Revenge of the Internet: Disney Dumps Eisner as Chairman
Message posted by Robert Niles (via 144.142.21.5) on March 4, 2004 at 12:03 PM (MST)
The business revolt that forced Michael Eisner from his job as Disney's chairman yesterday did not begin with Roy Disney's resignation from the company's board last year. It began nine years ago, on an Internet newsgroup, with a small group of loyal Disney theme park fans.
* * *
Let's start in 1995. Longtime Disneyland President Jack Lindquist has left the company. But instead of appointing another theme park lifer to replace him, Eisner tapped Paul Pressler, head of the company's successful Disney Stores and a manager with no theme park experience.
Instead of holding back, and learning the theme park business from managers who'd been working it their entire lives, Pressler moved swiftly to run Disneyland like a giant Disney Store. And fans noticed the differences. Souvenirs themed to park attractions disappeared, replaced by acres of plush toys and character-themed clothes straight out of the Disney store. Maintenance crews swept, painted and mended less often. Trash floated in ponds and cluttered paths. Burned-out light bulbs stayed in place, dimming Main Street's evening luster.
In times past, fans' disappointment would have spread slowly, by word of mouth. But in 1995, fans also could express their frustration to other around the world on the alt.disney.disneyland Usenet group. And they did. Disney's sterling reputation began to tarnish, and fans compared notes and launched websites illustrating the deterioration in their favorite theme park. Al Lutz' "Promote Paul Pressler" site drew attention from major newspapers, with its cheeky recommendation that the new Disneyland president be "promoted" to position in the company far away from the theme parks.
Why did Disney change the way it ran Disneyland? The theme parks were the company's cash cow, earning billions in revenue even when the rest of the company suffered. Why would Eisner entrust one of the company's jewels to a man who had not a single day of experience working in, let alone managing, a theme park?
Because that's the way things are done now in American business, that's why.
Michael Eisner knows television. He knows the movie business. He worked his way up through the industry as a production chief, then a studio head. He's produced shows and knows how filmed entertainment gets made. A generation ago, most managers were like that. They worked their way up through the production side of their industry, knew how to do what their company did and knew how to motivate and teach those who were doing the company's work.
Today, that's not often the case. American business has fallen in love with the idea that "management" is a unique skill -- one that exists apart from the particular function of a specific business. The modern manager can run anything -- a movie studio, a newspaper, a cereal company. The work of the company is not relevant. Armed with MBAs and no practical experience, these managers run their companies not from the factory floor or theme park sidewalks, but from top-floor offices, making decisions based on spreadsheets and computer models.
After the death of Disney President Frank Wells in a 1994 helicopter accident, Eisner showed signs of transforming from an old-school studio executive into a modern-style by-the-numbers manager. No longer running the company with a trusted partner, but by himself, Eisner began to populate the company with more of these business school managers like Pressler, turning away from the Disney lifers would had sustained the company for years.
Wall Street loved it. After languishing for much of 1994, Disney's stock took off in 1995, along with the rest of the market. Pressler and other managers cut the company's expenses while enjoying ever-increasing attendance at Disney's theme parks.
But what Pressler and other number-crunchers saw as "waste," long-time fans saw as the magic that distinguished Disney's theme parks from those run by Six Flags and others. But the immaculate streets, well-tended landscapes, innovative attractions and unique souvenirs were going away under Disneyland's new management.
Dissent spread. Internet critics spread the word about debacles like Disneyland's failed "Light Magic" show, helping torpedo that parade within one summer. Fans continued to visit the parks, but more of them with increasingly heavy hearts, as the saw their once-favorite park in decline.
Rather than abandon Disneyland, they turned their disappointment with the company against Pressler, and eventually, Eisner. The Disney CEO has in the past five years become the villain of Internet discussion boards. Current and former Disney employees, or "cast members," joined the chorus, voicing their contempt for a management team that pocketed millions in salary, stock gains and fringe benefits while front-line employees faced dissatisfied customers, long hours, poor support and even layoffs.
While the number-crunchers squeezed customers' experience to fatten the company's bottom line, Eisner bullied Hollywood. He cut deals, including two with highly regarded rivals Miramax and Pixar, expanded the company's share of the movie business and infuriated many within the industry along the way. He bought ABC and ESPN, returning the company to Eisner's roots in the television business. Encouraged by his number-crunchers' success with inflating profits, Eisner expanded Disney's operations and took on even more responsibilities for himself.
But customers' frustration with the company continued to grow. In 2001, they showed Disney they'd had enough, when fewer than 10,000 visitors showed up for the opening of the company's highly-touted California Adventure theme park in Anaheim. Poor reviews on the Internet from those disappointed fans crippled the park, dissuading an untold number of tourists from visiting. A depressed American economy and the Sept. 11 terrorist attacks accelerated the decline, and by 2002, Disney was forced to turn to aggressive discounts to lure visitors to its parks. Disney was becoming more like Six Flags in ways the company's fans had never feared to imagine.
And then, Roy. Forced from the board by Eisner's insistence that he abide by a mandatory retirement age, Roy quit and launched a campaign against the man he's once brought into the company. Finding few allies among the business-school types on Wall Street and in the press who looked only to Disney's recent stock surge, Roy turned to the Internet for support. He launched SaveDisney.com and linked to nine Web sites (including this one) which had publicized criticism of Eisner and Disney's management over the past several years.
Roy Disney became the Howard Dean of the anti-Eisner movement. As Howard Dean became the voice of Democrats frustrated with their party's inability to challenge George W. Bush, Roy Disney became the public face and voice of the Internet movement to replace Michael Eisner. Bolstered by an online echo chamber of support, Roy's message of dissent spread, attracting the attention of stockholders, analysts, fund managers and, eventually, journalists who could no longer ignore the growing dissatisfaction with what the Disney Company was producing.
And yesterday in Philadelphia, at Disney's annual stockholders' meeting, 43 percent of shareholders voted to withhold their support for Eisner -- a stunning and historic rebuke to a corporate CEO.
Disney management spun the shareholder revolt as a call to separate the jobs of company chairman and CEO. Which the board has now done, installing former U.S. Sen. George Mitchell and Disney' chairman. But fans remain unsatisfied.
* * *
Score what's happened to date an emerging victory for consumers angry and frustrated with managers who run corporations for their stockholders instead of their customers. Consider this a warning to near-sighted managers and corporate boards who value short-term profit over their customers' long-term satisfaction. With the Internet, disappointed customers can spread the word, organize and eventually convince even jaded Wall Street analysts that corporate myopia endangers their investment.
Consumers are growing sick with school-trained managers who don't understand their companies' business. Who see customers' satisfaction as irrelevant to their bottom line. These consumers now are speaking against profitable companies that won't bother to hire needed extra hands. They are joining with employees to protest businesses that demand productive workers give back pay, benefits or even their jobs while top-level managers rake in larger bonuses.
The Internet has given these customers and these employees a global voice -- one that many other consumers find as trustworthy, if not more, than the voice of "traditional media" businesses' PR departments have courted for years. Smart corporate executives will learn from the example of Michael Eisner: Drag your managers away from your spreadsheets and put them in front of your customers. Demand that your managers learn your company's business -- not just your company's numbers.
If you don't, Michael Eisner's fate awaits you, too.
I found this from another website themeparkinsider.com and find that there is little to quarrel about in this assement of the current situation. And i guess this does show the impact of the internet and the NEW PRESS!!!
Message posted by Robert Niles (via 144.142.21.5) on March 4, 2004 at 12:03 PM (MST)
The business revolt that forced Michael Eisner from his job as Disney's chairman yesterday did not begin with Roy Disney's resignation from the company's board last year. It began nine years ago, on an Internet newsgroup, with a small group of loyal Disney theme park fans.
* * *
Let's start in 1995. Longtime Disneyland President Jack Lindquist has left the company. But instead of appointing another theme park lifer to replace him, Eisner tapped Paul Pressler, head of the company's successful Disney Stores and a manager with no theme park experience.
Instead of holding back, and learning the theme park business from managers who'd been working it their entire lives, Pressler moved swiftly to run Disneyland like a giant Disney Store. And fans noticed the differences. Souvenirs themed to park attractions disappeared, replaced by acres of plush toys and character-themed clothes straight out of the Disney store. Maintenance crews swept, painted and mended less often. Trash floated in ponds and cluttered paths. Burned-out light bulbs stayed in place, dimming Main Street's evening luster.
In times past, fans' disappointment would have spread slowly, by word of mouth. But in 1995, fans also could express their frustration to other around the world on the alt.disney.disneyland Usenet group. And they did. Disney's sterling reputation began to tarnish, and fans compared notes and launched websites illustrating the deterioration in their favorite theme park. Al Lutz' "Promote Paul Pressler" site drew attention from major newspapers, with its cheeky recommendation that the new Disneyland president be "promoted" to position in the company far away from the theme parks.
Why did Disney change the way it ran Disneyland? The theme parks were the company's cash cow, earning billions in revenue even when the rest of the company suffered. Why would Eisner entrust one of the company's jewels to a man who had not a single day of experience working in, let alone managing, a theme park?
Because that's the way things are done now in American business, that's why.
Michael Eisner knows television. He knows the movie business. He worked his way up through the industry as a production chief, then a studio head. He's produced shows and knows how filmed entertainment gets made. A generation ago, most managers were like that. They worked their way up through the production side of their industry, knew how to do what their company did and knew how to motivate and teach those who were doing the company's work.
Today, that's not often the case. American business has fallen in love with the idea that "management" is a unique skill -- one that exists apart from the particular function of a specific business. The modern manager can run anything -- a movie studio, a newspaper, a cereal company. The work of the company is not relevant. Armed with MBAs and no practical experience, these managers run their companies not from the factory floor or theme park sidewalks, but from top-floor offices, making decisions based on spreadsheets and computer models.
After the death of Disney President Frank Wells in a 1994 helicopter accident, Eisner showed signs of transforming from an old-school studio executive into a modern-style by-the-numbers manager. No longer running the company with a trusted partner, but by himself, Eisner began to populate the company with more of these business school managers like Pressler, turning away from the Disney lifers would had sustained the company for years.
Wall Street loved it. After languishing for much of 1994, Disney's stock took off in 1995, along with the rest of the market. Pressler and other managers cut the company's expenses while enjoying ever-increasing attendance at Disney's theme parks.
But what Pressler and other number-crunchers saw as "waste," long-time fans saw as the magic that distinguished Disney's theme parks from those run by Six Flags and others. But the immaculate streets, well-tended landscapes, innovative attractions and unique souvenirs were going away under Disneyland's new management.
Dissent spread. Internet critics spread the word about debacles like Disneyland's failed "Light Magic" show, helping torpedo that parade within one summer. Fans continued to visit the parks, but more of them with increasingly heavy hearts, as the saw their once-favorite park in decline.
Rather than abandon Disneyland, they turned their disappointment with the company against Pressler, and eventually, Eisner. The Disney CEO has in the past five years become the villain of Internet discussion boards. Current and former Disney employees, or "cast members," joined the chorus, voicing their contempt for a management team that pocketed millions in salary, stock gains and fringe benefits while front-line employees faced dissatisfied customers, long hours, poor support and even layoffs.
While the number-crunchers squeezed customers' experience to fatten the company's bottom line, Eisner bullied Hollywood. He cut deals, including two with highly regarded rivals Miramax and Pixar, expanded the company's share of the movie business and infuriated many within the industry along the way. He bought ABC and ESPN, returning the company to Eisner's roots in the television business. Encouraged by his number-crunchers' success with inflating profits, Eisner expanded Disney's operations and took on even more responsibilities for himself.
But customers' frustration with the company continued to grow. In 2001, they showed Disney they'd had enough, when fewer than 10,000 visitors showed up for the opening of the company's highly-touted California Adventure theme park in Anaheim. Poor reviews on the Internet from those disappointed fans crippled the park, dissuading an untold number of tourists from visiting. A depressed American economy and the Sept. 11 terrorist attacks accelerated the decline, and by 2002, Disney was forced to turn to aggressive discounts to lure visitors to its parks. Disney was becoming more like Six Flags in ways the company's fans had never feared to imagine.
And then, Roy. Forced from the board by Eisner's insistence that he abide by a mandatory retirement age, Roy quit and launched a campaign against the man he's once brought into the company. Finding few allies among the business-school types on Wall Street and in the press who looked only to Disney's recent stock surge, Roy turned to the Internet for support. He launched SaveDisney.com and linked to nine Web sites (including this one) which had publicized criticism of Eisner and Disney's management over the past several years.
Roy Disney became the Howard Dean of the anti-Eisner movement. As Howard Dean became the voice of Democrats frustrated with their party's inability to challenge George W. Bush, Roy Disney became the public face and voice of the Internet movement to replace Michael Eisner. Bolstered by an online echo chamber of support, Roy's message of dissent spread, attracting the attention of stockholders, analysts, fund managers and, eventually, journalists who could no longer ignore the growing dissatisfaction with what the Disney Company was producing.
And yesterday in Philadelphia, at Disney's annual stockholders' meeting, 43 percent of shareholders voted to withhold their support for Eisner -- a stunning and historic rebuke to a corporate CEO.
Disney management spun the shareholder revolt as a call to separate the jobs of company chairman and CEO. Which the board has now done, installing former U.S. Sen. George Mitchell and Disney' chairman. But fans remain unsatisfied.
* * *
Score what's happened to date an emerging victory for consumers angry and frustrated with managers who run corporations for their stockholders instead of their customers. Consider this a warning to near-sighted managers and corporate boards who value short-term profit over their customers' long-term satisfaction. With the Internet, disappointed customers can spread the word, organize and eventually convince even jaded Wall Street analysts that corporate myopia endangers their investment.
Consumers are growing sick with school-trained managers who don't understand their companies' business. Who see customers' satisfaction as irrelevant to their bottom line. These consumers now are speaking against profitable companies that won't bother to hire needed extra hands. They are joining with employees to protest businesses that demand productive workers give back pay, benefits or even their jobs while top-level managers rake in larger bonuses.
The Internet has given these customers and these employees a global voice -- one that many other consumers find as trustworthy, if not more, than the voice of "traditional media" businesses' PR departments have courted for years. Smart corporate executives will learn from the example of Michael Eisner: Drag your managers away from your spreadsheets and put them in front of your customers. Demand that your managers learn your company's business -- not just your company's numbers.
If you don't, Michael Eisner's fate awaits you, too.
I found this from another website themeparkinsider.com and find that there is little to quarrel about in this assement of the current situation. And i guess this does show the impact of the internet and the NEW PRESS!!!
