Walt Disney vs. the news industry: How bad management is killing newspapers and their websites

I’ve attended many journalism conferences over the years, but our industry offers nothing like the event I attended this week. As many of you might know, my primary job these days is running a theme park news website that I founded nearly a decade ago. So this week I drove up to Las Vegas for the theme park industry’s largest annual event, the International Association of Amusement Parks and Attractions’ Expo.

What does this have to do with journalism, you ask? Nothing.

Which is everything. (Hang with me, okay?)

Wednesday afternoon, a source I’ve had a good relationship with introduced me to several former Walt Disney Co. employees who are now legends within the theme park industry. Each worked with Walt Disney himself, and had gathered for a panel discussion about Walt’s management style. The question they were to answer was… what could Walt Disney’s approach toward management teach today’s industry leaders?

Plenty. And not just in the amusement business. Walt Disney’s management philosophy contrasts sharply with contemporary management practices in the news industry, especially within “legacy” media companies. Might I suggest that difference in long-standing management tradition helps explain the sharp contrast between the recent financial performance of the Walt Disney Company and the newspaper industry? Disney today enjoys a market capitalization of nearly $55 billion, and its share price is up 13% over the past five years.

How many newspaper companies can report that?

So let’s look at how Walt did things, and compare that with how things are done in the news business. (Full disclosure: My first full-time job was with the Walt Disney Co., and my mother, sister and wife have worked for Disney in the past, though none of us do now.)

Yes, if….

Harrison ‘Buzz’ Price, the consultant who suggested that Walt build Disneyland in Anaheim, Calif. and Walt Disney World south of Orlando, Fla., described the difference between responding to an employee suggestion with a “No, because…” and a “Yes, if….”

Walt was a “Yes, if…” type of manager, Price said. Walt wouldn’t shoot down anyone’s idea with an immediate dismissal, but would challenge that employee to improve upon his idea.

Richard Sherman, the composer who, with his brother, wrote many of the Disney Co.’s most famous tunes, including “It’s a Small World After All,” told a story about a studio executive who disapproved of a gag in a movie the studio was making. The criticism made Walt furious, Sherman recalled.

“‘I don’t care if you don’t like it,’ Walt said. ‘Tell me what we can do to make it better.'”

Walt created an environment where his employees (“cast members” in Disney lingo) felt welcomed, and empowered, to speak freely – to Walt and to co-workers. “You were one of the members of the team and were free to talk,” Sherman said.

Ideas – the lifeblood of a creative business – could come from anyone in the company. And Walt often challenged employees to perform in areas where they’d had little or no formal training.

“You never know what you might find when you give someone an opportunity,” said Marty Sklar, the UCLA journalism student Walt hired to write a newspaper for distribution in the Disneyland who ended up becoming president of Walt Disney Imagineering, the design company that oversees the development of Disney’s theme park attractions.

There is no Walt Disney managing today’s legacy news businesses. (Yes, ABC News is part of the Disney Co., but Disney acquired it long after Walt’s death, and the news division does not share the same management tradition as the other divisions of the company which once reported to Walt.) Disney’s management style has nothing to do with today’s news business. Which I see as a huge problem for us.

Walt’s management style empowered the company to cultivate fresh ideas. Yet management practice within today’s news business has smothered creativity.

As a newspaper online producer in the late 1990s and early 2000s, I’m quite familiar with the “No, because…” speech, especially on projects relating to editorial coverage and social media. Newspapers blew millions on new products designed to replicate print advertising models online (“Bona Fide Classifieds” anyone?), but actively kept employees from pursuing truly innovate online models, ones that engaged readers as active participants in online communities. To many legacy news managers today, “social media” means little more than flame wars in poorly designed and managed comments sections, appended to news articles that were republished from a print edition.

Ugh.

How many online news pioneers have left newspaper companies, either to work for online giants such as Yahoo! or to strike out on their own? Anthony Moor today spends his last day at the Dallas Morning News before leaving for Yahoo!, becoming the latest in a long line of pioneers to depart legacy media companies.

Consider Walt’s amazing reaction to that critical studio executive. Rather than indulge the employee’s negativity, Walt challenged him to do better. I’ve worked with too many editors who equated managing with dishing out abuse. Walt showed that a more positive management style didn’t have to gloss over flaws. It simply demanded focus on what could be done better in the future, rather than looking back to place blame.

For the past decade, legacy news managers have indulged in the blame game. First, it was parasitic bloggers, then thieving search engines. But it was always someone else’s fault that revenue was tanking and readers were finding alternate sources for information. The only time most news industry managers look to the future is to envision a way to bring back the past – with its information monopolies and fat profit margins.

“The one thing that [Walt] never let is forget was it is all about the audience,” Sklar said. Yet following discussions within the industry today I hear much talk about the industry’s bottom-line needs.

The audience doesn’t care about saving newsroom jobs or keeping journalists in journalism. Nor should it. The people who provide true value to the audience will be the ones who will be able to earn money from that audience. That was true in Walt’s day and remains true today. If people won’t pay for your content online, maybe that should tell you the content you’re delivering doesn’t provide enough value to the audience.

Cutting back on producing better content won’t make them more likely to pay, either. (The Disney Co. strayed from its traditional philosophy tried that approach in the late 1990s and early 2000s, and, ultimately, it cost then-CEO Michael Eisner his job.)

Losing money with a negative approach, and cutting back to preserve the bottom line in response has put the legacy news industry into a death spiral. And it can’t find its way out, in part because managers never learned to see beyond defined models and roles. Newspapers segregated online staffs from their print reporters for nearly a decade, too rarely allowing employees to develop into the multi-talented programmer/reporters and journalist/entrepreneurs who power today’s online news start-ups. By waiting too late to unleash their reporters as online community leaders, legacy news managers squandered their employer’s market power in the new medium.

So… can legacy news organizations survive?

Well, I wouldn’t be a very good follower of Walt’s philosophy if I answered “no,” would I?

Can legacy news organizations thrive online? Yes… if:

They diversify. The consolidation of the news industry has left it in the hands of too few managers – many of whom are simply too rich, and too near retirement, to feel the desperate need to do something creative that their former employees now feel. News companies should raise cash by selling many of their titles to new, local owners. With more owners in the industry, we have a better chance of finding innovative managers who can provide leadership to all.

New owners reconnect with the industry’s pioneers. The news industry doesn’t need to discover how to profit from social media. Or how to better use online publishing tools to crowdsource reports from within a community. Plenty of individuals have figured out those, and other, problems. Many of those successful publishers once worked for legacy news outfits. It’s past time to call them home, and work together to find creative new models for journalism, the way Walt worked with his employees and contacts to build a new industry (with theme parks).

They put the audience’s needs above all. It’s tough to hear… but no one cares about us. It’s our job to care about them, though. If we can find ways to deliver news and cultivate communities that engage, inspire and inform readers, they will find real value in spending their time and attention with us. And when value is delivered, value is received, whether that be through subscriptions, advertising, event admissions, donations or other forms.

I can’t stress this enough: the economic model of journalism is not broken. What is broken is current news managers’ perception of the value that they’re delivering to the public.

Refocus on the audience – reconnect with them through all the available tools online, and managers once again can enjoy an accurate view of what their audience is getting, and how well they value it.

That’s what Walt would do. That’s what we need to do, as well.

About Robert Niles

Robert Niles is the former editor of OJR, and no longer associated with the site. You may find him now at http://www.sensibletalk.com.

Comments

  1. 70.179.69.143 says:

    Robert:
    You leave out a dark period in Disney’s history, the years between Walt’s death and Michael Eisner’s ascendancy (roughly 1966-1984). I covered the company in the tail end of that era, and Disney was as lost at sea as any newspaper company is now. Just like most newspaper companies today, it was plagued by a lack of imagination, fear of innovation, lousy management and bureaucratic morass–compounded by a paralyzing “What would Walt do?” internal question that was posed for every idea (and almost always answered wrong).

    While it’s hard to imagine now, given Disney’s dominance, the company was in dire straits in the early ’80s and the subject of regular takeover and breakup speculation. It wasn’t until Eisner–and more crucially, Frank Wells–came in as top management that Disney became the behemoth we know today.

    Lesson to newspaper companies: It takes strong, bold, innovative, visionary leadership to move forward. And sometimes, no, often, that leadership has to come from outside.
    Mark Potts

  2. Hi Mark,

    I did try to reference that period in my comment about Disney straying in the late 90s and early 2000s, ultimately costing Eisner his job, though it was a brief aside.

    I agree that period in the Disney Co.’s history does not undercut the validity of what Walt tried do to during his final decades with the company. In fact, I believe the company’s failures during that period (including two fatal accidents at Disneyland) validates Walt’s way, since what Eisner and his managers were pursuing was so very different than the culture Walt tried to establish. (Buzz Price offered a brief, but withering, takedown of Eisner during the panel.)

    Walt’s nephew, Roy E. Disney, concurred with that point of view, which led him to launch the “Save Disney” campaign that, I believe, ultimately cost Eisner his job. (More disclosure: Roy Disney’s original “Save Disney” website consisted of links to nine websites covering Eisner’s management of the company, of which my website was one.)

  3. 129.188.33.26 says:

    Hi Robert,

    Very interesting piece. As a former journalist, I very much agree that poor management has hindered the newspaper industry in many ways. Still, I think there are some underlying assumptions in your model that certain other underlying problems will work themselves out. In that spirit, I’d like to offer some other “yes if’s …”

    * Somebody online figures out a way for online community members to “report” to the standards that newspapers lived up to back when they were relevant. And I’m not just talking about objectivity; I mean basics like getting your facts correct and staying on-point. Nobody on the Internet, including giants like Wikipedia, has figured out how to do this well enough to product content of a high enough quality that people would be willing to pay subscription fees for it.

    * Advertisers suddenly become willing to pay as much for an online ad as a print ad. The last numbers I heard (which, admittedly, was several years ago), indicated that online advertising accounted for about one-tenth of the revenue that print did. I have long been under the impression that newspaper managers would gladly put all their content online, and save the headaches and mess of a massive printing and distriubtion option, if advertisers would support it. Of course, if someone figures out the first “yes if”, this one might follow.

  4. 70.179.69.143 says:

    Robert:
    The period I was talking about was before Eisner was hired; he transformed the company. What you referred to happened at the end of his tenure (he was simply there too long). By then, Disney was the powerful company we know today; any problems it had were minor compared to the horrible shape it was in when he and Wells took over.

  5. Mark,

    Strong point. Walt’s greatest weakness was that he failed to adequately prepare Card Walker (or anyone else, for that matter) to assume the leadership position, and style, that he had in replacing him.

    After Walt’s death, the company drifted for more than a decade, completing some projects that were “in the pipeline” at Walt’s death, canceling others (such as Mineral King), and otherwise doing little to grow or distinguish the company. (To be fair, though, the theme parks did relatively well during this period – and that was the area of the company that Walt seemed to be spending the most time with in the decade preceding his death. That’s also the area of the company where the panelists worked. I think that the legacy of Walt’s management style remains strongest in this division of the company.)

    Still, this is the addendum that Walt’s management style needs – identify and train potential successors. Then make sure that your board knows which one you want to assume that role, should death or some other catastrophe remove you from your job before your time.

    I was just talking with some folks about college football games tomorrow, so I’m thinking now of Northwestern University’s response when its head coach, Randy Walker, died of a heart attack in 2006. Walker had tipped Pat Fitzgerald (then just 31) to be his replacement down the road, and the school moved quickly to place him in the job. Walker had prepped Fitzgerald well, and four seasons later the team is about to go to its second consecutive bowl game. It can be done, even if Disney failed to do it.

  6. Revenue is the tough part, and I’m afraid the model is going to have to be sponsorship of some sort for the foreseeable future. Nobody “owns” news, and if newspaper X won’t give it away, then Broadcaster W probably will…and either way the reporting is coming from an accredited news source. The difference is that the broadcaster sees himself as being in the news business, while the newspaper sees itself as being in the newspaper business. I cringe every time I go to a newspaper web site (most of which don’t even list the city and state, province, or country they intend to cover on the page header) and see a bunch of ads coming from Doubleclick. These are companies that have been in the business of selling eyeballs longer than anybody else, and yet they are incapable of doing it for their own web sites? And that’s exactly what Robert is talking about. They need to go back and figure out what business they are really in, and if that means inventing or reinventing themselves, then so be it. That’s what Disney has done and continues to do. Disney happens to be in the entertainment business, and they do it through more channels than anybody else, including channels they invented, and channels they re-invented until they were better at it than anybody else. Their success comes from realizing that their business is what they do, not now they do it. Once you get past the “how” stage and think about the “what”, new forms of “how” become apparent.

  7. 99.155.72.251 says:

    Newspapers are plagued with micro managers with mioptic views and inflated egoes. Some of these top Managers have MBA’s and can’t even apply the basics of their graduate degree.
    Add to it the incompetence of those staff members that have moved through the internal ranks due to nepotism connections; the father, sister, son, daughter, father-in-law etc. Some of these folks had no talent or skilled brought to the table but are protected. Internal errors, mistakes and waste affect revenue. Advertisers see how thin their town newspaper has become,along with declined in readership and makes them wonder if they should continue to advertise, then add the economy. Other advertisers have looked to alternative medias with ROI and at less costly rates. I have been in meeting where a revenue generating idea or mentoring thoughts has been mentioned and management barely lets you finish and says no. Then on the other hand I have seen ideas given for someone else to run to upper management and take credit for it. Look at the online of some newspapers, some lack cohesiveness. Advertising is tucked away behind tab after tab. Newspapers need to clean up their act and if you are going to cut waste at the bottom, consider cutting the top tier; some of the problems start there. Will the newspaper industry survive and at what expense?

  8. 70.17.114.186 says:

    Brilliant piece, perhaps largely because I agree with it. What strikes me about newspapers and other corporate media flailing around a decade too late is that they are unaware that the online competition is fighting a guerrilla war. The guerrillas are winning by a thousand paper cuts.

    Publishers should study how large occupational forces prevailed over insurgents in the past. It’s not with atom bombs, napalm or shock and awe.

    For Wikipedia fans: “Tactically, the guerrilla army attacks its enemy in small, repetitive attacks from the opponent’s center of gravity with a view to reduce casualties and become an intensive, repetitive strain on the enemy’s resources, forcing an over-eager response, which will both anger their own supporters and increase support for the guerrilla, thus forcing the enemy to withdraw.”

    http://en.wikipedia.org/wiki/Guerrilla_warfare

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