Reliving Fond Memories: DisneyWar
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There is a lot that is less than proud. His handling of his associates, for example, borders on the sadistic. The “slap and tickle�? management style, the uncomfortable uncertainty, spying, rewarding loyal endeavors with ridicule and back stabbing, is all too woefully familiar to veterans of Disney. This is not an accident caused by too many cooks in the pot, a calcified compartmentalized layer of middle managers– it is willfully and knowingly a policy engineered by Eisner himself who led by example.
The official portrait
On the plus side, Eisner did take Disney from a sleepy “campus�? at the edge of Burbank, out of the Hollywood mainstream and mold it into an international global media giant. It seemed inevitable, and Eisner with his singular vision of a “growth company�? was the man to do it. On the downside: Eisner apparently had, and continues to harbor, a non interest in the very things that made Disney great and unique in the first place. Coming from a wealthy urban background, Eisner has no affinity, indeed no interest in, the blue collar family experience that Walt and Roy Disney had. The Disney brothers understood their audience because it was their background. Eisner had never even seen a Disney movie as a child. His world is of private schools and exclusive camps. I think this shows, especially in the 1990’s, of his disconnect with the theme parks and the family entertainment that are the staples of WDC’s success (wine tasting as DCA?).
In short, Eisner is a man who is in love with Power (with a capital P) and will do anything to keep himself in the corner office. Much like any other CEO across the world. His rise through the ranks of the entertainment industry was through intelligence and hard work. His downfall was his inability to trust his associates, and his over reaching self-indulgence. It’s been referred to as a “napoleon complex�? and it is the main downfall of leaders of nations as well as global corporations.
Disneyland Paris (Euro Disney) and Disney’s California Adventure will remain an unfortunate disappointment (Hong Kong Disneyland remains a question mark), hopefully as a living example of what happens when an entertainment company loses their way. MBAs are not designers. A company that thrives on creativity should be staffed with the creative. The problem with our current yuppie culture is that is confuses capacity with creativity. To have the enormous energy and capacity for work does not mean you are a creative person. The Caesar salad/Pellegrino lunch crowd get the two confused, with disastrous results. Overworked middle managers, with a Red Bull in one hand and the latest focus marketing report in the other is no replacement for the Imagineers and their earthy, intuitive understanding of what makes Disney entertainment so colorful, diverting, enduring and, in the end, profitable. “Magic�? cannot be graphed or made into a slick PowerPoint presentation. It’s on the faces of the people, the crowd that the slick managers just don’t seem to understand.
It was particular painful reading the story of Jeffrey Katzenberg. He did do a lot to make the movie arm of the company successful. Though he was not well liked by the animators and Roy Disney, he did help bring spark and life back into the animated product. His handling at the hands of an ever jealous Eisner is not pleasant. In the end, though, Katzenberg did get compensated; one wonders why he was treated so shabbily. His fall was quite sudden, and took everyone, including Katzenberg, by surprise. It seems Eisner wants his executives to be successful, but not…too successful. He is constantly guarding his power and has no problem chopping the heads or demoting those around him. Though loyal and efficient, he feels the need to put the hapless managers in their place.
When Frank Wells died in 1994, Eisner seemed to have taken over both offices. The office of President was purposely left vacant, and he freely used as a carrot to keep the other executives hopping. How many hard working executives wasting their time and life’s blood trying to reach the summit, only to find themselves demoted or let go. As one executive sardonically put it, “I tried to get into the Inner Circle. But there was no inner circle.�?
And shabby is the word that brings me to the one story I wanted to know about. I really really wanted to understand. This was the reason I bought the book. When it was splashed all throughout the papers, and argued on the morning shootouts, I had wondered how this business deal, which was so wrong and non sensible, could have happened in the first place. I refer, of course, to the strange case of Michael Ovitz. Why was he made president? He had no prior corporate experience. Though he was a hugely successful agent, founder of CAA, being an agent is a whole different animal than wading through the protocols and board rooms of the corporate jungle. That he was Eisner’s close friend for nearly 30 years made me think of cronyism. Ovitz’ embattled tenure began when the contracts were signed. Eisner knew instantly it was a big mistake. So did Ovitz. And both were right. Blocked and routed at every turn, Ovitz had no chance to begin to do his job. It ended just over a year, leaving Ovitz stunned and isolated, his reputation ruined. And the huge payoff of Ovitz’ contract was the first serious chink in Eisner’s Teflon image. The stockowners and board were not happy with so much money being handed out for so little. Still, the decision was Eisner’s, and was so completely wrong that it would have instantly evaporated a lesser CEO.
Roy E. Disney and Stanley Gold
Another interesting chapter of this story is how the old management, as well as Team Disney, seems to have underestimated Roy E Disney. Uncharitably dubbed “The idiot nephew�? by Card Walker (putting to rest the rumor that Walt himself said it), many of the company leaders misunderstood Roy’s quiet ways. Eisner dismissed him as ineffectual. But when Eisner tried to forcibly retire Disney from the board, he learned what a formidable opponent Roy E. Disney can be. Roy and his partner, Stanley Gold, publicly denounced Eisner’s bad management decisions, as well as he being out of touch with the soul of the company. Roy argued persuasively about the exodus of creative people from all divisions of the company, the lack of upkeep and morale at the parks. Steve Jobs, the boss at Pixar, was alienated from Disney and broke off contract negotiations, saying that he didn’t want to work with Eisner anymore. Even Diane Disney Miller, who usually stays out the daily running of the company, wrote a letter and Fedexed it to all the board members, including Eisner, saying it was time to go. All these were met with great enthusiasm by the stock owners as well as fans all over the world.
Eisner waved all this away contemptuously, but soon learned that Disney and Gold, with their website www.savedisney.com, were striking a chord with the shareholders and employees who had grown tired of Eisner’s imperial ways, and increasing failures. This resulted in an astounding 43% vote of no confidence in Michael Eisner at the annual stockholders meeting. This stunned Eisner and his staff. The stockholders also voted to strip Eisner of his position as chairman of the board. Eisner realized that the endgame had arrived, and he was checked. With his contract expiring in 2006, Eisner decided to draft a letter saying he would be stepping down as CEO.
So ends the tale, and the book. I don’t think we have seen the end of Michael Eisner. He may still be on the board of directors in some capacity. But it will be nice to have new management, someone who has a better understanding of the many arms of this diverse entertainment company. Perhaps the “corporate culture�? will become a little more kind to its employees; the creativity will return to a resurrected WDI and restore the animation unit. It may be “safe�? to work for Disney again.
I remember having dinner with someone who made a living as a business consultant. The conversation turned to Disney and Michael Eisner in particular. She told me that the “Disney Way�?, style of management is being exported out to a corporation near you. Why? Because originally Eisner was so admired, that other business leaders wanted to know his “secrets�?. These methods were being exported and taught in management seminars throughout the country. This brought back memories of the middle management we all had to wade through at Disney, managers I jokingly referred to as “Pod People�?, since they seemed to be all cut out of the same cloth. Perhaps they are not human but simply grown by WDI in the back lots of Glendale. This really ruined my evening, and I was depressed for days. Now I hope this too has passed.
So if you are interested in the recent events at the Walt Disney Company, and want to be filled in with the details, this book is for you. I found the read easy, the writing lean and packed with information and details. In the end, it is a story of hope, that most problems will be corrected. The most famous entertainment company in the world will continue to thrive and amuse for generations to come. In the end, the Prince will arrive.
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-- Posted October 17, 2005