Walt Elias Disney has created a legacy that has not only lasted longer than himself, but it has touched the lives of countless children and adults around the world. After facing some setbacks in the early part of his career, Walt Disney created Mickey Mouse and released Steamboat Willie in 1928, which became an overnight sensation. According to the article, Walt Disney began to diversify his company because he realized that his cartoon shorts, would not be able to keep his studio sustained forever. Walt Disney started producing movies, TV shows, and entertainment parks.
During the acquisition of new businesses and business ventures, Disney was taking on too much and losing the company’s original foundation. “I hope that we never lose sight of one thing – that it was all started by a mouse” remarked Walt Disney. Walt emphasized teamwork, communication, and cooperation as important factors to success. Because Disney was expanding rapidly, the question that arose was whether or not Disney was putting too much emphasis on controlling costs and not enough emphasis on their creative talent. As stated in the article by Ryan Harmon, a former Imaginer, “It’s not as fun a place as it used to be, it’s just money, money, money. The creative side doesn’t rule anymore.” It appeared as though Disney had lost focus on the one thing that started it all, a mouse.
Along with losing focus on what started it all, there was another issue that the company was facing. After Walt Disney and his brother, Roy O. Disney, passed away, Eisner was in charge of getting Disney back on financial track. From 1984 to 1993 Eisner secured the company financially by diversifying. This diversification was accomplished by: revitalizing TV and movies, maximizing theme park profitability, coordination among businesses, and expanding into new businesses, regions, and audiences. Between 1994 and 1995 Disney went through very trying times, both organizationally and financially mainly in part due to the acquisition of ABC.
From 1995 to 1999 Disney’s financial performance deteriorated and they could not seem to pull themselves out. Question again began to rise, was Disney becoming too large to have Eisner as the only creative head? “Can a $25 billion enterprise, with its efforts flung throughout the world, be creatively run with a single person?” asked an executive at a rival studio. “It didn’t get to be that business with one creative head.” Even though Eisner was able to get Disney back on track, people began to think that he did too much and he was not going to be able to keep up being the single creative head at Disney.
The firm should not lose focus on what they do well. As Walt Disney said, “You’re dead if you aim only for kids. Adults are only kids grown up, anyway.” Disney needs to continue to market to the child inside all of us. In order for them to effectively do this, Disney needs to scale back and not acquire anymore new businesses to put under their corporate umbrella. Disney should consider selling off some of the businesses they have like ESPN, ESPN2, newspapers and periodicals (which were acquired in the ABC acquisition). ESPN and ESPN2 are not as popular and profitable as they once were and newspapers and periodicals are a dying field in a world that is becoming more and more digital. By scaling back, they may concentrate their energies on the profitable portions of the company.
Disney has some of the most talented Imaginers that are valuable resources to help Disney focus more on marketing to children and adults. Disney’s Imaginers are great at properly masking adult humor into children’s movies. In this way they are catering not only to the children but, also the parents. If Disney sells ESPN, ESPN2, the newspapers, and periodicals the proceeds can be reinvested into current businesses that are profitable for the company. By not acquiring any more new businesses and by concentrating more on the businesses they have that are doing well, Disney will be able to more effectively build and strengthen their current portfolio of businesses.
Disney would be maximizing their resources where they could be the most effective utilized. The other big resource that would aid Disney is Disney Dimensions, which is a program that helps to create synergy among the senior executives of every business. By continuing this program, the synergy that is created among its senior executives will allow for a better flow of communication and a better flow of ideas and creativity. The creativity that Walt Disney first founded his business on.
This is a better course of action than continuing to diversify and spread their resources out too thin. As times change in the business world Disney’s business model needs to change to keep up to remain competitive. Eisner’s management style is under scrutiny and the question being raised is, does Eisner need to change his approach to continue running his entertainment empire. As the article states there have been 75 high-level executives that have left the company between 1994 and January 2000. To go along with that there are employees that are saying that Disney is not as fun a place to work as it once was. In order for Disney to stay true to its core competencies, they need to change the mentality of money, money, money and instead, re-focus on the creative side that got Disney off the ground in the first place.
The major implication of this plan would be that it is hard to change a business model like Disney’s, which has been proven over time to be successful, on a dime. It will take time, money, and cooperation from top executives all the way down to lower level employees. With the right people and the right plan in place Disney can capture that creativity that Walt Disney had when he first started this company.
Disney has had their fair share of ups and downs. If Disney takes the time to go back to their roots and focus a little more on the creative side and not get as caught up in the money aspect Disney will continue to flourish long into the future. The creativity that Walt Disney first founded his business on could be re-established.