Is it Eisner's Fault?

[JeffJewell]

good analysis

Most "analyses" worthy of the title (much less the praise) dig a bit beyond the data that the "analyzed" company spoon-fed investors in their Annual Report. Oddly enough, businesses don't air their laundry in that particular publication.

Hell, Enron's Annuals looked great right up until that whole biggest bankruptcy in US history thingy...

Jeff

 

[Bstanley]

1.

By ‘poke his nose into your business’ I assume you mean the very micro management style that Ei$ner has honed to a fine art.

2.

The big ME is (has always been) inept.

3.

It’s his fault, plain and simple. And it has been since day #1!!

If the big ME has ALWAYS been a micro-manager and has ALWAYS been inept and has ALWAYS been this way since day #1 (1984) then how is it possible that he selected and surrounded himself with so many excellent people for so many years? and he produced so many marvelous things (movies, parks, etc) for so many years?

Given your logic I guess we will just have to believe that the REAL big ME actually DIED on the quadruple bypass operating table and an EVIL big ME took his place, micro-managing for the worst this past 8 years instead of for the best like the first 13 years.

Herr Baron, I guess we will just have to agree to disagree...Because I cannot reconcile these positions.

 

[larworth]

Bstanley reintroduces a topic I have brought up several times with little traction and that is divisional cash flow. While the parks have always been very profitable, they have never been good cash generators. Free cash flow is their new mantra, so it is important in understanding their thinking, and does have some economic merit.

When Eisner made his comment about reaping the benefits of their recent investment I understood where he was coming from. Disney did double it’s capital investment rate (pre 1996) and as these new parks are finished capital should trend down and earning’s should begin to flow in. A natural by-product of an investment spurt.

I will agree that the division appears to be self-funded. That means extra profit had to be taken from legacy parks to pay for the funding of the new parks. Much of the “robbing Peter to pay Paul” sentiment is really an earning’s issue as earning’s still drives the market, but we could also say that the underperformance of the other units did not make extra cash available to help support this big growth spurt. They opted to lower standards in what they built rather than dip a little divisional cash flow negative to do it right. Under normal cirumstances this would be the typical approach.

As new park capital declines, this would allow them to now reinvest more in their legacy parks. However, their free cash flow target sounds as if we should expect the same tight leash and lower standards.

 

[YoHo]

BStanley Name one Person Eisner Chose.
Wells, and Katzenberg were chosen for him.

 

[JeffJewell]

Anyways, let's find a new topic. For me at least, this one is really tired.

I think the topic is tired, too, but I keep getting pulled back in because my position is just so reasonable and data-backed that, when faced with disagreement, my assumption is that I simply didn't state my case clearly enough. I'm supremely confident that, one by one, every reader on these boards is eventually going to stumble across something or other I post and realize "Oh, _that's_ what Jewell was on about! Well, of course that's correct, we can move forward, now."

It's with that confidence that I attempt the following re-statement.

I probably fall into the area where JeffJewell appears to be, that is (and always JJ, correct where needed), Eisner lost his way post-Wells.

Just to clarify, I wouldn't say he "lost his way," I'd say he "lost his balance."

It's my feeling that Eisner, at heart, has always been a "sharp-pencil" guy: I think he would have been an excellent executive for a business like Wal-Mart; where the name of the game is push as much out the door as you can manage, and you play hardball with your suppliers because we can buy our five tons of toilet paper from anywhere. I think Eisner might excel in that type of commodity industry, where the products are generic.

I don't think Eisner ever "got it" that Disney products, for much of the company's life span, were the exact opposite of commodities; further, I think Wells "got it," something fierce.

My position is that Eisner has always used pretty much the same set of marketing and sales tools, but that Walt then Frank provided him with the high-quality product upon which to use those tools.

With Frank gone and the whole Katz/Ovitz series of shoving matches behind him, Eisner lost the force that balanced, or perhaps even fueled, his own. Without the high-quality raw material, Eisner can't use his tools to the same effect as he had in the early 80's.

Without the dream, the creative vision, the care in the products, Eisner's Disney is hollow and soulless. At this point, I do not believe Eisner is interested in sharing his power, and I do not believe he is inclined to learn a different set of tools in his corporate dotage.

Whether Eisner lasts past 2004 or not may be questionable, but Disney has to have a leader with a creative vision as well as a financial one. I believe that Michael Eisner is currently a brick wall on the road to acheiving that goal; a wall that is best destroyed as quickly as possible.

Jeff

 

[Bstanley]

Mr. Yoho,

Gee, I can't think of a single name - I guess everything good from 1984 until 1995 must have come from the big ME! Kewl, I knew I was right.

 

[Bstanley]

Well now that this topic has crystallized, how about shifting to another topic with more debate possiblities?

Given that the big ME has run his course for whatever reasons, is it possible for anyone to run the company today and be able to meet the divergent requirements of all the segments?

In other words can Disney, as it is today, continue under a single corporate head? Or is it so huge that it's sheer size makes it literally impossible to 'hire' someone to be the CEO who wouldn't end up screwing it up.

Sort of an 'absolute power corrupts absolutely' question.

If you hire a guy who knows one segment well, what happens to the other segments?

If you hire a gal who's good at selecting capable underlings, will she be willing to accept their judgement or succumb to 'the power' and interfere?

In other words, is it possible to find someone willing to be responsible for 5 seperate multi-billion dollar business', but who is also willing to be 'in charge' of NONE of them?

 

[Another Voice]

Shutting down so soon?

1. Michael Eisner was hired as the creative executive. Frank Wells was the person really running the company along with the heads of the individual business units. Yes, Eisner did bring in Katzenberg, but he quickly developed his own power base and can’t really be considered a “Michael” person even in the best of times. Notably Attractions remained managed by “Walt and Ron” people all throughout the “golden Eisner years”.

2. These people were able to run their divisions as they wanted with the occasional interruption from Eisner. They were able to stop most of his really dumb ideas early – closing Animation, selling EPCOT Center, opening up a chain of fast food joints, etc.

3. Eisner’s primary purpose in the early years was to lend his Hollywood credibility and let Jeffrey borrow the rolodex to stars at the Betty Ford clinic. Yes, he did jump start the studio, but that was a process that had already started. Many people had been waiting for Disney to reawaken and jumped at the chance to help. And the single event that most sparked the company, ‘The Little Mermaid’ was a project that pre-dated Eisner (and one he wanted killed).

4. Eisner micromanages in the things that interest him, and utterly ignores those that do not. While he’s more than willing to spend an entire day picking out the fabric for the lobby chairs, the man couldn’t tell you what “rack rate” means to the hotel business. Many times he would get involved in the most mundane of decisions – and override the management that made the calls in the first place – while ignoring the serious issues around him. This caused tremendous problems between him and the company’s upper management. It’s very hard to look seriously at a man for strategic guidance when his only interest seems to be how quickly you can manufacture the new monorail costumes his wife just designed.

5. He has no ability to “tough out” a problem when they appear. It’s an ability that’s become legendary about town. He flung himself into the design decisions about Euro Disney and California Adventure and then completely abandoned both projects when troubles arose. Also witness his approach to Animation – he hated it at the beginning (because it was perceived as a failure), then “fell in love” when it made gobs of cash, but now since there hasn’t been another ‘The Lion King’ again he’s shutting down the division. There has been no attempt to fix the division or to find out what went wrong. It’s just been dropped like a worn out toy.

6. Eisner’s tinkering, ego, and lack of true business skills forced out all of the company’s top management and a created turnover rate remarkable even for Hollywood. In the last five years alone, how many studio heads have rolled through the lot? Through the death of Frank Wells and the loss of anyone with the intestines to say “NO!”, what you’re seeing today is pretty much the Eisner that’s been there all along.

7. Well, maybe not all along. It’s worse now after a decade of self-promotion and being surrounded by yes-droids. He honestly thinks he’s the business genius that he’s been pretending to be and that makes him dangerous as well. People were laughing at him for the Fox Family deal, both inside and outside of the company. On the ones on the outside didn’t both the wait until his back was turned.

No, Eisner is not to blame for all the bad things that have happened or are happening, but he should likewise receive the appropriate amount of praise for what went right. Eisner was good as the Hollywood smoozer to whisper sweet nothings into the ears of stars and to parade himself about at the premier parties. But he’s not a businessman. He never has been nor ever will be.

Too bad we can't call in for a stunt double whenever a real decision has to be made.

 

[YoHo]

Yes, Yes to Obi-Voice you Listen.

As to who or what could replace him. I suspect Any CEO or managment team is going to have to sell of some of this company. Its going to return to parks and Production and leave distribution to others.

OR, if the company does remain as is, it will be gobbled up by a bigger entity (can you say like Vivendi) which would then break up the managment of the different divisions in better ways.

 

[airlarry!]

The future CEO or Wellian figure is hard to predict, but the past is not.

Would Walt have trusted the keys to his kingdom to Paul Plushler or Michael Ovitz? Would a guy like Walt ever run off the likes of Sotto or Lassiter or any of the droves of guys working at Fox Animation or DW Animation etc?

Hello? Michael Ovitz? Heir to the throne? Replacement for Wells? What has Ovitz ever created? What has Plushler ever drawn, written, banged out in tune, designed, or even dreamed?

This company has a simple formula for success. Hire a money man (Roy) and a creative man (Walt) and let the sparks fly. Just make sure one is in charge, preferably the creative guy.

I've said it before, but a guy like Lassiter/Sotto combined with a money man is what is needed. It ain't impossible. But it is with The Brain That Ate Glendale in charge.

 

[JeffJewell]

I know this name will sound evil to some, but I'm all for Steve Jobs being a part of it.

Lasseter works for me as far as animation goes, and to a certain extent, the theme parks, I guess. But Disney is now much more than that.

Jobs at his worst can look Eisnerish, but it seems to me that Jobs always had an eye for good stuff; I suspect he could think of good people to head the divisions.

Get Oz and Jim's boy over... have them bring those marionette/puppet things with them.

Perhaps George could give focus to the film side.

Fantasies aside, it seems to me that Jobs has the skills one looks for when supporting "that side" of the business, and has a history of generally letting the talent be talented.

That sounds like a decent compromise, in this day and age.

Jeff

 

[PKS44]

Originally posted by thedscoop
Anyways, except for any poster whose agenda is so engrained that it's beyond malleability I state again:

-SNIP-
Imagineering also screwed up with DinoRama.

Talk about agendas beyond malleability- seems thedscoop would both have learned by now that without knowing the details of the process we can't know who did what with DinoRama...or maybe better yet-

I would suggest that, from our vantage point, that's really a tough call to make without the proof before us. Maybe it was bad intentions, maybe not. But, without the advantage of hearing all the proof (not just what the media finds interesting enough to report), this would be the most extreme form of speculation. Oops I think I should have put the quote thingee on for that last statement...does it sound familiar, scoop? Here it is again-

Originally posted by thedscoop I would suggest that, from our vantage point, that's really a tough call to make without the proof before us. Maybe it was bad intentions, maybe not. But, without the advantage of hearing all the proof (not just what the media finds interesting enough to report), this would be the most extreme form of speculation.

Those are your own words about what happened with the infamous shredded documents...and yet they are so applicable here as well...unless your agenda is beyond malleability--oops I mean:

]Originally posted by thedscoop
except for any poster whose agenda is so engrained that it's beyond malleability

Paul

 

[Bstanley]

Thank you Voice. A thoughtful picture of a human with problems rather than a demonic vision. I will accept the possiblity the Dark Side may have clouded my outsider vision.

So, either because the big ME is totally without redeeming features, or simply because he hasn't been functioning at the required 'CEO' level (ie a 65% good to bad decision ratio) for long enough, it would appear that it is time for him to pursue other interests.

My personal opinion is that a single human is incapable of running a corporation larger than $1B or so. In fact I am not even positive what the minimum number of people required is - although I have a theory that a binary system is the only stable choice since three is the only other viable number. More than three is a committee - with which it is literally impossible to achieve rational thought or decision.

So we need two people. Agreed?

 

[Another Voice]

It was said for a long time in the company that “one person can’t run a ten billion dollar company; what you need is ten people running one billion dollar companies”. The pre-Eisner Disney was criticized for being too centralized and for Burbank’s stifling control over everything that happened. In the early nineties a lot management changes happened which freed the local management – the start of the entire Home Video group is an example of one executive (Bill Mechanic) running things the way he wanted.

In the “Eisner golden era” the company was composed of several little fiefdoms. Each business was trying to run itself the best it could. It worked well for the most part with the occasional glitch every once and a while. Still, the top spots were held by people who knew their business and we’re interested in running it. Now however, the units are being run by people whose interest are focused only on pleasing The Guy At The Top at the expense of their own businesses. Paul Pressler is not running Attractions because he has either a background or an interest in the area – it was just one more rung on the corporate ladder. Like anyone else stuck in a job they don’t like, these people tend not to do a good job.

It’s not that Eisner is a bad person; he’s just more of a Hollywood executive than a real business executive. The lunches, the television appearances, the creative meetings talking about nothing – that’s what it takes to run a studio. But running a business requires more thought, more imagination and a greater degree of self control. Through circumstance and an ego befitting a Major Media Mogul, he’s worked his way into a position that he just doesn’t belong. And now he’s causing long term damage to the company – more damage than was ever done by Ron Miller and Card Walker.

In the end, it doesn’t take one person, two people or twenty people. It just takes good people.

 

[Bstanley]

Well that is certainly the key to any business' success - finding 'good' people - people that really 'get off' on what they are doing PLUS have the required management (personnel, finance, etc) skills to handle the 'logistics'. And when a company gets to the point where it subdivides each of the new segments needs the same sort of leadership.

When the company divides you are still going to need strong leadership at the top to handle those times when the subs need to be forced to 'play nice' - and there's the rub - finding someone who can 'be the boss of bosses' without being heavy-handed and overbearing. That's why I think it'll take 2 people. Like a large ship a large company needs a lot of energy and direction - and it's almost impossible for one person to handle both.

It would appear that during the FW days the big ME respected him enough to allow him to provide guidance, but since then he hasn't been able to 'accept' anyone to fill those shoes...so he figures he has to do both on his own...

Did Ron Miller really have enough time to do any damage? Other than taking away Roy Jr's parking space (if you believe the story) did he deserve his dismissal?

 

[PKS44]

Originally posted by thedscoop
Opinions. It's primarily about opinions. With a few facts tossed in.

SNIP
But, alas, ole' Paul, in his eagerness to attack any negative opinion about Imagineering, missed this.

Als -poor scoop continues to do what I have seen him do over and over- confuse opinion statements with facts...he spreads so much flat out incorrect speculation around like it is factual that he himself has lost the ability to distinguish one from the other...
"DINORAMA SUCKS"=opinion
"DINORAMA SUCKS BECAUSE IMAGINEERING WAS LAZY OR SCREWED UP=that is not an opinion, that is a statement pretending to know some facts, when the facts (reported by you or the media or anyone else) are not available.

since I am on his Ignore list he will never see this, but that is just a formality, he has obviously not really seen anything about what I am saying by the nature of his lame argument...Saying that IMAGINEERING was lazy or that they screwed up is not only speculation but may very well be completely the opposite of what actually (actually, that means as in a real fact, not some Eisner defending, Tennesee lawyer's guess) happened...that someone does not like DR or anything else is welcome opinion- trying to lay blame without details is careless speculation...just as scoop said it was wrong to assume bad intentions in the Pooh document shredding- it is wrong to assume bad behavior on Imagineering's behalf. His rules are applied inconsistently- not surprising- his posts are full of inconsistencies)
As has already been pointed out to scoop (but seems to be beyond his understanding)-Imagineering may have drafted the most wonderful attraction in history, even done it cheaply and underbudget, but the management has the ability and lately have shown their propensity to undercut their efforts, nevertheless...example already given-they design a dark ride, management says, great but we will build it without the building...or Imagineering designs a great ride with cardboard cutouts and Management says great but we will do it all without so many cutouts or whatever...the client has the final say and the final responsibilty and unless some Howard Roark-like Imagineer refuses to let them alter his/her creation and blows it up, no one will ever know that the final creation was ruined by someone other than the Imagineer... for the record I don't know any Imagineers and never have...I could not care less if they are to blame or not, or if anyone can actually expose their failures....I just know that I have seen enough of thedscoop's BS that I can't sit idly by as he dishes out opinion like it is fact and then whines about it when he's called out...(Other examples- his statement that AK was built to compete with Cypress Gardens- just wrong, his ludicrous assertion that EE was designed to sell more breakfasts in the parks-not just wrong, but Disney must have missed that memo since very few places even served breakfast in the EE parks)

Sorry if this sounds harsh but apparently some people actually think this scoop fellow has some inside factual information and they are being sorely misguided by his BS...these boards are about opinions- and everyone -even scoop can have one-but beware the difference between opinion and fact.

Paul

 

[DVC-Landbaron]

Bstanley says:

Thank you Voice. A thoughtful picture of a human with problems rather than a demonic vision.

Hmmm. Did I give you that impression? I didn’t mean it, if I did. I will agree that AV has a writing style to which many aspire, but few attain. But I didn’t think I was that far off the mark!! ‘Inept’ is a far cry from ‘demonic’. And if you boil down AV’s post, isn’t that the one word summary?

My personal opinion is that a single human is incapable of running a corporation larger than $1B or so.

Mine too!! So the one job he has, in order to adequately “run” this vast mega-corporation, is pick the right person to head the various ‘sub-corporations’!!

So!!! How does he measure up to the one and only job he really needs to do correctly? 65%? 100%? How about 0.00%. That’s the way I’d score it!! At least with the parks.

So we need two people. Agreed?

Agreed. With the ‘stronger’ personality residing in the artistic type!!!

these boards are about opinions- and everyone -even scoop can have one-but beware the difference between opinion and fact.

Just wanted everyone to see this little gem. Even though I come off as though mine is the ONLY opinion, I really enjoy everyone’s take on different issues. And I feel about these issues exactly as JJ said:

I think the topic is tired, too, but I keep getting pulled back in because my position is just so reasonable and data-backed that, when faced with disagreement, my assumption is that I simply didn't state my case clearly enough. I'm supremely confident that, one by one, every reader on these boards is eventually going to stumble across something or other I post and realize "Oh, _that's_ what Jewell was on about! Well, of course that's correct, we can move forward, now."

But then again I’m sure everyone else feels that way too!!

Happy writing!!!

 

[Another Voice]

If I may, I’d like to second Mr. Scoop’s opinion. While I have had the good fortune not to have seen Dino-Rama in person yet, it is still possible to judge a show from media representations. The area’s appeal is primarily visual so pictures I’ve seen are good enough to form an opinion; the humidity of the Florida summer, the screeching of the rides and the cries of children are not enough to influence a judgment one way or the other.

Dino-Rama is simply a really bad idea designed without enthusiasm or care. It is a joint effort by the managements of Attractions and of WDI. For every penny pincher at the corporate offices these days, there is a willing partner-in-crime in a big office in Glendale. There is far too much acceptance of the “good enough” philosophy today and a willingness to simply accept budget cuts rather than fight for what it proper. A division that once thought of itself as the last bastion of Walt’s Vision is now run by people with frightenly poor vision. It is not enough for WDI simply to whine about the budgets. If you can’t present a good show, pull the plug.

But I have worked too long in films not to recognize that good people can do very good work on really bad projects. That’s my sense here – the project was doomed from the start. All the nice touches, all the good work is simply overwhelmed by the mediocre concepts and poor design work in the area. Worse, many truly good people have already left – and the few that remain are too easily ignored.

Dino-Rama is a parody of everything that a Disney park is supposed to represent, and creating a parody requires a measure of cruelty that I don’t think the rank-and-file WDI people feel for the parks. The senior management of Disney may continue to look down their noses at the parks, but that attitude has yet to reach many of the people who created Dino-Rama. Yes, Dino-Rama is poorly designed. If that was because people couldn’t trash what they love, then I won’t complain too much.

 

[DVC-Landbaron]

Give the man a cigar!!!!

I can only speculate but, by his boldness (okay, sorry reeeaallly bad joke), it appears Baron has pulled this one from the ignore function hinderlands for my information.

Scoop! My man!! Very good! Very good indeed!! As I was writing I thought that perhaps I was being too subtle, but you came through with flying colors!!! Well played!!

From AV:

In the end, it doesn’t take one person, two people or twenty people. It just takes good people.

WOW!!! Can the guy turn a phrase or what?!?!?

 

[DisDuck]

Scoop just a note to say I understood what you were saying and that it was opinion. Just like I will see DR on 6/24 and give everyone here my opinion. Of course my opinion may have a rose-color to it as I liked Paradise Pier (reminded me of my youth at Coney Island).

Tell you what DVC, since Disney needs 2 people to run it. I will be the money guy, you can be the creative guy. OK?