A Glass Slipper Quest for Disney

As the search for a successor to chief executive Michael Eisner gets under way at the Walt Disney Co., the board of directors won’t have far to look for top executives with a Magic Kingdom history. The company has been a launching pad for top executive talent. But one of the issues being raised in the aftermath of Eisner’s retirement announcement last month is that the high number of company defections may have left only one clear successor, Robert Iger, Disney’s current president. That may have been Eisner’s plan all along, but critics say that Iger failed in his promise to turn the company’s ABC Network division around and is not a slam-dunk to take over the top job.

    The question is how many credible successful executives remain on the Disney bench, and whether any of them have the talent to lead the company and properties, which include theme parks, motion pictures, television and cable networks, retail outlets and cruise ships.

    Eisner’s history of running off potential successors, such as Jeffrey Katzenberg, who left to form DreamWorks SKG, and Michael Ovitz, the Hollywood power broker brought in as president during the mid-1990s, is well documented. Among those who jumped ship is Paul Pressler, president and CEO at Gap Inc., who gave up his job as chairman of Walt Disney Parks and Resorts two years ago to take the top job at the $16 billion retailer. Comcast Corp. CEO Stephen Burke, whose company made an unsolicited and unsuccessful bid to buy Disney for $54 billion earlier this year, spent 12 years at the entertainment company after stepping down as president of ABC Broadcasting. Meg Whitman, president and CEO at eBay, who was ranked by Fortune magazine in 2002 as the third most powerful woman in business, launched her career as a top marketing executive at Disney.

    “There is a tremendous need for new leadership at that company,” says Bill Simon, chief of the headhunting firm Korn/Ferry’s global media and entertainment practice. He says it’s a fair criticism of Eisner’s management style that so many top executives have left. “They need someone who can move in there and build a management team.”

    Simon and others watching the Disney drama unfold also point out that Eisner has given himself and the board two years to find and groom a successor. It probably won’t take that long. The board says it would like to complete its search by June. Citing the company’s strong recent performance, it says Iger is the only inside candidate it would consider. The board is promising an open process and says that external candidates would receive “full consideration.”

    Outsiders say speeding up the process is smart. Until there is an end to uncertainty at the top, advancement within the company could be frozen, and executives would be looking over their shoulders. There could be a stampede for the door. The relatively few outside executives who are qualified to run the company might not be willing to wait two years or more to move into the top job and work beside Eisner.

    Whoever is hired will likely have to deal with the same dissident shareholder group, led by Roy Disney, nephew of the company’s founder, and Stanley Gold, a former company director, who have been directing withering criticism at Eisner and demanding he resign.

    Considering the criticism, Brad Marks, a longtime entertainment industry executive headhunter, says Eisner must play a background role. “Otherwise, he will have his handprint all over it.”

    Chuck Pappalardo, managing director of the executive search firm Trilogy Venture Search, blames the uncertainty on the Disney board and its lack of a clear succession. “This is a board issue; this is not a Michael Eisner issue,” he says.

    In the meantime, with so much uncertainty swirling around the company, recruiters will be out in force, Marks says. “Disney makes a great target for people who do what I do.”

Workforce Management, October 2004, p. 25 — Subscribe Now!