Michael Eisner: the rise and fall of a Disney CEO

The happiest place on Earth was in deep trouble. Its profits had reduced by half in 4 years from 1979 to 1983. Wall Street vultures were trying to raid the company. Its films were not working at the box office. And its theme parks were stagnating.

The problem was lack of leadership. There was no one capable at the helm to guide the ship. Until Michael Eisner became the CEO in 1984.

Eisner quickly took charge and revitalised the company. Disney studios again started churning out hits like Aladdin and Lion King. He boldly acquired ABC and ESPN. And made the theme parks flourish again – as well as expanded and opened new Disney theme parks in Europe and Asia. His first decade bought in Disney’s renaissance!

But yet, in 2005 – Roy Disney and other board of directors came up with a “Save Disney” campaign and forced Eisner to resign. What went wrong?

The same seeds of success bought along failure too

Eisner was amazing because he was so very intuitive. He had an instinct to understand what the audience wanted. And he was extremely creative to come up with ideas to fix things.

Eisner would pay the same amount of detailed attention to a film script as he did to a theme park design. His ability to understand different departments was second to none.

Because of which, he was really bad at delegating. How can you delegate if you are better at almost all the tasks than others? 

When Disney grew bigger and bigger, Eisner became the bottleneck. When he could not decide every single detail anymore, he expanded the “Strategic Planning” department. The department’s job was gathering data and doing analysis. Eisner relied on their spreadsheet analysis for every decision he took. Decisions became centralized, with Eisner and the department at the helm. This created an environment where managers were unable to make even small decisions without clearance from the top.

During the second half of his reign at Disney, the same genius Eisner could do no right. Movies bombed. And theme parks started stagnating again. Spreadsheets killed creativity. And the top down environment killed motivation.

For all his genius, Eisner never learnt the key lesson:

“You can’t push a rope.”

Autocratic decision making takes away people’s will to work. Decreases their motivation. They just don’t perform to their best abilities.Even great ideas are executed poorly when people don’t feel a sense of ownership and belonging.

A good rope is strong and flexible. And it can help lift a lot of weight. But with all its strength, you can’t push a rope. Misapplied force is wasted force.

Understanding what motivates people, and pulling them to want to do great work instead of pushing them is what is required.

Isn’t that the great lesson that the failure of communism teaches us? That central planning and pushing decisions on people fail spectacularly?

Mediocre managers push. Great leaders pull.

So how do you pull instead of push?

In the 1860s, mining companies faced a problem. How to achieve proper ventilation in an underground mine? They first tried to place huge fans to push clean air inside the mines. It didn’t work very well.

What worked? Reversing the direction of the fans. When the same powerful fans are reversed, they suck the air out of the mines, which creates a lower pressure environment in the mines. As a result, fresh air flows in.

Great leaders don’t diminish their power, they just reverse the flow. And create low pressure environments. So fresh motivation flows in automatically. Decision making and productivity improve on its own.


You don’t push the air in. You pull it out. You don’t push motivation. You pull it out. The way to do it is the same. Reverse the flow of energy to create low pressure environments. Environments where people feel safe. Where people feel empowered.

  • Instead of directing, serve.
  • Instead of telling, listen.
  • Instead of controlling, trust.
  • Instead of criticising, praise.

Serving, listening, trusting, praising. That’s the way to give back autonomy to your team so that they feel safe and motivated to do their best work.

The first thing that Bob Iger – who replaced Michael Eisner as CEO of Disney – did was cut down the strategic planning division from 65 people to 15. Gave back the decision making power to the heads of their department. And focused on just facilitating and supporting his key people – instead of passing orders from the top. Changed the flow of decisions. Which changed the fortunes of Disney again.

Action Summary:

  • Personal genius can be harmful to team genius – because it can often lead to ordering and pushing people. True leadership comes from a person who listens and serves their team.
  • Just as reversing the fan in a mine facilitates a flow of fresh air, reversing the flow of decision making power in an organization fosters creativity and motivation.