For the better part of 97 years, from 1923-2020, The Walt Disney Company has embraced their founder’s vision – to provide the finest in family entertainment.
Sure there were times when they strayed, for example from 1972-1984 they continually refused to take risks, constantly asking “What would Walt do?” Then from 1995-2005, CEO Michael Eisner ignored Disney’s long tradition of quality. But during each of these time periods, Disney’s brand remained relatively untarnished and they were able to return to Walt’s original vision.
However, today’s “new world” might create an entirely different outcome for Disney. The term WOKE was added to the dictionary in 2017. It means “to be awaken to sensitive social issues.”
In 2020, Bob Chapek replaced Bob Iger as CEO of the company. Iger remained Chairman of the Board but was voted out in December of 2021. In March of this year, Chapek responded to Florida Governor Ron DeSantis’ “Parental Rights in Education Bill” by stating: “yet another challenge to human rights. I apologize to members of the LGBTQIA community for not being a stronger ally and vow to fight for the bill’s repeal.” Chapek’s overriding goal for the company is “Reimagine Tomorrow, 50% LGBTQIA characters in Disney productions.”
My thoughts are not meant to be a political statement or in any way a criticism of this part of our population. My perspective would not be any different if Disney embraced an extreme right wing agenda in its productions and theme parks. Walt created an environment of mutual respect and trust for all. This article is all about what happens when a business loses focus regarding its vision and values.
Disney’s WOKE agenda today means:
- Indoctrinating children in cultural indifferences, rather than creating tales of hope and triumph
- Characterizing traditional family members as villains
- Slipping inappropriate content into streaming platforms
- Disrespecting the overriding morals and values of its founder, Walt Disney
The short-term results of Disney’s WOKE agenda have been devastating. The stock is one of the worst performing stocks in 2022. An NBC and Hart Research Poll indicated their consumer approval rating dropped from 77% to 33% (less than both Biden or Trump). The Florida Legislature is trying to overturn the 1967 Reedy Creek Improvement Act that gave Disney much freedom to manage their 43 square miles of property with little State government oversight.
It is true that most of the Walt Disney era animated feature films were dominated by white male heroes. But let’s remember that Walt grew up in a white male business climate. Women were only allowed to vote 3 years before Walt and his brother Roy opened Disney Brothers Studios (later named The Walt Disney Company) in 1923.
Since 1989, Disney has made efforts to become more inclusive in their productions:
- 1989 The Little Mermaid
- 1998 Mulan
- 2009 The Princess and the Frog
- 2010 Tangle
- 2012 Brave
- 2013 Frozen
- 2018 The Return of Mary Poppins
- 2019 Frozen II
- 2021 Encanto
What happens when a company strays from their vision and values? Sears is a great example. In 2018, Sears filed Chapter 11 and was delisted from the NY stock Exchange after over 100 years! What went wrong?
- Failure to Innovate. Richard Sears was a visionary. He saw the railroad expansion of 1883 as a way to get product to rural farmlands. In 1920, he believed the automobile was a way to have access to retail and began opening stores. In the 1980s, rather than innovate their core business, they strayed from their retail roots into finance, insurance and banking. By 1996, they sold most of their financial assets.
- Inability to stay ahead of the Competition. In 2000, Sears began online selling about the same time Amazon was just beginning to branch out from just selling books. In 1990, Sears and Wal-Mart were about the same size.
- Lack of focus. Sam Walton proclaimed, “If we work together, we’ll lower the cost of living for everyone…we’ll give the world an opportunity to see what it is like to save and have a better life”.
- Lack of continual and sustained investment. In 2017, the costs per square foot to upgrade stores and ecommerce were as follows:
Sears $0.91; JC Penny’s $4.13; Kohl’s $8.12; Best Buy $15.36.
What a waste of iconic brands! Consumers in the 1960s and 1970s turned to Kenmore for appliances, Craftsmen for tools, and Diehart for batteries. At its peak, Sears operated 3,500 full-line stores, but today there are just 28 full-line operations.
Unfortunately, Sears and all too many companies have lost focus over the years. There are only 52 companies that have been on the Fortune 500 list since 1955. Since 2000, 52% of the Fortune 500 have either gone bankrupt, been acquired or ceased to exist.
One of the most dramatic examples of compromising values was the swift demise of Arthur Andersen. In 1913, Arthur Andersen started the accounting company in Chicago. His vision was, “Think straight. Talk Straight. Without integrity the firm will never grow.” By 2000 Andersen was one of the five largest accounting firms in the world. In 1990s, they embarked on a path of hefty fees ahead of honest bookkeeping. They eliminated 10% of their partners that failed to adapt to the firm’s new direction for “salesmen” types that could turn a modestly profitable auditing assignment into a consulting goldmine.
In October of 2001, the SEC began an investigation of Enron’s accounting practices. In November, they uncovered that Enron had overstated their earnings by more than $57 million since 1997. In December of that year, Enron filed for bankruptcy. Enron’s auditors were Arthur Andersen. Between 1998 and November of 2001, Andersen billed Enron $100 million. In August of 2002, Arthur Andersen surrendered their CPA license and closed their doors. They employed 85,000 workers worldwide and 28000 in the US.
Is Disney destined to become a Sears or Andersen? Can they survive with a 33% approval rating? The WOKE movement may not be all that popular with the liberals. Bill Maher, hardly a conservative spokesperson, stated, “(Children) if they knew at age 8 what they wanted to be, the world would be filled with cowboys and princesses. I wanted to be a pirate. Thank God no one scheduled me for eye removal or peg leg surgery.”
Too bad the Disney Board of Directors does not have Walt’s nephew Roy get them back on track to creating excellence in storytelling and stop wasting shareholder’s money on political crusades that have nothing to do with Disney’s business of providing the “finest in family entertainment.” Unfortunately, Susan Arnold, Disney Board Chairperson, has stated that she and the board support the Bob Chapek and the direction of the company. In June of 2022, the Disney Board unanimously approved a three-year extension of Chapek’s contract.
Walt Disney said, “Here you will leave the world of today and enter the world of yesterday, tomorrow and fantasy…That’s what storytellers do. We restore order with imagination. We will instill hope again and again and again.”
Is there a happy ending to this current saga? Only time will tell.