Why Bob Chapek Failed as Disney CEO
Bob Chapek’s brief tenure as CEO of The Walt Disney Company is all over but the crying.
While we’re all ready to stop talking about the dude and move on with our lives, we should still take the time to evaluate all the ways he should have done better.
Here’s why Bob Chapek failed as Disney CEO.
Lack of Humanity
Let’s start with the one that upsets me the most as a casual observer.
Whenever a CEO famously suffers a humiliating termination, reporters quickly speak with everyone involved.
The goal is to learn all the inexplicable mistakes that the former executive made during their tenure.
In the case of Chapek, most of the leaks thus far have involved philosophical differences.
However, one exception demonstrates a lack of humanity. To understand the egregious nature of what he did, you must do what you least want to do.
Please think back to the start of the pandemic during the spring of 2020. At the time, the entirety of western civilization experienced something akin to overnight societal paralysis.
Suddenly, we couldn’t gather in public locales…like Disney theme parks. For this reason, Disney executives quickly deduced the obvious.
The company must perform layoffs to account for the lack of theme park jobs at the time. Also, Disney suddenly faced dramatic revenue shortfalls.
All Chapek needed to do was wait for Congress to pass legislation that would provide assistance to the suddenly furloughed.
Guess what Chapek refused to do. Yup, he sought the approval of the Board of Directors to advance with layoffs before Congress acted.
In the process, Chapek risked the financial well-being of tens of thousands of cast members.
Thankfully, Bob Iger, who was the Executive Chairman of the Board at the time, interceded. He rejected that proposal.
Disney waited until legislators could provide blanket protection for its employees…but not because of Chapek. If he’d had his way, Central Florida’s economy might have collapsed.
Lack of Trust
Here’s a personal shortcoming of Chapek’s that mystifies me. As Chairman of Disney’s Parks & Resort, he worked as part of a team under Iger.
As a CEO had worked hard to empower all his executives so that they could perform their jobs without interference from their boss.
Chapek did the opposite. Rather than delegate, he “streamlined” Disney by consolidating numerous divisions into two core businesses.
Alas, those changes didn’t happen at once. Instead, Disney experienced multiple reorganizations during the first two years of Chapek’s tenure.
Ultimately, the best jobs at Disney went to all of the people Chapek trusted. He left out everyone else.
Did Chapek do this because of some elaborate loyalty test? Was the CEO living in fear of the shadow of Iger to that extent?
We will never know the answers to these questions. What we DO know is that Chapek’s insular nature and lack of trust in others proved his undoing.
During the most recent attempt to consolidate power, Chapek tried to take away marketing decisions from executives who had controlled this aspect of the business for many years.
After the predictable revolt from these underlings, the Board of Directors had no choice but to explore other options at CEO. Otherwise, they would have lost much of Disney’s executive talent.
As you imagine, Disney has hired hundreds of people to manage the various aspects of the company.
Chapek had narrowed the list of empowered division heads to just a handful. His insecurity ultimately did him in.
Lack of Self-Control
About the Scarlett Johansson thing: Just…why?
At the time, the popular actress was days away from giving birth to her first child.
Chapek inexplicably took this opportunity to administer a public flogging of Johansson.
The Black Widow star understandably felt that Disney had breached its contract by releasing her film in a way that reduced its box office potential.
Disney’s contract with Johansson includes escalator clauses that would have paid her generous sums for a blockbuster.
Due to Disney’s release strategy, there was no chance of that happening. When the actress sued, Disney blundered about as badly as I can ever recall.
The company said the following:
“The lawsuit is especially sad and distressing in its callous disregard for the horrific and prolonged global effects of the COVID-19 pandemic.”
I’m gonna let you in on a secret. No matter what you’ve read on the internet, nobody in Hollywood caused the pandemic.
For whatever reason, Disney wrote a PR statement that blamed ScarJo for, well, all of it.
Skipping to the end of the page, Chapek eventually cut Johansson a massive check, reportedly tens of millions of dollars.
While the parties at least theoretically made up, I’m confident the actress shed no tears over Chapek’s humiliating job loss.
Seriously, though. What kind of person publicly assails a woman who is eight months pregnant?
Lack of Understanding
This aspect ties back to what I just said. Chapek erred so badly with ScarJo because he understood so little about Hollywood’s inner workings.
Yes, Chapek had worked in Disney’s home video division and proven successful there. However, he didn’t have to cut any deals with Hollywood talent that way.
Instead, the money people handled all the negotiations. Dealing with directors, producers, and actors requires an entirely different skill set.
Not only did Chapek lack this ability, he also failed to recognize just how little he knew on the subject. He really thought he could fake it until he made it.
Spoiler: he did NOT make it.
Similarly, Chapek felt he had a firm grasp on Wall Street behavior. The CEO felt confident that as long as he kept the books clean, investors would adore him.
Instead, famous Wall Street analysts like Jim Cramer called for Chapek’s head the instant the industry changed its mind on streaming.
Chapek failed to understand the mercurial nature of Wall Street. The whole industry works like sports fandom. As long as the team is winning, everything’s fine.
When a team goes through a losing streak, people lose their ever-loving minds.
Specific to Disney, Chapek acted transparently in stating expectations for streaming services. He believed it would take until 2024 to turn a profit.
Wall Street acted fine with that thought in 2021. By the end of fiscal 2022, the tide turned to the point that people questioned how Disney could make money sooner.
That wasn’t the deal nor was it a reasonable request. Still, Chapek approached Wall Street and Hollywood alike with an almost childlike naivete.
Lack of Respect
Let’s finish with an obvious but critical failure.
Chapek never seemed to appreciate the gift he had been given.
As children, we all learn to love Disney and dream of working with Mickey Mouse and the other characters.
Nobody does story as well as Disney. Taking the job of CEO comes with a responsibility to deliver classic tales that resonate with audiences.
More importantly, the person in charge should treat Disney differently because it IS unlike any other corporation.
For a century now, Disney has taught children that anything is possible. We all relish our favorite Disney stories because they remind us of how we felt as kids.
Bob Chapek didn’t respect any of that. Instead, he treated his job at Disney like any other Wall Street gig.
Had Chapek led AT&T or Home Depot, he wouldn’t have behaved any differently.
Disney was a glorified widget to him, not a product that ignites a passion without creative souls.
In short, Chapek was the wrong person at the wrong time. And we’re all glad our close friend, Disney, dumped him.
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Photo: LA Times