Bob Iger: Power, Succession, and Leading Disney Through Upheaval

0:00This episode is brought to you by PayPal. You know how a mom's bag has everything? Sunscreen? Snacks? A stapler? The new PayPal app is like that, but for your money. Shop, pay, manage your account, and earn rewards all in one place. And with purchase protection on eligible items, biometric security, and pass keys, you're protected at every step. Download the new PayPal app to get started. See paypal.com slash protection terms. When you need to build up your team to handle the growing chaos at work, use Indeed Sponsored Jobs. It gives your job post the boost it needs to be seen and helps reach people with the right skills, certifications and more.

0:41Spend less time searching and more time actually interviewing candidates who check all your boxes. Listeners of this show will get a$75 sponsored job credit at Indeed.com slash podcast. That's Indeed.com slash podcast. Terms and conditions apply. Need a hiring hero? This is a job for Indeed Sponsored Jobs. The main argument that I make in my book is that CEOs matter not because they do or control everything, but because they shape everything that matters. You had a predecessor who also had a very long tenure. You'd waited a long time to become CEO. You were very ready for it when you got the job.

1:16One of the first things that you had to do was to tell the very storied part of Disney, which was the animation business, that they needed a reset. And you brought in Pixar as a way to help the company re-imagine this feature. Can you walk us through how you had Disney confront this reality and what it took to get people to get on board? The signs were all there that Disney animation was faltering and that its importance to the company was rather significant and therefore had to be fixed and fixed fast. It wasn't that the company was in denial, but I think because they had no solutions in terms of how to fix Disney animation, there wasn't any real movement to try to do so.

2:02They were kind of stuck in neutral in that regard, knowing there was a problem, but not knowing how to get out of it. I studied the company very carefully. it was very clear to me that at least in 2004, 2005, when I became CEO, the animation business to the company and animation in particular was probably more important than any other business in terms of not just the bottom line, but the perception of the company. And so I felt a sense of urgency and I acted very quickly to address it. And that was to buy Pixar and to not only bring Pixar into Disney, but bring the leadership of Pixar into Disney animation to turn Disney animation around.

2:44And unfortunately, it paid off. The people at Pixar that came in, John Lasseter and Ed Catmull, in fact, turned Disney animation around and relatively quickly. And kind of the rest is history. The success of Disney animation since then was movies like Moana and Frozen and Tangled and Zootopia has been very, very obvious, not just to the bottom line, but to the overall perception of Disney. One of the tasks that CEOs have to do is to both build on the heritage of the company, and you inherited a, you know, we take cases at Harvard Business School about Disney, about the extraordinary flywheel of how Disney for years had built amazing IP that it was able to leverage through theme parks and everything else.

3:27And yet CEOs have to also grow the company into new areas. How did you balance both the exploitation of the core of Disney as well as its movement into new areas? You made some very big bets. How did you think about that balance? Many people at Disney, even into the 2004-2005 period, were still stuck in its past in many respects. Stuck in the past that really was Walt Disney's past. And what I found interesting about that is that Walt Disney himself was a real futurist and an innovator and someone that was willing to challenge the status quo all the time and move forward, create new rules, break boundaries, et cetera, and so on.

4:13But there was this belief that he was so larger than life and so iconic and so successful that almost everything that he created should not necessarily stand still but be honored to a fault, actually. I talk often about it being revered, and I actually determined that that was way too powerful in terms of adherence to the past, and it should be respected, meaning let's respect what he did. Let's respect who he was. let's not relegate it to a museum case of some sort to be to be looked at and appreciated let's let's use it to build on it and to and to change from it which is exactly what we'll would have done so it was immediately basically emphasized this episode is brought to you by paypal you know how a mom's bag has everything sunscreen snacks a stapler The new PayPal app is like that, but for your money.

5:12Shop, pay, manage your account, and earn rewards all in one place. And with purchase protection on eligible items, biometric security, and pass keys, you're protected at every step. Download the new PayPal app to get started. See paypal.com slash protection terms. When you need to build up your team to handle the growing chaos at work, use Indeed Sponsored Jobs. It gives your job post the boost it needs to be seen and helps reach people with the right skills, certifications, and more. Spend less time searching and more time actually interviewing candidates who check all your boxes. Listeners of this show will get a$75 sponsored job credit at Indeed.com slash podcast.

5:50That's Indeed.com slash podcast. Terms and conditions apply. Need a hiring hero? This is a job for Indeed sponsored jobs. ...the need not to ignore our past, to respect it, but again, not to revere it to a fault and to enable us to bring the qualities forward but also maintain a culture of innovation and risk-taking. One of my own observations has been that people forget that traditions were once innovations, that you could not have a tradition that wasn't an innovation once, and the obligation of a leader, as you did, is to innovate today, something that then has the opportunity to become a tradition tomorrow.

6:28We get criticized at times for changing out older attractions in our theme parks, that sometimes were built in the 1950s and 1960s, and no one likes us to do that. And they say, well, Walt created that. Like, how can you touch it? Well, Walt himself would have changed it. They forget this. He wasn't wedded to his past or to Disney's past. He was always looking ahead and always willing to essentially create change, even if it was unpopular initially. Say a word about how you influenced the culture of Disney, because lots of people understand the word, but they don't quite understand how a CEO actually has an impact on the culture of a company.

7:10I wanted to be a collaborative environment, a collaborative company. Not everything should be top down, but I also wanted everybody to know that as CEO, I was an authority figure and that I had the final say. and kind of a balance between being an autocrat and being a democrat of sorts, allowing a process to be collaborative and with many people engaged and a lot of people and hearing input from many different sources. But at the same time, everybody knowing at the end, I could dictate what we wanted to do or when the debate should be shut off, that opinion should be shut off and we should proceed or move forward.

7:52So that certainly was one. I loved accessibility. I say I love it because I thought it was important. I was someone people could engage with. And so I made sure that, for instance, in time allocation, that I was there a lot. I cut off most extracurricular activities. I was only on one outside board. I attended very few conferences. I didn't give that many speeches. I spent my time at the company with our people, And with our people at all levels, that was really important. One, it gave me an ability to influence. Two, it gave people an ability to feel respected and appreciated because I had the opportunity by seeing them to actually express appreciation and support.

8:36And I think it also gave me an ability to demonstrate enthusiasm and optimism and also to preach to them what I thought was the most important about the company and its future. One of the CEO's scarcest resources is their time. My colleague Mike Porter and I did a study of how CEOs manage their time because new CEOs would say to us, oh my God, I've been a good person at managing my time my entire career, but this job is challenging me in ways that I never could have imagined. So talk a little bit about how you dealt with what seemed to be the infinite and myriad demands on a CEO's time. And yet it's not like the job expands, but the hours in a day don't.

9:26I was fortunate to have been COO for five years before I became CEO. And I was able to observe how my predecessor managed his time. And I quickly discovered that as CEO of Disney, particularly for an extended period of time, you're drawn outside the company constantly. You're asked to speak and appear and you can easily, either wittingly or unwittingly, become distracted and your time gets even more challenged.

10:15one place. And with purchase protection on eligible items, biometric security, and pass keys, you're protected at every step. Download the new PayPal app to get started. See paypal.com slash protection terms. When you need to build up your team to handle the growing chaos at work, use Indeed Sponsored Jobs. It gives your job post the boost it needs to be seen and helps reach people with the right skills, certifications, and more. Spend less time searching and more time actually interviewing candidates who check all your boxes. Listeners of this show will get a$75 sponsored job credit at Indeed.com slash podcast.

10:49That's Indeed.com slash podcast. Terms and conditions apply. Need a hiring hero? This is a job for Indeed sponsored jobs. I promised myself when I came in, particularly in the early stages, first maybe five years of being CEO, I would devote 99 % of my non-family time to Disney. Now, how do you allocate the 99 % of your time? One, there are things a CEO must do. You have to preside over board meetings and earnings calls and meet with critical constituents or constituencies, investors and employees and your senior team. So that's very, very clear. A second, anything that required either significant capital allocation or could have a significant impact on the perception of the company and its brand.

11:41As a CEO, you must be involved with those matters. Really important. The third bucket was where could I make a difference? In other words, if I was asked to engage in something and I really didn't think that my involvement mattered, then I shouldn't be spending my time doing it. I should delegate and rely on other people to do that. And the company got more successful. I had the freedom to choose things that I actually enjoyed doing. Now, that discretionary bucket was small. But like, for instance, even though I mentioned I thought I could have a positive influence on the creative process, there were days when I had no engagement in creative processes because I was drawn in so many other directions.

12:26Those were days that I left work not happy. And so I made sure that there was something creative in every single one of my days. It's rare to have a CEO who both at some point voluntarily decided to step down and then had to come back in. What have you learned about the succession process from your own experience of having done it once, didn't go as you hoped for, now you've thoughtfully done it again? What lessons could you share for someone else who thinks about making sure that succession, which is the last act of a CEO, goes as well as it possibly could? We had a process back in 2019 and 20 when we chose my successor.

13:11You know, looking back, perhaps it wasn't as thorough as we thought, in part because we thought we knew the person extremely well. He'd worked for the company for a very long time and for me directly. And we knew his strengths and we knew some of his weaknesses as well. I'm not suggesting that we discounted the weaknesses, but in our zeal to check a box with succession and enable me to move on first as executive chairman and ultimately to leave. I'm not suggesting that we ignored some of the issues, but I think we discounted them a bit more. I think the other thing that we missed is the environment was changing dramatically.

13:53We now live in an age where I think this crisis is almost omnipresent. We live in a state of almost perpetual crisis or an environment in which a crisis can occur almost on a very regular basis. I think that requires a different kind of leadership. And I don't think we realized that at the time. Now, this is in a way hindsight. But I realized today that leadership needs to be capable of managing an environment in perpetual crisis. So what does that mean? I think it puts even more emphasis on stamina. It puts even more emphasis on someone's ability to, one, admit the crisis and deal with it, but never lose hope and optimism and balance that optimism and hope with realism.

14:43It requires someone to have a really good team of people to either take up the slack while the leader is dealing with the crisis or to help the leader contend with the crisis as a team. extremely important later.

15:26When you need to build up your team to handle the growing chaos at work, use Indeed Sponsored Jobs. It gives your job post the boost it needs to be seen and helps reach people with the right skills, certifications and more. Spend less time searching and more time actually interviewing candidates who check all your boxes. Listeners of this show will get a$75 sponsored job credit at Indeed.com slash podcast. That's Indeed.com slash podcast. Terms and conditions apply. Need a hiring hero? This is a job for Indeed Sponsored Jobs. Who does the people choose as those that that person is, who does the person choose as those that he or she is closest to?

16:03The ability to, I think, in a crisis, presence becomes even more important. You can't retreat to a bunker. Yeah. And I think you have to be, I don't think people want fearless leaders, but they don't want fearful leaders. You know, they want someone that's going to be, show some vulnerability, but never show that they're frightened. We didn't ask ourselves those questions, though maybe it would have been premature to do so. This is before COVID hit, right before COVID hit, for instance. But as we approach succession this next time around, choosing my successor this past February, we asked ourselves some of these very questions about that person.

16:44Is he resilient? You know, does he have the stamina? You know, does he choose a good team? You know, is he someone who can call it what it is, meaning we're in a real crisis, but then deal with it in a reasonable and sane and steady way, mature way? Bob, I know it was not on your wish list, but it is rare for someone to become a CEO again and you return to Disney for the second time. What was different about being CEO for the second time around? I came back with an agreement to stay for two years. And that's interesting into itself, because when you become CEO initially, you think, well, I don't know, I'm not going to be there forever, but I could be here a long time.

17:29And so your decision-making, you want to get certain things done right away, but your decision-making can stretch over a period of time. Suddenly you're back and there's a clock ticking that's louder than you ever experienced. And you think, well, I got to get a lot done in a very short period of time. And you immediately have to come to grips with, am I going to be a short-term CEO managing more for the present? Or am I going to think long-term and leave the company with a momentum or strategy or a pathway into the future? Very, very different than the first time around. We talked about balancing being an autocrat and essentially running a process that is all-inclusive in democratic sorts.

18:10If you don't have as much time, then you're going to have to show off debate earlier and, in effect, become more of an autocrat. And I didn't really want to do that, but I thought, OK, no messing around here. We'll have a collaborative process and discussion and make sure everybody feels part of it all, part of the decision-making process. But the time to act was much faster and had to be. And I had to balance that again with not trying to basically come in and just order everybody around to do things very, very quickly. It was, that was challenging. CEOs, of course, have to make the decisions that only they can make.

18:51But there are thousands of decisions that get made in a company and you have to create the context to allow those decisions to be made well. Disney is a creative company. There's lots of people who are very attached to the decisions that they want to make about a film or greenlighting something or moving forward with something. How did you get involved in the creative process of the company to ensure that you allowed the great decisions to be made and yet intervened when it was necessary? So the first thing you have to do is you have to stress or even restress the importance of creativity to the company from a commerce perspective.

19:25And also, obviously, from a brand perspective and the overall perception of the company and its position in the world. Second, what does it really mean to be a creative company and what are the standards you want to apply to that? Well, first, it means that almost all of your capital supports creativity. That's people's time and the company's money, all of its resources. Second, it's not just about any creativity, and it's not about a volume of creativity. It's about being selective and actually being demanding in terms of quality. I talked often about... This episode is brought to you by PayPal.

19:58You know how a mom's bag has everything? Sunscreen? Snacks? A stapler? The new PayPal app is like that, but for your money. Shop, pay, manage your account, and earn rewards all in one place. And with purchase protection on eligible items, biometric security, and pass keys, you're protected at every step. Download the new PayPal app to get started. See paypal.com slash protection terms. When you need to build up your team to handle the growing chaos at work, use Indeed Sponsored Jobs. It gives your job post the boost it needs to be seen and helps reach people with the right skills, certifications and more.

20:37Spend less time searching and more time actually interviewing candidates who check all your boxes. Listeners of this show will get a$75 sponsored job credit at Indeed.com slash podcast. That's Indeed.com slash podcast. Terms and conditions apply. Need a hiring hero? This is a job for Indeed sponsored jobs. The relentless pursuit of perfection. And what I meant by that is let's relentlessly pursue high quality and perfection when it comes to creativity. Let's never let volume get in the way of quality. Did you learn that there was a cadence or the right timing of when to intervene in the creative process?

21:16It seems to me that one of the real challenges that leaders have is that if you intervene too early, people stop to pay attention to what you said and you don't benefit from what their thinking might be. If you intervene too late, sometimes that feels like you overrule the decision. So how did you learn how to intervene in this process to both set the standard and at times, I imagine, when you thought something was really going off the rails, to be able to say that? It's not as much about when I intervened. It was more about how much I intervened, I guess. You can over-intervene if there is such a term.

21:54Well, first of all, hear the idea. If it was a project that was likely to become important, I engaged early. What is the idea? And pitch the idea. Tell me why it's an idea that deserves our time and our attention and our resources. And then you let the idea gestate. In other words, let the creative entity essentially form it in its earliest stages. And when they are ready, get involved in their process to make sure that you're providing them with some perspective, some criticism of sorts or critique, some advice on how to take it forward, and then let it happen again. And so it's sort of a come in, come out, come in, come out to the process.

22:39And then if it is going well, then you slowly disengage, you know, as the project nears completion. And if it's not, then you deeply engage. Sometimes we call them Hail Mary passes, where you're throwing everything that you've got at trying to fix something, including, by the way, committing my own time to it. A culture of creativity is also a culture that is accepting of failure. And because, as I said earlier, creativity is not a science. You can't possibly hit about a thousand, as they say, in baseball. There are inevitable failures. And it's really important to know, as a culture, how to process failure.

23:25so that when you do, it doesn't destroy people's ability to continue to create, which is basically protecting their ability to take risks and not be risk-averse, because creativity is ultimately a risk. CEOs have a very important external-facing role. They become the face of the company. And these days, we live in an environment in which the CEO is required to weigh in on all manner of issues, political issues, social issues. And these are not things that anybody trains a CEO to do necessarily before they get the job. And yet there is this increasing demand to speak up on issues. During your time, there were many a matter on which you were asked to speak up.

24:11How did you think of navigating this terrain and when to speak, when not to speak, how to speak, how to be the public face of Disney? I tried to speak up on issues that I thought were really relevant to the company. What's interesting about that, as I look back, is I was accused often of partisanship or bringing my own politics to work. And I actually think that that was a misperception, meaning it wasn't about my politics. It was about what I thought was right for the company. So for instance, people thought I was a staunch environmentalist. I cared deeply about it, which happens to be true, by the way.

24:50And as you know, some people today would consider that to be political position. Push your limits, train with precision, see the results. At Equinox, that's high performance loving. Everything you need to lock in and unlock your potential at Equinox. Start today at equinox.com.

25:13Family time isn't just the big moments. It's weeknight dinners, sitting around the table, everyone talking all at once. So when the plates are empty and the sink is full, use Palmolive Ultra. Palmolive's most powerful formula removes up to 99.9 % of grease, leaving your dishes sparkling clean. And the new convenient pump makes cleaning even easier, so you can spend less time tackling dishes and more time together. Shop now at palmolive.com. In reality, I cared about the environment because I cared about Disney's ability to succeed. For instance, people won't go to a theme park if you can't breathe the air.

25:49So as Disney, we should care about that. You know, we have businesses on coasts. We have a theme park on the coast of Japan or in Hong Kong, for instance. Or actually, Disneyland in California is not that far from the California coast. You should care about global warming and the impact on rising seas, et cetera, and so on. So that's probably one example of it. I took a position on immigration because we need to be where we are a large employer. We hire from countries all over the world. We seek to attract the best talent in the world, no matter where people come from. And you need a very sound immigration policy in order to achieve that.

26:28And again, that was viewed as politically. It wasn't. It was because of what I believe was in the best interest of Disney. So I actually think that today, given how difficult the environment is or how hard it is to speak up, I think you have to, as a CEO, you have to really define why, it's not what the position is, but why you are taking the position and tie it right back to doing it on behalf of the company and its shareholders and its people. So in the final section of the book, I talk about some of the personal challenges of being a CEO. And one of the challenges I talk about is it's a job in which my colleague Rakesh Karana calls it, there's a risk of structurally induced narcissism, which is everybody gives you good news.

27:18Everybody puts you on a pedestal. You get surrounded with the trappings of power, prestige. And if anybody has experienced that, probably being in a company like Disney in Hollywood, you must have had the greatest such forces at play. And yet I have met you. You have managed to stay deeply grounded through this entire process. Help us understand what are the practices that a CEO can undertake to make sure that they keep their feet in the ground, even though everything about the job runs the risk of getting them disconnected from the reality around them. I followed a celebrity CEO. Michael Eisner became a real celebrity CEO.