Pride Goeth Before a Destruction

Pride Goeth Before a Destruction

Only a very stupid person would think that Bob Iger was stupid.

My current project is a history of the collapse of The Walt Disney Company for Castalia House. Consequently, I’ve been trying to learn everything I can about Robert Iger.

He is in truth, a very smart man. However, he is also an extremely haughty man. He overrates his wins and dismisses his failures. Iger accumulated a number of useful business life lessons over the course of thirty-five years of professional life and in the past eighteen months has thrown nearly all of them away in his frantic bid to retake Disney.

I remember being astonished by a period he called the War of the Mikes. What was astonishing is how he failed to learn anything from it.

The success of Michael Eisner’s early years should not be attributed solely to Eisner himself. Roy Disney had paved the way for a triumvirate of reformers. Eisner and Jeffery Katzenberg did produce wonders together but they needed the buffer proved by the President of The Walt Disney Company, Frank Wells. He ran interference between the two men and kept things in balance. He also had the job of smoothing the ripples caused by Eisner’s personality and mercurial style of leadership.

When Wells was killed in a helicopter crash, strife between Eisner and Katzenberg began almost immediately. When Wells died Katzenberg expected to be promoted into his job. Eisner probably should have done it but a firm decision went against his nature. When Katzenberg left the company in a rage Eisner knew he needed somebody to replace Frank Wells.

And made the worst choice he possibly could. One of Eisner’s longest-standing friendships was with Mike Ovitiz. Ovitiz had been a Hollywood super-agent in the 1980s. No. It would be more accurate to say he was thee Hollywood super agent. As the head of CAA Mike Ovitiz was the king of Tinsel Town. If you ever saw the HBO series Entourage, the character of Ari Gold was based on Mike Ovitiz. He was a man who lived for making that $200 million, three-picture deal over lunch. He lived for the high of closing the sale.

Making him the worst possible fit for Disney’s corporate culture. This is a company that is so conformist even Michael Eisner was always careful to wear a Mickey Mouse tie. A president who will interrupt a meeting to take a twenty-minute call where he is trying to close a deal is a disaster. Just to be clear, this wasn’t Ovitiz’s fault. This was kicking a super salesman into a job where calm and often protracted decision-making is a bedrock requirement and Mike Ovitiz was the kind of guy who would go bug fuck if he couldn’t close the sale by the end of any meeting.

Eisner had made a terrible call in hiring his old friend.

Ovitiz truthfully needed to be fired within three months of his arrival at Burbank. But Eisner’s nature got in the way of it, so Disney languished for two years during the War of the Mikes.

The astonishing part of this was Bob Iger going on at length in his biography about how incredibly destructive it is for entire organization when there is a civil war at the top. This life lesson was apparently meant to apply to other executives seeking wisdom in Iger’s biography because he demonstrated none of it himself when he began the War of the Bobs.

Bob Chapel had known that he needed to put allies on the Disney Board of Directors. For all practical purposes, The Walt Disney Company has had no real corporate governance for years. Every member of the BOD was nominated by Robert Iger on the basis of that person’s relationship with Iger. Or his wife.

Ike Perlmutter had sold Marvel to Disney and Bob Iger had shafted him for it.

When Ike Perlmutter came to Chapek and told him that Nelson Peltz wanted a board seat it must have felt like ray of heavenly light had descended on him. That light went out shortly after the infamous November earnings call when Christine McCarthy went miles off script during the meeting to stab Chapek in the back.

When Peltz made his first public request to get on the board Perlmutter couldn’t help him

While Perlmutter had a massive grudge against Bob Iger, he couldn’t say or do anything because he was still technically a senior officer of The Walt Disney Company. Oh, he was an executive with a “window seat” as the Japanese call it. But so long as he was in that seat he was bound by instructions from the Disney BOD, to include the specific prohibition against having any further communication of any kind with Nelson Peltz.

Bob Iger knew that. He also knew how many billion dollars worth of Disney shares Perlmutter had because he was the guy who assigned those shares when he bought Marvel.

Iger was in a position where he was just fine if he “kept his enemies even close.”

And Iger couldn’t do it. His need to humiliate Ike Perlmutter by throwing him out of the company was too immense, so he did it under the guise of making “painful but necessary staffing cuts.” Iger wasn’t even trying to make it look good.

The completely predictable result of this has now happened.

Ike Perlmutter has publically declared that Nelson Peltz has his proxy in the coming shareholder war against Bob Iger.

This was entirely preventable, and all that Bob Iger had to do was swallow his pride but he couldn’t do it.

Finally, there is the awkward question of; is there any other high-profile, multi-billion dollar shareholder who is not at all happy about what Iger did to his life’s work?

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