Speaking at an American Chamber of Commerce Leadership Series Luncheon on November 16th, Robert Iger, President and Chief Operating Officer of Walt Disney Corporation, hailed creativity as the source of Walt Disney’s achievements. “Disney bases its success on the nurturing of creativity and never doubts the awesome potential and inspiration of the creative idea,” Iger explained during his highly animated and colorful yet cautious forty-minute luncheon speech. Attendees were treated to an original black and white clip of Walt Disney himself explaining, “Never lose sight of one thing… it was all started by a mouse.”The lesson? Simple – creativity and vision are essential for any company moving forward into the future. They are also two values mastered by Walt Disney. Walt Disney, often held up as one of the first Old Economy companies successfully transitioning into the New Economy, is also a company that tugs at the heartstrings of almost any person old or young enough to read this article. Mickey Mouse and all of his friends have a magic touch, requiring little effort to softly inspire even the most hardened captains of industry. At the essence of that irony lays the spirit of The New Economy.
Iger explained that in his business, “Content is King” and Disney is the savoir-faire of content. Recent successes include Disney’s newest movie, Dinosaur, already exceeding $350 Million USD in earnings. According to Iger, Disney’s family oriented web sites, Disney.com and Family.com, are number one in their field. Disney’s sport site, ESPN.com is the number one visited sport site in the world, and ABC.com is currently the fastest growing news site in the world. Iger explains that it is hard to make the Internet work commercially when it comes to content and that creativity lies at the heart of content’s success.
No one could possibly doubt Iger’s words about the Internet being challenging for media to master. Since 1995, Walt Disney’s share price the company has had its fair share of ups and downs.
Even worse, however, is the Disney Internet Group (DIG.) (http://www.dig.com) DIG is home to some of the fastest growing, hottest web sites including ESPN.com, Family.com, GO.com, Movies.com, Mr. Showbiz, NASCAR Online and NBA.com to name a few. The colder side of the business equation has DIG spinning off from Disney in late 1999. DIG debuted near $35 USD per share and has gone straight down ever since. At time of writing DIG is well below $ 6.00 USD. Despite such dismal stock performance if any company is going to succeed with content on the Internet it will be Disney and while the stock performance may not be immediately evident, Disney is positioned to come back strong. (On November 22nd Bear Stearns reiterated coverage of DIG as “Attractive” with a price target of $15 USD.) Disney on whole is still a fantastically successful company with a huge history of growth – ten years ago Disney’s stock traded below $10 USD.
What makes DIS successful?
Creativity, which is an important business characteristic to possess. Creativity, also known as innovation, is the only source of sustained business growth. Without creativity new products and services will never be invented, and existing products and services will eventually die at the end of their life cycle.
How does Disney sustain and nurture creativity?
First, the company has a practice of granting an audience to any individual within the organization, regardless of rank or file, who has an idea for a film. In fact, the concept for Dinosaur was born in the much same fashion with the movie’s idea coming from within the company. Therefore, there are no apparent barriers to presenting creative ideas. An employee’s idea may not always be accepted, but management will always listen.
Second, Disney practices what it calls “Imagineering” where teams of people constantly brainstorm and innovate for new theme park ideas.
Third, Disney is a fun place to work, with creativity and fun being at the heart of the company’s activities. Even traditionally formal management meetings, where serious issues may be discussed, will be conducted with an element of lightness and style employees have come to know and love as the heart and soul of Disney. (Sounds very much like the latest management styles creeping out of Silicon Valley, doesn’t it?)
Finally, Disney gives its employees challenges and autonomy. Many of the creative ideas Disney pursues present impressively difficult engineering, logistical and theatrical problems. Disney, however, trusts its employees to achieve the impossible and they always do.
Disney invests heavily in its people, to insure they have the skills required to achieve the impossible. For example, the local Walt Disney theme park underway in Hong Kong will generate 18,000 jobs at the project’s commencement and 36,000 jobs by completion in 2005. Walt Disney Hong Kong employees will undergo intensive training, for some this training will take place overseas, to guarantee that staff has the necessary competencies to succeed. Iger explained how Disney believes “the creative idea is only as good as the talent to execute locally.”
Creativity aside, however, one could not help but notice Iger’s guarded responses to audience questions. No one asked about the environmental implications of Disney’s local theme park project nor raised the issue that the project is expected to kill off the few remaining rare Pink Dolphins swimming in Hong Kong waters. Neither did anyone suggest that Disney may have a difficult time sustaining visitors following the initial honeymoon phase.
When asked how Disney, a large, global company, balances creativity with bureaucracy, Iger quickly replied that at most companies, bureaucracy usually wins. However, Iger optimistically said that at Disney, where creativity has been prolifically instilled into the organization’s culture, creativity usually wins. Iger continued by saying that the challenge was to maintain a decentralized, entrepreneurial spirit. In fact, the only thing Disney centralizes is its brands.
Critics might argue that Disney takes its brands too far. For example, Disney employees are forbidden to break costume in front of “guests.” The motto being “the dream must never be broken.” It will be interesting to see whether or not Hong Kong employees are able to sustain 40 degree C heat inside Mickey Mouse, the companies leading brand!
Regardless of the skeptics, Disney stands at the gateway to the New Economy, with both new Internet groups and old business units strategically situated for the future. Fostering an environment of creativity is an imperative for both Old and New Economy companies. Maintain a light and fun management style and empower your employees with big challenges and plenty of responsibility. While Iger neglected to talk about strategic partnerships, he acknowledged that creativity is not just an internal phenomenon. Creativity requires being open to the ideas of all people, both internal and external, because “no one company or culture has a monopoly on creativity.”
Disney might be a mammoth, global company, but its success lies in its ability to unleash the creative idea and fight off the very evil of its own size. Even Iger acknowledges that Disney is rich with such dichotomies when he says “What self respecting global company would be willing to be represented by a rodent?” The answer is obviously Disney and regardless of how hot its get inside a costume, never doubt the inspirational power that mouse has on employees. That’s creativity – that’s vision – and that’s The New Economy.
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