Disney's Mild-Mannered Prince Crowned King, Robert Iger's Style is Very Different From His Predecessor (pp. 530-531)

(Source: Financial Times, 30 September 2005)

Just after the stroke of midnight tonight, when Robert Iger is officially anointed as the Walt Disney Company's (Disney) sixth chief executive, he will confront a slew of challenges bearing down on the Magic Kingdom. These include a downturn in the core film business, the complications of expanding into foreign markets, particularly China and India, and the urgency pressing upon all traditional media companies to re-invent their businesses for a new digital era. Yet, one of the most vexing challenges facing Mr. Iger, 54, may be one of the least tangible: to step out from the very long shadow cast by his charismatic - and sometimes combative - predecessor, Michael Eisner.

"People know Iger, but they know him as a non-CEO," says Dennis McAlpine, an independent media and entertainment analyst. "He is going to have to transform himself."

After all, over the last 21 years, it was Mr. Eisner who expanded Disney from a few iconic theme parks and a film business with revenues of $1.5bn to a diversified global media giant with revenues of more than $30bn. Even despite the turmoil of recent years, in which Mr. Eisner has sparred with Disney partners, alienated board members and mired the company in an embarrassing and public legal battle over compensation, his legacy remains formidable.

Mr. Iger, a one-time weatherman and long-time ABC TV executive, was not an overwhelming favorite for the top job. Some investors complained that his tenure as Disney's president for the last five years made him at least partly responsible for its recent problems. Since his promotion was announced in March, Mr. Iger, who is sometimes described as a technocrat, has sketched out his vision only in broad terms. It includes harnessing technology, such as high-definition TV, to make Disney's content more appealing; building more franchises, such as The Pirates of the Caribbean, that can be translated into toys and video games and other properties; and expanding into international markets.

He has carefully avoided any grand gestures that might suggest a sharp break with his boss. His comments at a recent Goldman Sachs media conference in New York were a typical example of the deference he has shown Mr. Eisner. "I have worked with Michael for 10 years since Disney bought Capital Cities/ABC in 1995, and I have been his partner as president and COO for five years. It has been an incredibly rich experience for me, a great experience," he said. Yet, in subtle ways, Mr. Iger has begun to separate himself from Disney's long-time king. He recently moved to restructure, and effectively de-fang, the strategic planning group, an internal organ that Mr. Eisner used to wield tight control over Disney's different business units.

Mr. Iger has also played the role of peacemaker. He managed to forge a compromise with Roy Disney, an aggrieved former director and heir, quelling a shareholder revolt against the company. He wrapped up bitter negotiations with Bob and Harvey Weinstein over their separation from Miramax, Disney's specialty film label. And he has managed to bring Steve Jobs back to the bargaining table after the Pixar chief had insisted that his animation studio would not renew a vital distribution deal with Disney as long as Mr. Eisner was around. "He has put forth a clear message that this will be a kinder, gentler Disney," Jessica Reif Cohen, a Merrill Lynch analyst, wrote in an approving note to investors. Or, as one media investor put it less diplomatically, "He doesn't piss people off the way Eisner did."

Having notched up those modest accomplishments, investors are now eager to see what Mr. Iger will do when he is running the company on his own. With the ABC and ESPN networks on a roll, the first test for Mr. Iger may be righting Disney's animated film division. Once the life-blood of the company, it has been surpassed by rivals such as Pixar Animation studios, Inc. and DreamWorks Animation, LLC., which have mastered the art of computer graphics animation (CGI). In November, Disney will release Chicken Little, its first in-house CGI production and a watershed moment for the company. The early reviews have been good. But, whether the film is a hit or a flop, the one certainty is that the responsibility will now fall squarely on Mr. Iger's shoulders.

Questions

1.How would you describe Michael Eisner's leadership style?

2.Do you believe that Michael Eisner should have retired? Why or why not?

3.What do you believe is the new CEO's biggest challenge in sustaining and igniting creativity at The Walt Disney Company (Disney) at this point? Be as specific as possible.

4.What should the new CEO do to meet this challenge? Devise an action plan.

5.Are any general lessons that can be learned from this case study on Disney's Robert Iger's style of leadership?