The Ride of a Lifetime - Chapter 13 (NO PRICE ON INTEGRITY)

CHAPTER 13: NO PRICE ON INTEGRITY

At the very beginning of this Chapter, Iger reiterated that the culture of the Walt Disney Company was to establish and nurture an environment in which people felt completely safe. However, at some point there were various claims of employees who had been abused and the CEO emphasised that he wanted to encourage people to be willing to come forward with the truth in order for Iger to resolve the situation, while promising to protect them. 

The last Chapter ended when Iger and his team realised that FOX would be a great acquisition, as it would be integrated perfectly into Disney’s long-term goals. Now in this Chapter, Iger points out the strategy that Disney would follow to complete the acquisition. They were willing to “make an all-stock offer of $28 a share—or $52.4 billion—for the acquisition.” Subsequently, however, “word had leaked that he was contemplating a sale, which invited others to start considering an acquisition.” Comcast emerged as Disney’s competitor and they made an all-stock bid that was substantially higher than Disney’s.

Correspondingly, at the same time, the CEO arrived at another problem as he figured out that one of his senior people, John Skipper, “had admitted to a drug problem, which had led to other serious complications in his life and could potentially jeopardize the company.” Therefore, with a heavy heart, Iger told John that he had to resign the following Monday. As Iger expressly commented in his book: “I regarded John highly; he is smart and worldly and was a talented, loyal executive. This was a clear example, though, of how a company’s integrity depends on the integrity of its people, and while I had great personal affection and concern for him, he’d made choices that violated Disney policy.” 

After this incidence, the CEO concentrated on how Disney would merge with FOX. This was a complex issue because they are both gigantic companies. As Iger said: “We couldn’t just add them to what already existed; we had to integrate them carefully in order to preserve and create value. So I asked myself: What would, could, or should the new company look like? If I were to erase history and build something totally new today, with all of these assets, how would it be structured? The first thing I did was separate ‘content’ from ‘technology.’ We would have three content groups: movies (Walt Disney Animation, Disney Studios, Pixar, Marvel, Lucasfilm, Twentieth Century Fox, Fox 2000, Fox Searchlight), television (ABC, ABC News, our television stations, Disney channels, Freeform, FX, National Geographic), and sports (ESPN). All of that went on the left side of the whiteboard. On the other side went tech: apps, user interfaces, customer acquisition and retention, data management, sales, distribution, and so on. The idea was simply to let the content people focus on creativity and let the tech people focus on how to distribute things and, for the most part, generate revenue in the most successful ways. Then, in the middle of the board I wrote ‘physical entertainment and goods,’ an umbrella for various large and sprawling businesses: consumer products, Disney stores, all of our global merchandise and licensing agreements, cruises, resorts, and our six theme-park businesses. I stepped back and looked at the board and thought, ‘There it is.’ That’s what a modern media company should look like. I felt energized just by looking at it, and spent the next few days refining the structure on my own.”

He, then, provided a lesson in ethics. Iger emphasised that “demanding quality and integrity from all of our people and of all of our products is paramount, and there is no room for second chances, or for tolerance when it comes to an overt transgression that discredits the company in any way.” Another one of his key people, Roseanne, made a racist tweet which violated Disney’s ethical policies and his only choice was to take a decision about what was morally right. 

Finally, the CEO asserted that: “It was an easy decision, really. I never asked what the financial repercussions would be, and didn’t care. In moments like that, you have to look past whatever the commercial losses are and be guided, again, by the simple rule that there’s nothing more important than the quality and integrity of your people and your product. Everything depends on upholding that principle.”