The Magic Is Gone

[miko]

http://www.msnbc.msn.com/id/4468640/
"Why are investors so furious with Michael Eisner? It's not just the stock price. The faithful think his singular focus on marketing has cost the company its soul"
"But the magic Eisner is talking about and the one shareholders say he's lost aren't exactly the same thing. The difference is how you define it. "Magic is about deception," Eisner told NEWSWEEK in a lengthy interview last year—a comment that elicited a panicked rebuke from his spokeswoman, who reminded him that " 'deceive' is really a bad word" and he might want to use the term "create."

Was ME's problem he focused too much on "Wall Street" and too little on keeping the Disney image and it's customers satisfied? Was he in a spiral, lowering quality to cut costs, then having to lower more due to attendance? Or, did he really do the best thing over his tenure for the stockholders, while offending the park goers?
I think he started out with both in mind, then as the article discuuses, decided to make Disney into Eisner and lost the formula.

 

[Chuck S]

Do you think any CEO that replaces him will be any LESS focused on Wall Street and profit? Mutual Funds and retirement funds should NOT be focused on "Magic" but on earnings for their members. That is their fiduciary responsibility. Oh, and while he probably could have chosen a better word than "deception" he is correct...what is "Magic" if it is not "illusion"?

Eisner provided the impression of "stability" for the company. If the company is now viewed as leaderless or unstable it becomes that much "riper" for being picked up in a take over bid, thus increasing the chances that each division will be spun-off and sold. Eisner should NOT leave until there is a plan of succession to replace him with a qualified, strong, executive.

 

[grinningghost]

It's all about profit, always will be. Unless they can resurrect Walt, who was more concerned with the product than the profit, it will never be as magical again.

 

[miko]

Do you think any CEO that replaces him will be any LESS focused on Wall Street and profit? Mutual Funds and retirement funds should NOT be focused on "Magic" but on earnings for their members.

Company's delivering hard goods can take advantage of efficiencies, model changes and other cost cutting while still selling product out of need by the public.
Service providers cannot expect to increase profitability by cutting their prime deliverable which are services. Making the service more desireable increases attendance (and use of discretionary spending), lowering the quality of services, reducing hours, expiditing films before they are really ready and other such actions cannot possibly generate more revenue. The strategy at Disney recently was to lower quality and increase price to offset lower attendance. Putting some of the "Magic" back into their services might just help increase attendance and overall revenues. The "soft" product is the draw, hardlines goods like shirts and other Themed items are only purchased if the buyer has enjoyed themselves.

 

[BibbidyBobbidyBoo]

Originally posted by grinningghost
It's all about profit, always will be. Unless they can resurrect Walt, who was more concerned with the product than the profit, it will never be as magical again.

Unfortunately I think you are right.

 

[Lanshark]

It makes one wonder how Walt would have run a company of this size in todays financial climate. Profit is the bottom line.

 

[grinningghost]

Originally posted by Lanshark
It makes one wonder how Walt would have run a company of this size in todays financial climate. Profit is the bottom line.

I think Roy, Sr. would have seized up before Walt in that scenario.

 

[freediverdude]

I'm sorry, but I have to speak my mind on this. All of the cynical "money is the most important thing to a company" people will probably flame and call me naive, but......magic is not an "illusion", much less a deception. The magic, among other things, is instilling hope and wonder into people....... or occasionally giving them something wonderful they didn't expect....... or giving kids (and some adults hehe) the chance to meet a character in person they've loved for years. These things are real, I believe, both for many castmembers doing them as well as the guests. That's why I believe that Disney would have to put a CEO and a chairman in place who together would agree to reinvest in the company for a period of time, and rethink some decisions, to make the magic more conducive. And I also believe that if this were the stated purpose to the shareholders, that even the institutional shareholders would not be worried about somewhat lowered profit expectations for a while during this timeframe, if improvements were taking place. In fact, I think the stock price would rise, possibly quite a bit, if everyone thought this were happening. The money will come, and the company will be successful, just as a natural byproduct of cultivating the magic and providing a quality experience unmatched by any other company.

 

[dcentity2000]

I would hold that anything that can cause a smile of genuine happiness is in itself magical

The company will need profits to survive and I guess no self respecting CEO will list as his objectives 'Magic' over 'Money'.

It is, however, not wrong to wish after the idea that magic should rule the world at all. I do.



Rich::

 

[freediverdude]

Well I think the point is, yes, it would SEEM unlikely that a CEO would make his priority "magic" over "money", but if the CEO could get across the fact that, at least for Disney, "magic" is a major driver of longterm shareholder value, then he or she could appropriately claim that "magic" be a major objective of the company, and thus justify some new reinvestment and new decisions.

 

[crusader]

If the management of the company can engage upon the public the "magic" qualities of Disney in a subliminal way then the success of past decades will continue. Disney products have the remarkable ability of sparking emotional commitment from the consumer - particularly with respect to the themeparks.

Once magic became synonymous with this company as a quality "label" attached to a product it lost some of it's luster which in turn, affected the ability to be invisibly generated.

Now consumers go looking for it. They refer to it as a "fix" and have innumerable ways of defining it.

It took a few decades to get here but maybe there wasn't any way to really avoid it, given the evolution and maturity of this company passing through several generations.

Eisner was wrong to associate the term "deception" because of the position he holds at Disney. You really can't publicly speak on that level to the consumer who feeds off your product the way so many disneyites do. They certainly don't want to admit deception is involved in any way, shape or form. They want to believe magic is special and dwells deep within their heart and soul.

Once the CEO attempts to explain to them it's all smoke and mirrors, he better get prepared to be lynched as a traitor who "doesn't get it". No self-respecting loyalist ever wants to hear that!

 

[WDSearcher]

Originally posted by grinningghost
It's all about profit, always will be. Unless they can resurrect Walt, who was more concerned with the product than the profit, it will never be as magical again.

Although I suspect that even Walt, were he alive in this day and age, would understand the need to satisfy his investors. The world was very, very different in Walt's day. He'd have had to move with the times if he wanted to fund and develop beyond EPCOT.

 

[manning]

What's that saying?

"The more things change, the more they look the same."