Will The Legend live on?
The Walt Disney Company has been one of The Most Iconic Corporate Turnarounds in Business History. Robert Iger has been Strategically Leading The Company since 2005, but The Challenge lies in reducing dependence on a Specific Business Segment. Is Disney up to it?
September 24, 1984: Despite his undisputed success as President of Paramount Pictures, Michael Eisner woke up feeling nervous. Monday morning blues were rare for a man of Eisner’s capacity. But, it was his first day as the Chairman and CEO of the Walt Disney Company. Two days back, Eisner waited at his home along with his wife Jane and friend Michael Ovitz while the Disney Board met to take a final decision on his appointment. A few minutes later, he got a call from Stanley Gold, President and CEO of Shamrock Holdings, Roy E. Disney’s (Walt Disney’s nephew) private investment company, stating that Eisner has got the job. Additionally, Frank Wells, former VP at Warner Bros. has been appointed as President and COO. In the evening, both Eisner and Wells joined a party hosted by Roy in honour of the new management. Towards the end, Eisner turned to Roy exclaiming, “We know you’re responsible for us being here. I’ll never forget it. If I ever lose your confidence, let me know, and I’ll resign”.
November 30, 2003: Roy is informed that he would not be renominated to the Disney board! In the afternoon, he decides to step down himself; sending the resignation to Eisner & dispatching copies to leading media houses. The following day, Gold also resigns and the duo decides to wage a war from outside to save the company. After much deliberations, Eisner finally resigns on October 01, 2005; handing over the reins to Robert Iger, President, Walt Disney Company.
Of course, there was a chain of cataclysmic events in between. In 1984, the company was struggling with insurmountable pressures. After achieving a high of $123 in 1973, Disney’s stock fell back to meager $50 levels. When Eisner and Wells joined, they were burdened with the task of turning around a legendary corporation, which had almost lost everything barring the legend. But, in less than four years, they did so, and Eisner became the darling of Hollywood and Wall Street. Profits increased by five times to $444.7 million and revenues doubled to roughly $10 billion. However, in 1994, Frank Wells died in a tragic helicopter crash. Ever since, Eisner lost his midas touch. In 2002, the operating income fell drastically by 29.5% yoy to reach $28.22 billion. Issues like his theme park expansion plans, choice of comrades and handling of ABC Networks brought Eisner under severe criticism. When Roy expressed his displeasure, Eisner ensured that he was taken off the board. And by now, you know the rest of the story.
November 30, 2003: Roy is informed that he would not be renominated to the Disney board! In the afternoon, he decides to step down himself; sending the resignation to Eisner & dispatching copies to leading media houses. The following day, Gold also resigns and the duo decides to wage a war from outside to save the company. After much deliberations, Eisner finally resigns on October 01, 2005; handing over the reins to Robert Iger, President, Walt Disney Company.
Of course, there was a chain of cataclysmic events in between. In 1984, the company was struggling with insurmountable pressures. After achieving a high of $123 in 1973, Disney’s stock fell back to meager $50 levels. When Eisner and Wells joined, they were burdened with the task of turning around a legendary corporation, which had almost lost everything barring the legend. But, in less than four years, they did so, and Eisner became the darling of Hollywood and Wall Street. Profits increased by five times to $444.7 million and revenues doubled to roughly $10 billion. However, in 1994, Frank Wells died in a tragic helicopter crash. Ever since, Eisner lost his midas touch. In 2002, the operating income fell drastically by 29.5% yoy to reach $28.22 billion. Issues like his theme park expansion plans, choice of comrades and handling of ABC Networks brought Eisner under severe criticism. When Roy expressed his displeasure, Eisner ensured that he was taken off the board. And by now, you know the rest of the story.
Source : IIPM Editorial, 2012.
An Initiative of IIPM, Malay Chaudhuri
and Arindam Chaudhuri (Renowned Management Guru and Economist).
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An Initiative of IIPM, Malay Chaudhuri
and Arindam Chaudhuri (Renowned Management Guru and Economist).
For More IIPM Info, Visit below mentioned IIPM articles.
IIPM Best B School India
Management Guru Arindam Chaudhuri
Rajita Chaudhuri-The New Age WomanIIPM's Management Consulting Arm-Planman Consulting
IIPM Prof. Arindam Chaudhuri on Internet Hooliganism
Arindam Chaudhuri: We need Hazare's leadership
Professor Arindam Chaudhuri - A Man For The Society....
IIPM: Indian Institute of Planning and Management
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