Eisner on CNN tonight @ 6pm et

[DVC-Landbaron]

Matt!! Perfect!! We'll make stage history! Just need to find a producer and an empty stage! .............

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Hey! I know! I think there are a few empty stages in WDW right now! Now we just need a producer!! (didn't AV say someone would be out of work soon? Hmmmmm.....)



Hey Scoop! If I promise (cross my heart) to stay out of this will you come back?

 

[Captain Crook]

Just as in the AKL & Poly evaluation thread you guys just aren't paying attention.

First Paul. Where the heck did you ever see Scoop say that a Company can be successful without attention to quality...?

Landbaron. Where the heck did you see Scoop state that it wasn't possible for huge innovaton to ever take place again?

Matt, I think you're close. I can see that it's nice to believe that a conglomerate could decentralize enough to allow each unit large degrees of autonomy. An idealistic scenerio where the 'big cheese' is operating with a good enough strategic plan and efficient enough management structure to run their divisions unfettered & profitably. The question Scoop keeps asking is where is the successful model for this utopian company? Do you guys suggest Michael Eisner is the guy that should have been leading such a ground breaking experiment? (I'm kiddding, I know the answer to that ). But the point is it hasn't been done on this scale before and there must be a reason for it (I suggest that reason is probably the greed, ego & lack of teamwork is the corporate environment). Surely these are all traits attributed to ME but at least he's only one guy. Think of a conglomerate with 8 or 10 leaders running on different philosophies...I just don't think it could work.

 

[raidermatt]

And that has revealed the clear fact that the idea that one certain division can follow a total different philosophy than other divisions just ends up in spin-off companies like Lexus.

Scoop, it really sounds like you agree that at least some divisions would be best run the "old" way, but feel the only way to accomplish this is to spin them off?

Not that I necessarily agree, but if that's the case, shouldn't they be spun off? Otherwise, you are intentionally causing them to under-perform.

Instead, I was asked to prove a negative.

Hey Scoop, Mr. Orwell called... He wants his double-speak back! (obscure late night TV reference)

"Nobody else does it" is not concrete proof.

In fact, the best concrete piece of proof offered is that it worked for Disney itself.


Now, when its all said and done, it maybe true that ABC can't be run the same way as the parks. If that's the case, and if you're right that a company cannot run them with different philosophies, the only possible option is a break-up.

BTW, I may not be up on all of my automakers, but isn't Lexus still owned by Toyota?

 

[DVC-Landbaron]

Landbaron. Where the heck did you see Scoop state that it wasn't possible for huge innovation to ever take place again?

No where! That’s why I didn’t address that issue at all!

Look who’s not paying attention, now!! I said and meant nothing about innovation!! My post was about the concept that because something hasn’t been done before, it can’t be or even worse shouldn’t be tried!! Matt followed that with an even better version (or a second act if you will) mirroring EXACTLY what Disney has gone through.

I know. I know. Pretty highbrow! But, good grieve!! Capt.!! I thought even you would have understood that!!! Tell me. Do you like made for TV movies too, or do you find them hard to follow?

 

[hopemax]

I asked for proof to the contrary and wasn't given any.

And you were also told that perhaps the residents of this board don't feel comfortable with other businesses enough to "prove" anything. But if your just going to take a lack of knowlege as lack of proof...

So fine, Berkshire Hathaway. #39 on the Fortune 500 list (is that big enough for you), 4th most globably admired. Now, how much of Walt's philosophies do Buffett & Munger use, I don't feel qualified to say, but I do know that one very important criteria to Buffett is the moral integrity of his managers.

And whether Buffett is Walt like in his business philosophies or not, Buffett certainly espouses business philosophies that are unconventional. But with all of the successes Buffett has enjoyed, how come more businesses haven't adopted his philosophies?

 

[Peter Pirate]

Can he sing like Jimmy?

 

[raidermatt]

But the point is it hasn't been done on this scale before and there must be a reason for it

But even if that's true, the answer is not to abandon the philosophy. Think about it. We know its the best approach, but we aren't going to use it because we don't think it will work over at ABC?

If different divisions need to be run with different philosophies to be successful, the company MUST find a way to make it happen. There is no other option. If its not possible (I disagree, but for the sake of argument), the ONLY option is to break it up. If you keep it together, it will surely die a slow death, and then be broken up. Better to do it on your own terms.

But again, we only have a few of these multi-media entertainment conglomerates around. Saying that because those few don't use the old Disney way it doesn't work is drawing conclusions on an inadequate sample.

We KNOW it works in the biggest revenue producing arm of the company, and we KNOW it works in the studios as well. Why on earth would you let the philosophies that you suggest should guide ABC and retail dictate the philosophy in the more critical divisions of the company?

 

[hopemax]

Can he sing like Jimmy?

Don't know if he can sing like Jimmy, but he talks like James.

Mr. Buffett provides the voice for James Madison in PBS' new animated show "Liberty's Kids." My husband and I watch it and we have no kids. We think its a great show, don't know what kids think of it though.

 

[DisneyKidds]

Oh, Ooohh, Oh, Ohhh, Oh, Ohhhhh *

1- What lesson can be learned from this?

Your two act play clearly shows that Disney should cut corners!!!!!

*No, this isn't a caveman trying to be heard, it is how a certain student in a certain classroom might try to get Mr. C's attention (old sitcom reference).

PS, Cap'n..........

Just as in the AKL & Poly evaluation thread you guys just aren't paying attention.

.......they just can't help it, it isn't in them .

 

[DVC-Landbaron]

A little after one in the morning, the TV is very, very low. I am the only one still awake in the house and I read this:

Your two act play clearly shows that Disney should cut corners!!!!!

I litterally laughed out loud, before I realized that I was quite loud about it!!



Thanks!!

 

[ppiew]

Boy how times change! A few years ago Eisner 'walked on water', now the lynch mobs are circling! Which proves the point, that the general public is after short term gains. ANY bad news, immediately results in finger pointing vs. taking responsibility. A lot of people made a lot of $$$$ during Eisners first years at Disney. Is that to be forgotten?? There seems to be a lot of short term memory loss here. You bet the company has stiff challenges ahead-as most companies do these days. As far as CNN vs. Fox, I find CNN increasingly difficult to watch. Weather in the corner, sports scores on the bottom, scrolling news items, and then some poor commentator trying to report the news. I am pretty adept at doing/watching 2 things at a time - but 4 or 5???? Seems to be an attempt to be all things to all people all the time - and the result is to lose audience attention. I agree that the creativity of Disney IS fading. The effort to produce frequent animated features, for example, vs. producing a high quality one with no timetable to meet, would better serve the public appetite-and long term gains for the company. Then of course, the naysayers would demand more, more, quicker, quicker, which of course dilutes the product.

 

[PKS44]

The answer to Chad's question is several pages back--the reason more companies are not doing things the old Walt way is that it remains HIGH RISK..like most high return investments...To inivest in WOW is expensive and not guaranteed to produce results but the potential return is enormous so a few brave pioneers like Walt who are driven not by the reward of money but by something else that makes them not worry about the money end up with the money anyway....On another thread I have referenced an excellent business analysis of Disney done on mouseplanet.com which explains the different ways a company can do business...Disney used to be a SPECIALTY company- offering an expensive to produce vacation product at an expensive price (a Saks Fifth Avenue vacation)---they changed somewhere along the line and are now trying to pass of JC Penney's at Saks Fifth prices...for a while they gotten away with it as they relied on the Brand to pull in the customers...but in lowering their standards they are destroying their brand and now have to compete with a lot more companies that can offer similar quality -so you get competition and price goes down-narrowing margins....in such n environment they must either lower quality more to keep fighting in this commodity market or die....their best hope is to get back to being a SPECIALTY company where the market is smaller, but the margins are bigger and the competition is less intense...they are trying to generate SPECIALTY margins by selling COMMODITY goods...any success they enjoy doing this invites others to do the same and thus competition will heat up to levels that drive down the margins...

Chad-- although I know you are not responding to me---you mention companies that are all struggling..please tell us if you feel there are any examples of NON struggling companies that are operating under this "new" philosophy that -whatever the Captain says- implies that quality is not so important...
..and I believe Lexus is owned by Toyota...and Infiniti by Honda- so they are companies that can provide high quality with success and serve different markets at the same time...


Paul

 

[hopemax]

What Scoop, no comments on Warren Buffett's unconventional business style and why no other large company tries to do the things he does even though it seems to be pretty successful?

I was reading the 2000 Letter to Shareholders, and came across the following:

Our managers are a very special breed. At most large companies, the truly talented divisional managers seldom have the job they really want. Instead they yearn to become CEOs, either at their present employer or elsewhere. Indeed, if they stay put, they and their colleagues are likely to feel they have failed.

At Berkshire, our all-stars have exactly the jobs they want, ones that they hope and expect to keep throughout their business lifetimes. They therefore concentrate solely on maximizing the long-term value of the businesses that they "own" and love. If the businesses succeed, they have succeeded. And they stick with us: In our last 36 years, Berkshire has never had a manager of a significant subsidiary voluntarily leave to join another business.

Perhaps, AV can share what things were like in Disney prior to Eisner, and even during Eisner/Wells years. I've certainly seen the revolving door since then. The answer to fears about the high turnover are supposed to be placated with "no company could hold onto it's people." But whoops, there is one.

Why hasn't Redstone or Case or Vivendi or the Dreamworks crew or any other diverse entertainment company at least tried to adopt Walt's philosophy as their own business philosophy?

Why have they forsoke such massive potential guest satisfaction and the resulting profits?

Are you actually open to an answer other than "Walt's way doesn't work?"

 

[larworth]

If I think about some of the common strategic dimensions we associate with Walt’s philosophy it is a focus on quality, the customer, and innovation. These are common levers preached in most management tests today for creating competitive advantage and certainly practiced in many industries. Some companies use higher quality to their advantage, some companies are lauded for their history of innovation, and others for their success in understanding and servicing customer needs. Are we doubting that these can be successful sources of competitive advantage?

Now, it does seem fair to question whether the traditional levers (of excelling in quality, intimacy, and innovation) are still relevant for today’s Theme Park / Alternative Entertainment market? Will they continue to create competitive advantage in the eyes of the customer and generate those higher than average returns they have been?

Is the conglomerate test important? A conglomerate by design is made up of different strategic units. As Matt has said repeatedly, each division will have it’s own distinct business strategy and business model. Some conglomerates promote a common set of core values, processes, and training. I think GE is well noted for this. However, there is still diversity in the unit strategies employed.

Is Disney closer to being a holding company or a amalgamated enterprise. Look at the management structure and how isolated the different divisions are. They really are run independently and seem to be silo’s (*). Why even something as similar as TV programming has totally separate cable and network management. Eisner just recently hinted they might experiment with combining these into one group (gasp). When ABC needed exposure for its’ new fall season Eisner had to force this to happen across the divisions. It would not have happened naturally, because they are run as separate entities.


* p.s. Sadly the only time I’ve ever heard Eisner talk about cultural synergy across the divisions is when he talked about how much they had learned from ABC about managing costs. Yes, this was to a bunch of analysts, but it still would have been nice if the example had been how much the other divisions were learning about being customer centric from the theme parks.

 

[raidermatt]

If anyone can explain why none, nada, zilch, zip, diverse entertainment companies like Disney have adopted Walt's original philosophy, then I'm All Ears...

C'mon, Scoop. How many times do you have to hear it?

HIGH RISK.

Its why Disney went through many periods of financial distress.

But they stuck to their guns and were successful in building an unparalleld brand. Yes, we get tired of Eisner going on and on about the brand, but it does exist.

And because of that brand, Disney's level of risk in staying with at least some form of the original philosophy is much lower than Vivendi's, or Dreamworks, or anybody else. Yet the rewards are enormous.

Would the public buy into Dreamworks trying to do what Disney did? Who knows? It would be extremely risky for them to find out. But we know the public buys into with Disney.

I don't think its surprising at all that very few large companies want to take the risk of making that switch. If they are doing well, why change? If they aren't, such a risky change would be an even tougher sell to the public and board.

Of course, the advantage that Disney built up over the years is not guarnateed for the future. Only if they uphold the public's trust will that advantage and success remain.

Many people already realize that the Disney name does not mean what it once did. Eventually, if Disney does not get back on course, the Disney name WILL mean nothing more or less than Universal or Dreamworks.

How sad to have given up such an advantage out of short term greed and ego.

 

[PKS44]

Chad (and anyone else interested)

here is the link to the business analysis I had referenced...

http://www.mouseplanet.com/dan/comments.htm

By the way I was wrong in my label for Disney..they used to be what Dan Steinberg says is Augmented, not Specialty..they have drifted down to Specialty and are in danger of falling into Commodity..anyway- this Steinberg guy is sharp...he wrote way back in the summer of 2000 about why DCA would fail and if you read his columns it has unfolded and failed EXACTLY the way he said it would...

http://www.mouseplanet.com/dan/ten.htm
http://www.mouseplanet.com/dan/ten1.htm

Paul

 

[ppiew]

The short term 'greed' for quick profits and quick fixes can hardly be layed at the doorstep of the CEO. It is the investor(shareholder) and the Wall Street types that DEMAND 25% annual earnings improvement. And when it isn't achieved, how quick it is to blame the CEO - the visible head of the company. Perhaps if these earnings improvements weren't EXPECTED every year, there would be less pressure to achieve them, hence quality would be sustained over quantity. Classic example is the Disney Stores - a premium product from a premium brand when they opened, now LOADED with quicky junk to pass off on the public - a dilution of the product name. Another example is the regurgitated 'junk' coming from animation. The Disney vaults don't have 500 'classics,' because classics aren't produced on an annual basis - they occur only intermittently over time. This brings us back to every product - whether film, theme park, ride, store, etc. MUST not just produce a profit (to satisfy the investor), NO, it must be a BLOCKBUSTER or is perceived as 'unsuccessful.' Perhaps if we lay off expectations and demands, both will be obtained.