"Like the old farmer, you've got to pour it back into the ground if you want to get it out." Walt Disney
"I believe that our mission has always been to be bringers of joy, to be affirmers of the good in each of us, to be - in subtle ways - teachers, and to speak, as Walt once said, "not to children but to the child in each of us," by way of great storytelling, by way of giving our guests a few hours in another world where their cares can be momentarily put aside, and by way of the memories of those moments that remain with people forever."
—Roy E. Disney
Save Disney for Future Generations
"Disney is not just another company. It is an American icon. Will the Comcast bid prove to be the stimulus that finally stirs the Disney board to awake from its acquiescence and lethargy and live up to its responsibilities? Shareholders can only hope."
-Stanley P. Gold
Editor's Note: I would ad that Disney is not just an American icon, but the World Cultural Heritage. People who were born in this country do not have the vision of it's domestic values that are important world wide and as well appreciated. Micky Mouse is not a symbol of imperialism as someone would like it to present, but a symbol of innocence that we do not dare to lose. The vision or Walt & Roy Disney is the last line of defense of decency in entertainment. The way CEOs value their time with excessive compensation (more than $700 million in a few years. From 1996 till 2003 - my God... I have no comment), our innocence is melting away rapidly.
One would ask a question, what is it your business, unless you are a shareholder? First, this is for Disney shareholders, but even more for the general public. Yes, we should and we will protest when art like Disney is being treated like a cheap commodity. Quality is the word that is associated with Disney and it should stay that way. Read www.SaveDisney.com send your opinion and support to Mr. Roy Disney and Stanley Gold and join us, shareholder or not, on March 2nd in Philadelphia. If not, voice your opinion locally in your newspapers, radio & TV shows, schools, clubs etc.
The following interview with Walt Disney was conducted by NBC in 1966. On the surface, in his highly informal, friendly way, Walt's business philosophy seems relatively simplistic. Translated, however, it provides an understanding as to why he was so highly rated by the business world. NBC: Walt, why did you pick Anaheim as the site for Disneyland? WALT: The Disneyland concept kept growing and growing and it finally ended up where I felt I needed two-three hundred acres. So, I wanted it in the Southern California area, there were certain things that I felt that I needed, such as flat land, because I wanted to make own hills. I didn't want it near the ocean, I wanted it sort of inland, so I had a survey group go out and hunt for areas that might be useful. And they finally came back with several different areas and we settled on Anaheim because the price of the acreage was right. But there was more to it than that. And that is that Anaheim was sort of a growing area. The freeway projection was such that we could see that the freeway would set Anaheim as sort of a hub. Well, that's how we selected Anaheim. NBC: Do you feel Anaheim has lived up to expectations? WALT: In every way, the city fathers have been wonderful. They've given us wonderful cooperation right from the start and they are still cooperating. NBC: What has been your biggest problem? WALT: Well, I'd say it's been my biggest problem all my life - it's money. It takes a lot of money to make these dreams come true. From the very start it was a problem of getting the money to open Disneyland. About 17 million dollars it took. We had everything mortgaged, including my family. We were able to get it open and for ten or eleven years now we've been pouring more money back in. In other words, like the old farmer, you've got to pour it back into the ground if you want to get it out. That's been my brother's philosophy and mine too. NBC: What plans for the future do you have at Disneyland? WALT: There's a little plaque out there that says, "As long as there is imagination left in the world, Disneyland will never be complete." We have big plans. This year, we finished over $20 million in new things. Next June, I hope, we'll have a new Tomorrowland; and starting from the ground up, building a whole new Tomorrowland. And it's going to run about $20 million bucks. NBC: What steps have you taken to see that Disneyland will always be good, family entertainment? WALT: Well, by this time, my staff, my young group of executives are convinced that Walt is right, that quality will win out, and so I think they will stay with this policy because it's proven it's a good business policy. Give the public everything you can give them, keep the place as clean as you can keep it, keep it friendly - I think they're convinced and I think they'll hang on after - as you say, "after Disney."
Thus, in the space of a brief, four-minute interview, Walt Disney covered no less than eight business considerations which went into the decision making process affecting Disneyland. Masterplanning... analyzing alternatives... evaluating costs... growth potential... working with government... taking risks... looking at investments and re-investment... up-grading, continually improving the product.
There is an old adage in the film industry... "You're only as good as your last picture." Actually, in business anywhere today, the standard is even tougher: "you're only as good as next year's results." Success today is not a vaccine for future economic ills. Many great businesses at one time or another, practically institutions and permanent fixtures on the American scene, have fallen by the wayside. Ironically, among the publishing giants on hand in 1955 as Disneyland struggled through its "Black Sunday" press opening were Look magazine, Collier's, The Saturday Evening Post, and Life. And among the cars in the parking lot were new Hudsons, Studebakers, Packards, and DeSotos. In 1955, they all had a vital, thriving part in the American scene. By 1975 they were all gone... along with dozens of other companies with long histories and great traditions.
Realistically speaking, what guarantee does the Disney organization have that some competition, perhaps not even in existence as we know it today, doesn't surpass us or worse yet... gain control of our organization? Walt Disney developed his own guarantee. He always said that we could never stand still. He had to explore, innovate and experiment and he was never satisfied with his work.
"If any of you starts to rest on your laurels, forget it," he told his staff. That was his guarantee for the future.
(An archival article from the mid-70's.)
The Eisner Effect By Stanley P. Gold As Published in The Wall Street Journal February 20, 2004
At a time when the once-obscure issue of corporate governance has become a front-page concern, company directors who used to view their positions as sinecures are finding themselves on the hot seat. It's not easy to ride herd on a chief executive whom you probably like, at whose table you've probably supped, and to whom you probably owe your position. But that's what directors are expected to do in the aftermath of Enron, Adelphia and Tyco.
Perhaps the toughest challenge a board can encounter is facing up to its responsibilities when a CEO has clearly outlived his usefulness, which is to say when his strategies or management style cause more problems than they solve. At major corporations, CEOs tend not to be shrinking violets. Typically, they are powerful, self-assured personalities who don't like being told what to do, much less being told it's time to leave. Delivering this sort of message to such an outsized figure -- and then enforcing it -- requires real courage. But in the end, that's what a board is there to do. A board's ability to assert its authority is the ultimate measure of whether or not its members are actually serving the company and the stockholders whose interests they are supposed to represent.
What happens when a board is unable to muster the resolve necessary to confront a CEO? As it happens, I have some personal experience in this area. More than two months ago, Roy Disney and I resigned as directors of the Walt Disney Company to protest just such a failure of nerve. As Roy and I made clear over the last several weeks, we tendered our resignations after several years of trying to work from within to make the Disney board more responsive to shareholders. The problem, as we saw it, was two-fold: a CEO in Michael Eisner who would not brook criticism, foster talent or groom a successor; and a board that was unwilling or unable even to question, let alone challenge him.
This unfortunate combination has been problematic for Disney, costing the company its focus, its creative energy, and its position as the world's leading creator of family entertainment. While Disney has posted some improved numbers of late, they are neither sustainable nor do they come close to making up for nearly a decade of substandard performance. The fact is, even after the company's gains in 2003, its operating income is only back to slightly more than what it was in 1996. And this is after reinvesting approximately $15 billion over this period.
In particular, one has only to consider the dismal state of the ABC Television Network, the decline of the company's signature theme parks, and the mediocre performance of such expensive cable assets as ABC Family -- not to mention Mr. Eisner's inability to maintain key creative relationships with both longtime employees and outside partners -- to see that something is seriously wrong with the way Disney is being managed. Not surprisingly, Mr. Eisner dismissively rejects this view of his stewardship. Be that as it may, it happens to be precisely what motivated Comcast, the largest cable company, to launch an unexpected takeover bid for Disney last week.
The Disney board initially rejected Comcast's offer, but the issues Comcast raised won't be so easily dismissed. In explaining to reporters what led his company to target Disney, Comcast Cable's president, Steve Burke, singled out a number of areas in which he thought the company was falling way short of its potential. Interestingly enough, Comcast's analysis of where and how Disney management has dropped the ball virtually mirrored our own critique. In Mr. Burke's view, the weak spots included the ABC network ("a weak number four [that] doesn't make very much money, despite the fact that CBS, Fox, and NBC make between $800 million and $1.3 billion a year"), ABC Family ("making very little money, and certainly not a fair return on investment"), the theme parks ("there's room for revitalization and improvement") and the creative brain-drain that, among other things, has eviscerated Disney animation ("since about 1999, the Disney animated studios have not produced . . . quality product[s]").
It's worth noting, by the way, that Mr. Burke's knowledge of Disney is anything but secondhand. Before joining Comcast, he was a senior executive at Disney for 12 years, an effective theme-park manager and the driving force behind the early success of the Disney stores. Unfortunately, he was also one of the many talented people who left the company during Mr. Eisner's tenure. Indeed, the fact that someone like Steve Burke is currently on the outside looking in, rather than on the inside making things happen, tells you everything you need to know about what is wrong with the way Disney is being run these days.
In my view, Mr. Eisner's overbearing style and intrusive micro-management of everyone around him has undermined morale throughout the company and led to an exodus of creative talent from Disney. The recent collapse of Disney's vitally important relationship with Pixar alone is a debacle that I believe could cost the company hundreds of millions of dollars in lost future revenues. Indeed, it's not too much to say that under Mr. Eisner the company has become the opposite of what the Walt Disney Company used to stand for.
Of course, what has allowed Mr. Eisner to get away with all this is a passive board of directors that essentially abdicated its responsibility to shareholders. Rather than tackle the difficult issues facing Disney, the board has consistently preferred to devote its time and energies to adopting policies that focus on process rather than substance, and serve only to muzzle and isolate those directors who recognize that their role is to be active participants in shaping the company's future. As Institutional Shareholder Services recently noted: "For 20 years Disney's revolving door for board members and management has had one constant -- Mr. Eisner."
Disney is not just another company. It is an American icon. Will the Comcast bid prove to be the stimulus that finally stirs the Disney board to awake from its acquiescence and lethargy and live up to its responsibilities? Shareholders can only hope.
Mr. Gold, a former board member of the Walt Disney Company, is president and CEO of Shamrock Holdings, Inc.