MGM Resorts International last week released a condensed transcript of the presentation given by company Chairman and CEO Jim Murren at the University of Pennsylvania’s Wharton School of Business in April.
The presentation, part of the school’s Leadership Lecture series, laid out the five strategic initiatives that transformed MGM Resorts over the past decade, in a lecture title “Transforming a Business and Building Communities.”
Murren made the following points in the lecture:
Initiative One: Forging a single, unified company
“MGM Resorts resulted from the merger of MGM Grand and Mirage Resorts. After the merger, the two organizations continued to operate separately, with two COOs and two separate cultures. Multiple properties competed against each other. There was no unified strategy for growth—and no way to implement one even if it existed. The company also shared some shortcomings of the traditional gaming industry, which lagged in business strategy, technology, and diversity.
“When I became president and COO in 2007, I believed it was imperative to create a new MGM—a unified company with a unified strategy for growth, sophisticated business capabilities and a defining culture.”
Initiative Two: Embedding a drive for continuous improvement and profit growth
“With this architecture in place, we began unifying MGM Resorts. Yet, our properties weren’t meeting expectations or generating the same revenue as before the crisis. So we executed another strategic pivot. We re-evaluated every aspect of our business, including $4.5 billion to $5 billion in operating expenses. We examined how we staffed, used technology, and managed vendor relationships. And we spoke with Fortune 100 executives and our largest investors to find fresh ideas.
“The result was the Profit Growth Plan—a $400 million continuous improvement project to leverage our ‘one company, one culture’ vision. Employees now evaluate how their decisions impact the entire company, not just one property or department.”
Initiative Three: Turning a set of gaming assets into a powerful entertainment brand
“While we re-shaped MGM internally, we also transformed ourselves externally. Instead of focusing on casino-centric assets and gaming revenues, we turned our resorts into showcases of entertainment choices, inviting public spaces, and sophisticated architecture. We first tested this approach at CityCenter—a pioneering Las Vegas development—and then applied it across the nation and globe.
“Our resorts now offer unrivaled entertainment experiences, including five-star hotels, state-of-the-art conference centers, mind-blowing live performances, and cuisine from renowned chefs. Customers are responding; our new MGM National Harbor outside Washington, D.C. attracts over 20,000 daily visitors.”
Initiative Four: Revolutionizing our industry by making social responsibility a business imperative
“Diversity, community building and sustainability are central to MGM’s business strategy, not mere buzzwords. They make MGM a better place to work and a more welcoming place to visit, driving our company’s success.”
Initiative Five: Positioning MGM Resorts at the cutting-edge of business
“I believe our success validates the strategy launched in 2007.
“But our goal is to establish MGM as a leader not just in our industry, but in the entire business world. To do so, we’re developing capabilities that rival the best of any industry. Our database is on par with any major bank, and MGM recruits from Amazon and eBay are turning this data into advanced analytics and marketing capabilities. We’ve completed financial deals virtually unprecedented in the private sector, soaring into the billions of dollars.”
