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Jim Murren CEO of MGM Resorts, welcome to Stanford Graduate School of Business and
the Industrialist's Dilemma.
>> Thank you, it's my pleasure.
>> So now you've been the CEO of the firm since 2008.
Is that correct?
>> That's right.
>> What are the biggest changes you have seen in your business in the last decade?
>> Well, I’ve been there 20 years and I’ve been the CEO for 10.
The biggest change is really going from a casino-centric
model to a global entertainment company.
And it's a conscious change,
it didn't happen by happenstance but that's a major change.
I think the second would be how we've unified the company culturally.
We were a company of disparate properties, different cultures,
different points of view.
And we really weren't working well internally and
I think I'm proud of the change we've made there.
And I guess last is evolving in non-gaming areas to make us more relevant globally.
>> So do you think of your customers on a go-forward basis,
in fact some of whom are going to be our students later here today.
How do you need to interact with them differently maybe than
how you interacted with customers in the past?
>> Well, we continue need to understand technology.
The industry has been poor relative to other
retail industries as it relates to using technology to its benefit.
We are actually proud of our physical environments which really draw a lot
of people, but in today's connective world we really need to be more digitally aware.
And in the future, that's going to be important for
every demographic we deal with, but particularly, for
the folks who are going to be in this classroom because they're going to want
to be able to do everything they want to do on their smart device.
And we're crawling into that,
I think we're going to a major leap forward this year.
>> The time I spent with your team and understanding MGM,
one of the things that I've seen is you don't just have one business,
you really have five businesses, right?
You have hospitality, you have food and beverage, you have entertainment,
you have convention, it's a very, very complex business.
How do you think of those five businesses working together and
coordinating especially as you move to a more sophisticated digital infrastructure?
>> Well, that's the unique part of our business model I think,
is that that ecosystem of everything working together.
I don't think any one of those businesses would be as powerful
individually as they are collectively.
And being able to create that integrated resort experience
instead of a hotel experience is really the key to our business modeling.
Where MGM is a bit different than the other gaming companies is that we really
only feel we should be in markets where we can provide that entertainment experience.
So we're not in the commodity-based slot machine business, for
example, which is not to say that that's not effective for other folks.
It's just I don't think that's where we can deliver the most incremental value.
>> So you recently hired your new and first chief digital officer?
>> That's right. >> Tell me a little bit about
why you made that hire and what are the things that you're looking to do on
a go-forward basis over the next several years.
>> Well, I could say that you told me to- >> [LAUGH]
>> When you saw me last year.
But that'd be only partially true because we're in the market
when we were chatting in 17.
We had to find the right individual and this individual, Kelly Smith,
25 year vet, well known, he was running the digital platform for Starbucks.
I set it up in China.
He's got the right kind of experiences.
So we knew we needed somebody when you and I were chatting,
we didn't just want to hire anybody.
>> Right. >> And
I think we got the right individual and we've given him a lot of money to hire up,
staff up his department which really was nonexistent.
So why do we do that?
Because we recognize that yes, we have these experiences, but if we can improve
the guest interaction through digital, then we're going to get more market share.
So whether it's digital wallet, whether it's digital access into your room
Whether it's working on making your own reservations when you want to do it, or
just saying you need more towels, or whatever it is that you feel like when you
do not want to have a human interaction you do not have to have that.
We know that's important and he's already, we haven't announced this one yet,
but he's already hired another person and
he's well on his way to creating quite, I think, a good organization.
>> How do you coach your team to be balancing the move to digitization but
also the kind of service that MGM provides when people come to Vegas, and they
want to have fun, and talk to people, and feel like they're being treated specially?
>> I think the personal interaction comes naturally to my employees.
That´s what they've been brought up in the hospitality business,
that´s what they want to do.
The other part's the harder part, getting them to adapt to and embrace technology.
So we've talked about technology more in the back of the house area.
How do we use technology to get people out of their offices more,
to get them on the floor more, to streamline system services and procedures?
We've done a really good job of that in the back of the house.
We really haven't done a great job in the front of the house yet.
All of the people that work for me know we need to do that.
They don't know exactly how we're going to do it,
I think the people we've been hiring more recently will teach us all how to do it.
I don't think it will be as culturally difficult to get that change
implemented as other changes we've already done, working
together more collaboratively, not having destructive conflict within properties.
A lot of the change we've made, I think, sets us up
internally where we have a level of trust with our employees that we're going to try
to do the right thing and change can be a positive, not a disruptive force.
>> One of the new changes, and we've talked about this before,
you're a global business, you do business in Japan and China, and around the US.
And you think about Las Vegas, where MGM's obviously got a very large footprint.
Sports is becoming a big thing, you've got the Golden Knights,
who would've thought they would be in first place.
You stole our Raiders, right?
So the Raiders are going to come.
>> Sorry. >> That's okay, eSports is also something-
>> That's right.
>> That is increasingly becoming popular, especially with younger generation.
How do you think about those influences on your business and how that shapes,
how MGM will be doing business on a go-forward basis?
>> It's single greatest growth opportunity for Las Vegas.
Lets take tonight's, for example.
If you get on StubHub, 80% of the StubHub tickets out there are for folks
buying from the city where the visiting team is playing the Golden Knights.
Imagine what that could mean for us, what it already means for
us in terms of better fan engagement, more people coming to Las Vegas.
You mentioned the Raiders a couple years but
this year MGM, this is fairly ground breaking.
For the first time in our history we own a professional team,
we bought a WNBA team called them the Vegas Aces, and
they start playing with Bill Laimbeer as their coach this year.
I firmly believe within the next three years,
people will widely consider Las Vegas as the sports capital of the United States.
Major sports, bowl games, Superbowl,
college and there are a lot of reasons why it's easy to foresee that now.
Probably five years ago no one would have sensed that,
but all the perceived barriers between the casino industry and
the professional leagues have broken down between
the NCAA and my industry have broken down.
And I think that it bodes well for the whole town.
>> Okay, so if the last decade was a lot of integration, right?
Getting the properties to work together as you said fixing the back-end and
making that happen.
When you look forward the next decade, what do you think are the top two or
three things that are the biggest both challenges and opportunities?
You've mentioned eSports, but
what else is on your mind when you wake up in the morning?
>> From an operational perspective, I worry a lot about cyber security,
I worry about protecting our assets.
From a physical security perspective, that's an ongoing concern.
So I always worry about that, day and night.
From a standpoint of making Las Vegas relevant today and
in the future, I have high confidence and I think it's based on
being a student of Las Vegas prior to living out there for 20 years.
And seeing how it has really very nimbly changed itself over many,
many generations.
People want to move to Las Vegas, we don't have state income tax,
I hate to brag on that here in California, but we are collecting a lot of talent.
It's an exciting place to live now, wasn't so much so when I moved there.
And so we have to continue to do what our founder taught me to do 20 years ago.
He always said, and this is the genius of Kirk Kerkorian.
He always said that at any time we can attract intellectual and financial capital
to Las Vegas for ourselves and for our competitors, it's good for MGM.
And if you go into everyday thinking that you want your competitors to succeed,
you want them to invest, you want them to grow
because that'll help the destination of which you're the dominant player.
Then you go into it not thinking that someone's going to win,
someone's going to lose.
You go into it thinking we can continue to elevate the destination,
I do believe that's going to happen.
>> I think of all the companies that we study in the industrialist dilemma, MGM
may actually embody one of the greatest combinations of physical and digital.
The location and the entertainment and everything else and
now the next wave of entertainment that'll be coming.
So I'm looking forward to continuing to watch and observe and learn.
And Jim, we appreciate your coming to Stanford and
helping us do the class today.
>> It's my pleasure.
>> Thanks for your time.
>> Thank you.
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