On Oct. 3, 2005, more than 30 years after he started as a studio supervisor for the American Broadcasting Co., Bob Iger became the sixth CEO in the history of The Walt Disney Co. (DIS, Financial). He succeeded Michael Eisner, who had been the CEO since 1984.
In the early 2000s, Disney had issues that needed to be addressed. As Iger noted in his book, “My first six months at Disney [which acquired Capital Cities / ABC for $19.5 billion] were the most dispiriting and unproductive of my career.” After years working with the legendary Tom Murphy and Dan Burke, he was shell-shocked at Disney. A notable example is the Strategic Planning group, which had grown to become the antithesis of the “put talented people in positions where they can grow” approach that Iger had become accustomed to at Cap Cities.
But when Iger met with the board during his consideration for the CEO role, he made it clear that his focus was the future: “I can’t do anything about the past. We can talk about lessons learned, and we can make sure we apply those lessons going forward. But we don’t get any do-overs. You want to know where I’m going to take this company, not where it’s been. Here’s my plan.”
Iger believed there were three clear strategic priorities for the company. First, devote their time and capital to the creation of high-quality branded content. Second, embrace technology to enable the creation of higher-quality products and to reach consumers in more modern, relevant ways. And third, to become a truly global company.
After he became the CEO of Disney, Iger quickly got to work. One of his first priorities was repairing Disney’s relationship with Steve Jobs and Pixar. A deal between the two companies to coproduce, market and distribute five films had soured over time due to tensions between Eisner and Jobs. The strains in the relationship were fully apparent in January 2004, when Jobs publicly announced that “After 10 months of trying to strike a deal, we’re moving on. It’s a shame that Disney won’t be participating in Pixar’s future success.”
Iger realized this was a grave mistake, and quickly worked to change things. Five months after initial discussions between Iger and Jobs, the two stood together on stage at an Apple (AAPL, Financial) event, where it was revealed that five popular Disney shows would be available on iTunes, in addition to being available to watch the shows on the iPod with video capabilities. As Iger noted in the book, this was a critical moment: “Steve responded to boldness, and I wanted to signal to him that there could be a different way of doing business with Disney.”
This early deal between Jobs and Iger ultimately led to a much more important deal for Disney: the 2006 acquisition of Pixar for $7.4 billion. At the time, Iger didn’t mince his words when pitching the deal to the board: “The future of the company is right here, right now… when Animation soars, Disney soars. We have to do this.”
A few years later, in 2009, Iger announced another important deal to expand Disney’s library of high-quality branded content: the $4 billion acquisition of Marvel. That was followed in 2012 with the $4 billion acquisition of Lucasfilm, the creative engine behind the Star Wars franchise.
These three deals, all of which were questioned at the time they were completed, have proved to be transformative moments for the company. As Iger noted in the book, these deals were material bets for the company and they far from assured to succeed – but they were risks worth taking: “Nothing is a sure thing, but you need at the very least to be willing to take big risks. You can’t have big wins without them… Fear of failure destroys creativity.”
Iger’s book is a master class in strategic decision-making and how to manage people in a sprawling enterprise with hundreds of thousands of employees. It’s the culmination of nearly 15 years of best-in-class leadership at one of the most iconic companies in the world. It has been a job that “requires an ability to constantly adapt and re-adapt” – and for anybody that follows the company, you know that this willingness to tasks risks in an attempt to reinvent for the future still rings true today.
If you haven’t read this book, I would highly recommend it.
Disclosure: Long Disney.
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