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Entertainment Network Implements Custom Internal Audit Solution

Abstract

We designed an internal audit solution to the challenges facing a major entertainment network with regional programming offices. The network's corporate goals and objectives were not clearly understood at the regional level.

The Challenge

We were asked to help the client, a major entertainment network, to optimize the integration of local operating entities within a newly centralized corporate strategy, based on a sports network with national news and events and a high degree of local programming. Corporate goals and objectives were not clearly understood by regional operating management; the centralized strategy did not address critical regional issues.

How We Helped

Our Enterprise Risk Services (ERS) team approached the engagement as an internal audit assignment. The project required detailed analysis of the client's business processes and close cooperation among personnel at all levels. Through a series of individual interviews with corporate and regional management, and group workshops at each regional operating entity, the consultants identified 38 risks not adequately addressed.

The consultants were careful to establish credibility with the local operating personnel. The goal was to identify key impediments to effective management strategy. Whereas the initial focus of corporate management was to streamline staff, the interviews and workshops revealed the importance of all existing roles. The results illustrated that corporate influence on local operations would be enhanced by focusing on more basic strategic and operating issues.

The ERS team's interview process focused on the nature of the business, including objectives and barriers to reaching goals. The interviews uncovered four key challenges—implementing customer relationship management technology, ensuring timely payment of vendors, creating effective on-air promotions and improving communications between corporate and local operations.

A major finding was that the role of the local general manager was not clearly understood, defined or communicated. Prior to setting up the new corporate organization, this individual had substantial autonomy. In the new organization, the position became the key relationship manager in the local market, with ties to the team owners and the sports marketing community. Even with a change in focus, the general manager needed to be aware of team negotiations and advertising efforts within the context of the local market environment.

Solution

The internal audit review resulted in a rebalancing of corporate strategy and local autonomy within a centralized structure. This involved creating a corporate position,  vice president of operations. This spokesperson for local general managers has primary responsibilities for ensuring good communications between that group and corporate staff. Additionally, regional sales representatives were given more authority, and their relationships with the local general manager were clarified and enhanced.

The consulting team helped corporate management frame the changes so that they would be viewed positively by local operating management. This was accomplished in part through creating a self-assessment tool for the local stations. Surprisingly, stations that were viewed as "stars" did not score as well as expected with the new assessment tool. However, all groups found the results useful in indicating needed change.

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