mail and doesn't even possess an office computer. Instead, he relies on those prehistoric tools: the telephone, notes prepared by his three full-time assistants and his highly organized mind.

"I'm kind of anal-retentive," he admits. Sitting in his office within Universal's celebrated Black Tower, just days after the fire, he crosses to his almost-bare desk and opens a folder with lists of meetings to attend, people to call and appointments to keep, each of which he strikes out with a clean line the moment it is done.

This zen simplicity operates within one of the most complex organizations in American business history. And it is Meyer's ability to avoid the extraneous and concentrate on the people in an approximately 10,000-person operation that makes him exemplary, the recipient of this year's Leadership Award. (Previous Leadership issues have spotlighted Rupert Murdoch, Oprah Winfrey and Robert Iger, among others.)

"Believe it or not, in a company like ours, it still all revolves around people -- picking the right people, knowing who to trust," says Jeffrey Immelt, GE's chairman and CEO. "Ron's proven he is just a great people guy. He's got a good nose for it, and so he interacts well with me and with the GE team."

"He creates an environment of trust, but absolute accountability," says director Ron Howard, whose Imagine Entertainment has a long-term relationship with Universal. "He's extremely gifted in terms of understanding the human dynamics that factor into the filmmaking process on every level, from script development through distribution."

Meyer credits the late Phil Weltman, for whom he worked at the William Morris Agency, with helping to shape his worldview.

"He was an amazing leader," Meyer says. "He didn't worry about taking credit for himself; he worried about having his people grow and do the job they were hired to do."

Weltman taught his protege that there were three things that mattered in business: "The first thing is people, the second thing is culture, and the third thing is profitability," Meyer explains. "If you do the first two right, the profitability will follow."

That is how it has worked for Meyer at Universal, whose overall revenue has grown by more than 200% since he took over, with the studio releasing an average of 17 films a year. Out of the approximately 200 movies released during his tenure, 38 achieved worldwide boxoffice over $200 million and the studio has been profitable for 10 of his 13 years, with nine films nominated for the best picture Oscar and three wins (2001's "A Beautiful Mind," 2000's "Gladiator" and 1998's "Shakespeare in Love").

Insiders often forget that Meyer has also been a shrewd overseer of Universal's theme parks and fought off attempts to sell them early in his run. Now Universal is reaping the rewards: Attendance has grown from 11.5 million in 1995 to over 17 million visitors per year now. More than a dozen major new attractions have been added, along with new parks around the world and more to come.

This success has allowed Meyer to survive multiple studio ownership changes and seven different bosses. There have been questions about whether another ownership change is on the horizon -- especially in recent months -- but Meyer rejects that possibility.

"Having been part of four sales, I can usually see the signs," he says. "I see no sign from GE at all."

Born Sept. 25, 1944, Meyer was the son of a middle-class traveling salesman who fled Nazi Germany in the 1930s. He grew up in Los Angeles, but quit school at 15 and enlisted in the Marines at 17. While quarantined with the measles, his mother sent him Stephen Longstreet's novel "The Flesh Peddlers" (1962), about a talent agency. Meyer was hooked -- he wanted to be an agent.

As soon as he could, Meyer returned to Los Angeles, but none of the agencies was interested in a high school dropout fresh from the Marines. After being widely rejected, he got his start in 1964 working for the Paul Kohner Agency, whose clients included Henry Fonda, David Niven and Billy Wilder.

For the next six years, Meyer worked as a messenger for Kohner, running errands, delivering packages and driving his boss around -- always watching, listening and learning.

He learned the importance of being scrupulously organized and meticulous. He recalls being given 10 things to do one day and accomplishing nine -- and being pleased with himself. But the office manager yelled at him for missing the 10th. "I realized eventually, she was right," says Meyer. "My job was to do all 10 perfectly, not nine. If I didn't write it down and keep meticulous notes, I wouldn't get it right. My brain didn't work that way, so I wrote everything down."

In 1970 Weltman hired him as a TV agent at William Morris, where he worked alongside other fledgling agents, including Bill Haber and Michael Ovitz. It was a strikingly different operation from the one he had left. To figure out his new job, Meyer would stay at the office reading deal memos and contracts hours after everyone had gone.

When Weltman was abruptly fired, his loyal team was infuriated. It was a key motivating factor that led to five agents, including Meyer, Haber and Ovitz, leaving to found Creative Artists Agency in 1975.

CAA would grow into one of the most powerful agencies in Hollywood, the epitome of the modern tenpercenter, whose employees dressed in Armani suits and operated from a state-of-the-art building designed by Pritzker Prize-winning architect I.M. Pei.

Meyer was the good cop to Ovitz's bad, an agent who stayed beloved even as CAA took on an occasionally threatening mantle. His roster of clients grew to include Tom Hanks, Meryl Streep, Michael Douglas, Sylvester Stallone and Barbra Streisand.

Douglas, born the same day, year and hour as Meyer, was his client for 23 years until Meyer left for Universal. He credits Meyer with helping him make his best films.

"He could judge talent's passion strongly and act accordingly," he says. "He was very helpful in drawing the line in the sand (to make deals). As the negotiation went on, he was diplomatic; but when it reached a certain point, he was strong."

Part of Meyer's skill as an agent -- and now as an executive -- lay in calibrating precisely how much strength to use, and when to use it.

Barry Meyer (no relation), now chairman and CEO of Warner Bros., remembers once, as a young executive, missing an important deadline to renew an actor's option. "It was something that could have cost me my job," he explains. "What (Meyer) did was talk me and his client through it -- which he didn't have to do. Those are the kinds of things you remember for a long time."

In the mid-1990s, with his reputation soaring and his power ascendant, Meyer left CAA to run MCA (renamed Universal Studios in 1996) -- a move that jolted the entire industry.

He wasn't the first choice for the job. When Edgar Bronfman Jr., a Seagram heir, staked much of his family's fortune on the entertainment business by engineering the $5.7 billion acquisition of MCA from then-owner Matsushita in 1995, he initially approached Meyer's partner Ovitz. Only after Ovitz made excessive financial demands did Bronfman turn to Meyer in a move many regarded as an act of desperation.

"I was the second choice," Meyer shrugs. "There was no question of it."

The industry was skeptical. How could this untested agent ever run a studio, let alone survive the machinations of a large, conservative corporation?

Meyer's first two years added grist to his critics' mill. Looking back, he says he didn't realize how different it would be to be a buyer, not a seller, that he underestimated the resistance he would face from an entrenched management corps.

"I thought when I came here I would understand what I could do and what I could bring to Universal. But it was a place that resented me to a certain extent (for having displaced the longtime managers), and one that I didn't completely understand. It took me about two and a half years to get my feet planted."

While a few big films like "The Lost World: Jurassic Park" (1997) worked well, the studio failed to produce enough hits and sank into red ink.

"I'm lucky Edgar stayed with me, because I really had horrible results," Meyer reflects. "I really was fortunate to get on-the-job training and his support. But we were able to create a culture, build a team of people who were working with us, and that hasn't really changed."

Creating a culture is a concept Meyer returns to repeatedly, part of a clear management philosophy.

"'Culture' is establishing an environment that is conducive to doing our very best work," he explains. "Part of my job is to be an advocate for Universal Studios -- for and against whoever employs us. If I can win 65% or 75% of the fights, then I've done my job."

One of the points Meyer won centered on expanding the bonus pool to share profits from the studio's successes more broadly than in the past.

"I said to Edgar, 'We need to have a plan here that goes very deep within the organization so that people all have a rooted interest in what happens in this company,'" Meyer explains. "To Edgar's credit, he agreed immediately."

That helped solidify executive loyalty -- along with Meyer's own ability to forge deep bonds with his colleagues. Many of the executives he brought in remain with him today, including general counsel Maren Christensen, executive vp human resources Ken Kahrs, Universal Pictures vice chairman Rick Finkelstein and head of corporate affairs Cindy Gardner.

In notable contrast to most industries, as of 2008 the average service for Meyer's top 25 executives is 15 years. Among department heads, 83% have been with Universal more than 10 years.

If an instinct for people came naturally, Meyer admits he needed help in understanding the financial mechanisms at play. For that he turned to business consultant Ram Charan, who, he says, "took us from red to black."

Charan, an Indian business consultant with an M.B.A. and doctorate from Harvard who has written a series of books about how companies need to operate to do well, "helped put it in understandable terms," Meyer says. "He was able to look at our results and, while not really understanding the movie business, (explain) business fundamentals. It made a huge difference."

By 1999 Universal had begun its turnaround in earnest.

"When I got here 10 years ago, the studio was coming out of a kind of dark period," recalls Adam Fogelson, president of marketing and distribution for Universal Pictures. "Things started turning around with the first 'Mummy' (1999), the first 'American Pie' (1999), the first 'Fast and the

Furious' (2001) and 'Notting Hill' (1999)."

As success kicked in, "everybody who worked here got offered a lot more money to go somewhere else," Fogelson recalls. But it was Meyer who convinced them to stay.

"As much fun as this business can be, it's really hard," says Fogelson. "It is infinitely harder when you don't feel you know where you stand. You always know where you stand with Ron."

Where Meyer himself stood -- at least in his bosses' eyes -- was a more open question. In 2000, Bronfman sold a controlling interest in Universal to Vivendi, a French communications giant. It was the beginning of a period of turmoil that would have doomed most other executive reigns.

In 2001, Vivendi extended Meyer's contract another five years, but it also struck a deal with Barry Diller's USA Networks, combining USA's TV assets with Universal's film studio and theme parks into a new company dubbed Vivendi Universal Entertainment, headed by Diller, which made him Meyer's new boss. Though they had been friends for years, Meyer and "Killer" Diller had distinctly different styles.

"Barry had very much an in-your-face management style," says Meyer. "We just didn't agree culturally on how to run (the studio)."

Leaning back in his plush modern sofa, dressed in T-shirt and jeans, he adds, "I believe if you have the right people and the right culture, results will follow. I have great respect for Barry, but in my experience, Barry cares about the results before people and culture."

Sources say Meyer came close to quitting, but Diller left and Vivendi went through changes of its own, leading to the 2004 acquisition of Universal by GE and NBC.

His steadiness kept the studio functioning.

"As we went from owner to owner, the smooth transition was amazing," says Finkelstein. "(Meyer) would sit down with these people and spend time with them initially. He is so honest and genuine, they would trust him from the get-go."

That trust added weight to Meyer's role when it came to one of the largest-scale negotiations in recent Hollywood history: Universal's attempt to purchase DreamWorks in 2005.

Meyer spent months negotiating with DreamWorks' notoriously demanding owners, David Geffen, Jeffrey Katzenberg and Steven Spielberg. Terms and price had been set, but the deal needed approval from the GE board, which balked at the price and bounced it back to Meyer. That move insulted the high-profile trio, who instead sold to Viacom, parent of Paramount.

Shortly after, Meyer faced another letdown when his longtime deputy, Stacey Snider, left -- ironically, to join DreamWorks.

It was "more of a pain in the ass than a catastrophe," Meyer says. "I loved Stacey and loved working with her, but she's doing great now and we had the best year in our company's history last year."

That success was shaped in part by a bold decision Meyer made when it came to replacing Snider.

It was his call to harness two very different executives as chairman and co-chairman of Universal Pictures: longtime marketing executive Marc Shmuger and David Linde, a veteran of the independent and international scene who had co-headed specialty label Focus Features.

"I'm a believer in partnerships," Meyer says. "Stacey and I were partners. And at CAA, Mike Ovitz and Bill Haber and I functioned as partners."

The Shmuger/Linde partnership helped lead Universal to its most profitable year ever, with five films that each grossed over $100 million domestically in 2007: "Knocked Up," "Evan Almighty," "I Now Pronounce You Chuck & Larry," "American Gangster" and "The Bourne Ultimatum."

The 2007 boxoffice results set a new all-time record for the studio, with worldwide grosses of $2.13 billion.

For those who may once have questioned Meyer's skills, there is no better evidence than this. For those who once doubted his ability to master the intricacies of studio life, the recent past is proof.

Meyer's business acumen is beyond question. But it is his humanity that those who know him best keep coming back to.

"This place has a moral center because he's our boss," says Jimmy Horowitz, Universal Pictures executive vp and co-president of production.

Adds Shmuger: "There's never been a day that Ron hasn't been there to support you in the best and most collaborative way. That empowers you to do your job."

He pauses. "He will never fail you. He never has."

Meyer's journey from agent to studio chief

1964 Meyer begins his career as a messenger with the Paul Kohner Agency.

Meyer is hired by the William Morris Agency.

Along with Bill Haber, Michael Ovitz, Rowland Perkins and Michael Rosenfeld, Meyer forms Creative Artists Agency.

Sylvester Stallone becomes Meyer's first major movie star client, marking the beginning
of CAA's rise.

CAA’s new Beverly Hills headquarters is built.

Seagram, led by Edgar Bronfman Jr., buys a controlling stake in MCA, parent of Universal. Meyer signs 10-year contract as president and COO.

Bronfman hires Frank Biondi as Meyer's boss. MCA is renamed  Universal Studios.

Seagram sells most Universal TV assets to Barry Diller's HSN, renamed USA Networks.

"Shakespeare in Love" wins seven Oscars. Universal breaks its single-year domestic boxoffice record, which had stood since 1982, pulling in $934 million.

Vivendi acquires Seagram and French pay TV service Canal Plus,
renaming the new firm Vivendi Universal.

"Gladiator" wins five Oscars. Vivendi acquires Diller's USA Networks and forms Vivendi Universal Entertainment, headed by Diller, who becomes Meyer's new boss.

"A Beautiful Mind" wins four Oscars. Jean-Marie Messier is forced to resign as CEO of Vivendi Universal and is replaced by Jean-Rene Fourtou, who sells off assets to avoid bankruptcy.

Vivendi Universal and General Electric's NBC merge to form the new NBC Universal.

Meyer leads Universal's failed effort to acquire DreamWorks.

Stacey Snider leaves Universal for DreamWorks. Meyer names Marc Shmuger and David Linde chairman and co-chairman of Universal Pictures.

Meyer receives the PGA's Milestone Award. Jeff Zucker replaces Bob Wright as CEO of NBC Universal. Meyer renews his contract as president and COO of Universal Studios for five more years

A fire at Universal burns the New York Street cityscape.