Good Morning,
This is the second part of my summary of The Ride of a Lifetime. Read Part 1 here.
Part 2: Leading
The Power of Respect
There was a 6 month period between Micheal Eisner’s exit, and Bob entering his role as CEO. One of Bob’s first order of business was to salvage the Pixar relationship. He didn’t know Steve Jobs that well, and he knew it would be difficult to repair the relationship between the companies. However, Bob understood that Steve would hardly be open to a fair deal with him based on the fallout with Eisner. Instead he called Steve Jobs to discuss another idea he had about the future of television. Bob regularly listened to music on his iPod, and he had a thought about being able to watch television on a device in the same way you listen to music. “Imagine having access to all of television history on your computer”. Note: this conversation happened years before the iPhone was announced. Steve told Bob he wanted to show him something and later flew down to Burbank to meet him. In their meeting, Jobs pulled a device from his pocket, “This is our new video iPod, this is going to allow people to watch video on our iPods, not just listen to music”. Steve asked “If we bring this product to market, will you put your television shows on it?”, and Bob agreed.
Initially, Disney content was streaming on the iPhone/iPod Touch as soon as they were released. Bob spent the next few months developing a professional and personal relationship with Steve. The barrier to entry for negotiating a partnership with Pixar was gone.
Disney-Pixar and a New Path to the Future
A few months later Bob had a risky idea, especially for a new CEO. Instead of negotiating a Disney-Pixar partnership, he wanted to acquire Pixar. When he brought this idea up to the board, they immediately shut him down. Even in speaking to his CFO, Bob was told the acquisition made no sense financially. Bob then made a call to Steve Jobs, and nervously made his proposition. Steve replied, “You know, that’s not the craziest idea in the world”. The only hurdle in the way was the uncertainty of the creative team at Pixar. Through his own experience at ABC and being acquired, Bob could understand where they were coming from. He spoke with them honestly and explained that if he changed their culture or stepped on their creativity, there would be no point in buying them.
This story is an excellent example of how honest communication and developing relationships is important even in business. Bob didn’t just try to acquire a company. He spent months talking with Steve Jobs and the other leaders at Pixar. He took a previous feeling of hostility between the companies, and replaced it with a positive relationship between people. And perhaps most importantly, he sought to understand their reservations to his ideas, rather than just focusing on what he wanted.
After months of trying to work out the details, Disney acquired Pixar for $7.4 Billion. Once the deal was done, Bob and his team made a list of more “acquisition targets” which they were interested in. The top of their list was Marvel and LucasFilms.
Using the similar principles of understanding the person at the other end, Bob was able to acquire both Marvel Entertainment and LucasFilms. Later, Disney also acquired 20th Century Fox, along with a controlling stake in Hulu and other FOX assets.
If You Don’t Innovate, You Die
In the final phase of Bob’s tenure, he completed possibly the most impactful project during his time as CEO, Disney+.
Bob understood the direction that entertainment was heading in, and so Disney invested in BAMTech, the company which built HBO Now. They eventually gained a controlling stake in the company and began developing the Disney+ and ESPN+ platforms.
But disruption isn’t just about technology. Bob needed all entertainment parts of the business to now start looking at the online streaming as the most important thing. Innovation is made difficult in a large organization because it’s hard to tell people to drop what they used to focus on and completely change priorities. Bob changed how the different business leaders at Disney were compensated. Their pay was significantly based on how they would collaborate and come up with ideas for the platforms.
“I would decide at the end of each year how much stock would vest, and that it was going to be based not on revenue but on how well they were able to work together. ‘I don’t want any politics,’ I said. ‘This is too important. It’s for the good of the company, and it’s good for you. I need you to step up’”.
No Price on Integrity
Bob recalls some difficult situations he faced during his term as CEO. “At Disney, we always believed it was vital to create and maintain an environment in which people felt safe”.
He recounts situations where he had to fire people due to harassment issues and drug abuse issues. One notable moment is when Rosanne Barr, of the popular ABC series Rosanne, tweeted that Valerie Jarrett — former advisor to Barack Obama — was “The product of the Muslim Brotherhood and Planet of the Apes”. Bob knew that nobody should be above the rules that are in place. “We don’t have a choice here, We have to do what’s right. Not what’s politically correct, and not what’s commercially correct. Just what’s right. If any of our employees tweeted what she tweeted, they’d be immediately terminated”. He fired Rosanne, called Valerie Jarrett to apologize personally, and sent a company wide email to address the issue.
Core Values
Looking back on his journey, it’s clear Bob Iger embodied the core values he mentioned at the start of the book. He navigated many situations where he didn’t have the experience, by being honest and having integrity.
He ends the book with:
No matter who we become or what we accomplish, we still feel that we’re essentially the kid we were at some simpler time long ago. Somehow that’s the trick of leadership, too, I think, to hold on to that awareness of yourself even as the world tells you how powerful and important you are. The moment you start to believe it all too much, the moment you look yourself in the mirror and see a title emblazoned on your forehead, you’ve lost your way. That may be the hardest but also the most necessary lesson to keep in mind, that wherever you are along the path, you’re the same person you’ve always been.
If you enjoyed this issue, please leave a like. If you liked it enough to share with others:
I would love to hear your thoughts on this week’s book,
You can also hit me up on twitter @h__sid
Thanks for reading,
Sid