The Ride of a Lifetime: Lessons Learned from 15 Years as CEO of the Walt Disney Company

Synopsis

For nearly a century, the Walt Disney Company has experienced seismic shifts and maintained its status as the world's most successful media company.

Robert Iger, Chairman and CEO of this legendary brand and a 45-year veteran in the entertainment industry, now tells his story and lays out the principles that nurture the good and manage the bad.

Read The Ride of a Lifetime: Lessons Learned from 15 Years as CEO of the Walt Disney Company to learn how to simultaneously embrace change and operate with integrity, and foster a culture of trust, creativity, and pragmatic risk-taking.

Top 20 insights

1. Tom Murphy and Dan Burke, who bought ABC in 1985, taught Robert Iger that true integrity – being guided by your clear sense of right and wrong – can be a secret weapon in a competitive business. In Iger's words: "The way you do anything is the way you do everything."
2. Iger still has a note that Dan Burke handed him early in his career: "Avoid getting into the business of manufacturing trombone oil...the world only consumes a few quarts of trombone oil a year!" In other words, only invest in building things that people need.
3. When Disney's board was considering Iger to be the new CEO, they questioned how he could be trusted when he'd been Michael Eisner's number two throughout several poor business decisions. Iger refused to rehash the past and determined to focus on the future: "You want to know where I'm going to take this company, not where it's been. Here's my plan."
4. Relationships at the top matter. Former CEO Michael Eisner and company President Michael Ovitz constantly clashed. This undermined the trust and morale of their employees.
5. Neither Eisner nor Ovitz ever stopped to ask how Ovitz's introduction into the team would work on the day-to-day basis. A leader must look past the short-term problem and question, "What am I really trying to solve, and does this solution make sense?"
6. When Roseanne Barr tweeted an offensive comment about a former administration official in 2018, Iger immediately canceled her show and announced to the board: "We have to do what's right. Not what's politically correct, and not what's commercially correct. Just what's right."
7. The successful acquisitions of Pixar and Marvel hinged on the realization that the value of the companies lay in their people. The deals were structured to ensure that Disney protect their unique corporate cultures.
8. When Disney acquired Marvel in 2009, they put together a dossier of thousands of Marvel characters that it could mine. This included Black Panther, which became the fourth highest grossing superhero movie of all time.
9. The acquisition of Lucasfilm required months of careful discussion with George Lucas. Disney was negotiating to be the keeper of the Star Wars legacy, with the very person who had creative control over the saga.
10. Iger's three strategic priorities once he took over as the CEO were: 1) devote time and capital to the creation of high-quality branded content, 2) embrace technology to the fullest and treat it as an opportunity instead of a threat, and 3) become a truly global company.
11. When Roy Disney publicly opposed Iger's ascension as CEO, Iger had to put his ego aside and stop the disruptive attacks to figure out what Roy was upset about and how to appease him. He concluded that Roy just needed to feel validated.
12. Embrace the Japanese concept of shokunin—the endless pursuit of perfection for some greater good. For Iger, this means to take immense pride in the work you create, have the instinct to push for perfection, and the work ethic to follow through on the goal.
13. Always make it great. When the first Star Wars movie made by Disney struggled to meet its May 2015 release date, Iger pushed it to December. He believed the financial cost of a delay was better than a movie that misses its potential.
14. In regard to innovation and bureaucracy, Iger comments: "Companies fail to innovate because of tradition; it generates so much friction, every step of the way."
15. In 2016, Iger backed away from a deal to acquire Twitter. He believed that issues like hate speech, fake accounts, and political messaging could be corrosive to the Disney brand. As Tom Murphy had said years earlier, "If something doesn't feel right to you, then it's probably not right for you."
16. Trust your people. For example, the people on the job in Hong Kong are best placed to decide issues such as pricing on the local level, not the suits back at corporate HQ.
17. By 2017, it was clear that Disney needed to reinvent itself yet again. This culminated in the bold step to launch Disney+, a direct-to-consumer streaming service.
18. Although the introduction of Disney+ inflicted short-term damage on the bottom line as the company effectively competed with itself in its traditional businesses, it was necessary to take on short-term losses to win long-term growth.
19. Former CEO Michael Eisner used to say: "Micromanaging is under-rated." But he could take it to the extreme and ultimately came across as petty and small-minded.
20. Those who stay in power too long can easily become over-confident and dismiss other people's opinions. Iger cautions that when you start to believe too much in your power and importance, you lose your way.

Summary

Throughout his long and often tumultuous career, Robert Iger has developed a set of guiding principles for leadership. One of the most important is the relentless pursuit of perfection, but this must be balanced with fairness so that employees aren't afraid to make mistakes. Alongside this is his focus on integrity, the secret weapon in a competitive business. Through the acquisitions of Pixar and Marvel, Iger learned that long shots are not so long if you do your homework, and that acquisitions are really about the people rather than the product. When times get tough, focus on the future and the abilities of your people, and always be willing to curb your ego as a leader. Ultimately, be ready to innovate or die. And during that process, be prepared to suffer now in order to win later.

Pursuit of perfection

Robert Iger joined ABC as a studio television supervisor in 1974 and soon transferred to ABC Sports, then led by Roone Arledge. Arledge had a simple mantra, but one that had a profound impact on Iger: Do what you need to do to make it better. This mantra became the basis of what Iger identifies as one of the key qualities of leadership—the relentless pursuit of perfection.

Shokunin

The pursuit of perfection is less a set of rules and more a mindset. Rather than striving for perfectionism at all costs, Iger sees the pursuit of perfection as creating an environment in which you refuse to accept mediocrity and never make excuses for something being "good enough." Never say, "I don't have the time or the energy to do X." If you are in the business of making things, then make things great.

In 2013, while in Tokyo, Iger met master sushi chef Jiro Ono. Even in his 80s, Ono said he was still working on perfecting his art. The master chef embodied the Japanese concept of shokunin—the endless pursuit of perfection for some greater good. For Iger, this means taking immense pride in the work you create, having the instinct to push to make it better, and the work ethic to follow through on the goal.

Allow failure

However, there can be a downside to the pursuit of perfection. Those working for Arledge strove to meet his exacting standards, but he had no patience for excuses and would quickly turn on people he felt were falling short. Iger believes there is a delicate balance between demanding your people to perform their best versus paralyzing them by the constant fear of failure.

One step toward this balance is to recognize that everyone messes up sometimes, and to own up to your own mistakes. By setting the example that it's okay to get things wrong if you learn from your mistakes, you instill trust and encouragement in others. Excellence and fairness don't have to be mutually exclusive.

Make it great

To this day, Iger holds to the pursuit of perfection, even when the stakes are high. Movie studios can get locked into release dates and let that have an impact on creative decisions. Disney acquired Lucasfilm in late 2012 and was planning to release the first of its Star Wars/ movies in May 2015. But early script delays and other production problems meant shooting didn't even begin until spring 2014.

Rather than compromise on the quality of the movie, Iger pushed the release date back to December, even though the delay represented a hit to the studio's bottom line.

Integrity—always

In 1985, ABC was sold to Capital Cities Communications. Its owners, Tom Murphy and Dan Burke, had created a culture of decency. Under their tutelage, Iger learned that true integrity, which means being guided by your clear sense of right and wrong, can be a secret weapon in a competitive business.

For Iger, success depends on setting a high ethical standard for everything: "The way you do anything is the way you do everything." This standard goes beyond treating people well to include hiring for good. This means hiring people with the same strong ethical compass, not just those who are good at what they do professionally.

No second chances

Integrity must seep into every part of the business, and sometimes this means making tough decisions quickly and decisively. In 2017, ABC brought the show Roseanne back to prime-time TV and it promptly received very high ratings. The show's outspoken star, Roseanne Barr, had began to make certain controversial remarks. In late May 2018, she tweeted an offensive comment regarding a former administration official. Iger's reaction was swift: "We have to do what's right. Not what's politically correct, and not what's commercially correct. Just what's right." He immediately demanded Roseanne to apologize and informed her that ABC would be making an announcement canceling the show.

Iger was undeterred by what the financial repercussions would be. In his email to the Disney board the same morning, Iger stated: "Demanding quality and integrity from all of our people and of all of our products is paramount, and there is no room for second chances, or for tolerance when it comes to an overt transgression that discredits the company in any way."

Fire fairly

This focus on fairness must carry over even into firing people—one of the hardest things to do as a boss. There's no good playbook for how to fire someone, but Iger has developed an internal set of rules, based on the notion of integrity.

Always do it in person, not over the phone or by email, and don't push the task off onto someone else. You must have the honesty to look someone in the eye and tell them the reasons why you are making this decision about them. Explain clearly and concisely what isn't working and why you don't think it will change. There is no way to avoid the conversation being painful, but the best you can do is to make it honest.

"Don't manufacture trombone oil"

In 1988, Murphy and Burke made Iger the president of ABC Entertainment. To Iger, this felt like taking a big leap without a parachute. He recognized that you can't fake what you don't know, especially in a creative industry, and decided to be honest with those who reported to him. It paid off: in the ensuing months, he swiftly climbed up a steep learning curve.

Early on, Burke handed Iger a note that read, "Avoid getting into the business of manufacturing trombone oil....the world only consumes a few quarts of trombone oil a year!" In other words, don't put a lot of energy and time into projects that won't give much back. Iger still has that piece of paper.

Having the trust of bosses like Murphy and Burke soon gave Iger the courage to take risks. He learned that if you do your homework, long shots aren't usually as long as they seem.

Not the craziest idea

In the mid-1990s, Disney had a co-production and distribution deal with Pixar, but the tension between then-Disney CEO Michael Eisner and Steve Jobs at Pixar led to the two companies acrimoniously parting ways in 2004. Once it was announced in early 2005 that Iger would be taking over as the next CEO of Disney, he decided that one of his first tasks was to repair the relationship with Pixar, which meant building a new relationship with Steve Jobs.

Iger had the idea that technological change meant that, sooner or later, people would want to watch TV on their computers. He therefore took a risk and pitched the idea to Jobs, who turned out to have been tinkering with the same idea. Five months later, Iger stood on stage with Jobs at Apple's launch of its video iPod, announcing that five Disney shows would be available to download on iTunes. The speed with which this happened helped to convince Jobs that Disney was becoming a forward-looking company.

After he formally became CEO, Iger told the board that Disney Animation—the heart of the Disney brand—was in trouble. They had three choices: try to turn it around under its current management, or bring in new talent to turn it around, or buy Pixar. Many board members deeply opposed to the idea of buying Pixar, but Iger won enough backing to explore the idea. When he broached it with the head of Pixar, Jobs said: "You know, that's not the craziest idea in the world."

They sealed the deal in 2006. Iger had done his homework. Not only did her recognize how both brands would benefit, but he also built a relationship with Jobs and convinced him that Disney could protect Pixar's culture.

Maintain the value

The Pixar acquisition was the first step in rebuilding Disney. The entertainment business continued to transform rapidly, and it was essential to keep taking risks and keep up with the times. Disney's next target was Marvel, a much "edgier" company whose fans might be horrified by a link with Disney. Iger recognized that preserving the Marvel culture would be paramount to its success and brand loyalty.

The same awareness came into play when Iger approached George Lucas to buy Lucasfilm. Disney was negotiating to be the keeper of the Star Wars legacy, with the very person who had creative control over the saga. They finally signed the deal in October 2012 after many months of careful negotiation.

Finding Wakanda

At the time of the Marvel purchase, other studios owned the rights to characters like Spiderman. However, the Disney team had done its research and put together a dossier of thousands of Marvel characters that it could mine—including Black Panther, which went on to be the fourth highest grossing superhero movie of all time.

The demands of leadership

There are many aspects to strong and effective leadership. One of the most important is to realize that relationships at the top matter. In 1995, then-CEO Michael Eisner brought in Michael Ovitz to be President of the Walt Disney Company, and it quickly became apparent that this was a mistake. Ovitz still acted like an independent agent, not someone who operated a diverse collection of businesses within a large corporation.

The two men constantly clashed, undermining the trust and morale of those working for them. They never stopped to ask the hard questions about how this set-up would work to begin with. A leader has to look past the near-term problem and ask, "What am I really trying to solve, and does this solution make sense?"

Forward focus

Effective leadership also means not giving in to pessimism, which is ruinous to morale. Fearing calamity is not a good way to motivate people. It is much better to embrace optimism—not saying all is well when it is not, but rather making it clear that you believe your team is capable of steering toward the best outcome. Optimism is a kind of pragmatic enthusiasm for what people can achieve.

One manifestation of this is to focus on the future. When Iger was being considered to take over from Eisner, the board repeatedly asked why they should trust him when he'd been Eisner's number two through several poor business decisions. Iger told the board he couldn't do anything about the past; "You want to know where I'm going to take this company, not where it's been. Here's my plan."

Curb the ego

As a leader, you cannot let your ego get in the way of making the best possible decisions. Board member Roy Disney, Walt Disney's nephew, had very publicly and vehemently opposed Iger's taking over as CEO. Once appointed, Iger had to put his ego aside and figure out what was making Roy so angry and how to appease him, or else the disruptive attacks would continue. He concluded that Roy needed to feel validated, so he made him an emeritus board member with special event privileges.

Know when to go

The final key to effective leadership is not holding on for too long. When one person has a lot of power, it becomes harder to keep how they wield that power in check. Over-confidence becomes a liability as you start to be dismissive of others' opinions. When you start to entrust too much in your own power and importance, you lose your way.

Value people

Effective management starts by recognizing that the true value of a business, especially one in the creative industry, is its people.

No guesswork

Company culture is made up of a lot of aspects, but it can be shaped most effectively by leadership that conveys priorities clearly and repeatedly. A great manager takes the guesswork out of people's day-to-day by being clear about priorities: this is where we want to be, and this is how we get there.

Iger's three strategic priorities once he took over as CEO were: 1) to devote time and capital to the creation of high-quality branded content, 2) to embrace technology to the fullest, seeing it as an opportunity, not a threat, and 3) to become a truly global company.

Don't be petty

It is OK to sweat the details to some extent. Eisner used to say, "Micromanaging is under-rated." It can show how much you care, and excellence is often a collection of small things. But when taken to extremes—as when Eisner proudly pointed out that he had chosen the types of lamps used in a hotel lobby—it can come across as petty and small-minded.

Hong Kong can figure it out

A good manager also trusts his/her people. Early in his tenure as CEO, Iger was asked to join a meeting about ticket pricing at the soon-to-be-opened theme park in Hong Kong. He canceled the meeting, saying that the people actually on the job in Hong Kong didn't need HQ to tell them how to price things, they should be able to figure it out for themselves. And if they couldn't, then they shouldn't be on this job.

Innovate or die

By the turn of the century, the entertainment industry was changing at lightning speed, and every traditional media company was operating out of fear rather than courage and trying to build walls to protect the old ways of doing things. Disney made a series of bold acquisitions, but by 2017, it was clear that the company needed to reinvent itself yet again. It was a case of innovating for survival. Could high-quality, branded products still be valuable in a changing marketplace? Could Disney adapt to the new habits of entertainment consumption and use new technology as a tool for growth?

In mid-2017, the heads of each of the company businesses made presentations to the board describing the level of disruption they were facing, culminating in a recommendation to buy a controlling stake in the streaming technology company BAMTech, and use it to launch Disney+. This was a huge step, as Disney would become a distributor of its own content, direct to consumers without intermediaries.

Suffer now, win later

Launching a new streaming service like Disney+ was major risk. Iger had to explain to Wall Street this was an expensive project upfront, with more than 25 new series and 10 original films were slated to come out in the first year alone. But it would also inflict short-term damage on the bottom line as Disney effectively competed with itself in its traditional businesses.

Intentionally taking on short-term losses in the hope of attaining long-term growth is a big risk and one that takes a lot of courage. To create original content for Disney+, Iger decided not to create a whole new studio but rather to task the existing studios—including Pixar, Marvel, and Star Wars—with creating new products on top of their current business demands. Everything gets disrupted, including existing business models and practices, routines and priorities, jobs and responsibilities. Iger even tied executive compensation to whether people were stepping up to make the new initiative successful.

Does it feel right?

Sometimes, courage can also mean turning away from an idea. In summer 2016, Disney expressed an interest in acquiring Twitter, and by October, both boards had approved a deal. The platform could work as a way to deliver content directly to consumers. Still, Iger was concerned about the management of hate speech, which included making difficult decisions about freedom of speech, fake accounts, and political messaging. Tackling such issues could be corrosive to the Disney brand. As a result, Iger decided to listen to his instincts and called off the deal.

As Tom Murphy had said years earlier, "If something doesn't feel right to you, then it's probably not right for you."