Lessons on hiring, firing and company renewal: The secrets behind Blackmagic Design’s success

Grant Petty is the founder of Blackmagic Design, a technology company that designs and manufactures AV equipment for the film and television industries.

The company was created to democratise film and television production by making the highest quality video equipment affordable to everyone, and thereby removing barriers to the post-production and television industry. 

In 2001, when Petty started the company, TV video equipment cost over $1 million, with businesses buying the devices and hiring them out for thousands per hour.

“This meant really creative and artistic people were working incredibly hard in what was effectively an equipment hire business dressed up as the TV industry. Back then, it wasn’t a creative industry, but there were so many creative people in it,” Petty told SmartCompany in 2017.

Only by removing those barriers to entry can the industry be truly creative, Petty reasoned.

It’s a philosophy Petty clearly takes within his own business too, removing any barriers for staff to be as innovative and creative as possible. This even includes an on-site chef to cook meals for staff on a daily basis.

Today, Blackmagic Design’s team create world-class products that are still affordable.

Petty’s company has forged exclusive partnerships with Apple, its 4K camera equipment is one of few approved by Netflix for external productions, and its products are used on 90% of the industry’s big productions. Recently, this has included Mulan, Jojo Rabbit, Normal People, Game of Thrones, and The Walking Dead.

Incredibly, Blackmagic Design nearly quintupled its net profit in 2019-20 despite the huge upheaval in film and television, reaching $72.7 million, with annual revenue up 38% to $522 million. It also added three new manufacturing plants and 20 robots.

Not bad for a recession.

Petty is still the leading face and voice of the company, regularly giving video updates for customers, demonstrating new products and showing how they work.

When I caught up with him to discuss his company’s performance over the past year, and how he makes decisions within his business, we touched on culture as a prison, freedom of speech within businesses, and lessons learned through mistakes.

One thing that shines through is Petty’s focus on creativity and person-to-person feedback over numbers, metrics, or past performance.

As he tells it, we’re in a world addicted to data, where no-one is creative unless they can see it in Excel as a solution. At the same time, when a crisis hits — like a global pandemic — this dependence on data means people in power slip up as there is no past performance data to rely on.

Five key takeaways

1. Go deeper when you’re asking questions. Your first answer and approach will always be too shallow.

2. When employees won’t change, or they stop caring, it’s time to let them go.

3. To get someone to do what you need done, you need to give them the bigger picture.

4. Metrics stifle creativity. They will only tell you the past, and should not be used to predict the future. There’s a difference between failure and no success yet.

5. Don’t renew every part of your business at once. By focusing on renewing one aspect at a time, you can let things mature while others are refreshed.

Blackmagic Design equipment on set for The Great. Credit: John Brawley

What did you do differently in 2020 to get these results?

We did a turnaround five years ago, trying to renew the business. We looked at the company and said, “where we’re heading does not have an interesting future, let’s reposition ourselves and revamp everything”.

It gave everyone a real goal. What is our new product? What does it mean here?

We are now seeing the benefits of that turnaround from five years ago, and new products coming online. It’s a long time frame.

But the lesson I’ve learned is not to renew everything at once. You can select a portion of your business for renewing, while other parts are more mature. You need non-synchronised turnaround plans now because no one understands when you try to turn the whole thing around at once.

Four years ago I was getting a lot of criticism from people saying we were not making profits. But $50 million of that was going into R&D. It would be a huge profit if we weren’t spending it.

There’s almost an expectation in tech businesses, you’re supposed to be burning cash for years or generating massive profits, and nothing in between that is acceptable. You’re not allowed to be marginally profitable.

Pre-COVID, everyone told us what we were doing was wrong. 

Now they ask: what’s your secret?

What is the worst piece of business advice you’ve ever received?

In our early years, a salesperson at a trade show once said, “oh, you don’t have to make the product work, you can announce it and just start shipping it. The company I worked for didn’t get the product working for six months”.

They were telling us to do the exact opposite of what we should do.

What’s the most counterintuitive thing you’ve learned by running a business?

The most fundamental thing that most people get wrong in business is taking the first view of something and running with it. Often, it is the completely wrong thing to do and you need to go much deeper to find the right thing.

If you go deeper, it’s a fascinating world. It’s like assuming the whole world is made up of atoms, then realising that the atoms themselves are made up of something. There are whole worlds below the first thought that you have.

How has your approach to hiring changed over time?

There are definitely some red flags we didn’t spot early enough in the old days.

One is the person who does nothing but complain about their previous employer. 

It’s clear that they think they knew how to run the show and their employer was an idiot. You’re going to get the same problem: that they know best and you’re stupid. 

Creative businesses can’t see business as a hierarchy; you have to see it as a network, almost like an artificial intelligence. Who will fit in? Who will mesh? Their thoughts and ideas will contribute, they will accept ours, and at end we will get a product plan. Who will fit into that fluid style? There are a lot of conversations, it’s messy.

With 10 people in a company, you get the benefit of 20 people when you all mesh together. Otherwise, what’s the point of driving into the office every day?

You want to make sure that the sum of the parts is much much bigger than the individual parts.

How do you know when it is time to fire an employee?

There are two issues, which sit at both ends of a bell-shaped curve.

The first: when someone is aggressively pursuing what they believe at the exclusion of everyone else, will not accept a technology change and refuses to look at new ways of doing things. 

Sometimes, that will be a person with a lot of qualifications and a lot of experience that is viewed really highly by people outside the company.

The other side is people that really do not give a shit. They see it as an everyday job. They don’t understand they’re supposed to be creating something new, or rethinking things. 

So what you’re doing is getting rid of the fringes of the bell-shaped curve, that are so far off centre that they’re useless. People are useless if they won’t change, or don’t care.

What’s the best way to get someone to do something you need done?

If you give people the information they need, and explain the bigger picture around it, they can see the sense in it. They will actually tell you when you’re wrong — and they might be right. 

What you’re really trying to do is reconcile a plan, and if they’re not doing it, provide more information and generally they will see your point of view.

At the same time, you have to be aware of their point of view; they may have a valid point, and you might be wrong. There may be a third solution if you realise that you’re both wrong. It is a lot of conversations and talking to people.

What do you remember most: the wins or the losses?

The losses are more memorable, but you have to be careful about how you remember them, because you can be overly traumatised and it ends up turning you into a corporate speaking nightmare.

The things that go wrong are hard lessons, so I try to look deeper. Could we have seen this coming?

But, you can’t let them damage you. You can become paranoid if you focus on potential mistakes, as people are naturally loss averse. 

You need to maintain your young thinking. The positive stuff often gets forgotten about.

It’s bizarre — you need to make sure the bad stuff does not affect you as much, and that the positive stuff is eclipsed by the future to the point where it does not seem that significant anymore.

Blackmagic Design used on Mad Max Fury Road
Credit: Michelle Pizanis

On the difference between failure and success 

How do you know that something hasn’t worked? Often it’s just not successful yet. Steve Jobs got screwed at Apple, and had to leave because the Mac had technically failed based on the metrics and analysis at the time.

Jobs’ suggestion was that they needed to lower the price to sell more computers, which is what they had to do, but the company decided it was a failure because it hadn’t sold off the bat.

When something is new, people don’t get it. It takes a while for it to take off.

So what is the difference between a failure and not successful yet? We’ve got products that failed initially but over time have grown.

Data explains the past, it does not predict the future

You can’t make that decision on metrics — they will show you the product is not selling — but rather whether the first customers are happy? Only smart people having direct conversations with customers will tell you that.

We launched a studio camera that didn’t sell well, but the people we sold it to were a growing market for us. We thought okay, we’re gonna make some changes to the marketing, and talked to people at trade shows to realise what we needed to do. Over time it has become successful, but at the time it wasn’t — yet.

That requires a different skill set, so the most important issue with failure is how to work out whether it is a failure.

We’re in a world swamped with data and it’s almost like a drug for people. They think more analytics, more drugs, more data and more spreadsheets will help them.

But you can’t measure the future, it does not exist. You can only measure what’s happened.

The responses have been edited for clarity and length.