Old Way Strategy at Disney
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The battle was essentially complete. Eisner was out; Bob Iger was in. Disney was under new management at long last after an epic battle for control of the board. Eisner was a lame duck awaiting his final day a couple months down the road.
Among Iger's first jobs? Dismantle the strategic planning department (Stewart, 538).
If you go back to the beginning of strategy at Disney, you see why the department was created in the first place.
Eisner was a new hire, having come aboard in September 1984. He toured the parks (which he had never visited as a kid), heard about plans for new hotels at Disney World, and met Gary Wilson the Marriott Corporation's Chief Financial Officer. Marriott had been eyeing Disney as an acquisition candidate not so long before and was involved in designing the new hotels at Disney World. Wilson had been part of the team gathering information about Disney as they prepared their bid (Stewart, 62-66). Soon as he could, Eisner hired Wilson.
Wilson almost immediately hired a series of Marriott executives to establish a strategic planning department at Disney. They had five year plans for all the divisions and targeted 20/20 growth: twenty percent growth in earnings each year and 20 percent growth in stock price each year (Stewart, 66 and 200). Leverage their cash flow to buy companies in industries related to Disney became part of the planning, especially broadcast companies (Stewart 201).
You know things are going badly for the strategic planning department when everyone starts to call it's members the "goon squad," labeling them "arrogant and insensitive" (Stewart, 231).
So, what went wrong at Disney? Stewart's point of view is pretty clear. Strategic planning's "scrutiny" coupled with Eisner's willingness to "intrude" on all sorts of matters at all levels around the company caused "dismay" among the executives (Stewart, 231), enough so that many of them were thinking about leaving.
You're a CEO. You like to know what's happening. You even like to push things to happen along the lines you select. What's wrong with that? Nothing, as long as you're a relatively small company. When you get big, things change.
Risk is avoided, opportunities missed, finance acquires new strength, power shifts to corporate staff - simply, inertia reigns (Adizes, 88).
CEOs pretty much know what to do, but sometimes they are unwilling to.
Actually, that is why Eisner was so successful. He came into a bureaucratic organization and initially had great success at shaking things up. Most of what he did worked. Ultimately, however, he couldn't stay successful. He couldn't or wouldn't trust his team to manage, even after he had broken up some of the most dysfunctional bureaucracies. That was his undoing.
Oh, yes. And what to do about strategy at Disney - or your company? My advice is, when it feels like a bureaucracy, it is a bureaucracy. Ditch the bureaucracy, if you have it. If you don't, nurture what you have.
References
Adizes, Ichak. Corporate Lifecycles. How and Why Corporations Grow and Die and What to Do About It. Prentice Hall. 1988.
Stewart, James B. Disney War. Simon & Schuster Paperbacks. 2005.