Leadership & Management

Broad Experience Gives Iger the Disney Touch

Iger and Disney Have Survived Singing Cops and Moms on Mars.

May 01, 2011

| by Michele Chandler

The Walt Disney Co. is known worldwide for its movie hits including The Little Mermaid, The Lion King, and Beauty and the Beast. But Robert Iger, the company’s president and chief executive officer, rather wishes you’d forget Mars Needs Moms and Cop Rock.

While he thought a musical police television drama could be a winner, viewers were unimpressed. Cop Rock was canned and landed on TV Guide’s List of the 50 Worst TV Shows of All Time in 2002. And this year’s animated sci-fi adventure movie Mars Needs Moms was “one of the biggest failures we ever had from a bottom line perspective,” Iger admits.

Outside the movie and TV arena, Disney’s 2007 foray into the highly competitive mobile phone industry also flopped. “I have been in the business so long that there have been a lot of things that I’ve been responsible for that just haven’t worked,” he said. “Fortunately, I guess there have been more successes than failures, or otherwise I wouldn’t be here.”

Resilience when things go bad is a major trait of an effective leader, Iger told a Stanford GSB audience on May 24. He described his four decades in the media business and the many challenges he has faced since 2005 when he became president and chief executive officer of Disney, the world’s largest media conglomerate.

Iger took over the helm at Disney at a particularly challenging time, when the California-based media conglomerate was in the midst of a divisive battle that had pitted previous CEO Michael Eisner against Roy Disney, nephew of founder Walt Disney. Iger had worked for years under Eisner as the company’s chief operating officer and faced his own skeptics after taking over the company’s top post.

But Iger focused on shoring up the company’s culture by giving managers throughout the highly diversified $38 billion company a green light to make independent decisions - from approving the opening of new Disney Store locations to embracing new technology and taking creative risks.

“The first thing I set out to do was to start trusting people again. That becomes important when you are managing the creative process,” he said. “If you start micro-managing or centralizing the management of creativity, you — destroy creative passion and vision.”

Adopting technology also featured high on Iger’s to-do list. Before he took over, permitting Disney movies to appear on the web had been viewed “as a challenge and not an opportunity,” he said. Instead, Iger believed quickly adopting technology was mandatory for Disney “to grow our business — to reach more people more effectively and be more efficient.”

In 2005, Disney became the first to supply its TV programs and movies to the iPod video platform. Four years later, Disney’s ABC television subsidiary became co-owner of Hulu.com, a web video service that delivers about 900 million videos online per month.

“We saw a world that was changing,” Iger said, to communities where people wouldn’t be locked into traditional entertainment experiences such as physically going to a movie theater or watching entertainment strictly on TV. “We felt we needed to be on these platforms, even if they provided an early threat to our current businesses. We find that with our product on new platforms, it enhances the brand value and makes people think that we are more relevant, that we are available in more modern ways,” he said.

Disney is the largest media conglomerate in the world, with $38 billion in annual revenue and encompassing businesses including cable television’s ESPN and The History Channel, Marvel Toys, TV stations in six states, motion picture firm Pixar, and Disney resorts around the globe.

Igor gleaned several important management lessons from watching his prior media bosses. As a production assistant at ABC-TV in the mid-1970s focused on daytime soap operas and game shows before going into news and sports, he ended up working for television executive Roone Arlege. Iger called Arlege - who built modern-day sports TV including Disney-owned ESPN - a phenomenal innovator, big risk-taker, and perfectionist. “When you work for someone who’s a perfectionist, you can’t go to them with a ‘no’ answer on something they’ve asked for, or deliver something that’s less than great,” he said. “That quality of demanding excellence from your people is incredibly important.”

Iger also learned the importance of managing multiple businesses in a decentralized way from another broadcast executive, former Capital Cities founder Thomas Murphy. Capital Cities bought the much larger ABC in 1985 and then sold it to Disney in 1996. Iger described the lesson Murphy taught to his employees: “Constantly reminding them of their responsibility to their customers and shareholders and people who work for them, but giving them the room and freedom to operate. Tom was brilliant at that.”

During a decade spent working for Disney’s Eisner, Iger said he found out much about how to manage a wide variety of creative enterprises. “Michael had this unbelievable ability to move from business to business. That was a great thing to observe and learn from.”

All those observations have come in handy since Iger said he can now, in a day, “go from the movie business to the TV business to the theme park business to the publishing business to the retail business to the games business to the music business to the stage play business to the cruise ship business,” all areas that fall under Disney’s multifaceted scope.

Iger’s appearance, the final “”View From The Top”” of the academic year, was dedicated to Roanak Desai, a member of the Stanford MBA class of 2010 who died last spring after a brief illness. Desai had been an integral member of the student-led “View From The Top” committee, which identifies business leaders and invites them to address MBA students about leadership issues.

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