Disney CEO Bob Chapek with two famous Mice, Photo: Disney

New leader unloved? Direct reports in revolt? Product tanking? Customers fleeing? Things are not well at the house of the mouse and we all can learn some lessons from their situation.

Lesson One – Don’t ignore the primary reason customers buy your product.

Former Disney studio leader Alan Horn said, “The thing about the Walt Disney Studios is that when someone goes to one of our films, they may not know what they’re going to see, but they do know what they’re not going to see.” Well, that used to be true. Walt wanted product that the entire family could experience together. He did that through product largely devoid of political and controversial content. Today’s Disney content has become both. Long time customers have reacted by skipping that product. Lightyear bombed, for example, with one third the box office of the inferior Minions: The Rise of Gru. Thor: Love and Thunder will barely break even. These two films follow over a year of Disney released box office duds, including Black Widow, Eternals, Jungle Cruise, Encanto, Cruella, Raya and the Last Dragon.

Conclusion – Customers buy product for a reason. Ignore that reason and you risk losing your customer base.

Lesson Two – Don’t lecture your customers.

Disney has, time and time again, perceived itself as a teaching organization. Epcot, for instance, had an opening day educational premise. Many customers complained that it was boring, and the park evolved. Walt even tried to build an educational film arm but the pedologists could not agree on what made for good education. Walt finally gave up, saying, “From now on let’s make the word ‘educational’ a dirty word around here. Let’s just stick to entertainment.“ The current “woke” content, often inserted without storytelling purpose (IE–neither America Chavez revealing she has two mothers in Doctor Strange in the Multiverse of Madness or female tavern owner Manticore in Onward mentioning her wife had any bearing on the story). When Disney entertains, it wins. When it lectures, it loses.

Conclusion – Don’t talk down to your customers. That’s not why they come to you.

Lesson Three – Don’t assume you’ve succeeded when you substantially raised prices and profits soar.

Chapek recently thanked his cast members for a very lucrative quarter. The financial numbers were impressive, but profits soared because Disney raised park prices and people who were already planning to visit the Mouse still came. But one good quarter of financial growth obtained on the backs of customers does not automatically translate into an ongoing healthy bottom line, and those customers may feel taken advantage of. Indeed there have been complaints about the rising cost of a Disney vacation.

Conclusion – Don’t penalize those who are your biggest supporters and fans.

Lesson Four – Don’t think that profits today translates into profits tomorrow.

In spite of the price hikes, the Disney parks are very busy these days. But much of that attendance is a reaction to people being COVID locked down for two years. It is like the steam escaping from the tea kettle: an immediate release that soon dissipates. Once people have fully absorbed the price hikes, and once those who were “dying” for a “Disney fix” have visited Walt Disney World or Disneyland, attendance will drop. I expect that will happen next year. That patronization drop is already visible in other products with direct competition (see Lesson One above).

Conclusion – Suddenly higher prices may actually reduce profits over the long term.

Lesson Five – Don’t expect the previous boss’s direct reports to support you too.

Remember those school days when there was a substitute teacher? Classes would often erupt in chaos as students (me included) tested the teacher. Although it is hard to discern what goes on at the highest levels of a company, it is extremely likely that Chapek is fighting substitute teacher syndrome against former CEO Bob Iger’s direct reports. Some of those executives likely believe they should have been promoted instead of Chapek, or disagree with Chapek’s decisions, or believe that Chapek is weak and can be forced out. The current a period of instability, and the Disney board’s firm statement of support for Chapek is likely an attempt to quash substitute teacher syndrome.

Conclusion –If you are chosen to lead, beware of the actions of those around you. It will be substitute teach time until you establish yourself.

These five points are not a complete recipe for success, but they are illuminating, both for what they explain about Disney’s current turmoil and for our own chances of success in business and life.

PS – Bob Chapek and the board may already be backpedaling on lesson one. Last week, Bob Chapek made the following statement, “When people come to a Disney park they don’t walk in with their political views on their sleeves. People don’t come to Disney to get political points of view, either from the left or the right. Disney is a source of positivity in the world, no matter your sex, race, or politics. That’s a core focus for me.”

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