When Bob Iger Replaced Eisner at Disney

Leadership Effect on Organization

Introduction

Leadership style plays an important role in an organization. The case of Michael Eisner and his time as CEO and Chairman of the Board at Disney is a perfect example of the way leadership style effects a company. Eisner came into power as the leader at Disney at a pivotal time when Disney’s revenue was lackluster and the brand seemed to be stagnating with consumers. Eisner helped to reverse the fortunes of Disney; however, he had many factors working in his favor, such as buy-in from other followers. Later on in his tenure, Eisner faced opposition from other members of the Board and Eisner mismanaged the conflict and eventually resigned—but not before making sure Disney was in good hands with Bob Iger taking over. This paper will describe how Bob Iger has managed to right the ship that was left in mortal danger at the end of the Eisner era. It will critically analyze Iger’s impact on organizational performance, provide recommendations for organizational success, and discuss recent developments in the field of leadership.

From Eisner to Iger

One of the more daunting tasks faced by Disney executives was how to guide Disney successfully into the 21st century in a market where so much was changing. Under Eisner in the 1980s and into the 1990s, Disney had been able to revitalize its brand with a string of animated box-office hits from The Little Mermaid to The Lion King. However, by the end of the 1990s, Disney was once again floundering as Toy Story, the Pixar computer-animated film clearly showed that traditional hand-drawn animation like what Disney produce was the future of animation. Yet Disney and Pixar had a tense relationship during the Eisner era. Additionally, Disney had been unable to capitalize on non-animated film markets because of its sense of being a family-oriented brand. The studio that Iger inherited from Eisner was one in need of direction. Iger returned Disney to the recipe for success that Eisner had initially hit upon in the 1980s: give the people what they want. Iger acquired Marvel and LucasFilm as well as other hot properties and began producing films and shows that audiences demanded. Iger also oversaw the rise of Disney+, the company’s streaming service that would allow it to compete with Netflix. Finally, Iger helped Disney foster better working relationships with creators who could bring their vision to life under the Disney banner; he resolved the Pixar issues that had existed between the largely independent animation studio’s leaders and Disney; he also helped creative talent feel secure and supported in the Marvel Cinematic Universe that has dominated the box-office in the 21st century (Downes, Russ & Ryan, 2007).

With that in mind, what was the leadership style that Iger utilized to right the ship at Disney following the final tumultuous years under Eisner when the Board was conflicted and the conflict was aired in public? Iger’s leadership style was laissez-faire leadership style—a hands-off approach to running the various departments on Disney. Iger trusted that those involved had been hired for a reason and that they had the talent and know-how to produce great products and achieve great performance. Thus, he did not have to be involved in every leadership decision. He wanted others to take on leadership responsibilities and make the decisions that fell to their purview. Iger’s outlook was simply that he wanted Disney to be consistent: he wanted creators to feel supported and independent so that they had the room they desired to bring their vision to life. This, more than anything else, helped motivate workers, enhance morale, and bring Disney roaring back to life.

Authentic Leadership

One reason people had reason to trust Bob Iger as head at Disney was that he is an authentic leader (Scipioni, 2019). One of his maxims is that it is okay to make mistakes sometimes so long as people learn from their mistakes. He never fakes his way through his work and asks that others do not either. He wants the organization to be one that is successful because it is filled with creative people who not only know how to make things work but also have the capacity to figure out solutions to problems (Weber, 2019). Iger was able to identify top talent that could mesh with his vision of what Disney needed to become in the 21st century and then stop back and let those individuals do what they were hired to do, knowing that the culture he had established was one in which authentic leadership was promoted and honored. Those who merited praise would receive it under his watch. Those who showed that they had the tools and know-how to perform well were given space to do their work without the risk of a leader attempting to micro-manage their work.

Successful leaders carefully analyze problems, assess subordinates' skill level, consider alternatives, and make an informed choice, and this is what Iger has done since taking over Disney from Eisner. Iger saw that one of the big problems under Eisner was that Disney and Pixar were at odds over who would control the future of the animated studio. Iger understood that Pixar’s greatness lay in the genius of its animators and creators; the last thing he wanted to do was stifle their creativity by requiring Pixar to submit to oversight from Disney. Instead, Iger stepped back and gave Pixar free reign to produce as it saw fit, which was the right step to resolve that conflict.

Recent Literature on Leadership

Alvesson and Einola (2019) note that there are risks to authentic leadership, especially when a leader falls into the trap of excessive positivity: one such risk is that authentic leaders may have an out-of-date view of corporate leadership. What made Iger’s approach work at Disney is that it came about at the right time and addressed a real need within the organization. Disney had been overseeing various departments with mixed results. Pixar was in danger of leaving, which would really cripple Disney’s animation prospects. Likewise, Disney had not released anything promising since the early 1990s. Iger stepped in and identified what the public wanted, and hired top-tier talent to cultivate the Marvel projects and the Star Wars universe projects. He married authentic leadership with transformational leadership and helped to turn Disney from a family-oriented brand into an all-access brand that could get behind more adult-oriented fare. As Elrehail, Emeagwali, Alsaad and Alzghoul (2018) note, transformational and authentic leadership styles can be merged together to help bring about creative turning points in organizations looking to push themselves to the next level. That is what Iger brought to Disney.

Another important article is that by Crawford, Dawkins, Martin and Lewis (2020) which looks at how authentic leadership can help to address issues in an organization where unethical leadership has been a problem in the past. This was certainly the case at Disney under Eisner. Eisner had appointed friends to the Board so that none of his decisions would be questioned (Downes et al., 2007). He had allowed a spat between Roy Disney and others boil out of the board room into the public space, which worried shareholders. He had also seen collapsing relations with other creators working with Disney because he had adopted an authoritarian tone and he struggled getting buy-in from others after his initial successes had passed. He was viewed as stubborn and concerned primarily with enriching himself and maintaining his own power.

Iger brought more transparency, more openness, and more authenticity to the company. He was not concerned with wielding power over anyone: his focus was on getting creative people to feel secure and welcomed at Disney. That is how he managed to create the Marvel Cinematic Universe under his watch and to secure the rights to Lucas Film and the Star Wars universe. He solidified Disney’s relationship with Pixar by allowing Pixar to run its own show. What Crawford et al. (2020) explain in their article on authentic leadership is that there are ways to measure authenticity in one’s leadership to see if one is meeting the right standards. Based on their analysis, Iger met all the right standards. The important point about authentic leadership that Alvesson and Einola (2019) make, however, is also relevant to the study by Crawford et al. (2020): authentic leaders cannot make the mistake of assuming that a mere positive tone and direction will be sufficient to get an organization back on track and moving in the right direction. The organization’s leader has to be backed up and supported by the ability to be thoughtful, fair, innovative, and capable of making decisions born from critical thought.

Recommendations for Organizational Success

Now that Iger is preparing to hand off leadership responsibilities in 2021, it is important that Disney’s new leader implement the following recommendations to ensure organization success. First, it is worth pointing out that Disney’s hand-picked new leader is Bob Chapek, who is the current chairman of Disney Parks. His experience is all on the side of merchandise and amusement parks (Whitten, 2019). Unlike Iger, who came from the creative side of content development, Chapek is more on the sales side of merchandise and experiences. Yet where Disney has always thrived has been in content creation. If the content is not there, the merchandise does not sell and the theme parks have little attraction. That is the main mistake that Disney has made in rushing the Star Wars universe: it did not take time to consider how best to handle the intellectual property it acquired from Lucas Films.

Now that Disney is going to have a new leader, it is essential that recent literature be considered, particularly that of Alvesson and Einola (2019) who warn against excessive positivity in the workplace. It is not going to help the organization to have someone come into leadership without any sense of realism or what stakeholders want or need from their leader. Iger thrived because he was transparent but also hands-off: so long as people were executing and performing at a high level he had no reason to intervene. He identified the goals and helped everyone to realize the best course of action. The new leader has to combine the same kind of authentic leadership with realism, as Alvesson and Einola (2019) say a leader must do.

At the same time, as Crawford et al. (2020) point out, the new leader can measure his authentic leadership by paying attention to specific metrics and engaging in construct clarity and leader centricity. There must be a moral component that is seen in the leader (missing under Eisner but evident under Iger); the leader must also possess awareness, sincerity, balanced processing abilities, and a positive moral perspective. Too much positivity can be dangerous, as Alvesson and Einola (2019) warn. But there is also an informal influence that the leader should wield (Crawford et al., 2020). Informal influence is what helps to cultivate buy-in and get various stakeholders to line up behind the leader. That is how Iger was able to achieve success when he took over from Eisner. He had informal influence that resonated because it attracted followers, who in turn pulled others after them.