AOL's True Believers

There's something quietly subversive about Belinda Hankins. She doesn't shock with her office decor or her style. She's a conservatively dressed executive in her mid-forties, with a warm smile and soft features. Spend no more than five minutes in her modest office in Dulles, Virginia, and you'll start thinking, How did anyone this nice get into a position of power at AOL Time Warner?

Keep listening, though, and you'll hear ideas that rock the foundation of conventional wisdom in giant media companies -- especially Hankins's. Stop thinking of audiences as passive, she insists. Forget about aiming for perfection and mass appeal before you show anything to the outside world. Most of all, admire your users, even the ones with bad teeth and low incomes. If you take them for granted, you won't have a business. Take them seriously, and you may conquer the world.

Hankins lays out her creed so gently that it takes a few minutes to realize how radical her ideas are. After all, she works for the company behind Jack Welch's book, Madonna's songs, and the Harry Potter movies. This is the largest of all of the global media conglomerates, a brash place where swagger and superstar brands are a way of life. This is AOL Time Warner, where top executives joke that the company's mission is to help people escape the unbearable tedium of everyday life.

These days, of course, the joke is on AOL Time Warner. The empire that Gerald Levin and Steve Case built has become one of Wall Street's favorite whipping boys. The company's stock is reeling, and its financial results are alarming. Analysts scoff at the company's "synergy" story, which once thrilled them, and there are rumbles about a breakup: Warner Music Group (WMG) plus Time Inc. magazines plus AOL adds up to what, exactly? Journalists write with undisguised glee about day-to-day clumsiness within the company. Even the new CEO, Richard Parsons, is on the defensive. "This is a three-to-five-year journey," he cautions reporters.

But look deeper, past the harsh glare being cast on the very top of the company, and you'll find a cast of power players who are doing the hard work of trying to bring this troubled giant to life. They are frontline innovators like Hankins, who runs the chat rooms, message boards, and other community services of the company's AOL Internet service. Such managers are doing the hardest and most essential work at the company: finding ways to combine AOL Time Warner's renowned brands with projects that could create significant new value.

"Community is the DNA of the Internet," Hankins says. "People come to AOL to meet other people. We figured that out early on -- and it was what helped us pull ahead of all of the other Internet services." Now she and her 180 employees are trying to pass along that expertise to other parts of the AOL Time Warner empire. She consults with Warner Bros. movie executives and CNN editors on how to engage their audiences through AOL and the Internet.

Nothing is as easy as the top brass thought it would be back in January 2001, when it created the company. Even the easy stuff is hard: scheduling meetings, briefing the right people, keeping the bureaucracy under control. Despite the headaches, though, some young executives are inching forward. And as they do, they are creating new models for teamwork, new opportunities for growth, and new approaches to digitally driven innovation. Here are four stories of innovation at the front lines of a media colossus.

Music Man

When Kevin Conroy took charge of AOL Music in February 2001, he knew his number-one priority right away: making friends with the top executives at Warner Music Group. For the past three years, the music industry had been a battleground for traditional recording labels and online upstarts such as Napster. The newcomers thumbed their noses at shrink-wrapped, $16.99 CDs. The old guard was horrified -- and in a mood to sue. Betting was that the turmoil would only stop when one side put the other out of business.

Despite his futuristic new job, Conroy's sympathies lay in the middle -- or perhaps even aligned with the traditionalists. He had been a senior executive at Bertelsmann Music Group (BMG) before coming to AOL. Other executives at BMG had championed an investment in Napster. Conroy didn't like that deal. But he did believe that it was possible to get the old guard and the newcomers working together, and he had ideas for making it happen. "From day one, it was important to have a different relationship with Warner than anyone expected," Conroy recalls. Within days of landing the AOL Music job, he flew to Los Angeles and spent a weekend with top WMG executives such as Roger Ames, chatting poolside at their homes.