David Calhoun left a job he loved as a star executive at General Electric to step into a mess as CEO of the A. C. Nielsen Corporation. His immediate challenge: The media research unit, which is under heavy fire from television clients such as NBC and CBS for chronic delays in reporting television ratings. Nielsen held a conference call with major clients acknowledging the delays and promising to do better, but the following Monday, the company again failed to report any ratings at all for the previous day. Nielson was not delivering data to customers as promised.

What’s the big deal? Calhoun and chief of research Susan Whiting know that about $70 billion a year in advertising revenues for the television industry depends on Nielsen ratings. Viewers might think TV networks are in the business of providing entertainment, but management’s primary goal is providing eyeballs for advertisers. When television managers and advertisers don’t get timely, accurate data from Nielsen, they’re shooting in the dark with decisions about how to allocate resources. Daily meetings at some companies are scheduled based on getting the information from Nielsen when promised. “There is so much revenue involved over which we have no quality control,” said Alan Wurtzel, president of research for NBC. “We don’t just use this data for analytical purposes. This is the currency of the business.”

Calhoun and other top managers are analyzing what went wrong at Nielsen. Originated in 1923 to perform surveys of the production of industrial equipment, Nielsen became a household name when it launched its television ratings system in 1950. More than 60 years later, Nielsen still functions as a near-monopoly in the ratings business. Yet the company could be facing a serious threat from cable and satellite companies that are working on a way to get set-top boxes to provide real-time TV viewing data to rival Nielsen’s.

Managers see several factors involved in the problems at Nielsen, but the biggest one is that the amount of data the company processes doubled in a year, overloading computer servers and straining the company’s human systems. The increase has come both because of changes in how people are watching television, such as over the Internet and other digital devices, and in the amount of information networks want. As the television business gets cut into thinner slices, clients need even more precise data to make good decisions. Nielsen is pursuing a strategy it calls “Anytime, Anywhere Media Measurement” to stay relevant and address new competition, but it has to get its quality problems fixed fast. Clients understand the strain, but they have little sympathy. They want to know why Nielsen managers didn’t anticipate the spike in data demands and plan accordingly.

Questions

1. Where do you think the problems lie at Nielsen? For example, are they primarily with the company’s strategic goals and plans, tactical goals and plans, or operational goals and plans? With alignment of goals and plans?

2. Do you think developing a strategy map would be a good idea for Nielsen? Why or why not?

3. If you were David Calhoun, what kind of planning processes might you implement right now to fix this problem?