Bob Iger has had a long career—22 years at ABC, then 23 at Disney (after Disney acquired ABC). He started as a bottom-level crew member on television sets and eventually became CEO of Disney for 15 years. He led Disney through momentous changes in technology, global expansion, and its noted acquisitions of Pixar, Marvel, and Lucasfilm. He still looks back at his career in mild disbelief as an incredible, lucky ride of a lifetime.
This book is a retelling of his professional career, with his leadership principles woven in. We’ll give an overview of his career, then focus on his major leadership principles.
Bob Iger grew up working-class on Long Island, NY. He lived with his sister, younger by 3 years, his mother (a stay-at-home mom), and his father, a Navy veteran who flitted between advertising jobs. He never thought of their family as poor, but only as an adult did he realize how threadbare their finances were.
His father struggled with bipolar disorder and constantly viewed himself as a failure. Bob was determined not to end up like his father—Bob didn’t want to see his own life as failure—and he worked hard and strove to achieve. Through high school and college, he worked hard, determined to achieve some kind of success and escape disappointment. Throughout his career, Bob would have a habit of accepting every opportunity, even if he felt unprepared; he wanted to move up, learn more, and be capable of doing more things.
After college, Iger worked for a year as a reporter and weatherman for a small Ithaca TV station. He’d once dreamed of becoming a big-time news anchorman, but his mediocrity at the job convinced him to try something else.
In 1973, at 23, he moved to Manhattan and got a job as a studio supervisor at ABC. It paid $150 per week and was the very bottom of the totem pole. His job was to do anything needed to get shows ready for airing, including showing up at 4:30 AM to let the stagehands onto the set, checking on catering, and keeping the staff happy however he could.
This was a pivotal experience for the young Bob Iger. He learned how shows of all kinds were made, from soap operas to news shows to game shows. He learned to work with all kinds of television staff, from makeup artists to electricians to carpenters. Most importantly, the grueling hours and workload developed a flinty work ethic that stays with him today.
ABC Sports was a star department at ABC. They produced hit shows like Monday Night Football and Wide World of Sports, and they had exclusive coverage of the Olympics.
The president of ABC Sports was Roone Arledge, a legend in broadcasting. Roone changed sports broadcasting to focus on the human drama inherent in sports. He also embraced technology under his catchphrase, “innovate or die.”
Roone Arledge was also a perfectionist. He was unwilling to accept “good enough” and demanded greatness. He knew everything about his production and examined minute details, often requesting major overhauls the night before the broadcast. Roone also didn’t accept excuses—if you came to him saying something couldn’t be done, he’d push you to find another way.
Here Iger honed his own hunger for greatness and learned to question what could be possible. For instance, Iger led the first broadcast team into North Korea in decades to film a table tennis championship. The harsh State Department and US sanctions would have turned away anyone but Roone and the people who worked for him.
In 1985, Bob was 34 years old and, after spending 12 years at ABC, was a vice president at ABC Sports. That year, ABC was acquired by a company called Capital Cities Communication for $3.5 billion. This was an acquisition where a minnow swallowed a whale—ABC was four times as large as Capital Cities.
Capital Cities was run by two savvy business operators, Tom Murphy (CEO) and Dan Burke (COO). Despite their operational shrewdness, Tom and Dan were folksy, down-to-earth people who instilled admirable values in ABC: authenticity and low egos; respect and empathy to their staff; a decentralized management structure that gave business units autonomy.
Iger had a senior role in the 1988 Winter Olympics, and the success of that event caught Tom and Dan’s eye. A few weeks after the Olympics, Tom and Dan promoted Bob to executive vice president of ABC Television, the number two job at ABC TV.
This wasn’t the end—in 1989, Tom and Dan fired the head of ABC Entertainment and offered Iger the job. This was another big promotion—he’d be in charge of picking new primetime shows and become a major creative force in the company. Despite his hesitation that he didn’t know how to read scripts and pick good shows, Iger had a habit of saying yes to major opportunities, and he packed up his family and moved from New York to Los Angeles for the job.
As head of ABC Entertainment, Bob Iger’s job was to catch up to the prime-time leader, NBC. ABC had a few well-performing shows, like Roseanne and The Wonder Years, but NBC was far ahead, with their hits in The Cosby Show, Cheers, and LA Law.
More specifically, Iger’s job was to greenlight shows that would be ABC’s next big hits. But since he didn’t come from Hollywood, the entertainment elite viewed him with skepticism and saw him as a bland suit from New York. Iger admitted he was clueless and sought help from his lieutenants, who were veterans in television. With their help, he learned to read scripts, and he realized he had already developed a knack for understanding what made for good television.
When stepping into the role, Iger knew that big changes were happening in television, and ABC needed to adapt. Notably, cable television had greater creative license to show edgier content. Iger knew that ABC needed to take risks.
So when the surreal show Twin Peaks came across Iger’s desk, Iger knew it was unlike anything that had ever aired on television, and he felt they needed to develop it. Despite pushback from ABC executives, its debut was a cultural phenomenon, with 35 million people watching the pilot. Even though the show fizzled out over several seasons, it established ABC as a new cultural force in entertainment. Iger’s reputation also changed—once seen as a bland outsider, he was now an innovator willing to take big creative risks. Iger would continue to oversee the development of other successful shows like NYPD Blue and Doogie Howser, MD.
Iger’s success continued impressing Tom and Dan, and in 1993, Iger became the president of ABC at 43 years old. His rise through the ranks was dizzying. Just 8 years ago, he was still reporting to Roone Arledge; now Roone reported to him.
At the end of 1993, within a year of Iger’s taking the role, Tom shared that his COO Dan was retiring, and he needed someone as his number two. He wanted Iger to do it. Even though Iger habitually accepted every new opportunity, this was too fast—he needed to stabilize his work at ABC. Iger demurred, but Tom returned in 1994 and repeated his request. This time Bob accepted, and he became president and COO of Capital Cities/ABC.
In spring 1995, soon after Bob Iger became COO of Capital Cities/ABC, Disney made clear it wanted to acquire the company. Michael Eisner, who had been Disney CEO since 1984, led the charge.
What motivated the acquisition?
With ABC, Disney would expand its reach to audiences through ABC’s many media properties, including ABC, television stations, ESPN, cable channels, newspapers, and magazines. In return, Disney would benefit ABC with its famed creative forces and large catalog of content.
Ultimately, Iger agreed to a five-year contract as head of Disney media, and he couldn’t help dreaming about possibly one day running Disney. The deal closed in February 1996, with Disney paying $19.5 billion for Capital Cities/ABC.
When Iger took the job, he angled to be Eisner’s number two and to be named company president, but Eisner deflected. Eisner was reluctant to name anyone to be president or COO, which stemmed from his insecurity about grooming a successor who would potentially compete with Eisner for the top job. For his part, Iger was ambitious and wanted a shot at running Disney one day, but he was also respectful and patient.
From 1996 to 1999, Iger’s responsibilities ranged from running ABC Group (which included ABC network and ESPN) and leading Disney’s effort into international expansion. His successes included laying the groundwork for Disney Shanghai; his failures included a slump for ABC, where lack of creative risk-taking led to being solidly third among networks.
By 1999, Eisner had been straining for years under the load of running Disney by himself, and he started thinking he needed a number two. He’d been CEO for 16 years, and the board was now pressuring him to plan for succession. At the end of the year, Eisner formally proposed that Iger become president, COO, and a member of the Disney board.
As COO of Disney, Bob Iger was responsible for Walt Disney International, consumer products, and the media networks like ABC and ESPN. Eisner continued to have control over Walt Disney Studios and Disney’s parks.
By this time, Disney was at risk of another decline. When Eisner joined Disney as CEO in 1984, he had revolutionized Disney—he brought in a golden era of animation, leading to hits like Beauty and the Beast and The Lion King; this in turn fueled sales of theme park tickets and products. He also led the successful acquisition of Capital Cities/ABC.
But by 2000, Disney had begun another decline. Disney Animation hadn’t produced a major company-defining hit in years. At the same time, Pixar was leapfrogging Disney, and its major owner Steve Jobs was publicly feuding with Eisner over their partnership. Digital technology and the Internet were disrupting media and shifting power, away from the content creators and toward technology companies like Apple and Google. Then September 11th happened, which halted tourism globally and caused Disney stock prices to plummet.
This cocktail of problems led to Eisner’s downfall. Roy Disney, nephew of Walt Disney and a board member, led a very public, years-long campaign to oust Eisner from Disney. The frictions persisted for years until, in a shareholder meeting in March 2004, Eisner received a massive vote of no confidence. It was time for him to go.
In September 2004, Eisner announced to the board that he would step down in 2006 when his contract expired. The board accepted the offer and pushed the timeline faster—they would begin a search for the next CEO immediately and replace Eisner once they found the right person.
Iger was not the predestined successor to Eisner. In fact, given Disney’s decline, the board wanted a “change agent” from the outside. As Eisner’s number two for the past 4 years, and a lifelong ABC/Disney man, Iger simply looked like more of the same.
Iger knew he had to prepare a compelling vision of the future, and he focused on three priorities for Disney:
Iger had an uphill battle—most of the board members were against or lukewarm about his becoming CEO. But over the course of six months and fifteen interviews, Iger laid out his vision for the future and gradually swayed the swing voters on the board.
In March 2005, the board met to finalize their decision, and Iger got a call after they were done—Iger was to be the next CEO of Disney.
Iger began by focusing on his first major priority—making high-quality content. From 2005 to 2012, Iger embarked on three major acquisitions of major media companies, each powerful storytelling brands with passionate fan bases.
While each of the three companies had a distinct storytelling approach and characters, they showed common challenges in selling to Disney:
Each of the three acquisitions turned out to be home runs. They each produced blockbuster films that were adored by their fan bases and became global cultural phenomena. They restored Disney’s status to being a beloved brand and a leading storyteller. They also propelled Disney to new financial heights; once on the precipice of a downturn, Disney was now an entertainment juggernaut.
By 2016, Disney had grown considerably, but the technology and media landscape had changed even further. The massive technology companies of the day—Google, Apple, Amazon, Facebook, Netflix—commanded the attention of billions of consumers. All these companies were also investing heavily in creating their own content.
In this climate, Disney had two choices. First, it could simply continue business as usual—it could continue distributing its content through movie theaters, TV, and distribution platforms like Netflix and Apple. However, Disney risked being made a commodity content producer, just one option among thousands. The tech behemoths would continue to gain power and consumer loyalty, and eventually Disney might have no choice but to be on these networks, meaning it’d lose all its negotiating leverage and lose its direct connection to consumers.
The other option was for Disney to control its own distribution to consumers, with no middlemen. This would require developing their own technology platform and severing ties with distributors like Netflix. It would also mean disrupting their own existing businesses in the short-term and losing hundreds of millions in revenue.
In this context, Disney chose the hard route of developing its own streaming services. It acquired the streaming technology company BAMTech and developed what would become Disney+ and ESPN+. At the same time, it took its beloved content off of competitors like Netflix. Now Disney held its destiny in its own hands.
Around August 2017, Rupert Murdoch approached Iger about the possibility of Disney’s buying 21st Century Fox, which housed the 20th Century Fox film studio, the Fox television network, and a bevy of other studios and cable channels.
Murdoch bemoaned the threats to their media companies, particularly from big tech companies, and how much scale mattered in surviving in the environment. These threats were exactly what Iger and Disney had been defending against with their acquisitions and their own streaming service. The difference between their two companies, according to Murdoch, was that 21st Century Fox didn’t have scale, but Disney did.
The possibility was intriguing to Iger, but it would represent a deal possibly ten times bigger than Pixar’s $7 billion sale. It would be a company-defining decision.
Over the course of nineteen months, Disney pursued the acquisition of 21st Century Fox. It competed aggressively against rival Comcast, which made competing offers, and it fended off antitrust concerns about the deal. Ultimately, in March 2019, the deal completed—Disney bought 21st Century Fox for $71 billion. Disney was now one of the largest media entertainment companies in the world.
In 2019, when the book was published, Disney was at unprecedented heights. Avengers: Endgame became the highest-grossing movie of all time. The streaming service Disney+ launched with projections to gain ninety million subscribers within five years. It had made serious inroads in expanding globally through efforts like Disneyland Shanghai.
Fifteen years earlier, when vying for the CEO job, Iger had laid out a three-point plan—produce high-quality content, embrace technology, and become a global company. Now Iger could see that they had executed beyond their expectations, Disney had become an entertainment giant, and all the hard work was worth it.
Looking back on his career, Iger can’t help reflecting on what a wild ride it was.
Throughout the book, Iger shares his management advice behind his career and Disney’s success. Here are the ten major themes:
Optimism: This isn’t about blindly believing things will work out, but rather about believing in yourself and your team’s abilities. In contrast, a pessimistic “everything’s going to fail” attitude leads to defensiveness and risk aversion; plus, no one likes working for pessimists.
Courage: Growth requires risks, and risks require courage. Even the biggest ideas are possible if you work hard and smart. Don’t fear failure, or you won’t take risks. Don’t fear change, or you’ll refuse to embrace the future and go extinct. Instill this in your team—make it acceptable to fail.
Perfectionism: This doesn’t mean being 100% perfect at all costs. Rather, refuse to accept mediocrity. Don’t just make things “good enough”—make them great. Sweat the details because you care—but not so much to the point of stifling micromanagement. And apply the same standards to yourself—you need to do the work and be great yourself.
Focus: Decide what the few most important priorities are and focus on them. Then communicate those priorities repeatedly to your team, so they know how to align their own work with them. “This is where we want to go. This is how we’re getting there.”
Decisiveness: Make decisions quickly and deliberately. Don’t muddle; your team will lose sense of direction and get anxious. You’ll never have enough information to reach 100% certainty, so recognize that decisions are risks, and be guided by your instinct.
Curiosity: Seek to understand new ideas, people, and the shifting marketplace. Innovation requires learning.
Fairness: Treat people fairly and decently. Even as you enforce high standards, be empathetic; realize how much the creator has put into her work. Give people second chances for honest mistakes. When negotiating, be respectful; disrespect can be very costly.
Thoughtfulness: Be informed in your opinions. Admit when you don’t know something and learn to close the gap quickly.
Authenticity: Be honest and don’t fake it. People will trust and respect you, even if they don’t like what you have to say. If you’re explaining a difficult decision, like demoting a friend, explain your thought process honestly. When negotiating, explain clearly at the start what you’re looking for. Don’t create a false expectation and then go back on it later.
Integrity: Know what right and wrong means to you—your values will define the company’s values. Then set a high ethical bar for everything that your company does, big or small. “The way you do anything is the way you do everything.” Your company will be defined by how your people behave. Hire good people, not just people who are good at what they do.
In June 2016, Bob Iger had been CEO of the Walt Disney Company for 11 years. He was now in China, ready to unveil Shanghai Disneyland, the culmination of 18 years of planning and work. Even among all of Disney’s gigantic projects, Shanghai Disneyland stood out—it cost $6 billion to build, was 11 times the acreage of Disneyland, and required countless negotiations with the Chinese government. Opening the park was meant to be a joyous event, a union of Disney’s ever-popular magic with an authentic Chinese flavor. Just as millions of American children hoped of going to Disneyland, now a new generation of Chinese children would have the same joy.
It wasn’t going to be smooth. Two tragedies would occur in quick succession that tested Iger’s composure.
First, the Sunday night before the unveiling, the Orlando nightclub shooting occurred just miles from Disney World, killing over 50 people. Concerned about whether any Disney staff were among the victims, Iger’s team quickly phoned the security team in Orlando to stay updated. They’d learn a few days later that two part-time Disney employees were killed, and other employees were friends of victims. Their trauma and grief team quickly went to work for affected employees. Moreover, they’d learn from investigators later that the gunman had originally intended to target Disney World, until apparently being dissuaded by the extra police presence who happened to be there because of a concert.
Second, the day before the unveiling, a 2-year-old boy was killed by an alligator at Disney’s Grand Floridian hotel in Orlando. That night, the family had been playing on the beach of the Seven Seas Lagoon, a man-made lake, and the child was near the edge of the water. An alligator attacked the boy and dragged him away.
In this tragedy, Iger felt deeply responsible. As the head of the company, he felt he should be the company’s voice in crises rather than a cold PR team, despite the possibility of complicating their legal liability. He wrote a statement about his experiences as a father and grandfather, and how that gave him just a glimpse into the pain of losing a child. He then tearfully called the child’s parents to offer his support; his parents begged him not to let their child’s life be in vain, to prevent this from happening to any other child. Iger promised to do this. Within a day, the Orlando security team put up fences and signs throughout the entire park.
The Shanghai Disney opening continued as scheduled, but it was the saddest day of his career.
Management Principle: Trust Your Team
Iger confesses that he usually doesn’t feel anxiety when things go bad. He sees a crisis more as a problem to be solved, rather than something he has no agency over.
When emergencies like the shooting and alligator attack happen, he triages the problem, decides the response, trusts his team to do their jobs, and then gets out of the way when he has little more to add. This avoids micromanagement and meddling with little benefit.
Bob Iger has had a long career—22 years at ABC, then 23 at Disney (after Disney acquired ABC). He started as a bottom-level crew member on television sets and eventually became CEO of Disney for 15 years. He led Disney through momentous changes in technology, global expansion, and its noted acquisitions of Pixar, Marvel, and Lucasfilm. He still looks back at his career in mild disbelief as an incredible, lucky ride.
This book is a retelling of his professional career, with his leadership principles woven in.
Iger starts the recounting of his journey with brief aspects of his childhood and his early start at ABC.
Iger grew up working-class on Long Island, NY. He lived with his sister, younger by 3 years, his mother (a stay-at-home mom), and his father, a Navy veteran who flitted between advertising jobs. He never thought of their family as poor, and only as an adult did he realize how threadbare their finances were.
Iger comments on his father’s influence most:
Because of his father’s instability, Iger felt he had to be the stable core of the family. He fixed things that were broken around the house; having to take things apart and use tools, he gained an interest in technology, which would later shape his views on embracing technological changes.
Bob didn’t want to end up like his father—perpetually considering himself a failure—and he worked hard and strove to achieve. He began working for money in eighth grade, picking up a series of jobs in shoveling snow, working in a hardware store, and cleaning the school in the summer. During college (he attended Ithaca College), he worked harder than he did in high school, determined to achieve some kind of success and escape disappointment. Throughout his career, Bob would have a habit of accepting every opportunity, even if he felt unprepared; he wanted to move up, learn more, and be capable of doing more things.
Later, when Bob became CEO of Disney, he expressed his gratitude to his father. He appreciated his parenting, and he knew he inherited many of his father’s important traits. Bob hoped it would relieve a little bit of his father’s eternal disappointment in himself.
After college, Iger worked for a year as a reporter and weatherman for a small Ithaca TV station. He’d once dreamed of becoming a big-time news anchorman, but his mediocrity at the job and the unclear path upward convinced him to try something else.
In 1973, at 23, he moved to Manhattan and got a job as a studio supervisor at ABC. It paid $150 per week and was the very bottom of the totem pole. His job was to do anything needed to get shows ready for airing, including showing up at 4:30 AM to let the stagehands onto the set, checking on catering, and keeping the staff happy however he could.
This was a pivotal experience for the young Bob Iger. He learned how shows of all kinds were made, from soap operas to news shows to game shows. He learned to work with all kinds of television staff, from makeup artists to electricians to carpenters. Most importantly, the grueling hours and workload developed a flinty work ethic that stays with him today.
Management Principle: Carve Out Personal Time
Today, Bob Iger still wakes up at 4:15 AM. He relishes the time he gets to himself and his thoughts before the daily mundane demands of email and triaging priorities set in.
Even if you don’t want to wake up at 4:15 AM, it’s important to carve out time to yourself every day to explore your creativity unfettered.
Iger’s run in the department ended when he clashed with his boss. Iger’s boss was corrupt and used company resources for himself and his mistress. Iger asked other people what he could do about it, and his boss accused him of spreading rumors. In an argument, Iger was told to transfer to another department or lose his job.
Iger moved to ABC Sports as a studio operations supervisor, which in retrospect turned out to be a lucky break.
ABC Sports was a star department at ABC. They produced hit shows like Monday Night Football and Wide World of Sports, and they had exclusive coverage of the Olympics.
A large part of their success was due to the division’s president, Roone Arledge. His strong points of view changed the way sports were broadcasted:
Roone Arledge was also a perfectionist. He was unwilling to accept “good enough” and demanded greatness. He knew everything about his production and examined minute details. Irritatingly, he would often review the work at the last minute, the night before the broadcast. He’d decide everything needed to be scrapped—the lighting changed, the set redesigned, the introduction re-edited—and cause his team to work overnight to make the deadline. And during the live broadcast, he’d deliver continuous feedback, phoning in from home if he had to.
Roone didn’t accept excuses. If you came to him saying something couldn’t be done, he’d push you to find another way.
This was exhausting, but also inspiring. People knew that Roone’s heart was in the right place—to create the best work product possible, regardless of the human cost. Roone was also usually right, and his high expectations lifted what people thought they were capable of doing. Because of Roone’s stature and the quality of his product, people wanted to meet his expectations.
For instance, in 1979, North Korea was hosting the World Table Tennis Championships. Roone wanted to cover it, regardless of how hostile the international politics were, and Bob Iger was assigned to the job. At first, the State Department shot Iger down, saying this grossly violated US sanctions prohibiting any business with North Korea. But knowing Roone wouldn’t accept failure, Iger eventually found a workaround—securing rights through the table tennis organization, not with North Korea directly. They were able to film in North Korea, a breakthrough moment for US media. Iger knew he wouldn’t have done it if Roone weren’t in his head demanding he get the job done.
Management Principle: Pursue Perfection
Today, Iger practices “the relentless pursuit of perfection.” This doesn’t mean being 100% perfect at all costs. Rather, it means refusing to accept mediocrity. Don’t just make things “good enough”—make them great. Sweat the details.
A successful pursuit of perfection consists of two things: 1) a mindset of perfection, and 2) the work ethic to achieve it.
There was no question, though, that Roone was abrasive in his pursuit of perfection. He was very clear about what was wrong, and he didn’t care what it took to achieve his vision. He could also be cruel in how he expressed this. Despite the inspiration, working with Roone was exhausting and could be demoralizing, and plenty of people thought about quitting.
Management Principle: Be Empathetic and Fair
Today, Iger knows that the pursuit of perfection doesn’t have to come at all costs. You can achieve greatness while still being empathetic and fair.
This doesn’t mean lowering your expectations. Rather, it means hearing people out, being emotionally stable, and giving people second chances for legitimate mistakes.
Since ABC Sports was a star division in the company, people who worked there earned special treatment. They had expensive clothes and tastes, they associated with Hollywood celebrities and sports royalty, and they jetset around the world to cover sports in exotic places.
The travel broadened Iger’s worldview, giving him both his first refined French meal and his exposure to the daily struggles of people in the Soviet Union. At the same time, he was aware of how relatively unsophisticated and uneducated he was compared to his co-workers, and this drove him to the one place he knew he could win—work harder than anyone else.
In 1985, Bob was 34 years old and, after spending 12 years at ABC, was vice president at ABC Sports. That year, ABC was acquired by a company called Capital Cities Communication for $3.5 billion. This was an acquisition where a minnow swallowed a whale—ABC was four times as large as Capital Cities.
Capital Cities was run by two savvy business operators, Tom Murphy and Dan Burke. The company had begun as a single TV station in Albany. Over time, they acquired station after station until they had assembled a large portfolio of TV stations, radio stations, and newspapers.
Their consistent strategy was to find a new TV station and increase profits by 1) investing in programming to raise revenue, and 2) cutting unnecessary costs. They’d then use the profits to acquire more stations. (Shortform note: Read more about the growth strategy of Capital Cities in our summary of The Outsiders.)
Capital Cities immediately went to work making changes at ABC. First they clamped down on perks, like executive limos and first-class flights. While some executives complained about the penny-pinching, in retrospect this was the right strategy—competition was getting tougher, and margins were slimmer; to survive, they’d need to be smart about their spending.
Despite their operational shrewdness, Tom and Dan were folksy, down-to-earth people. Unlike the hotshots at ABC Sports, Tom and Dan didn’t have deep connections to Hollywood and talked about humble values. To ABC executives, they seemed like country rubes. In reality, they simply cared about operating good businesses and wanted little of the glamour.
To Bob Iger, Tom and Dan embodied strong, admirable values:
Over time, Tom and Dan’s humble values spread throughout ABC and transformed its culture.
As part of the acquisition, Tom and Dan asked Roone Arledge, who at the time was managing both ABC Sports and ABC News, to choose one department. Roone chose News, and Capital Cities brought in their own executive to run Sports.
Bob Iger was soon promoted to senior vice president of programming, where he’d be in charge of all sports programming. This was a big break for him, and especially because Bob’s new boss was a humble manager who let Bob take the spotlight. Embodying Tom and Dan’s values, his boss let Bob lead conversations with senior management and sang his praises to Tom and Dan. Bob made a strong impression.
Around that time, the big event in the sports world was the 1988 Calgary Winter Olympics. Bob was the senior program executive, in charge of the detailed logistics around running all the televised coverage and negotiating with the Olympics committee.
The first few days went normally, but then warm winds raised the temperatures to the sixties, melting the snow and ice and ruining the outdoor events. Suddenly ABC didn’t have events to televise during primetime hours. Each day was a panic. Bob desperately called the Olympic committee to reschedule events to air during primetime. The ABC team went out hunting for human-interest stories to fill the air, and landed on hit pieces like the Jamaican bobsled team. The work was anxiety-inducing but also invigorating—each day they focused on just making it through the night.
Despite the emergencies, the ratings were an all-time high, and Tom and Dan were impressed with Bob’s steely performance under pressure.
A few weeks after the Olympics, Tom and Dan promoted Bob to executive vice president of ABC Television, the number two job at ABC TV. Bob would be in charge of daytime, late-night, and Saturday morning television, and manage business for the whole network. Not only that, Dan told Bob this was just a temporary position—they had bigger plans for Bob.
With this move, Bob joined Tom and Dan’s inner circle. He learned how they made decisions and how they evaluated people.
In 1989, Tom and Dan fired the head of ABC Entertainment for being a bad culture fit, and they offered Bob the job.
This was another big promotion—he’d be in charge of picking new primetime shows and become a major creative force in the company. Despite Bob’s tendency to say yes to opportunities, this seemed like too big a leap. This was a major creative role, and, unlike typical heads of entertainment, Bob didn’t come from the entertainment industry and hadn’t read scripts since college.
Bob flew out to Los Angeles and met with the two heads of primetime, Stu and Ted. They were veterans in entertainment and had developed hit shows like The Wonder Years and Roseanne. While they could have hated the clueless guy who was promoted above them, they were instead relentlessly supportive, telling Bob they’d teach him and things would work out fine. This gave Bob confidence that they’d be able to succeed together.
The final obstacle was his family. Bob and his then-wife were both long-time residents of New York, and their children were established there. Now they’d have to move to Los Angeles. However, his wife supported him, urging him to take the adventurous path in life.
Everything was set. Bob took the job and started a few days later.
As head of ABC Entertainment, Bob Iger’s job was to catch up to the prime-time leader, NBC. ABC had a few well-performing shows, like Roseanne and The Wonder Years, but NBC was far ahead, with their hits in The Cosby Show, Cheers, and LA Law.
More specifically, Iger’s job was to greenlight shows that would be ABC’s next big hits. As the head of one of the big three networks, he was placed into one of the most powerful roles in television. The problem: he didn’t come from entertainment, and he didn’t know how to pick good scripts. Everyone in the industry knew this too, including the creators he was meant to greenlight, and they questioned his appointment and scrutinized his decisions.
Instead of posturing, Bob admitted how clueless he was and sought help from his number twos, Stu and Ted. They were veterans in television, and they warmly supported Bob, in large part because of how Bob didn’t come in acting like he knew it all. They taught Bob how to dissect scripts and find what was missing.
Management Principle: Admit When You Don’t Know
Continuing the theme of being authentic—be honest when you don’t know something. If you fake being more knowledgeable or competent then you are, you’ll lose trust immediately once other people find out.
It’s far better to know who you are, admit it, and then work hard to improve from there. Admit you don’t know something and ask lots of questions.
Be careful not to be so humble that you don’t lead. If you’re honest with who you are, then you’ll know where your strengths lie and how you’ll lead from that position.
In one case, TV producer Steven Bochco (who had created Hill Street Blues and L.A. Law) had signed a deal with ABC to develop ten new series. Bochco came to them with Doogie Howser, M.D. and was excited about the young actor Neil Patrick Harris. Iger saw video of Harris and wasn’t sure Harris was strong enough to make the show successful. Bochco suggested Iger didn’t know anything. Moreover, under the terms of his deal, Bochco was given creative carte blanche of his shows; if his show didn’t make it on air, he’d be paid a kill fee of $1.5 million. Iger greenlit the show, and Doogie Howser, M.D. turned out to be a 4-season success.
Despite his formal inexperience, Bob found that he’d learned plenty from ABC Sports and Roone Arledge about what made for good television—structure, pacing, clarity—and he soon felt more comfortable trusting his instincts.
Twin Peaks
When stepping into the role, Iger knew that big changes were happening in television, and ABC needed to adapt. Network television was no longer the automatic first choice for people’s time—cable television had greater creative license to show edgier content, video games competed for attention, and the VCR changed how freely people could access content. In this environment, ABC needed to change how they thought about television. He kept Roone’s old adage in mind: “Innovate or die.”
One project that came across Iger’s desk was Twin Peaks, a surreal show by filmmaker David Lynch. Upon seeing the two-hour pilot, Iger knew it was unlike anything that had ever aired on television, and that they needed to develop it. Twin Peaks had mediocre showings in test screenings, among ABC execs, and even with the Capital Cities owner Tom Murphy. Everyone thought it was a huge risk to air. But Iger knew the problem wasn’t that it was a bad show; it was simply unfamiliar, and unfamiliar and boundary-pushing was what ABC needed. Iger greenlit the show for a full season.
Twin Peaks debuted in April 1990. It had generated curious buzz during its development and was promoted by ABC; its pilot airing was watched by 35 million people. It quickly became a cultural phenomenon, gracing magazine covers and becoming one of ABC’s hottest shows.
Beyond the critical and commercial success, Twin Peaks established ABC as a new cultural force in entertainment. ABC started talking with superstar creators like Steven Spielberg and George Lucas to develop their own shows. And Iger’s reputation changed—once seen as a bland suit from New York, he was now an innovator willing to take big creative risks.
Management Principle: Don’t Manufacture Trombone Oil
At Capital Cities, Dan Burke gave Iger a note cautioning him not to get in the business of making trombone oil. They might make the world’s best trombone oil, but the world only needs a few gallons of it a year.
The point was to avoid focusing on small projects that don’t yield much in return. Instead, focus on big projects that can produce big gains.
Twin Peaks didn’t keep its momentum. The show centered around the murder of a teenager girl, Laura Palmer, and the mystery around who the killer was drove viewers to tune in. But over time, as a viewer, Iger grew impatient with how slowly the key plot point was being resolved, and he worried audiences would get frustrated too. If David Lynch had had his way, the murder might never have been resolved, and the show would revolve around the town and its characters. But Iger coaxed David Lynch to resolve the murder in the middle of the second season. After this, the intrigue had been let out like air out of a balloon; the show continued on in a meandering direction, and the ratings fell precipitously.
Today, Iger isn’t sure it was the right creative call to resolve the murder. He still thinks David Lynch was an undisciplined storyteller for television, but he acknowledges his own tastes might have been old-fashioned.
Management Principle: Treat Creators Empathetically
When giving feedback to creative people, understand that they pour their souls into their works. They may understandably be sensitive to feedback, especially if you seem to be trampling on their vision.
When giving feedback, Iger always starts out positively. Then he focuses on the big picture, not with nitpicking small items.
For example, when giving notes to young director Ryan Coogler for Black Panther, Iger first made clear that he thought the film was special and that the entire company had faith in him.
When you take risks, not every move is going to work.
In addition to Doogie Howser, Steven Bochco pitched Cop Rock, a police procedural set to music. Buoyed by the success of Twin Peaks and feeling the need to continue taking big risks, Iger greenlit the show. It was a colossal failure; the mixture of serious drama with actors bursting out into song was too bizarre. Iger was unapologetic about the failure—taking big risks necessitates failure.
Management Principle: Make It OK to Fail
Playing it safe never leads to greatness. To be great, you need to take big risks. And if you take big risks, you will inevitably have big failures.
You should personally accept that failure will come when you aim for greatness. Then you should push your team to take risks and accept the possibility of failure; when they do fail, support them through it and prepare them to take more risks.
The owners of Capital Cities Dan and Tom sometimes disagreed with Iger’s creative choices, but they had faith in him and encouraged him to take chances.
In the aftermath of Cop Rock, Steven Bochco pitched a new show idea: the first R-rated show ever to be put on network TV. From a business perspective, this would be a big risk—advertisers wouldn’t want to put ads next to edgy content. But the idea was creatively intriguing, and to compromise with business needs, they settled on pushing the boundaries of a PG-13 show. They figured out what curse words they could use and how to show nudity without getting fined by the FCC. The result was NYPD Blue, which became a hit show and is still considered one of television’s best dramas.
Bob Iger got plenty of credit for ABC’s rising success, and late in 1992 Tom and Dan made clear Iger would be replacing the retiring president of ABC. On January 1, 1993, he assumed the role at 43 years old.
This necessitated moving back to New York. By this time, he’d separated from his first wife Susan, and he welcomed the chance to spend more time with his daughters.
His rise through the ranks was dizzying. Just 8 years ago, he was still reporting to Roone Arledge; now Roone reported to him.
This wasn’t the end. At the end of 1993, within a year of Iger’s taking the role, Tom Murphy shared that his partner and COO Dan was retiring, and he needed someone as his number two. He wanted Iger to do it. Even though Iger habitually accepted every new opportunity, this was too fast—he needed to stabilize his work at ABC. Iger demurred, but Tom returned in 1994 and repeated his request. This time Bob accepted, and he became president and COO of Capital Cities/ABC.
Use Bob Iger’s experiences to think about your successes and failures.
Bob Iger felt that great successes only come with courage and risk. When did you take a risk outside your comfort zone, only to have it succeed?
When have you taken a great risk, only to have it fail? Did that cause you to take fewer risks afterward, or did you acknowledge that taking risks requires having failure?
Among people you work with or manage, do you make it acceptable enough to fail? Or are people around you afraid to fail for some reason?
In spring 1995, soon after Bob Iger became COO of Capital Cities/ABC, Disney made clear it wanted to acquire the company. Michael Eisner, who had been Disney CEO since 1984, led the charge.
What motivated the acquisition?
With ABC, Disney would expand its reach to audiences through ABC’s many media properties, including ABC, television stations, ESPN, cable channels, newspapers, and magazines. Better yet, the businesses were run profitably, giving Disney a financial boost and allowing it to weather the more hit-driven entertainment business. And in return, Disney would benefit ABC with its famed creative forces and perennially in-demand content.
Iger notes that much has already been written about the acquisition, so he focuses the book on his personal experience.
Iger wasn’t completely thrilled about the deal. On a personal level, he was in New York, and the job would likely require moving back to Los Angeles. His first marriage had ended, and his new fiancee Willow Bay was a TV host in New York. New York also had his daughters and his aging parents.
On the other hand, this was yet another opportunity to rise and gain experience. Michael Eisner made clear that he wanted Bob Iger as part of the deal; this suggested Eisner knew he needed help running the newly combined massive company, especially Capital Cities/ABC’s sprawling properties. Furthermore, Iger couldn’t help dreaming about possibly one day running Disney.
To negotiate on his behalf, Iger hired a lawyer. Iger wanted to be as close to the top as possible, ideally reporting directly to Eisner and possibly eventually being named second-in-command. Eisner refused, stating he wanted the freedom to name someone else as president, and that Iger would report to that person.
Ultimately, Iger agreed to a five-year contract as head of Disney media. The deal closed in February 1996, with Disney paying $19.5 billion for Capital Cities/ABC.
To most of Disney and ABC, the acquisition was a complete surprise, and people immediately started wondering how the two companies would work together. In speaking to Capital Cities/ABC executives, Iger was clear that there would be cultural clashes—where ABC had spent years under Tom and Dan becoming humble and embodying classic good values, Disney was aggressive, creative, and deeply rooted in Hollywood.
For example, Tom and Dan had always run Capital Cities/ABC with decentralization. They had a meager corporate headquarters, instead trusting the individual business units to make the best decisions for themselves and the company. In contrast, Disney was a completely centralized company; all major decisions had to be run through the “Strategic Planning” group.
“Strat Planning” consisted of MBAs who provided data and analyses of Disney’s major decisions, giving the CEO Michael Eisner peace of mind. But people in Strat Planning knew their lofty position and acted like schoolyard bullies, speaking abrasively and shutting projects down by fiat.
Iger felt this setup constrained the company’s entrepreneurial forces. For example, ABC heard a pitch for a new fashion/lifestyle magazine appealing to younger women called Jane. Iger liked reaching a new demographic and gave it the green light. In response, Strat Planning admonished him, saying all businesses needed to run major decisions through Strat Planning, and Iger didn’t have permission to greenlight projects on his own. The Capital Cities/ABC team missed the freer days before they’d been acquired.
During negotiations, Eisner wanted to retain the ability to choose a president, and it soon became clear why—a month after the deal closed, Eisner named his friend Michael Ovitz as president.
Michael Ovitz was a super-agent in Hollywood who co-founded Creative Artists Agency (CAA), one of the largest talent agencies in the world. He was now looking for a new role in Hollywood; he’d tried to become head of Universal Studios but failed. Now as president of Disney, Ovitz would be Iger’s boss, but unlike being COO, he wouldn’t be seen as Eisner’s direct successor.
Unfortunately, Ovitz was a bad fit for the role. Disney needed a president to operate its many complicated businesses. The role needed a detailed understanding of television ratings, broadcasting rights negotiations, and talent deals. It also needed someone comfortable with the centralized structure of Disney.
Ovitz was the opposite of this. Still an agent at heart, he was most interested in creating new ideas, especially lucrative deals for his agency’s clients. He had little interest in the operational business details, often refusing to brief himself on important decisions and rendering instant opinions. He still treated his former clients as top priorities, interrupting Disney meetings to talk to his celebrity pals like Tom Cruise and Martin Scorsese.
Furthermore, having enjoyed decades of being the head of CAA, he was used to people treating his ideas as golden and racing to make them real. At Disney, his ideas were treated with lukewarm interest, most of all by Eisner.
Over the months, Disney knew Ovitz was failing, and Ovitz knew he was being ignored at Disney. He reacted poorly and publicly, taking a visible disinterest at senior management meetings, even when Eisner was presenting the company’s strategies. The dysfunction became clear and ruined morale from the top down. Disney executives started threatening to quit.
Finally, 14 months after being appointed president, Ovitz was fired by Eisner in December 1996. For his time, Ovitz received a severance package worth over $100 million (which later became subject to a shareholder lawsuit).
Management Principle: Be Clear When It’s Not Working
When you desperately want something to work, you may blind yourself to the reality that it’s not working. At these times, take a step back and force yourself to explain how it will work. If you feel any doubt as you explain this, figure out why. Then figure out why you want it to work so much, and whether you’ve gotten too personally invested in the solution.
With Michael Ovitz gone, Bob Iger now reported to CEO Michael Eisner. But Eisner was reluctant to name anyone to be president or COO, and he ran the company without a formal number two.
Eisner treated Bob erratically, at one moment warm and confiding and at another cold and distant. At the root of this treatment seemed to be Eisner’s insecurity about grooming a successor who would potentially compete with him for the top job. (Shortform note: In our summary of business classic Good to Great, read about how mediocre leaders refuse to groom successors out of ego, while great leaders support their successors whole-heartedly.)
For his part, Iger was ambitious and wanted a shot at running Disney one day, but he was also respectful and patient. He had no intention of aggressively competing against Eisner. Instead, he wanted to do a great job in his current role and learn as much as he could about the company.
Management Principle: Be Ambitious, But Not Impatient
Ambition to take on more responsibility and rise up is valuable, but it can be stretched too far toward impatience. Some people focus so much on the job they want that they start doing poorly in the job they have. In turn, they sabotage themselves from achieving the job they want.
As an employee, do a great job in where you are today. Make your ambition clear through your action—be eager to learn, help out where you can, and work hard. When your boss has an opportunity, you want to be the one they think of first.
As a manager, when you think about who to promote, don’t focus on people who keep asking for promotions but don’t have the work to back it up. Focus on people who do the work well and are true team players. In turn, if you establish a pattern of rewarding people on merit and not on politics, your team will be loyal to you.
In 1998, Iger was chairman of ABC Group, overseeing the ABC network, ESPN, and Disney TV. In one of his warmer moments, Eisner asked Iger to head Walt Disney International, a new organization to focus Disney’s international efforts.
At the time, Disney had offices and cultural influence globally, but the efforts were scattered and unfocused. There was no compelling global strategy, the offices didn’t talk to each other, and there were no proactive efforts in the international offices to find local opportunities.
Iger’s job was to form a coherent global strategy, as well as achieve a monumental task they’d sought for decades—build a theme park in mainland China. From his time in ABC Sports, Iger had previous experience in China, and he flew to Shanghai to hash out details with local officials. They chose a property close to Shanghai; it was then an unimpressive rural place, with stray dogs and patches of farmland dotting the landscape, but 20 years later it would be one of Disney’s crown jewels.
By the end of the millennium, ABC television’s momentum had run out. Long-running favorites like NYPD Blue and Monday Night Football were still reliable anchors, and new shows like Home Improvement and The Drew Carey Show did well, but they were being outpaced by other networks. (Shortform note: Notably, NBC took top spot for several years with juggernaut shows like Seinfeld, ER, and Friends.)
Iger blamed the malaise on complacency and lack of risk-taking, and today he acknowledges some responsibility for this. When they found a new #1 show in Who Wants to Be a Millionaire, they milked it to the extreme, running it three nights a week. This temporarily buoyed their ratings, but it masked their fundamental issues with creative show development. For years, they would slip down to third behind NBC and CBS.
Besides Millionaire, there was one other bright point—ABC’s coverage of the coming of the new millennium. In 1998, Iger thought this was a globally intriguing event that people would want to see unfold throughout the world. He pitched a live 24-hour event to the ABC executive team; his former boss, Roone Arledge, demurred, saying a calendar event wouldn’t make for a day-long event. Iger, however, had an instinct that he was right, and he cajoled Roone into taking on the event, saying only he was capable of running such a demanding, history-making event. The event turned out to be a hit—ABC had coverage from the earliest time zone in Vanuatu and followed the globe through China, Paris, Brazil, and the United States.
Two years later, Roone died from cancer. Iger visited him the week before he passed, and they reflected on how times had changed.
By 1999, Eisner had been straining for years under the load of running Disney by himself, and he started thinking he needed a number two. He’d been CEO for 16 years, and the board was now pressuring him to plan for succession. But Eisner was still hesitant, not just because of his concern about being undermined but also because of Michael Ovitz’s very public and costly failure.
Eisner’s indecision left a power vacuum, and multiple people, such as Disney’s general counsel, tried to angle for the COO job. This caused ripple effects downward as executives jockeyed for authority. In turn, this corrupted long-term strategic thinking and soured morale.
Eisner continued his confusing treatment of Bob Iger. In a private dinner in August with former Capital Cities CEO Tom Murphy, Eisner asserted that Iger would never succeed him. Murphy called Iger to report the news and counseled him to leave Disney, and Iger was crushed. He’d worked so hard to integrate ABC into Disney and to build Disney’s international presence, at great personal cost.
A month later, Eisner asked to meet with Iger. Given that Iger thought he was “unpromotable,” he fully expected to be fired. But Eisner asked an unexpected question—was Iger willing to move to Los Angeles and help him run the company? Iger was shocked. He brought up Eisner’s vacillating treatment of Iger over the past years; his boss responded candidly that he was hesitant to groom his own competition. Iger reassured Eisner that he had no intention of competing with him, and that he couldn’t see a Disney without Eisner.
The meeting ended ambiguously—Eisner hadn’t actually proposed a title and didn’t make concrete plans to move forward. But in December, Eisner formally proposed that Iger become president, COO, and a member of the Disney board.
Iger hashed out the details with Disney’s general counsel, who had himself angled for the COO role. In a dirty move, the counsel called him the day before the announcement, saying the plan had changed—Iger would be executive vice president instead of COO, and he’d no longer be on the board. Iger firmly responded that he would take only the original deal or nothing. An hour later, the lawyer called back and said it would go through as planned.
Mimicking his appointment to head ABC Entertainment 10 years ago, Iger packed up part of his family (his new wife Willow Bay and child), left the rest of his family (his daughters from his first marriage and his aging parents), and left for Los Angeles.
As COO of Disney, Bob Iger was responsible for Walt Disney International, consumer products, and the media networks like ABC and ESPN. Eisner continued control over Walt Disney Studios and Disney’s parks.
By this time, Disney was at risk of another decline. To understand why, we’ll need to understand what Eisner did for Disney to begin with.
CEO Michael Eisner had a remarkable rise and fall within Disney. When he joined in 1984, Disney was nowhere near the entertainment juggernaut it is today. The founder Walt Disney had died in 1966, and since then the company had entered a creative and financial malaise.
In response, board members Roy Disney (Walt’s nephew) and Sid Bass (Disney’s largest shareholder) hired Eisner to reverse the decline. Eisner revitalized Disney, partially by putting its abundant assets to work and partially by expanding their footprint:
From 1984 to 1994, Disney’s profits quadrupled, and its stock price grew by 13-fold.
However, by 2000, when Iger officially became Eisner’s number two, Disney had begun another decline:
This cocktail of problems marked the beginning of Eisner’s downfall.
In this precarious environment, Bob Iger began training closely under Eisner. Iger notes two management characteristics of Eisner’s, both with mixed impressions.
Eisner was a notorious perfectionist. When walking through parks, he kept the guests’ experience constantly in mind and noticed minute details to improve it. Iger walked for miles inside their parks with Eisner, and he was impressed with Eisner’s ability to pick out inconsistent building styles and insufficient landscaping. While visiting Disney Imagineering, the creative studio of Disney experiences, Eisner would also critique storyboards and hotel lobby designs.
Like Iger’s old boss Roone Arledge, Eisner saw details that others were blind to, and he demanded greatness. He obviously cared about their customers’ experience, and he had a remarkable ability to see the big picture and the tiny details all at once.
However, Eisner’s eye for detail could cross over into an oppressive micromanagement and pettiness. In a TV interview in a Disney hotel, he pointed out the lamps and boasted that he’d picked them out himself—an egotistical claim for a CEO.
In the midst of Disney’s troubles, Eisner was pessimistic, and he voiced his doom-and-gloom predictions to Iger. He’d predict that Disney would be outclassed by a competitor, that a deal would fall through, or a project would fail. While this anxiety fueled his motivation to claw his way out, it ruined morale for people reporting to him.
Management Principle: Lead With Optimism
A pessimistic “everything’s going to fail” attitude leads to defensiveness and risk aversion, possibly exactly when you need to be bold. Plus, no one likes working for pessimists—it kills energy and inspiration.
Optimism isn’t blindly believing things will work out. Instead, it’s about believing in yourself and your team’s abilities to get to the best outcome. It’s about looking for new solutions without prematurely giving up.
In the wake of these challenges, two board members, Roy Disney and his lawyer Stanley Gold, challenged Eisner to reverse course or threatened to fire him. As Walt Disney’s nephew, Roy Disney felt a conservatism to protect the company’s legacy and purity (he opposed the Capital Cities/ABC deal, since it would bring in non-Disney brands). To add, Roy Disney had a long-running grievance of not being given enough respect within Disney, including from his uncle Walt; he bristled at being treated insultingly.
Over the next few years, the friction between Eisner and the board escalated over a series of events:
All this came to a head at the annual shareholder meeting in March 2004. Roy and Stanley gave statements excoriating Eisner and received a standing ovation; Eisner and Iger then answered an aggressive Q&A. In the end, the proxy votes were tallied, and an unprecedented 43% of shareholders withheld support for Eisner’s re-election to the board.
This was a crushing blow, and the board removed Eisner from his chairman role (he stayed on the board). Board member and former Senate majority leader George Mitchell became chairman instead.
In September 2004, Eisner announced to the board that he would step down in 2006 when his contract expired. The board accepted the offer, and pushed the timeline a year faster—they immediately announced a search for Eisner’s successor, targeting June 2005 as a deadline, and they wanted to replace Eisner soon after.
Iger wanted to be CEO, and he had questions for George Mitchell.
Knowing this, Iger pressed Mitchell to publicize that Iger was the only internal candidate. This would legitimize Iger as a possible successor. Within the company, this would give him some authority to continue managing and prevent him from being seen as a lame duck, predestined to be removed with Eisner. Iger felt this had to happen for him to have any shot at becoming CEO.
Mitchell agreed, but much of the board thought Iger in reality had slim chances of becoming CEO. Given how long of a slide Disney had been undergoing in the past years, they thought they needed a “change agent” from the outside. As Eisner’s number two for the past 4 years, and a lifelong ABC/Disney man, Iger simply looked like more of the same.
The board began its CEO search, and Iger wanted the job. He didn’t feel entitled to it, but he did think he would do a good job.
He’d have to convince the board he was the right person, but his challenge was escaping his contributions to the decline of Disney. As COO for the past 5 years, he was clearly partially responsible for the decline. He could simply blame Michael Eisner for the troubles, but he saw this as a betrayal of Eisner and a cowardly excuse.
He soon got a solution from political consultant and brand manager Scott Miller. Miller argued that, as a member of the old guard, Iger could never win the vote as an incumbent. Rather, he needed to be an insurgent—the past didn’t matter anymore; only the future mattered. The message to the board should be: “We can’t change the past. We’ve learned lessons that we can apply, but we can’t redo our mistakes. What matters now is where we take this company from here. The soul of the company is at stake—we need to protect it and grow it. Here’s my plan for the future.”
To make his plan concrete, Miller also counseled Iger to outline his strategic priorities. Iger started listing priorities, when Miller cut him off, saying that too many priorities meant there were no priorities. Iger could have only three priorities. In response, Iger focused on three:
Management Principle: Define Your Priorities
Priorities are an articulation of where you want to go and how you’re going to get there.
If your team members understand the priorities clearly, they can focus their own work in the right direction. They can make individual decisions that support the priorities.
In contrast, a team without priorities is aimless and anxious. They waste time wondering what they should be doing and working on things that don’t help the priorities.
Choose just a few priorities. Communicate them often.
Iger had an uphill battle—most of the board members were against or lukewarm about his becoming CEO. But Iger knew there were a few swing voters he could try to persuade.
His first interview was an all-on-one meeting. The tone was pure business; that Iger had been on the board for the past 5 years didn’t give him any favors. Iger laid out his vision for the future, centered around his three strategic priorities. He stated that his goal was for Disney to be “the most admired company in the world” by their consumers, shareholders, and employees.
The interview process continued for another 6 months and another fourteen interviews (including one-on-ones with individual board members). It was an intellectually demanding time. While interviewing, he still had his COO responsibilities of running Disney. Interviewing was like a second job that required him to think strategically about the company like he never had before.
But the work was the easy part—Iger had been a hard worker for all his life. The more difficult part was the psychological strain from the public scrutiny and his many detractors. The press covered the interview process closely, and many commentators asserted Disney needed fresh blood, not Iger. The board members who were against his appointment made their disapproval clear in interviews.
For the most part, Iger remained calm, filtered the noise, and stayed centered about who he was and what he could do. He only broke on two instances:
Management Principle: Filter the Noise
There may come a time when you have lots of detractors. People tell you you’re terrible at your job and that you should be replaced. This might even be public, and people who don’t know you make judgments about you.
During these times, don’t let how other people feel affect how you feel about yourself. You have little control over what other people say about you, but you do have control over what you do and how you feel. This perspective will help you through the rough times.
In March 2005, the board met to finalize their decision. Iger wasn’t sure how the votes would swing, and he anxiously spent the day with his family.
He soon got a call from the interim chairman and Michael Eisner—Iger was to be the next CEO of Disney. He appreciated that Eisner was on the call, as difficult as it must have been for him to name his successor.
He sat and absorbed the moment with his wife, then called his parents, his daughters, Dan and Tom and Capital Cities. Then he called Steve Jobs, knowing that repairing the relationship with Pixar was going to be critical. Jobs was skeptical that anything would change, given that Iger had spent over a decade under Eisner, but Iger knew he had to give it a shot.
New CEOs and politicians are watched closely during their “first 100 days” as an early indicator of their tenure. Since Eisner still had 6 months on the job, Iger thought he had some buffer time to plan his moves carefully.
This wasn’t the case. Upon the announcement that Iger would become CEO, the press, the public, and Disney employees started scrutinizing his actions. Many still believed that Disney had made a mistake, or that Iger was only a temporary solution until they found a real CEO from the outside.
Iger decided that his first 100 days would essentially start now, and he needed to establish the tone of his leadership. He focused on three key actions:
As soon as Iger was appointed CEO, Roy Disney and Stanley Gold sued the board for running a fraudulent CEO selection process. They claimed that Iger had always been preordained to be CEO, and the board had done a perfunctory job.
Iger, already wearied from the selection process, was insulted by this move, since it questioned his legitimacy as CEO. But he didn’t want to escalate tensions by fighting the lawsuit and perpetuating Michael Eisner’s long grievances with Roy Disney. Instead, Iger wanted to set Disney on a new direction, free of enmity.
Management Principle: Don’t Let Ego Override Your Decisionmaking
Your job is to find the best possible solution. Don’t let your ego bias you away from that.
Iger felt a blow to his ego when Roy and Stanley challenged his appointment, but he knew the better path was to suck up his pride and repair the relationship.
Iger first called Stanley Gold asking to meet, thinking he’d be calmer and open the door to Roy. Addressing the lawsuit, Iger explained the torturous interview process he’d gone through and that his appointment was legitimate. Iger then asked what could be done about Roy and the lawsuit. Gold suggested that much of the remaining friction stemmed from Roy’s feeling of being disrespected for being kicked off the board over an age technicality. Roy felt he had lost his home at Disney, and the board hadn’t listened to him when he started sounding alarms about Eisner years earlier. Gold issued a proposal: If Iger could get Roy back into Disney somehow, then they could drop the lawsuit.
Iger asked Gold to meet with Roy, and he soon had his wish granted. In their meeting, Roy wasn’t friendly and expressed that he’d continue fighting the company if it was headed in a wrong direction. But Iger also saw a new vulnerability in Roy. It was clear Roy never felt like he got the credit he deserved for his contributions to the company, and being kicked off the board was the final straw.
Iger wanted to get Roy back into the company so he’d feel at home again, but he didn’t want to open up new opportunities for Roy to continue undermining the company. So Iger proposed an arrangement: Roy would be an emeritus board member, would be invited to company events like film premieres and park openings, and would get an office in Disney. In return, they would drop the lawsuit, not proclaim victory, and not air their grievances publicly.
Gold and Roy Disney agreed, and virtually instantly, years of tension dissolved. All Roy wanted was respect; Eisner ignored this, but Iger embraced it.
Management Principle: Treat People With Respect
This should go unsaid, but it’s often not put into practice. If you treat people with respect and empathy, you will gain their trust and open up new opportunities you never thought possible.
Iger took a similar approach with Steve Jobs. Eisner and Jobs had clashed for years about Pixar and technology in general. Eisner criticized technology companies for disrespecting the rights of content creators, and he fought for Disney’s share of Pixar’s creative output. In return, Steve Jobs thought Disney was a creative vacuum and had become conservative and stodgy. The tension kept escalating between the two strong personalities.
Iger took a different tack. He called Jobs with an idea—Iger loved using the iPod and it stored all his music. What if you could access all your TV shows and movies on your iPod too? Just as iTunes let you access the entire corpus of music, it could also let you access the entire corpus of entertainment media. Jobs was quiet for a moment, then said he was working on something he wanted to show Iger.
A few weeks later, Jobs flew down to meet Iger. He showed Iger a secret project—an iPod that could play videos. Apple had been imagining the very same thing Iger had described. Now Jobs had a proposal—could Disney put its TV shows on iTunes?
Ordinarily, this would be a major strategic decision requiring deep analysis. Disney could undermine itself by putting its content on a technology platform it didn’t control. Under Eisner, these decisions would take eons, and that irritated Steve Jobs.
Now, guided by his instinct, Iger said yes without checking with anyone else at Disney. This was refreshing to Jobs—for once, here was a Disney CEO who admired Apple, who could see the future, and who could make bold decisions quickly. Months later, Apple launched the video iPad, and Iger joined Jobs on the stage to announce that five Disney shows, including hits like Grey’s Anatomy and Desperate Housewives, would be available on iTunes.
Iger’s final move was to change Disney’s reliance on the central Strategic Planning.
As discussed in Chapter 4, when Iger first joined the company, Strategic Planning was created by Eisner to analyze and approve all major business decisions. This worked well for a time, but eventually it dragged down the company in three key ways:
Iger wanted Disney to be more nimble, to respond to new opportunities quickly. The only way this could be done was through decentralization—business leaders should have the power to make key business decisions themselves. (Shortform note: This is a strong echo of the management style of Tom Murphy and Dan Burke from Capital Cities. Read more about the history and management style of Capital Cities in our summary of The Outsiders.)
Within weeks of joining, Iger announced that Strat Planning would be reduced from 65 to 15 people. They would no longer have central decision authority; instead, they’d focus on acquisitions to further Disney’s three priorities.
The effect on morale was instantaneous. Suddenly, business leaders felt they had a license to be creative and risk-taking again.
At the end of September 2005, Michael Eisner had his last day at Disney. A few days later, Bob Iger officially became only the sixth CEO of Disney.
Iger’s first priority was to resuscitate Disney Animation. The failure of the department to generate new hit movies was a big contributor to Disney’s financial malaise. Over the past decade, they had only produced lukewarm movies—The Hunchback of Notre Dame, Mulan, Lilo and Stitch—a far cry from the iconic early 1990s blockbusters The Little Mermaid, Aladdin, The Lion King, and Beauty and the Beast. Over the past decade, Animation spent over a billion dollars making films but lost nearly $400 million.
Beyond their financial difficulties, Disney was losing ground with its core consumers. Iger asked his deputies to do market research on how their key demographic, mothers with children under twelve, felt about Disney relative to other competitors. The results were depressing: Pixar had overtaken Disney as “good for their family” and was the more beloved brand. No surprise—Pixar had recently produced the hits that Disney couldn’t, like Toy Story, Monsters Inc., and Finding Nemo.
If Disney couldn’t produce beloved content, all the other engines of the business would fail, such as consumer products and theme parks.
In this environment, Iger thought of four possible paths:
Iger knew buying Pixar was a crazy option, and his deputies told him so. There were many reasons: Steve Jobs owned half of Pixar’s stock and was stubborn; he loved Pixar, and he had such a rotten experience with Eisner he wouldn’t possibly sell to Disney; even if he did, he had so much leverage he’d ask for a skyhigh price (the market capitalization of Pixar then was about $6 billion); ultimately, the risk would be too great and the board and shareholders would never go for it.
Still, Iger felt this was the right move. His wife Willow had told him that the average tenure of a Fortune 500 CEO was 4 years. The point was that he had little to lose with taking big risks, and little time to do it.
Management Principle: Take Big Risks, Thoughtfully
Some people self-sabotage, preventing themselves from taking big risks. They think rationally about the odds, then convince themselves not to do it before they even seriously try. But if you don’t take big risks, you won’t get big wins.
Instead, believe in your ability and your team’s ability to accomplish great things. With energy, perseverance, and resourcefulness, you can achieve even the biggest, most outlandish ideas.
This doesn’t mean you should gamble compulsively. You still need to thoughtfully collect data and analyze things. But ultimately you’ll never have complete information, and you need to trust your instinct.
For his first board presentation as CEO, he focused on all of the above: the crippled state of Disney Animation, Disney’s loss of brand loyalty, and the various options they had. Then he pitched his final option: buying Pixar. The room nearly exploded. They gave all the usual reasons it wouldn’t work and tried thinking of alternatives, but ultimately they recognized there might be some fruit in the idea. They gave Iger permission to explore the idea further.
At this point, Iger merely had an idea; now he had to execute it. In sum, he would have to convince three key sets of people, in sequence:
Iger thought Steve Jobs might be the hardest challenge, and there was a chance he’d simply nip the entire deal in the bud. The day after the board meeting, he was on a call with Jobs about the video iPod, which they were due to announce in about a week. Iger said he had a crazy idea he wanted to run by Jobs and asked to fly up to introduce it. Jobs, who liked hearing crazy ideas, asked to hear it right then.
Iger wondered aloud what Jobs thought about the idea of Disney buying Pixar. Jobs was quiet for a moment, and Iger expected him to burst out into laughter or into an angry tirade. Instead, Jobs replied it wasn’t the craziest idea in the world.
A few weeks later, Iger met with Jobs at Apple in a conference room with a long whiteboard. On the board, Jobs wrote “Pros” and “Cons” and tasked them both with filling them in. To the Cons list, Jobs added concerns like the death of Pixar’s creativity, burning out John and Ed, and the opposition of Wall Street and the board. To the Pros, Iger volunteered that Pixar would save Disney and “we’ll all live happily ever after.”
A few hours later, they had a long list of Cons, and scanty Pros. Iger was dejected, but Jobs seemed nonplused. To Jobs, a few big Pros outweighed dozens of minor Cons.
The deal was far from over, but Jobs didn’t shoot it down immediately like Iger had feared. Iger thought a good next step would be to visit Pixar, where he’d be able to meet with both John Lasseter and Ed Catmull, Pixar’s leaders. Jobs made clear that he was committing to nothing and that he’d never sell Pixar without John and Ed onboard, but he immediately agreed to a visit.
The following week, Iger visited the Pixar office. Iger was excited to learn how Pixar made its magic. He wanted to meet the people working there, feel their culture, and understand their technology.
Iger was warmly greeted by John and Ed. John Lasseter was the creative head of Pixar and oversaw its films. Ed Catmull was the technology head of Pixar and oversaw the computing resources that made their animation work. Iger’s visit would consist of visiting each person’s domain.
First, with Lasseter, Iger got a preview of every movie they were working on. He saw works in progress for Cars, Ratatouille, Wall-E, Up, and Brave, all of which would be commercial and critical successes. Iger was blown away with the narrative authenticity of each project and the quality of the animation.
Next, with Catmull, Iger got a tour of the technology side that powered the movies. The creative team and engineers worked in harmony—the creative team would challenge engineers to create tools that made their visions real, while the engineers would come up with new tools (like a new way to render snow) and ask the creative team what they could do with it.
Finally, as Iger toured the campus, he felt a giddy creative energy buzzing throughout the campus and the employees. Everyone seemed happy to be working at Pixar. Even the space was designed to improve creativity—wide open areas let groups mingle, like in a university.
After his visit, Iger knew Pixar was magical, and if Disney acquired Pixar, it would be transformative. Iger called Jobs and breathlessly described how amazing Pixar was and how eager he was in making the transaction work. Standard negotiation practice suggests you should make the other side think you don’t want them all that much; Iger couldn’t help being honest and enthusiastic. In response, Jobs reiterated that a deal would only happen if Lasseter and Catmull were on board, and he arranged for Iger to meet with them.
In the following week, Iger met with both Lasseter and Catmull. He knew that both people loved Pixar and were wary of Pixar losing its soul, regardless of how much money they could make in a sale. Iger knew how they felt—he had been through multiple acquisitions himself, first by Capital Cities, then by Disney. Iger’s message to both was the same—Pixar was magic, and Disney knew it. The goal of buying Pixar was to power Disney’s creative products; if Disney destroyed what made Pixar work, the deal would be worthless to them. Iger committed to protecting Pixar’s culture.
Iger made another irresistible offer—Lasseter and Catmull would both run Disney Animation. Lasseter had started his career as an animator at Disney, before being fired for pushing computer animation in its early days. To return in a triumph and run the legendary department would be a dream.
The day after, Jobs called Iger and said Lasseter and Catmull were onboard to sell. Iger met with his board and got permission to start negotiations, though they were still skeptical of the deal’s closing.
Iger met Jobs at Apple to negotiate the deal. Iger knew that Jobs was intolerant of long, drawn-out processes, particularly with Eisner, and he signaled that he was different. He made clear that he wanted to make the deal happen, and they’d try to make it as straightforward as possible. Jobs seemed to respond to this honesty well, and he didn’t invoke his leverage as a weapon like before.
Over the following month, Jobs and Disney’s CFO worked out a deal—an all-stock transaction worth $7.4 billion, exchanging 2.3 Disney shares for each Pixar share. It was a high price, but not unfairly so. In addition to negotiating price, Disney promised to keep Pixar’s culture intact through a list of specific items, and they agreed on branding joint features as Disney-Pixar.
The deal was now nominally set to go. Iger had one last challenge—convincing the board.
Disney’s board was still skeptical, and Iger had to give it his best shot. He knew that the best way to persuade them was to have Jobs, Lasseter, and Catmull talk to the board directly.
In January 2006, the board, the Pixar trio, and Iger met in a Goldman Sachs conference room in Los Angeles. There were no slide decks; each member of Pixar simply shared their vision for the partnership. Lasseter shared his childhood love of Disney and his desire to take Animation to new heights. Catmull shared the future of technology and the cutting-edge work they could achieve together. Jobs emphasized the need for big companies to take big risks, and that Disney needed to make big moves like this to stay relevant. Initially skeptical, the board started turning around; Pixar’s enthusiasm was infectious.
The board was set to take a final vote a few weeks later. In the interim, the news of the deal leaked, and they started getting detractors in the press. Irritatingly, former CEO Michael Eisner lobbied against the transaction. He called Iger and urged him not to take the deal, for all the same reasons—Jobs would undermine Disney, it was too expensive, Iger could fix Animation himself. Eisner even called the board chairman and asked to speak at the final vote; Iger hated this idea but begrudgingly agreed, thinking that it’d be better to rebut his concerns directly instead of having Eisner wage a campaign outside.
At the final vote, Eisner spoke and aired his doubts. Then it was Iger’s turn. He was counseled by the chairman that it wasn’t a done deal, and he had to pitch his heart out one last time. Iger went in and argued as passionately as he could for the deal. Disney lived and died with its animation. The future of Disney was “right here, right now.” The board had the future life of Disney in its hands, and it needed to make the right step to the future.
The board took a vote, and the deal passed—nine members for, and two against. Just a few months into his new job as CEO, Iger had made a massive bet on the company. His future would be defined by this decision.
(Shortform note: To learn more about Pixar’s history and the factors that have made it so successful, read our summary of Ed Catmull’s Creativity, Inc.)
The day of the announcement, Iger was at Pixar headquarters.
An hour before the announcement, Jobs asked Iger to take a walk with him. Surprised at the timing, Iger thought Jobs was going to back out of the deal or push for a better deal. Instead, Jobs put his arm around Iger, asked him for confidentiality, then revealed what was then a secret to the world—his pancreatic cancer was back. He was going to fight it as best he could and try to make it to his son’s high school graduation in 4 years. But if Iger wanted, he could back out of the deal.
Iger was caught completely off-guard, and he found it difficult to absorb the emotional weight while thinking pragmatically about the business. Ultimately, he decided Jobs wasn’t critical to making the partnership work, and that calling the deal off now would be inexplicable to the board.
They announced the deal later that afternoon. It was a bittersweet moment, but Iger looked ahead to what Disney and Pixar could accomplish together.
From that point on, Jobs would become Disney’s biggest single shareholder. More importantly to Iger, he’d become a close friend and confidante. They talked several times a week, and Iger ran every major decision at Disney by Jobs. Jobs always spoke his mind, and Iger appreciated how candid they could be without disrupting their friendship.
When Jobs criticized, he was often harsh. He told Iger that the film Iron Man 2 “sucked,” and that a budget hotel Disney was constructing was “crap.” Iger knew that Jobs wasn’t the audience for much of Disney’s products, and he took this feedback in stride.
In October 2011, Steve Jobs died from cancer, 5 years after the Pixar acquisition. At his burial, Iger told the story about the day of the Pixar announcement, about how Jobs had been transparent and how much he cared about seeing his son graduate from high school. Afterward, Laurene, Jobs’s wife, told Iger that she had her version of the story of that day. Jobs had returned home, and his wife asked if he’d confided in Iger. Jobs said he had, and Laurene asked if they could trust Iger to keep it a secret. Steve said, “I love that guy.”
Even today, Iger looks at a success that Disney has had and thinks, “I wish Steve were here to see this.”
Acquiring Pixar had settled the existential problem of Disney Animation. Emboldened by the ensuing success of Pixar, Disney continued studying other companies that could bring high-quality content into the Disney universe. Two companies were at the top of their list—Marvel and Lucasfilm (keeper of Star Wars). Both produced legendary characters and stories that Disney could extend further in film and television; in turn, this would fuel Disney’s consumer products and theme parks.
These weren’t new ideas. The possibility of acquiring these brands had been on Eisner’s radar as well, but both Disney and Eisner were too conservative to pull the trigger for a few reasons. For one, Disney was still driven by a sense of purity and was wary of adding outside brands and characters, especially those as edgy as Marvel’s superheroes. For another, Eisner had grown weary of governing his own acquisitions, including the entertainment studio Miramax—he had constant battles with the Weinstein brothers and the board over finances and creative control.
Now, though, Iger was open-minded and willing to take risks. Even though Pixar had worked out fantastically, the media industry was still shifting rapidly. Disney needed to extend its lead and built its momentum, and that meant expanding the storytelling they produced. So they pursued more company-defining acquisitions in earnest.
For a number of reasons (including the suspicion that Lucas would be unwilling to sell Star Wars), Marvel was Disney’s top target. Around 2008, three years after the acquisition of Pixar, they started approaching Marvel.
Just like Pixar, Marvel had its own unique complications. First, its intellectual property was scattered. Over the years, Marvel had scattered movie rights to a bevy of other companies. Columbia Pictures and Sony owned Spider-Man; Universal owned The Incredible Hulk; Fox owned X-Men. This meant Disney couldn’t access all Marvel characters, and the branding could become scattered and confusing.
Second, Marvel’s CEO and chairman, Ike Perlmutter, was an unknown entity. He was ex-Israeli military, intensely secretive, and hard to reach. What they knew about his history was that Ike was a shrewd businessman—he had a toy company that had been acquired by Marvel in 1993, and when Marvel filed for bankruptcy in 1997, he acquired control of Marvel. Everything else was a mystery.
In these circumstances, Disney started approaching Perlmutter however they could. It wasn’t easy, since Ike had no direct lines of contact. Disney reached out for six months with no response.
Desperate, they tried to find someone Ike would trust. They found a contact: a former Disney exec who had joined Marvel to develop their movies. Iger asked the contact if he could meet with Ike. The contact made no promises but since he’d do what he could.
A few months passed with no news. Finally, in June 2009, they got a call to schedule a meeting with Ike at Marvel’s offices in Manhattan.
As with Pixar and Steve Jobs, Iger decided to visit by himself. He felt it was important to approach authentically and not with a corporate army. He and Perlmutter opened the meeting casually, by discussing their backgrounds and their businesses. When Ike asked about Pixar, Iger saw an opening—he shared how respectfully they’d integrated Pixar into Disney, and he explained that Disney was interested in doing the same with Marvel.
They continued the discussion over two dinners, first by themselves and the second with their wives. In these conversations, Iger got a sense of who Ike was and what was important to him. He’d immigrated to the United States with nothing, built up a fortune through hard work and intelligence. Now, selling Marvel would earn him a fortune, but it was important that the buyer not mess up what they’d accomplished.
Over the coming weeks, the conversation deepened. On one front, Disney constructed financial models to think about the price they could pay. They planned out movie releases and box-office estimates and thought about the value gained in the theme parks and consumer products businesses.
On another front, Disney made sure they could integrate Marvel successfully. They studied how Marvel fans would react to being acquired and found the reaction would be fine, as long as Disney treated the brand respectfully and independently. Iger also assured Marvel staff the same way he’d assured Pixar staff—Marvel had created something very special, and it’d be foolish and financially ruinous for Disney to destroy that.
Iger even asked Steve Jobs to call Ike and vouch for Disney and Iger. Jobs told Ike that the Pixar sale had exceeded even his lofty expectations, and that Iger held true to his word and treated the company, brand, and people right. Ike was flattered to be called by Jobs, and this helped swing him over the fence.
On August 31, 2009, just a few months after Iger’s first meeting with Perlmutter, Disney announced they were buying Marvel for $4 billion.
The deal wasn’t immediately seen as a great decision. Observers thought both brands would be ruined by the acquisition—Marvel would be watered down, and Disney’s clean image would be dirtied. Even Iger’s colleagues, fellow CEOs, questioned his judgment, wondering why comic book characters would be worth $4 billion.
Iger, though, knew that Marvel had over seven thousand characters, and there were plenty of heroic stories to tell. Notably, Marvel Studios, led by Kevin Feige, had a master plan—the Marvel Cinematic Universe, which would bring historic characters like Iron Man and Thor to life over a decade of intersecting plotlines. These early films were instant successes, and Disney quickly realized that they had bought Marvel for a bargain. Across over twenty Marvel films, the average gross box-office for each film would cross $1 billion.
Executing the plan correctly wasn’t without its frictions, though. Iger remembers two major personnel decisions that were difficult:
Both moves were difficult and fraught with emotional complexities, but Iger knew they were the right decisions to let Disney, Marvel, and Pixar unleash their full potentials.
Management Principle: How to Fire Someone
Firing or demoting someone, especially a friend or loyal employee, is always difficult. Iger gives the following advice:
Do it yourself; don’t give the dirty work to someone else. People deserve that respect, and they need to hear it from you.
Do it in person, and look them in the eye. Don’t do it by phone or email.
Don’t start off with small talk. Iger starts with, “I’ve asked to meet for a difficult reason.”
Be direct. Talk about the issue, explain why it isn’t working, why you think it can’t be fixed.
Be empathetic. Say that it’s not about them, but about their performance on the job. Say that it was a hard decision to make, and it’ll be harder for them.
If you’re authentic during this, the recipient will at least feel respected, even if they disagree with the decision.
Marvel and Disney’s influence went beyond making financial blockbusters. They could also shape culture by promoting underrepresented stories.
In particular, conventional wisdom in the movie business held that female superheroes and black casts never sold well. In a regular meeting with Marvel, Iger observed that most Marvel heroes so far were white males, and they should do a better job of diversity—great role models and storytelling were universal—and upon hearing of Black Panther and Captain Marvel, he greenlit them for full development.
These films became cultural phenomena and financial successes. In particular, the black community felt that Black Panther represented their community in ways the film industry had never done. It reinforced how Disney had a mission beyond simple profits—they could reshape the entertainment industry and help audiences see themselves in a new, empowering light.
Besides Marvel, Lucasfilm, the company founded by George Lucas and owner of Star Wars, was the other top pick.
Disney had a long-running relationship with Lucasfilm. In the 1980s, Eisner licensed Star Wars and Indiana Jones to build attractions at their theme parks. In 1992, after Twin Peaks became a creative phenomenon, Lucas pitched a show that would become The Young Indiana Jones Chronicles. After a good opening, the ratings fell; ordinarily the show would have been canceled, but Iger gave them a second season since Lucas was doing his best and, after all, it was George Lucas.
Now, Iger wanted to approach Lucas about the possibility of an acquisition, but he had to be careful. Moreso than Pixar and Steve Jobs or Marvel and Ike Perlmutter, Lucasfilm was the baby of George Lucas. He founded the company and grew it over 40 years, and he created Star Wars, which was perhaps a generation’s defining mythology. Lucas’s life would be known for Star Wars, and Iger had to approach Lucas in a way that showed he understood that and would protect his legacy.
In May 2011, Lucas was visiting Orlando to launch the reopening of Star Wars attractions at Disney World, and Iger took this chance to meet with him. He had breakfast with Lucas and his fiancee, and halfway through Iger broached the topic of whether George had ever thought about selling Lucasfilm. Lucas was getting older, and he had no clear succession plan. While he had the ability, shouldn’t George decide how his legacy would be handled?
Lucas agreed. He wasn’t ready to sell, but he was aware that his legacy needed protection after he was gone. And if he did decide to sell, he said the only candidate was Disney. He had always trusted Iger for giving the Indiana Jones show a fair chance, and now he saw what a magnificent job they’d done with Pixar.
Upon hearing the news, Iger’s deputies urged him to press forward with the conversation. But Iger knew that, in this case, the action had to come from Lucas himself. So they waited.
At the end of 2011, seven months later, Lucas called Iger. He was now ready to sell.
In a meeting, Lucas stressed that he wanted “the Pixar deal”—specifically, a deal worth around $7.4 billion, what Disney paid for Pixar. George believed that Lucasfilm was at least as valuable as Pixar. Immediately, Iger knew this was an undoable price. Despite Lucasfilm’s renowned brands, it was in a materially different position from Pixar. Pixar had six movies in the pipeline; Lucasfilm had none. Pixar came with a fully-developed team of directors, technologists, and writers; Lucasfilm was the only director. Moreover, because Lucasfilm wasn’t a public company (unlike Pixar and Marvel), Disney could only guess at its financials and operational information.
Iger asked Lucas for confidential access to Lucasfilm’s operating information to get a better sense of the price they could offer, and George agreed. Disney’s team went to work, estimating the value of possible new Star Wars films, consumer products and toys, and additions to their theme parks. However, there was still a lot of uncertainty—unlike with Marvel, there was no cohesive creative vision around the future of Star Wars, and the development could be drought with risks and setbacks.
Iger went back to George and said the price range they could offer was between $3.5 billion and $3.75 billion. Lucas had abandoned his expectations of Pixar pricing, but being priced lower than Marvel was a slight. Iger went back to his team and, with some more aggressive estimates, they could pay $4.05 billion, just a hair above Marvel’s price. Lucas agreed.
Even with the price settled, the thornier negotiation point was the extent of George’s creative control at the new company. In George’s view, he should retain creative control over what Disney developed without being an employee. Iger knew this was a non-starter—they couldn’t pay $4 billion and then give Lucas carte blanche to develop whatever he wanted.
The discussion stalled on this point for months. Lucas couldn’t bear the thought of having no control over his mythology; Disney couldn’t responsibly give up their control. Twice, discussions stopped entirely due to disagreements.
What finally pushed the deal over the edge was finances. Due to capital gains changes starting in 2013, Lucas would lose $500 million if he didn’t sell by the end of 2012. In the end, George relented, choosing to serve as a consultant for Disney at Disney’s request, with Disney having no obligation to use his ideas.
At the end of October 2012, they signed the agreement and announced it; the deal closed in December that year.
To justify the $4 billion price, Disney had to make new Star Wars films on a tight timeline, and they had to be blockbusters. The pressure on the first film was enormous. The Star Wars fan base was deeply committed, and there hadn’t been a Star Wars film since 2005, seven years earlier, and now this would be the first one without George Lucas involved. Disney had one shot to convince the fanbase that they weren’t going to destroy decades of legacy.
Disney hired J.J. Abrams as director, and Iger joked that this was a “$4 billion movie.” Abrams didn’t find this funny. Through development, Abrams felt the pressure, but he faced it valiantly, and Iger made clear he supported him fully and shared in the stress.
Management Principle: Share in Stress, Don’t Add to It
In stressful situations, both you and your team will feel the pressure deeply. In this situation, you should avoid adding stress to other people. Don’t remind people how stressed you are. This suggests that you want them to work primarily to relieve your stress.
Instead, let them know empathetically that you’re in it with them. You share their stress, but you’ll work through it together. Be supportive—guide them through the original vision, clear roadblocks for them, and remind them that you believe in their abilities.
Despite selling Lucasfilm and becoming a billionaire, George Lucas still found it hard to stomach his lack of creative control. Early in development, the Disney team met with Lucas to share their script. Lucas was appalled at the direction and insulted that they hadn’t used ideas he had previously contributed. Then, when George saw a screening of The Force Awakens, he was disappointed in its lack of innovation—unlike what he strove to do with each of his films, this new film had no new technology, no new visuals, no new groundbreaking worlds.
Despite these criticisms, the Disney team held firm. Their job wasn’t to break the mold too early; they needed to gain the trust of Star Wars fans, and this meant a movie that was strongly rooted in the past, even if it was somewhat unoriginal. And, to his credit, George Lucas followed the non-disparagement clause in his contract and showed up at the movie premiere, where he got a standing ovation from the audience.
The Force Awakens turned out to be a critical and commercial success, and the Disney team was relieved.
On reflecting on the three major acquisitions in Pixar, Marvel, and Lucasfilm, Iger notes that authenticity was critical to making the deals. The major owner of each company wanted to know that Disney was going to protect their company’s legacy, and Iger thinks they did an admirable job of it.
By 2016, Iger’s three big acquisitions were well underway and all looked like home runs. But this still didn’t feel like enough. Even though Disney had grown considerably, the technology and media landscape had changed even further. The massive technology companies of the day—Google, Apple, Amazon, Facebook, Netflix—commanded the attention of billions of consumers. All these companies were also investing heavily in creating their own content.
In this climate, Disney had two choices. First, it could simply continue business as usual—it could continue distributing films through movie theaters and shows through TV, and it could license its content to distributors like Netflix and Apple. However, Disney risked being made a commodity content producer, just one option among thousands. The tech behemoths would continue to gain power and consumer loyalty, and eventually Disney might have no choice but to be on these networks, meaning it’d lose all its negotiating leverage and lose its direct connection to consumers.
The other option was for Disney to control its own distribution to consumers, with no middlemen. This would require developing their own technology platform and severing ties with distributors like Netflix. It would also mean disrupting their own existing businesses in the short-term and losing many millions in revenue. But if they did it right, Disney could control its long-term destiny.
Iger thus started to look at companies that could plausibly serve as their technology platform, including Snapchat, Spotify, and Twitter (giants like Google and Amazon were obviously too big for Disney to have a chance at acquiring, and none expressed interest in acquiring Disney). They settled on Twitter, and negotiations reached a near-complete deal. But one weekend, Iger got cold feet. The political and social tensions of Twitter—its reputation for polarized speech, fake news, and general toxicity in its members—would be too much for Disney to handle. Iger called off the deal and apologized to Twitter’s CEO, Jack Dorsey.
Around the same time, they had looked into BAMTech, a company primarily owned by Major League Baseball. The company had developed streaming services for both MLB and for HBO, and they could do something similar for Disney. Disney thus bought 33% of the company in August 2016 for $1 billion and started making a subscription service for ESPN. Soon, the vision expanded to creating a subscription service for all of Disney’s other content.
At the following year’s annual board retreat, Iger presented the progress to date and the challenge of disruption. He then shared a more aggressive plan to buy a majority stake in BAMTech, then use that to launch what would become Disney+ and ESPN+ within the next two years. Far from being skeptical, the board gave full-throated approval—a few newer board members from Nike and General Motors were acutely aware of the threat of disruption and the need to move quickly. Disney announced its strategy to the public in August 2017, and their stock jumped, an indication of support from investors for Disney’s fight for its future.
Disney was now poised to serve its content directly to its consumers, with no intermediaries. As a result of the public announcement and the stock market’s positive response, Disney was galvanized to execute the plan.
Such a fundamental change, though, meant big adjustments in the short-term. For one, Disney cut ties with Netflix for its shows and movies, which meant a short-term loss of hundreds of millions of dollars in licensing fees.
Another change was the murky compensation structure for developing new content for the streaming platforms. Traditionally, content creators would be rewarded directly on the success of their own projects—the more profits they earned, as in box-office gross sales, the more they were paid. However, the bottom-line profit in streaming services couldn’t be clearly measured, since consumers weren’t paying for individual titles. To resolve this, Iger proposed a compensation model through stock grants, based on Iger’s subjective assessment of how much the executives were contributing to the streaming project, and how well they were working together. It was unusual, but it was a necessary part of Disney’s disrupting their own business.
Around this time in August 2017, Rupert Murdoch asked Iger to visit him at his winery in Bel Air. Murdoch was then the founder and biggest owner of News Corp and 21st Century Fox, which included the 20th Century Fox film studio, the Fox television network, and a bevy of other studios and cable channels.
At their meeting, Murdoch commiserated about the threats to their media companies, particularly from big tech companies, and how much scale mattered in surviving in the environment. These threats were exactly what Iger and Disney had been defending against with their acquisitions and their own streaming service. But the difference between their two companies, according to Murdoch, was that 21st Century Fox didn’t have scale, but Disney did.
It soon became clear that Murdoch was suggesting that Disney should buy 21st Century Fox. The implication was that his company’s shareholders, of which he was the largest, would benefit more from being part of Disney and building a strong united front than they would by standing alone. The possibility was intriguing to Iger, but it would represent a deal possibly ten times bigger than Pixar’s $7 billion sale.
Iger and his team started studying what assets they could acquire, and what it would mean for Disney. First, they knew they couldn’t buy the entire company—antitrust regulation would prevent them from owning the Fox television network or their sports networks, and Murdoch liked Fox News too much to let it go (let alone the political muddying with the ideologically clean Disney). The assets left included their movie studio, a major stake in National Geographic, their international operations, and stakes in streaming service Hulu and Sky (Europe’s largest satellite broadcasting company).
Next they had to figure out what these assets were worth to Disney. This meant projecting not just their performance as a standalone company, but also the gains from combining with Disney. This included reducing costs through efficiencies and in growth through synergies, such as Disney using Fox’s presence in India and Fox bringing in great content talent. It looked like the growth opportunity was in the billions. It could be a really good deal.
Having done their analysis, Disney offered to buy Fox for $28 a share, or $52.4 billion, and maintained that they couldn’t go any higher.
Around that time, word leaked of the possible deal, and Comcast put in its own significantly higher offer. Iger wasn’t intimidated—Comcast would face significantly more antitrust scrutiny (given that they already owned NBC-Universal and one of the nation’s largest distribution networks). He thought the Fox board and shareholders would prefer the higher likelihood of Disney’s deal, even if it were lower in value.
Furthermore, Iger was willing to walk away from the deal. Fox would be a major accelerant in Disney’s strategy, but integrating the two massive companies would be wearying, and there were still plenty of unknowns about how the combined entity would succeed. Despite Murdoch’s insistence on $29 a share, Disney’s best offer was $28, and no higher.
At the end of November, Murdoch accepted their bid, and they announced the acquisition a few weeks later on December 14. This wasn’t a done deal—an acquisition of this size and importance required regulatory approval, which could take six months and still allowed for competing bids.
Notably, the media industry was watching for the outcome of an antitrust lawsuit blocking the merger of AT&T and Time Warner. If the lawsuit was upheld and the merger was deemed illegal, then Comcast would likely have little success in buying Fox. But if the lawsuit were overruled, then Comcast might pursue Fox with renewed vigor and make a higher bid for Fox.
Even still, Disney had to plan as though the deal were going to go through, and Iger began planning for the integration. Merging all the business units would be an organizational headache. So he asked himself—“If I were designing the combined company from scratch, how would it be organized?” He decided first on separating the content pieces (the movie studios and TV stations) from technology and operations (which included apps, distribution, data analysis, and sales). This would let creative people be creative and let the tech and operations people focus on distributing the content and making money. Then, the remaining businesses, like the theme parks and consumer products, went into a third group, “physical entertainment and goods.”
With this master structure worked out and approved by his deputies, Iger began the difficult challenge of deciding who would lead which business units. He started flying around the world meeting with Fox and Disney executives.
During the time that Disney was building its direct-to-consumer services and working through the Fox acquisition, another wave was sweeping through the media industry—the Me Too movement, revealing years of sexual harassment perpetrated by powerful men, most notably of which was Harvey Weinstein, a former Disney employee.
Iger called for HR policies enabling victims to come forward, share their stories, and ensure they wouldn’t be punished. In the fall of 2017, multiple Disney staff members complained about John Lasseter’s gratuitous physical contact, including unsolicited hugs and kisses, as well as inappropriate comments. Despite his critical role in Disney Animation, Iger knew they couldn’t compromise their values for money. Lasseter was placed on a six-month leave, then ultimately left Disney and Pixar entirely.
The Me Too movement itself was part of a larger trend toward transparency and punishment for bad behavior. The very same technology movement that put Disney in jeopardy was the one that highlighted poor actors. In this stretch, Iger had to deal with two further scandals:
This left Disney without key leaders in Animation and ESPN, but Iger didn’t hesitate to do what he had to. The integrity of the company was priceless.
Management Principle: Maintain Integrity
Your company is defined by its actions and the actions of people working for it. Any behavior that discredits the company is intolerable and needs to be acted on. You cannot compromise your integrity, regardless of the financial losses you might incur in the short term.
In June 2018, the event Disney feared came to pass: the AT&T-Time Warner lawsuit was struck down by the court judge, and AT&T could proceed with buying Time Warner. The next day, Comcast issued a new offer: $35 per share, or $64 billion, in cash. This was a huge premium over Disney’s $28 per share, and the fact that it was all-cash rather than a stock transaction made the offer even sweeter. Disney had spent six months deciding how to integrate Fox, and it might all be a waste.
The Fox board was due to vote on the Comcast offer in a week, and Disney had a few options to bid in response. It could issue a lower bid like last time, hoping that Fox would still prefer Disney due to lower risk of a regulatory hiccup. Alternatively, it could match Comcast’s offer. Lastly, it could exceed Comcast’s offer and try to win outright. Disney’s execs and bankers counseled Iger to go low or match, but Iger wanted a clearly better offer, and not just an incrementally better one—a significantly better offer that would be hard to match.
Two days before the Fox board meeting, the Disney team flew to London in secret and met with Murdoch. They proposed $38 per share—$3 higher than Comcast’s offer and $5.5 billion more—in half cash and half stock. The next day, Murdoch brought the bid to the board, and they approved Disney’s offer, not Comcast’s. This came as a surprise to Comcast.
Soon thereafter, Disney tried to get a clear answer from the Department of Justice on the likelihood of their approving the deal. The DoJ responded that if Disney sold the sports networks, they wouldn’t block the acquisition. This gave Disney an even greater advantage over Comcast.
The final Fox shareholder vote was due in late July 2018, and Comcast could still return with a higher bid. But Comcast announced it was dropping its campaign to buy Fox and congratulated Disney. The deal was approved by Fox shareholders.
It still wasn’t totally done. Disney needed to secure regulatory approval globally, including in China, Russia, India, and the EU. It took months, but in March 2019, nineteen months after the initial meeting with Murdoch, they completed the deal. Disney was now one of the largest media entertainment companies in the world.
In April 2019, Disney hosted an investor’s day to share the fruits of their years-long effort to control their own destiny. They revealed the quality content that would be available on Disney+—not just the huge catalogue of existing Disney, Pixar, Marvel, and Star Wars films, but also new, original shows like The Mandalorian. They would price the service at $6.99 a month, an accessible cost to the global audience that they estimated would gain them sixty to ninety million subscribers within five years.
Disney was also transparent about the short-term impact of these efforts. The cost of creating new content and technology, along with reduced revenue from undercutting their existing businesses, meant their profits would drop by a few billion dollars a year in the short-term. But over time, these profits should return and more than compensate.
The investor response was immediately ecstatic—Disney’s stock rose 11% after the conference. More good news came—Avengers: Endgame became the highest-grossing movie of all time; Disney acquired Comcast’s stake in Hulu; Galaxy’s Edge opened at Disneyland.
Fifteen years earlier, when vying for the CEO job, Iger had laid out a three-point plan—produce high-quality content, embrace technology, and become a global company. Now Iger could see that they had executed beyond their expectations, Disney had become an entertainment giant, and all the hard work was worth it.
At the time of the book’s publishing in 2019, Iger had spent forty-five years at ABC and Disney. He was sixty-eight years old, and he was determined to retire by 2021. He ends the book with a few final reflections.
First, he comments that it’s not always healthy to hold power for too long. You can eventually become overconfident; you’ve seen it all, and you tend to strike down new ideas impatiently. People also start treating you differently—rather than voicing their true opinions, they wait to hear what you think. You lose self-awareness—with all these people telling you you’re powerful and important, it’s hard not to get caught up in your own ego. As you gain power, it’s critical to maintain perspective, to keep listening to people and entertaining new ideas.
Iger thanks his mentors throughout his career, including Roone Arledge, Tom and Dan from Capital Cities, and Michael Eisner. He also acknowledges the thousands of people in Disney who made the progress possible.
He doesn’t comment on what he wants to do next, other than noting in an earlier chapter that he’s always been interested in public service and has entertained running for President of the United States. For now, he thinks back to his childhood self in Brooklyn, watching Disney shows on TV and pining for his first visit to Disneyland. What that boy would have thought if he knew he’d one day be safeguarding Disney’s legacy for decades to come.