Well, this is interesting. The succession of Michael Eisner at Disney has been pressing, with the Disney Board and Wall Street insisting Eisner get over himself and clarify the issue. Two things are now clear: Eiser is leaving in September of 06 and the heir apparent is Robert Iger.
Apparently, Iger is likeable and diplomatic in ways the unfortunate Eisner is not. (Eiser is so difficult, he managed to antagonize Steve Jobs, and endanger the relationship between Disney and Pixar. CE(g)O Eisner strikes again.)
But does Iger have the more urgent gift? Does he have the ability to read changing consumer tastes and preferences. According to DisneyWar, the new book by James Stewart, Iger actively discouraged the two shows without which ABC would still be languishing in third place. Iger apparently called Lost a “waste of time. Stewart says he fought often and publicly with the creator of Desperate Housewives.
I bet this is a really tough decision. Seeing the significance of Lost and Desperate Housewifes can’t have been easy. It may make perfect sense that Iger could not see the opportunity these shows represented.
I am betting though that there is no “reporting convention here. It is certain that Iger has no good, systematic, grounded, and nuanced account of the shows he thinks will and wont make it. In a perfect world, every executive would be obliged to write a couple of thousand works about each project and seal it into an envelopment. Next time Disney goes wooing the street, it would be obliged to stand and deliver. It would need to show that a) that it has a system for predicting trends, b) where it thinks these trends now stand, c) how the present line-up represents an intelligent set of bets. The analyst deserves this. No one says you can’t be wrong. But we have to insist that you show us what you were thinking when you were wrong.
Could Iger give an account of why he did not like Lost and Desperate Housewives? Does he have a map in his head that says, here is the opportunity space of night time television and here how it is shaped by the history of the medium, the near history of night time television, the current trends of consumer taste and preference? Or does he just “go with his gut. I bet the reason Iger cant give us an account of how and why he was wrong about Lost is that he doesnt have an account and never had one. He made the Lost decision intuitively, without careful reflection, and with any sort of documentation. There was no due process here. He just decided.
Roy Disney is famous for his impatience with the cavalier and unsophisticated way in which Eiser runs the family business. Why he is not asking executives to report how they make key strategic decisions and what these decisions are? When will analysts begin to say, “so you are launching new products this fall. Can we see the strategy map that shows us how you are courting opportunity and managing risk, please?
I get why capitalism does not want to routinize creativity. It cant and it knows it cant. But predictions about shifting trends? This gets the same “by that creativity does. We continue to act as if this were essentially imponderable. We continue to act as if this were something that must be left to the executives “gut. When do we begin to install a ‘trend GPS when we have the executive in the MBA shop? Or to put this another way, how much longer are we going to treat successes like Lost and Desperate Housewives as happy accidents instead of the result of good strategy?
We continue promote executive talent on its abilities to “pick winners and “spot quality. But we continue to act as if this were a God given talent. We dont have programs that help people cultivate their native gifts and give them the benefit of formal ideas, formal training, formal scrutiny, and the opportunity to practice, refine, and test their intuition. I dont doubt that many of the best decisions come to us as intuitions. This means merely that we have made the decision in some unconscious place where are intelligience is most formidable. But to act as if every and all strategic decisions must be made in the gut seems to be roughly comparable to asking an engineer to “guesstimate his or her stress calculations. When are we going to get serious about this?
References
Stewart, James. 2005. DisneyWar. New York: Simon and Schuster.
On the mysterious sell out of DisneyWar from Hollywood bookstores, visit defamer here.
Great post. When the day comes that analysts expect and commonly get this kind of documentation from corporate execs, we will soon be expecting similar from the President, the Supreme Court, and even from tenured professors.
Isn’t it interesting to see the scream put up by most lawyers when former Supreme Court clerks tell us even a bit of the process involved?
It does seem amazing that so much important decision making is largely intuitive and yet we seldom do give the “intuitive arts” much formal training or formal scrutiny. What would your class look like? Do you have a worksheet to reccomend?
Don’t some top salesmen, artists, or investors do journal their intuitive notions extensively. Do you have a reading assignment for us?
You’ve hit upon an incredibly rich vein here, Grant.
To gain a deep appreciation for the complexities of “intuitive decision-making,” and methods for systematically developing it, I’d recommend not Malcolm Gladwell’s tepid, Blink, but rather, Gary Klein’s very impressive works, Sources of Power and The Power of Intuition.
This is a fascinating topic. There are some serious reflexivity problems here. Any articulable, systematic method for picking winners should earn zero economic return in equilibrium. Once it’s known to all, the value ON THE MARGIN of such a method drops to the competitive level, because the prices of winners will rise in advance and/or a glut of “winners” will be produced. This is one of the most powerful results of modern economics. If a firm really had a systematically superior method of picking TV shows, it should NEVER publish that method (I don’t think such a thing would be patentable). Of course, once the method is out, anyone not using it would be at a disadvantage, so the method would have inframarginal value.
For a really well-written discussion of this concept and its application to everything from magic to literary criticism, I strongly recommend D. N. McCloskey’s If You’re So Smart.