Author: Robert Iger
The Ride of a Lifetime: Lessons Learned from 15 Years as CEO of the Walt Disney Company Robert Iger 2019
On the way to Disney (The Ride of a Lifetime)
The Ride of a Lifetime: Robert Iger’s career began on July 1, 1974, when he became a studio manager at the American Broadcasting Company. Before that, Iger, who had dreamed of being on TV since the age of 15, worked for a year as a weather forecaster in Ithaca, New York. This year did not bring any money or fame, but, Eiger’s jokes, taught him the skill of delivering bad news, which was so useful later in high positions.
The position of a studio manager in a company is a lot of responsibilities related to ensuring the smooth operation of a variety of content: soap operas, talk shows, news. Irregular working hours, constant force majeure, rush – but also good knowledge of the ins and outs of the television business. It is not known how long Aiger would have been performing these troublesome duties if it were not for the conflict with the boss, a man who was dishonest and saw a threat of exposure in a daring straightforward employee. At 23, Eiger found himself on the street, but he was not going to say goodbye to television. A suitable vacancy was found in the sports broadcasting department – so Eiger changed both his position and specialization (as it turned out, not for the last time).
It was not the worst job change: in the 1970s and early 1980s, ABC Sports was one of the most profitable divisions of the company – it seemed that all of America had turned into fans. In addition, from 1964 to 1988, ABC was involved in broadcasting the Olympic Games. Aigner, who was in charge of organizing sports broadcasting from different countries, literally opened up the whole world.
ABC’s head of sports broadcasting was Ron Arledge, Iger’s immediate supervisor, and his first real teacher. In the 1970s, television was for millions of people the only window into the world, and sports were the most poignant entertainment. Arledge, however, understood the technology of broadcasting sports events not just as spectacle, but as storytelling: a good reporter should not be inferior to a novelist. Arledge was also famous for his perfectionism and complete lack of condescension towards his employees in terms of professional interests. His motto was: “Invent new or die, don’t expect any discoveries if you are driven only by fear of the new. ” If his tasks seemed impossible to his subordinates and they let him know about it, Arledge said only one thing: “Try it differently.”
In 1979, the World Table Tennis Championship was held in Pyongyang. Arledge called Iger in and said: ABC Sports should cover this event. The first reaction to this idea is bewilderment: North Korea is one of the most closed states, its relations with America leave much to be desired, this country will never provide the rights to cover the championship. But Iger knew that would not work for Arledge. It was necessary to look for other ways. What if you look at the situation not from the North Korean side, but from the American side?
It turned out that the US State Department had no objection to the ABC team entering North Korea. The rights to broadcast the championship could not be secured through the host country, but through the World Table Tennis Federation, which, in turn, had influence on the decisions of the North Korean sports committee.
In the end, the North Korean government agreed to let American reporters in, and Iger and his colleagues became the first team of journalists to enter Pyongyang in decades – a historic moment in sports broadcasting!The Ride of a Lifetime
Arledge was never interested in the effort that events like the North Korean championship cost his staff. Years later, Eiger talks about the pros and cons of this approach: such tasks made employees resourceful professionals and filled with great personal pride in the quality of the work done (sometimes they were also driven by a desire to please the charismatic Arledge). At the same time, Iger acknowledges that concern for product quality at all costs is often at odds with concern for employees, and Arledge too rarely thought about this dilemma.
Everything is changing
In March 1985, Iger became vice president of ABC Sports, and at the same time, the company was on the verge of major changes. Its founder, Leonard Goldenson, decided to sell ABC to Capital Cities Communications, owned by Thomas Murphy and Daniel Burke, legendary figures in American management in the 1980s. Warren Buffett himself called the two “the greatest management duo the world has ever seen.”
The life of ABC has changed – as at first, it seemed to many, for the worse. Arledge was a tyrant, but also a genius in terms of creative freedom, he spared no expense. Murphy and Burke, on the other hand, were businessmen who primarily counted the money. No more bottomless spending on sports broadcasting. No first-class flights from New York to anywhere in the world. Arledge was asked not to engage in sports but in the news. Aiger, on the other hand, was waiting for a sharper turn in his career. But first, he was offered the design of the entire line of sports programs for ABC.
The main test of this period is the 1988 Olympic Games in Calgary: Iger was one of the leaders of the broadcast organization. A record number of sports delegations participated in these competitions (from 57 countries!), while the Games were nearly canceled due to bad weather: the snow melted on the tracks, strong winds raged, the temperature rose and fell, and even those events that all the same, they took place, they could not be captured in the proper quality: the cameras of the operators did not see anything through the fog. Eiger did not sit still for a minute and almost never let go of the handset, constantly calling the Olympic Committee, urging him to change the competition schedule so that reporters would have something to show in prime time. Where holes in the air were unavoidable, storytelling came to the rescue (here it is, the school of Arledge!):The Ride of a Lifetime
Eiger’s resourcefulness in saving the Olympic broadcast impressed both Murphy and Burke enormously. So much so that they offered Iger a new role to lead entertainment content from ABC Sport to ABC Entertainment. Accepting this offer meant changing not only the field of activity (for the first time in the history of the company, the person who led ABC Entertainment was not from the world of entertainment), but also the city, moving with his family to Los Angeles. Eiger’s solution is? He remembered Arledge’s lesson: “Don’t expect any discovery if you are driven only by the fear of the new.” And he agreed, although so far he could hardly imagine a new job.
Lynch and the ABC high point
The first days in Los Angeles are a series of trials. A new life in an unfamiliar city where Eiger knew almost no one. A new job that required completely different skills. Iger came to ABC Entertainment, not from Hollywood, and did not boast of great creative abilities. But he did not hesitate to ask questions and admit that he still does not understand everything. Another lesson that would come in handy for a future Disney executive is that nothing is less credible than a person who feigns knowledge. True leadership comes from knowing who you really are, on the contrary, pretending to destroy trust, without which a person cannot become a leader.
The first night after work, Eiger came home with a stack of 40 scripts. Everyone had to read and make a verdict. Each text was thoughtfully reviewed, and acquired a lot of marks in the margins, but gave rise to more and more new questions. Later, Iger became convinced that doubts about how the script will be realized on the screen are an absolutely normal part of the workflow. The appearance of masterpieces is not guaranteed.
One such scenario was about life in a fictional town and the murder of prom queen Laura Palmer. The idea belonged to David Lynch and Mark Frost. Even at the level of the idea, it looked very strange and extremely tempting. Eiger and colleagues decided to give the project a green light.
The rest is known: the legendary show “Twin Peaks” appeared on television, the likes of which the audience had not yet seen. ABC Entertainment was in its prime: Steven Spielberg and George Lucas contacted the company, both interested in talking about what they could do for ABC, a collaboration Iger never dreamed of before. In May 1991, Eiger went to a big meeting with advertisers and the press, everyone was waiting for the speech of a person who was directly related to the main TV triumph of the year, waiting for special words. Eiger took the stage and said, “From time to time leaders take big risks…” The crowd immediately burst into applause. Iger admits that it was the most exciting feeling he has ever experienced in his career.
Soon he had to be convinced of the inscrutability of TV success: in 1991, the legendary Lucas created the Young Indiana Jones Chronicles series for ABC Entertainment, but he did not have popularity and was quickly closed.The Ride of a Lifetime
The creator of the new genre, Lynch, was given complete creative freedom, but the closer the season 1 finale got closer, the more intense the dispute between him and ABC Entertainment became. This debate was about audience expectations. Everyone was extremely interested in the question: so who did kill Laura Palmer? What does Lynch think about this? Iger saw that the show’s creator was evasive. Some new, yet unknown plot construction arose in his head, and the murder of Laura Palmer had no place in it. Millions of viewers were left with nothing. The producers couldn’t let that happen. But in Lynch, the director turned out to be stronger than the producer.
ABC Entertainment could have fired Lynch. Instead, the company pushed the series to less profitable airtime – Saturday night. When the show’s ratings plummeted, Lynch immediately accused Iger: they say that he first demanded to reveal all the plot secrets, and then brought down the ratings. The director and producer parted as enemies. This story amended Ron Arledge’s thesis: if you want to create something truly new, you must be prepared to fail. Moreover, you must learn to live with this feeling.
On January 1, 1992, at the age of 43, Iger became president of ABC and in September 1994, president and CEO of Capital Cities/ABC. An impressive trajectory – but this appointment was not too unexpected for Eiger. All these years, he’d felt confident about him, whether it was Ron Arledge or Murphy and Burke. As if someone persistently pushes him in the back and thereby inspires confidence in his own strength. And shortly after the appointment, the Walt Disney Company began making inquiries about a possible acquisition of Capital Cities/ABC. The deal went through in 1996.
In the early 1990s, Disney was already a legend. The company released hit after hit (“Honey, I Shrunk the Children”, “The Little Mermaid”, “Beauty and the Beast”, “Aladdin”), successfully earned money by selling the rights to their products, and launched the Disney Channel in the USA. It was a huge, highly centralized, highly structured corporation that at first seemed overly rigid to Cap Cities/ABC employees. Disney had never acquired such a large company before, but it took little care to treat new hires with sensitivity. Differences that could have been resolved through diplomacy were dealt with in an authoritative and demanding tone.
Many Capital Cities/ABC divisions were drastically shut down as the highly experienced Disney foresaw a lack of profit—for example, deciding to abandon Capital Cities/ABC’s newspaper business long before the entire industry became unprofitable. And when Iger tried to defend the newspaper business, a Disney executive quipped, “Avoid doing something like making trombone oil. You can become the greatest producer of this oil, but at the end of the day, the world only needs a few quarts of trombone oil a year!” This was a good lesson for Eiger – a note about trombone oil is still in his desk.
After the purchase of Disney Capital Cities / ABC changed its name (ABC, Inc), but not the president – Iger remained in his previous position. As he adapted to a new corporate culture, he witnessed a rapidly unraveling relationship between his new boss Michael Ovitz and Disney chairman Michael Eisner.
Ovitz co-founded the Creative Artists Agency, Hollywood’s largest acting agency, and served as its chairman until 1995. Then he left CAA to become president of the Walt Disney Company under Eisner. Alas, he quickly became disillusioned with his role. The decision-making process in an agency is very different from working in a large corporation. Instead of spouting creative ideas, it required the methodical management of a complex Disney conglomerate, and Ovitz was not ready for this. But he was not ready to admit the inconsistency of the new position. After a series of scandals, Ovitz left his post, unwittingly teaching Eiger, who was watching these events, a new lesson: everyone wants to believe they are irreplaceable, but good leadership is not about being irreplaceable—it means being willing to help others to be ready to take your place when needed.
Does Disney need Iger?
Iger himself in early 1999 was waiting for a new position – he was appointed president of Walt Disney International, responsible for representing the interests of the company abroad. Ironically, by this time, Disney remained a company with extremely weak international ties (Eiger half-jokingly calls it “small-town”). But Michael Eisner’s most important idea, with which he came to the post of head of Disney, was the recognition of the fact that the company has extremely valuable, but underused assets, such as theme parks. If they raised ticket prices just a little bit, it would increase revenue significantly, while the price would not have much effect on the number of visitors. What can we say about the huge and so far untapped resources of China, India …
This, however, was not the company’s main problem in 1999. The turn of the century is another big challenge for Disney. These are the technological changes that the new century promised. Players appeared on the market ready to play by the new rules, including Apple. In the 1990s, things did not go well for the future mega-corporation, but in 1997 Jobs returned to the company, and Apple began to discover new opportunities. In 2001, the iPod audio player was introduced to the world, and in 2003, the iTunes Store was opened, promising to revolutionize the world of audio, video, and gaming media content. Disney saw in all this a direct threat to their own well-being and was right.
The point is also that Jobs, who, in addition to the leadership of Apple, headed Pixar, was a partner of Disney, and a profitable partner, but only for the time being. In the mid-1990s, Disney made a deal with Pixar to co-produce five films. The success of Toy Story in 1995 alone ($400 million worldwide) showed the fruitfulness of such a collaboration, but Pixar remained an independent company that valued its independence and, moreover, was far ahead of Disney in terms of animation innovations. In turn, Disney owned all the scripts and rights to released films, which infringed upon the capabilities of Pixar. No one wanted to give in, the situation required subtle diplomacy, but alas, Eisner decided to lash out: he said that Disney was ready to make remakes of films with or without Pixar.
The Board of Directors questioned Eisner’s managerial abilities. Roy Disney, the founder’s nephew and current vice-chairman of the board of directors, made extremely harsh criticism. Yes, Disney hasn’t fallen into poverty yet, profits continue to come in (after all, theme parks host more than 120 million guests annually), but the head of the company had obvious problems with creativity: films released under his direction like Pearl Harbor or Hercules failed. at the rental. As a result, in early fall 2004, Eisner sent a letter to the board of directors announcing that he would retire when his contract expired in 2006. The proposal was accepted, but the search for a successor was decided to begin immediately. Eiger was given to understand: as soon as the board of directors finds a suitable candidate, Eisner will be fired—before his contract expires; Eiger, on the other hand, is seen by many in the leadership in Eisner’s place.
Many – but not all. The possibility of calling the manager from outside was also discussed. How to convince the board of directors of Disney that he, Iger, will make the changes that the corporation needs so much? Reflecting on this, Iger realized that the board of directors and himself were held hostage to two delusions. Everyone got too caught up in criticizing Eisner. And no one had a coherent comprehensive vision of the future of the company. If he, Eiger, wants to convince his colleagues of his competence, he needs to keep these two pitfalls in mind. The head of the company must provide the team with a roadmap. Yes, most of the work is difficult and sometimes thankless, but the key point of all company processes should not be in the past, but in the future.
Eiger’s strategy boiled down to three principles:
1. In an age where more and more content is released every month, a company should focus not on speed, but on quality. As consumers become increasingly conscious of where to spend their time and money, they need to offer the best.
2. Creating quality content requires quality technology. From the very beginning of the company, technology has been a key tool for storytelling, and this is even more relevant at the beginning of the 21st century. Technology is aggressive, but for Disney, it’s not a threat, it’s an opportunity.
3. Disney must become a truly global company.
Formulating a strategy is half the battle, you still need to present it. Iger had to go through dozens of interviews, during which skeptical board members (sometimes, it seems too skeptical) asked the same questions: “Why should the board believe that Iger will offer something fundamentally new?”, “What his predecessor did not right?”, “What could have been done differently?”. There were also one-on-one conversations with each member of the board and collective meetings. The questions were repeated, again and again, pulling Aiger into the swamp of past problems and conflicts.
The company has been facing an uncertain future for six months now and hasn’t moved. Eiger’s patience was at its limit. When at the final interview he heard the same questions in the same style (“What did his predecessor do wrong?”, “What could be done differently?”), Eiger broke down and left the meeting room. A few days earlier, he had experienced the first panic attack of his life and realized that this was the first ominous signal: reevaluate the situation! Is this position worth your health, family, or life? Can people be persuaded who don’t seem to want to be persuaded? Is it possible to change a structure that cannot change?
The answers to these questions turned out to be surprisingly simple. Life is not about work, and work has nothing to do with who he, Iger, really is. There are things that will always be out of our control, and there is no need to spend mental strength on them. Well, if the board of directors does not accept Eiger’s candidacy, he will take a month’s vacation and go on a car trip around America, which he had long dreamed of.
The trip did not take place. In March 2005, the board approved his candidacy, and Iger took over as CEO of Disney.
Every American president is accountable to the nation for the first 100 days in office. Iger, who headed Disney, had several tasks that needed to be solved in an equally short time. The first task was to reconcile with Roy Disney, the second – with Steve Jobs.
Roy Disney strongly insisted on the dismissal of Eisner and was dissatisfied with the appointment of Eiger. He was rarely satisfied at all because he felt that his influence on the affairs of the company was gradually fading away. It was true: Not only was the board at odds with Roy, few people at Disney showed him respect, including the legendary uncle. But what could be worse for the image of the Disney company than a conflict with a member of the Disney family?
In a personal meeting with Roy Iger, he realized that he would continue to be stubborn, presenting new accusations to his colleagues if he felt humiliated. All he needs is respect, which he has never received, despite the incredible bonus of Disney heritage. And Iger gladly went to meet the feelings of Roy Disney: in subsequent years, until his death in 2009, Roy remained an honorary director of the company, regularly speaking at movie premieres and park openings.
Jobs needed a different approach. Eisner did enough to disrupt an already fragile partnership. But Apple was rapidly overtaking Disney in almost all respects. Eiger admits that when he held an iPod in his hand, he felt that he was squeezing the future itself in the palm of his hand. Unsurprisingly, when Jobs asked, “If we bring the iPod to market, will you provide your shows for it?” Eiger immediately answered “Yes!”. Over the course of a series of meetings, Eiger tried in every possible way to arrange Jobs for joint projects (later they would become close friends). Delivering content to Apple could have been a one-sided game, but at the time, Iger felt that agreeing to Jobs’s initiatives was the right decision.
Two weeks after Iger officially became CEO of Disney, he and Jobs stood together at another Apple presentation. Announced: Five Disney shows, including hits like Desperate Housewives, Lost, and Grey’s Anatomy, are now available to download on iTunes and watch on the new iPod with the video player. The ease with which Iger agreed to this deal, and the admiration he showed in getting acquainted with Apple products, impressed Jobs. He confessed that he had never before met a person in the entertainment industry who would be willing to try something that could change the business model of his own company. And Eiger felt that the risk would pay off.
New strategic decisions required changes not only in the company’s business model, but also in its very structure. At times, these decisions were painful. So, Peter Murphy, one of the key people in the company, left the post of chief strategic director of Disney. It was Murphy’s contributions, including his significant role in the acquisition of Capital Cities/ABC, that turned Disney into a global media company. Murphy was a true strategist both in business and in everyday life, a far-sighted, powerful man. Murphy’s skill and intellect made him an arrogant, cold-blooded boss, which caused more and more conflicts among the leaders. Meanwhile, more and more power over the affairs of the company passed into his hands. The head of Disney, Michael Eisner, became increasingly dependent on Murphy. Murphy turned into a gray cardinal: almost all important business decisions throughout the company were made in his department. This imbalance needed to be corrected. Iger did not remove Murphy from Disney by offering to advise the company on long-term trends, but he removed his former power by disbanding the strategy department in its current form. This announcement had an instant impact on the morale of department heads. As one of them told Iger: “If there were church bells on the spiers of Disney, they would be ringing now!”The Ride of a Lifetime
Reconciliation with Jobs did not mean a complete coincidence of interests. Pixar had become the leader in complex animation in the mid-2000s, and Disney was rapidly losing ground. The only bargaining chip was the right to make sequels to early films. This is the trump card that Eisner used to threaten. However, given the quality of Disney animation at that time, this trump card would have been beaten in the near future, and Jobs was well aware of this.
Well, if we can’t beat them, we can buy them, Eiger decided. For Disney management, this decision looked almost like a joke. However, Iger did not hide his extremely skeptical attitude towards the current Disney animation and tried in every possible way to convey it to his colleagues, no matter how rude it may sound. During the first board meeting as CEO – one of the most important meetings of his life – Iger began by ignoring all formal pleasantries and declaring: “As you all know, Disney animation is a real nightmare right now. “
A few weeks before that historic meeting, Iger attended the opening of Disneyland in Hong Kong. This was the last major event that Eisner presided over. The opening ceremony was held on a sunny hot day, actors dressed as legendary characters paraded past Eisner and Aiger – Aladdin, Beauty and the Beast, the Lion King … Aiger turned to Eisner and asked if he noticed that something was amiss in this procession. He shrugged. “There are almost no characters from Disney movies in the last 10 years among them,” Iger said. The grand fantasy company stopped making them.The Ride of a Lifetime
The fate of Disney has always depended on the quality of its animation – Iger was completely confident in this formula. So it was in 1937 when Snow White with the Dwarfs appeared on the screens, and so it was 60 years later when in 1994 the audience admired the Lion King.
Disney animation spawned great brands. It was the fuel of the entire company, the success of consumer products, and the fate of the parks, and all TV content depended on it. Now it was 2006, and it was obvious that over the past 10 years the great brand had lost its luster. To revive it by the forces of the same employees seemed pointless. It was not possible to recruit new animation geniuses, especially in a short time. That’s why the company needed Pixar so badly.
Eiger recalls that he received a “yellow light” from the board for this deal. Colleagues considered the idea of buying Pixar quite crazy but still imbued with the seriousness of the situation. All that was left was to call Jobs. It was one of the most important calls of Eiger’s life, and he was not at all sure of the consent of a man who not only owned such a promising business but was also famous for his difficult character. What did Jobs say? “Well, not the craziest idea in the world.”
Iger now intended to personally visit the Pixar studios. Relations with them remained so bad that Disney had no idea what more successful colleagues were working on. They slandered that Pixar was creating a film about the adventures of a rat in the kitchen of a Parisian restaurant (it was about the cartoon “Ratatouille”).
Once at Pixar and exposed to the work of directors, cinematographers, and editors, Iger was mesmerized by the quality of animation and shocked at how far technology has advanced. On paper, the purchase of Pixar looked like a waste of money, which is how many at Disney perceived it – on the spot, it turned out that Disney was buying a real factory for the production of high-quality miracles.
The Pixar visit sparked reflection: When creative corporations buy other companies, what are they really buying: physical assets? intellectual property? This is true, but only partially, because in the first place, such companies acquire people. It is in their skills and talents that the true value lies.The Ride of a Lifetime
A conversation with Jobs that took place the day after visiting the Pixar studio taught Iger another important lesson. As he dialed the number, Eiger told himself that he should try to contain his enthusiasm. Of course, it was necessary to express gratitude and say the proper compliments, because Jobs’ pride in Pixar was huge. But this was the start of important negotiations, and Jobs shouldn’t have felt too confident! However, as soon as Iger got through to Jobs, all impassivity disappeared: he described to him his day at the studio from beginning to end, without hiding his enthusiasm and realizing that honesty and sincerity will serve the cause better than feigned pretense.. Someone would consider it a weakness (as soon as you show that you want something so much, you will have to pay more for it!) – someone, but not Jobs. He appreciated the frankness. The matter moved forward, the experts began to describe in detail the financial details of the event, and a month later the price of the transaction was announced – $ 7.4 billion.
This amount, which terrified so many at Disney, paid off very quickly: Disney made $7 billion from the sale of Toy Story merchandise alone.The Ride of a Lifetime
Much more delicate negotiations took place over creative content (the deal left Pixar free to retain the creative principles of its work, so valued by its employees), as well as film and merchandise branding. Disney research has shown that Pixar has already eclipsed them as a brand. However, Iger was sure that in time Disney-Pixar would become the strongest brand. That’s settled: Pixar’s famous Luxo Junior intro still opens each movie but is preceded by the Disney Castle intro.
Aiger and superheroes
The Pixar acquisition convinced Iger that his tactic was true: if your company can’t make modern content, it can buy the people who make it. Appetite comes with eating: Marvel and Lucasfilm became Iger’s next targets.
Buying Marvel looked just as ambitious as buying Pixar and promised to be tough. First, Marvel was already under contract with other studios: Columbia Pictures owned the Spider-Man movie rights, Universal-owned The Incredible Hulk. If Disney had made the deal, it would have received an incomplete set of superheroes, in the future this threatened brand confusion and product licensing difficulties.
Secondly, Marvel was headed by Isaac Perlmutter – a man famous for his tough, closed character and incredible stinginess. Eiger spent several months just getting in touch with him. And when I finally ended up in Perlmutter’s office, I realized that the rumors about the head of Marvel as a modern-day Uncle Scrooge were justified. His office was tiny and almost empty: a small desk, a few chairs, no expensive furniture, empty walls. Perlmutter was wary, but still not belligerent, and immediately asked about buying Pixar. Iger spoke about the details of the deal, emphasizing that Disney took care to preserve the unique culture of Pixar and intends to treat Marvel with the same care. Perlmutter was intrigued.
Iger understood that his company had taken a huge risk with the acquisition of Pixar, and now it would be wiser to take a breather, not to insist on further expansion of the company. However, by the end of the 2000s, progress in the field of entertainment accelerated rapidly: the head of Disney felt that he did not have more than years to spare – months. Once Perlmutter signaled he was willing to negotiate (with the backing of Jobs, whom Iger had asked to vouch for Disney; Perlmutter was flattered by the call), analysts began a painstaking valuation process for Marvel. They did a full accounting of their assets and liabilities, analyzed potential film releases, and projected box office returns. And most importantly, they have collected a huge dossier on 7,000 Marvel characters. That was the main subject of the deal. Disney wasn’t buying technology, it was buying an entire fantasy universe. On August 31, 2009, Disney announced that it was buying Marvel for $4 billion.
Pretty soon it became clear that Marvel was worth a lot more than that amount. Thus, The Avengers (2012) grossed more than $1.5 billion worldwide and became one of the three highest-grossing films in cinema history.The Ride of a Lifetime
Disney not only infiltrated the Marvel Universe but also expanded its boundaries. One day, leafing through a catalog of superheroes, Iger wondered: why are “white men” always the key characters? The film that refutes national stereotypes was Black Panther, which added the African continent to the Marvel Universe (and grossed over $1 billion at the box office).
Bet on a legend
Iger’s second target was Lucasfilm, the company of the legendary Star Wars creator. Once Iger had a chance to collaborate with Lucas – he gave the director carte blanche to create a series about Indiana Jones for the ABC channel; the series was not successful, but Lucas appreciated the credibility. In 2011, Lucas participated in the preparation of the Star Wars attraction at Disneyland. At the opening ceremony, Eiger directly asked Lucas if he would like to sell the company. Lucas agreed.
There were several reasons for this. Lucas considered leaving the cinema. He was already 67. The second Star Wars trilogy was received rather coolly by the audience. All this did not add enthusiasm to the director. The subtlety with this deal, however, was that Iger was buying from Lucas not so much the company or technology (here Lucasfilm was much inferior to Pixar), but the very legacy of the great director – the world of Star Wars. Eiger felt that he needed to be especially delicate here. He had to get “legacy rights” and then continue to settle in the Star Wars universe – so that this does not turn into disappointment for millions of fans and financial collapse.
Negotiations went on for six months and were not easy. Lucas immediately stated that he wanted “the same deal as with Pixar,” in other words, he valued his company at $ 7.4 billion. But Lucasfilm was not worth that kind of money, which was immediately announced to its owner. Iger decided that Disney could afford to pay $4 billion. Lucas agreed, but on the condition that three new films are made from his scripts and he retains the right to vote. Disney insisted that they have the final say.
Finally, at the end of October 2012, an agreement for the purchase of Lucasfilm by Disney was signed. Iger and his colleagues immediately began recruiting a creative team to film the new Star Wars. Directed by JJ Abrams. Discussing the details of the contract with him and wanting to emphasize the responsibility of the moment, Iger joked that this film would cost them $4 billion. Abrams said that the joke failed. However, the point of buying Lucasfilm really depended entirely on the success of this film.
No one in this project needed a reminder of what was at stake, Eiger later realized. In an awkward joke, his anxiety about the upcoming film was revealed, but there is nothing more unproductive for a leader than to share his doubts with the team. The job of a leader is to help the team stay on track and support their ambition, whether it’s allocating additional resources for filming, discussing the script, or watching selected scenes from the film. The confident presence of the leader reminded the team that Aiger believed in them, and this was the best tactic in a difficult period.
The new Star Wars film was supposed to be released in May 2015, but due to complications on the set, it was delayed until December. Hundreds of millions of dollars flowed from one financial year to another, and the company’s budget was redrawn, which unnerved many. But Iger tried not to succumb to the pressure of the deadline. Quality over time, he decided. The worst thing they can do right now is releasing a weak film that doesn’t live up to the expectations of picky Lucas fans.
Episode VII “The Force Awakens” was released on December 14 and set an all-time record for grossing $1 billion in 12 days, the fourth highest-grossing film of all time. At the same time, the audience did not see the Disney splash screen in the credits – Iger decided not to replace the Star Wars logo, thereby emphasizing that his company also appreciates Lucas’ work and gives him the palm in this whole story.
Looking back at the acquisitions of Pixar, Marvel, and Lucasfilm, Iger sees something in common: all three deals were personal, entirely dependent on trust and respect for the partner, whether it be the technological genius of Jobs, the artistic genius of Marvel, or the legendary history of Star Wars. Both Jobs and Perlmutter and Lucas were sensitive to their heritage, and everyone needed to be sincerely convinced that his works would not be distorted in the interests of others. And of course, all these companies transformed Disney, brought it out of the deep crisis of the late 1990s – and, in the end, turned it into a mega-corporation.
Disney’s transformation into the largest entertainment conglomerate meant a change in the entire business model. Now the company was ready to become a distributor of its own content – directly into the hands of consumers, bypassing intermediaries. It’s time to deliver new original content on our own technology platform.
This suggested two scenarios: create such a technology platform or buy it. The implementation of the first option would take at least five years, require huge investments, and slow down the company’s steady growth. Removing all Disney shows from the Netflix platform and bundling them into their own subscription service would mean losing hundreds of millions of dollars.
The purchase of a ready-made platform would make it possible not to interrupt business processes, and not to lose profit. But who could become a seller? Google, Apple, and Facebook clearly didn’t count given their size. And, as far as was known, none of these companies were planning to buy Disney (although Iger is sure that if Jobs were alive, they would have merged the companies, or at least very seriously discussed such a possibility).
And then 21st Century Fox got in touch. The Murdoch clan, which owned the legendary corporation, put the assets up for sale. He was driven by the same motives that drove the actions of Iger: by 2017, it became increasingly difficult for companies to compete with media giants in an unpredictable market. Well, Disney has been proactive in the past by gently enticing potential sellers with lucrative terms. Now the seller has come to Disney himself.
The Fox purchase is the largest deal in Disney history: $52 billion (Pixar, Marvel, and Lucasfilm combined cost $16 billion). What did Disney buy? Fox film and television studio, 30% stake in streaming service Hulu, a majority stake in National Geographic, 300 international and 22 regional sports channels. This is a lot. And in the future, the purchase promised even more:
• franchises of the films “Avatar”, “X-Men”, “Home Alone” and TV series “The Simpsons”, “The X-Files”, “How I Met Your Mother” will become the property of Disney;
• Disney will acquire the rights to X-Men and Fantastic Four: the superhero universe is expanding, promising exciting crossovers like X-Men vs. The Avengers in the future;
• Internet channel Hulu, now not very profitable, can become a trump card in competition with Netflix, turning into the desired platform for their own content;
• Disney gets 40% of the American film market and thus turns into a confident monopoly.
More than 10 years of Eiger’s hard work to revive the company has finally paid off!
Did the story come true?
The acquisition of 21st Century Fox was accompanied by difficult changes not only within the Disney company but throughout the world. The late 2010s are allegations of harassment; they, alas, did not bypass Disney. Toy Story director John Lasseter has left Pixar and Disney following allegations of sexual harassment. The second difficult decision is the closure of the most popular American sitcom Roseanne, which was watched by one in ten Americans, including President Trump. The reason is a racist tweet by series creator Roseanne Barr. It was a commercially painful decision: on one side of the scale is the show’s tremendous financial success, on the other, the actress’s unacceptable behavior. However, only a few hours elapsed between the publication of the offending entry and the official closure of the show. Eiger admits that he did not doubt the decision for a second. And Lasseter
During these same years, Iger was thinking about the possibility of running for the presidency of the United States. Leading up to the 2016 election, there was growing American dissatisfaction with traditional politics, including formerly popular parties. The country was ready to accept a “man from the outside.” Iger talked to members of Congress and Obama administration officials, read articles on everything from health care to taxation, and even pored over the Bill of Rights. And yet this desire did not become something big, the social atmosphere did not overcome personal motives.
But he remained the president of a huge company that was gaining momentum! June 2019 was supposed to be the date of Iger’s departure from the Walt Disney Company. The Fox purchase changed the agenda: Iger’s new retirement date is December 2021, and until then, he’ll be handling the Disney-Fox merger. As time goes by, retirement day becomes more and more tangible, and Iger keeps asking himself, “Is there life after Disney?” The question is a joke, but only in part – for Iger himself, it is rather existential because Disney has become the main business of his life. He is consoled by the understanding of a simple fact: one person cannot be in power for too long, this spoils both the leader and the company.. Let the path described by Eiger look like the result of a perfectly realized vision that he had from the very beginning, it is not. This vision had to be invented. It could not be realized if Eiger did not rely on quality. And I was afraid of change.
Disney creates fairy tales – and looking back, Iger realizes that his entire journey was like a fairy tale journey. Could little Robert imagine, going with his grandmother to his first film Cinderella, that he would become the steward of the entire legacy of Walt Disney? There is certainly something magical about this transformation. However, in the depths of his soul, Eiger remained the same little Robert, not forgetting his children’s enthusiasm and desire for miracles. This, according to Eiger, is the main lesson of leadership: to hold on to a realistic awareness of yourself, even when the world gives you a powerful responsible status. If you begin to believe in your power too much, the magic is destroyed and you are left with nothing: you are no longer Cinderella, but one of her evil sisters.
Lessons from the head of Disney
The cornerstone of Eiger’s entire business philosophy is “Invent or Die.” Anyone who does not want change and is afraid of the new has nothing to do with business. However, change should not be sought at any cost. Perfectionism is deceptive: the restless pursuit of excellence does not inspire employees to new successes but instills anxiety in their souls. You, in turn, may be faced with completely unfamiliar tasks and feel confused, as it was with Iger in the early days of working in Los Angeles. Don’t be afraid to be ignorant or appear naive, feel free to ask questions if they need to be asked to get the job done well. An honest assessment of your knowledge and a desire to solve a problem will endear you to people, while attempts to disguise your own ignorance will be quickly figured out and you will not gain respect.
Mistakes are inevitable – they are not a reason to punish others or shame yourself, but only a temporary obstacle to greater goals. And certainly, they should not become a weapon in a dispute with colleagues, including if these mistakes come from the past. Did the former head of the company make a series of extremely unfortunate decisions? The business strategy chosen a year ago almost turned out to be fatal? Take note of this and move on: the company is driven forward by a vision of the future, not endless revisions of old failures. This vision needs to be created, and it should be perfectly clear to any employee of your company.
Obviously, it will not be easy and sometimes mistakes are confusing but do not be discouraged. This is a poison that slowly kills the company, depriving it of its future. If you are a leader, consider it your job to look to the future with confident optimism. Be prepared to take full responsibility in the event of a fiasco, and make it clear to employees that they are always entitled to another chance. However, do not consider any of your employees irreplaceable, including yourself. There are no irreplaceable ones, and if the head of the company gives such an impression to his subordinates, he does not care about the interests of the company, but only about how to stay in power longer. Good leadership is not about being indispensable, but about helping others to be ready to take their place.
Without blaming others, without looking for someone to blame, we rely on our own decisions and respect others. In our hands is the most powerful weapon of a leader – honesty with oneself. Knowing what you are capable of, you become self-confident. Understanding who you are, feeling your strengths, and listening to your own business instincts, even if others convince you otherwise, are the tactics of a leader. Do this, and you will not need the myth of perfectionism: the team will work in an environment where it is shameful and uninteresting to do mediocre work.
Top 10 Thoughts
1. Invent or die. Today this rule is more relevant than ever. Do not wait for discoveries if you are driven only by the fear of the new.
2. Perfectionism is tricky. Don’t strive for perfection at any cost. Create a work environment that is embarrassing to accept a mediocre job.
3. Take responsibility in the event of a fiasco. At work and in life, you will be much more respected by others if you admit your mistakes.
4. The secret weapon of leadership is honesty with oneself. When you become aware of your abilities, you become self-confident. Knowing who you are and following your own business instinct, even when others tell you otherwise, is a leader’s tactic.
5. Value ability over experience, and put people in roles that require more of them than they think of themselves.
6. Feel free to ask if you don’t know something. Ask questions that need to be asked to get the job done as well as possible.
7. There are no irreplaceable employees, including those who hold leadership positions. Good leadership is not about being indispensable, but about helping others to be ready to take their place.
8. Pessimism and leadership are incompatible. Despondency is poison for the company.
9. Don’t cling to past mistakes, no matter how nice it is to criticize others. The development of the company depends on the vision of the future, and not on the memories of the past.
10. When you buy another company, you are buying people first. This is especially important for those whose business is related to creativity.