“We’re the best, why change?” “We build it, they come.” “We put our name on it, they buy it.”
These sound ridiculous, right? Unfortunately, these phrases captured the essence of the Walt Disney Company corporate culture for a number of years during the late 70’s and early 80’s. The reigning mind-set was one of arrogance, indifference and a circle-the-wagons style of decision making that was focused on the past and stifled creativity.
This came to a crashing halt in 1983 during several leveraged buy-out attempts by financiers who had been tracking Disney’s sluggish performance, then targeted the corporation for a hostile takeover.
Fear, rumors, finger-pointing and anger among employees ran at an all-time high during this tumultuous period. We were indignant … we were in denial: “How could this be happening, we’re Disney!” “You can’t dismantle the House of the Mouse, we’re an American institution!”
It didn’t matter. Our product line had dried up due to a lack of creative risk-taking. Our stock was underperforming. After all, why would someone go to see a stink-bomb of a Disney movie called The Black Hole, when an amazing, non-Disney, product called Star Wars was available?
Painful? Yes. And this was the best thing that could have happened to us. It was the ultimate wake-up call to our executive ranks to re-kindle what had made our company such a powerhouse in the past. It also meant making tough decisions about who was leading the company. Through a number of brilliant moves, the Board of Directors averted the hostile takeovers by bringing on board two new executives, from outside the corporation, who channeled the delicate balance of the founding brothers Disney. The creative brilliance of Walt Disney and operational genius of Roy Disney arrived at Disney Studios in the form of Michael Eisner and Frank Wells. As with the team of Walt and Roy, Michael Eisner and Frank Wells were a balance of: “break down creative barriers,” “get it done,” and “get it done right!” Under their leadership, the company woke up and enjoyed a decade of unprecedented success.
Yes, we were on death’s door, but the shakeup that was started by corporate raiders was the best thing that could have happened to our beloved company.
The lessons I took from that crazy time are many. Here are a few:
1) No one is too big to fail.
2) Balance is vital for sustained success. We all have to have the equivalent of a Walt and Roy Disney on our teams.
3) Legacy and Brand are double-edged swords. The longer your history, the bigger your brand = risk-averse, circle-the-wagons plodding decision making. Beware!
My suggestion for all companies is to focus on #’s 2 and 3. Find your Walt and Roy, then balance your legacy with current realities. In these reside your competitive edge, your market differentiator. Good luck.