If you’ve ever seen those large lumbering Recreational Vehicles (RV) driving through Walt Disney World, there’s a good chance they’re on their way to Fort Wilderness. Families and retirees share the tradition of driving cross-country to spend some quality time in Disney’s campground, living in the heart of the magic and yet still believably in touch with nature.
I don’t know for sure what Bob Iger had planned to do upon his retirement, but I heard something about wanting to own an NFL team. Now that that’s fallen through, perhaps he and Willow plan to hit the road in their own RV, enjoying the slower side of life after years atop the Disney corporate chain of command.
Alas, it looks like Bob and Willow will have to postpone their RV trip for at least a couple more years. As we reported earlier, Bob’s designated successor, Tom Staggs, previously the COO of the Walt Disney Company, lost the confidence of the Board of Directors and was given the option to leave gracefully. Which, to his credit, he has.
If this sounds familiar to you, it’s because it is. For some reason, The Walt Disney Company has not found succession planning and execution particularly easy. The company goes pretty much into crisis mode and back room deals have to be made before things settle down again. That’s what saw Michael Eisner and Frank Wells swept into power originally, and later Eisner found himself on the receiving end of the broom. Read James Stewart’s Disney War for a fascinating recounting of that period in Disney’s history.
When Iger announced his planned retirement a few years ago, it was hoped that there would be an orderly succession. Two candidates were chosen and groomed – Jay Rasulo and Tom Staggs. Both were given the opportunity to lead some of the company’s most important divisions and Staggs was selected as the designated successor, causing Rasulo to depart. For a while it looked like everything would work out for once. Now, it looks like the Iger era could possibly end a lot like the Eisner era and the Miller era before that.
Of course, there are big differences between how the company works today, even over how it was when Eisner left. The Eisner era was driven largely by growth at the parks (which made him a hero to fans for the first half of his reign) with some life coming from Animation and then later the company’s first big acquisition that actually paid off big — Capital Cities / ABC. Cap Cities had one big bonus hidden inside – ESPN. Knowing a good thing when he saw it, Iger arranged a few other small pick ups (like say Pixar, Marvel, and Star Wars) and changed the face of The Walt Disney Company forever. Iger will leave a legacy of franchises in multiple brands that the company can monetize for generations, Eisner left mostly some really nice architecture.
The complexity in the collection of assets Disney holds today makes it that much more difficult to find another Iger. Everyone I’ve talked to and read says that Staggs was the real deal. He had both the financial knowledge and the entertainment business knowledge. Even more he was closely involved in making some of those acquisitions happen. I’m not sure where the board hopes to fine someone better, and definitely not on a short turn around.
A new Disney CEO will need experience in themeparks and studio development, they need not be a master storyteller, but they must understand how stories are crucial to the company’s DNA and its future. One of Iger’s strengths is his understanding of how technology is core to the future success of the Mouse House. The next CEO must share a passion for technology and an intuitive sense for where it’s going in the future. The next CEO must have the temperament of a five star general who always knows where the next battle will be and is aware of where the pieces are on the battlefield at all times. And yet, they must also appear kind and gentle, dare I saw grandfatherly (or grandmotherly) and possess the ability to speak as the face of the company. Possessing something of Iger’s ability to cipher out the difference between a property that has franchise potential and one that may be useful in other ways would be a big help too.
No one is going to be Bob Iger, but Iger himself. Hopefully he realizes the board has painted him into a corner and that he’ll have to stick around a few more years, even beyond 2018, to help with the transition. Meanwhile the board can look for an interim CEO. Someone who nominally runs things from the top, but also has a set of trusted individuals around them, not just yes-men either. The interim CEO can run things while a few potential long-term replacements immerse themselves in the key parts of the company.
I don’t think the permanent replacement has to come from within (although there are great candidates), but they do have to get acclimated to the culture in multiple divisions before ascending to the throne.
If the candidate comes from more of a creative background, pair them with a financial officer who can advise them in those matters. The opposite would also be true. To me the ideal pairing would be a creative leader and a financial leader, like Eisner when he had Frank Wells or Walt and his brother Roy. The problem is time. It might take 6 or more years for the transition to really happen. Each candidate needs 3+ years atop the theme park division and 3+ years with a close eye on the studios side.
Of course, there is another option. Split Disney back up into its component parts. the Studios, Pixar, ESPN, Marvel, the theme parks all become their own companies, each with various licensing agreements between them. Spinoff as many companies as you can. Let Disney be Disney and release Marvel and Star Wars to be their own thing again.
This is essentially how things are run now (no need for the spinoffs really). Iger selects the right talent to lead each division and trusts them to run that division as its own company. Iger, and a couple key committees, make sure things run as smoothly as possible. I don’t think you need to split up the Mouse House, but you need a CEO who can see the whole playing field at once – a quarterback, if you will. Iger gets to lead his NFL team after all. Only this time the score is kept on the balance sheet.
Disney fans should keep an open mind during this transition time. Reorganizations are ahead, including some that may seem awkward pairings at first. The company may need tighter ties between its divisions to survive this transition. There may be new leadership brought to lead divisions that don’t have any experience in that area (I’m looking at you Bob Chapek (the man currently in charge of Disney parks)). We have to hope that they don’t do too much damage while they attempt to put their stamp on things in hopes of getting noticed by those up above.
Before the Board of Directors lost confidence in Tom Staggs, the Disney Company was generally seen on the right path. Those business fundamentals haven’t changed. The only thing that is different is the 5 year outlook is a bit more shaky. I know that makes fans and investors anxious, but there is a pathway through it.
Whenever the time comes for Iger to finally step aside, there will be a space for Bob and Willow at the Fort Wilderness Campground. I know they’d find it a fun community and a terrific base of operations for their Disney vacation. Until then, there’s work to do.