When Bob Iger, the now former CEO of one of the most iconic companies worldwide, took over leadership at Disney in 2005, the company had just finished a bruising fight between former CEO Michael Eisner and Roy Disney, board member and nephew of Walt Disney.
In the16 years after he became CEO, The Walt Disney Company’s stock outperformed the S&P 500 by nearly 2 to 1. The 15 years prior to him being the CEO, Disney slightly underperformed the S&P 500.
His tenure as Disney CEO coincided with massive change in the entertainment business:
- the fall of DVDs and switch to streaming
- the rise of originals from Netflix and other non traditional studios
- YouTube where parents can easily find entertainment for their kids
Disney vs S&P 500 16 years after Bob Iger becomes CEO
Disney vs S&P 500 15 years before Bob Iger becomes CEO
While there are many reasons why Disney performed so well during Iger’s leadership, the simple strategy he laid out in 2005 when becoming CEO, is what stood out to me the most in his autobiography, The Ride of a Lifetime.
Iger’s strategy:
- Focus on high quality branded content
- Embrace technology
- Transform into a truly global company
Iger recognized that animation was the key to Disney’s success and the company had fallen behind its peer. He acquired Pixar, LucasFilm and Marvel Entertainment and 21st Century Fox (all high quality branded content). While the content catalogs at these companies was important, the talent Disney acquired was more important.
While NetFlix is viewed as the pioneer in streaming, Disney owned ABC actual began streaming its shows in 2005. More recently, Disney+, ESPN+, ESPN3 (all owned by Disney) have all performed well.
Disney’s global growth can be summed up with DisneyLand Shanghai which opened in 2016 and cost over $5 billion.
Lessons For My Company
Have a clear strategy; Iger’s three point strategy is simple to understand.
