- In today’s CEO Daily: Diane Brady breaks down Disney’s CEO transition.
- The big story: Gen Z moves on from TikTok.
- The markets: How low will Bitcoin go?
- Plus: All the news and watercooler chat from Fortune.
Good morning. Every CEO has three basic tasks: Set the strategy and vision of their company, hire the leadership team to execute on that, and create the conditions to successfully replace themself.
That last part can be awfully hard to do. Power is intoxicating. Most of us like to think we’re irreplaceable. And good intentions don’t always lead to good practices.
So let’s look at how a veteran is handling that task.
Disney CEO Bob Iger announced this week that he’s stepping down nine months before his contract ends, though he’ll stay on through the
end of the year as a senior advisor. The goal is to give successor Josh D’Amaro some time to settle and
then a clean break to set his own path.
That’s different from the last time Iger stepped down in early 2020, an exit that had already been delayed four times. He stayed on as executive chairman for two years, then cut all ties, only to return as CEO in November 2022 after Bob Chapek was suddenly ousted. In addition to raising questions about the board,
at least from me, the drama reinforced the myth that, when it comes to running Disney, as they say in the movie
Highlander (now streaming everywhere but Iger’s channels), there can be only one. So what are the takeaways this time?
Beware the myth of genius – Bob Iger had a great track record at Disney and certainly cut costs and refocused the company this time around. That said, its stock has underperformed the market and top-line growth is modest. History is rife with examples of celebrated CEOs who
stumbled the second time around, from Procter & Gamble’s A.G. Lafley and Twitter’s Jack Dorsey to Howard Schultz at
Starbucks and Ken Lay’s disastrous return to Enron—the last of which was
an epic disaster for other reasons. Raise your hand if you think Jack Welch could have maintained GE’s momentum if he’d stayed on the job.
Shut the door on your way out – Having the old boss stay on as an executive chairman can be a Faustian bargain for the new one. They’re used to calling the shots, may wax poetic about how they would have handled a situation, and can create conflict where clarity is needed. Wise move on Disney’s part to give the new guy a clean slate. That
$45 million payday, on the other hand, seems pretty lofty.
One size doesn’t fit all – There are times when a different governance structure may be justified. With the growing complexity of the external environment, from geopolitics to AI’s impact on operations, many CEOs are feeling forced to act more like chief operating officers who have to steer the ship through the storm. That creates a more compelling case for co-CEO roles or a more external/vision-setting executive chairman. The world is a complicated place. But Iger, or his board, recognizes that his most important job now is to help Disney’s next CEO succeed.
Contact CEO Daily via Diane Brady at diane.brady@fortune.com
