MICHAEL EISNER: Creativity & Growth
2007 World Business Forum

Ideas don’t just happen, They need to be inspired. All too often business will put incredible amount of energy to inspiring bad ideas.

Tribal wisdom of Dakota Indians, when you discover you are riding a dead horse, best strategy is to dismount and get on a new one. Some companies make another choice, buy a stronger whip, see how others ride a dead horse, lower the standards so that dead horses can be included, reclassify horse as living impaired, ride or hire outside contractors to ride that dead horse, harness several dead horses together to get increased speed, add additional spending to increase performance, lower overhead to it performs better, promote dead horse to supervisory position.

During my career I’ve tried to inspire great ideas, example 1989 idea to build Euro Disney, listing on French stock exchange, we cheered and were excited. Instead this is what greeted us, video of protestors shown. Not exactly enthusiastic reception we had anticipated. Well we got our suits cleaned and got back to work, euro Disney went on to be attractive resort, most visited tourist destination in Europe.

Things don’t always go smoothly, question is how can we increase the odds that at the end of the day our inspired ideas will yield desired results (in the business world). I have found it comes down to something pretty simple. The box. Works like this: early in the process for new initiative, determine size of its financial box, some require large box, often others do fine with small one, size should be based on straightforward analysis of the expected return on investment. Then comes less straightforward process, what goes in the box. One crucial element to obtain optimum results: that element is creativity.

Creativity is closely associated with entertainment industry for obvious reasons, but is essential to endeavor. Has to have symbiotic relationship with fiscal, that is micro management. Let me tell you about a film, Raiders of the Lost Arc, it’s now a classic, but we didn’t know that when we greenlit it during my tenure at paramount, believe it or not, every studio rejected the idea. Steven Spielberg and George Lucas assured us they could deliver it with a surprisingly modest financial box. They kept their end of the bargain.

Creativity can actually flourish with financial limitations. Opposite can be the case, because they have attempted to substitute more capital than creativity, example: movie Raise the Titanic.

At paramount we kept movie budgets under $10M, lower than others at the time, we had many films that were successes, all produced on a tight financial budget, these provide vivid evidence of another important decision making tool: saying the word "no". In Hollywood, there’s nothing more seductive than saying "Yes". Everyone celebrates except for one individual, the shareholder, who is paying the fact of contracts that result in unprofitable projects. When you say "No" enough times people actually start to believe you. But the entertainment that resulted was cause for celebration for movie goers and shareholders alike. Disney: involved in many businesses than movies, and tried to maintain objectivity in our approach. Then we had two fantastic brands: Disney and ESPN. Analysts calculate ESPN is worth twice alone than the entire ABC acquisition made. What about it is so compelling? I maintain it is its creative spirit, an infectious attitude, daring ability to obtain new ways to capture sports. Our success with ESPN underscores one thing, our constant process of fortifying the brands, strengthening their bond with consumers.

Goughan painting example. How we approach managing our brands – every toy, Disney TV show, theme park attraction, performance, hotel room, Disney movie, ashtray, online community, Broadway show is another dot in the painting of a brand. It takes years, decades to create a meaningful brand, but no single dot captures the whole essence. If you take it one dot at a time, paying close attention to every detail – micro management – keeping eye on the big picture. Separates itself from marketplace and the clutter.

Tornante Company, Italian for Hair Pin Turn, we are about to finalize Topps company acquisition, best known for sporting cards, Bazooka bubble gum. Topps is closely associated with the essence of sports. Millions of fans continue to think fondly of the suspenseful thrill of opening a pack of baseball cards and the first smell of bubble gum. The possibilities are tremendous, but I don’t think we can transmit the smell through the Internet. I had a great run with Mickey but now am about to start up with Bazooka Joe. We think we can turn the Topps brand around today.

Throughout Disney: Two questions: what does this brand stand for and what does it not stand for. Opens up doors to new creative opportunities, sometimes have to shut doors to opportunities lucrative in the short run but would hurt the brand. Past 20 years Disney has built hotels, with thousands of hotel rooms, once again finding an inspiring an idea, filling the box, and deciding how much creativity we choose to put into it. By establishing these standard motel building with giant whimsical icons, touches like this piano shape pool, we were able to elevate entire experience to something just can’t do anywhere else.

Process demonstrates limited utility, shifts attention from merits of a fresh new idea, and substitutes a look backward at what people are already doing.

Quote: Wright, “To steel ideas from one person is plagiarism, to steel from many is research.”

The key is to act on an idea, whether a big new venture or a tiny shampoo bottle. The movie got made because somebody had an idea, and made it happen – executed it and went forward on a good idea. Keep eyes open, and ears. Success requires more than micro management, it requires failure. Way to accelerate your success is to double your failure rate.”

Failure is not a corporate death sentence, making the same mistake twice on the same issue is a terrible thing. To punish failure is another way to encourage mediocrity. Think of the painting, a bad dot cannot ruin the painting, you can fix it and move on. People are afraid to use bright and bold colors, if you want to inspire idea, you have to accept that you will encounter more than a few that won’t make the grade.

World is Flat, Tom Freeman, journalist, describes how new communication tech is helping to create level playing field for
international commerce. World is dimensionally shrinking. Once was full 3 dimensional sphere, now he says it’s 2D flat. I propose they are shriveled down to one dimension, the world has become a single dot, with the Internet, everyone can occupy the same space…time money and language. Now communication is instantaneous, free, can log onto translation.com and you can be conversant in anything. Mass communication isn’t about masses. Recently it took a mass of money that had to attract a mass audience, now this is no longer true. Sure there will always be demand for costly spectacles, but now with video camera and computer anyone can shoot a movie and Tribute to potential audience over the Internet. Computer is both distribution and home theater. Consequently a low budget movie is imaginably tiny, leaving creativity the only variable.
This phenomena is incredible, we are helping funding a website called Veoh, making it possible for anyone to distribute DVD quality movies over the Internet. Website like Veoh so a website in Kenya can be seen by a producer in Santa Monica, but of course, systems aren’t in place to do this yet. It is risking the fate of becoming to pure anarchy, can lead to frustration when choices are overwhelming, what is needed are human filters, also known as human micro managers, to filer it down and help inspire to bring it down the mass audience, so people can go to certain sites they can count on.
Personal core competency, of being a human filter for a great entertainment idea to the Internet.

I started out as an executive to ABC TV network, where I had a wide range of old school TV shows, moved up corporate ladder, had a hand in movies and other kinds of crafted entertainment, and now I’m back where I began, working with a new exciting media, where a single brand can be the time of a single break. Once human filters are in place, not only will the Kenyan filter not have to go to Hollywood, a brilliant investment banker won’t have to be in NY, and a next generation shipment vendor will not have to be in silicon valley, they can all make it where they are, in their home place. This with a human filter is where the Internet is heading, will be fantastic thing. The breakthrough will come from people who use the decision making tools we use today. I use them for everything from gun shot, to bicyclist, hotel, cruise ship, shampoo bottle, lion king to a rock band. My message is this: whatever one’s business the way to
optimize the success is thinking inside the box, make sure first the box is right size, use micro management, and be willing to dance with failure. You’ll be delighted by inspiring ideas you discover once you are all boxed in.

Questions & Answers:

Q: You have a fascinating vantage point as a guy who created a company dozens of employees, and now you have a dozen, what’s the equation when that multiple goes up exponentially?
A: In my case when you have a lot of people, and a lot of ideas, then you have to execute those ideas. If you have an idea for a movie, you call up the head of the movie division and say does this make sense. You call somebody. When you are down to 2 or 4, you tell your wife, your dog, and then you have to do something. You have to take a good idea and execute it yourself, kind of the reverse when you work for a public company, where there’s infrastructure, fax machines, elevators, and I’m used to getting things done. Now I’m an entrepreneur, I’ve done it backwards. Most people start with dog and then go to big company.

Q: You and your reputation was 99% positive and 1% he’s a micro manager, you have to surround yourself with people better than you. How do you keep arms around something and at same time surround yourself with people who don’t want to be managed? Dichotomy.
A: Keep people around you that are strong. People who have weak people around them always end up in trouble. Better the people are the better you do. Mico manager is another word for effective management. People are micro managers, at Disney people love to have the boss come in and say what are you doing, and throw out ideas. They love the boss having stupid ideas, if the people are really good, you have to let them do their job.

Q: I want to get to a lesson learned here, as a guy with tremendous gut, and did have hands on the wheel, how do you deal with a brilliant young talent who is rising, a superstar, and they want to write the check, yet you in your gut feel it’s wrong, how do you manage letting top people do their thing, not stifle them but at same time keeping your hands on the wheel, do you let them go, bet on person or bet on you?
A: For 40 years never had that happen, never had someone with a great idea who wasn’t allowed to go forward. Great ideas don’t spring up like that, there’s conversation, by the time it’s a reality to move, you’ve talked about it so much that you’re in the same ballpark. The only time I was nervous was $19Billion for ABC, I did walk around the block and keep saying to the CFO are you sure we have the money, is this nuts? Eventually we got on board and did it. Doesn’t work that someone has an incredible idea and you say oh that’s stupid, pass, but if it’s that interesting you talk about it. The myth that business is conflict inside a company and everybody is fighting over good ideas and strong young people who have good ideas are thwarted is a mistake. My theory was go to a company where you can’t fall of the floor. You don’t go in and let everybody go, there are good people at these companies, but no one is listening to them. I went to Disney the first time we spoke to a group this size at Disney, I was shaking hands, they said they worked at Buena Vista, and I didn’t know that it was their distribution. Admit you don’t know.

Q: Your talk is about the box, we all know the backwards story of Disney, you had this tattered jewel box. Let’s do an exercise with bazooka Joe and Topps, what can we do and what can’t we, do a future tutorial with it. Give me the businesses, the box can go here but I won’t take it here?
A: I like brands, some brands that are around 70 years, Disney was this giant family company and everybody had an associated with thing past. Here’s a company where in the US you talk to males, and you remember the cards, the gum, the sugar has ruined the card, and your mother keeps asking you to throw out the collection in the garage, you keep thinking it’ll be worth more. Emotion of sports growing up. My view is you have a company with great affinity and love of sports, it’s a back door into a sports media company that becomes a full media company. I don’t know what to do, we are just closing on it tomorrow or so, I assume somebody will have a good idea to take it on Internet, do fantasy sports, prom queen meets Topps, there’s something there, a little company and I’m hoping someday it’ll be a big company, but I don’t have an idea of what to do.

Q: Launching of cigarette, the cowboy or the best tasting cigarette, everyone said they didn’t know anything about a cowboy, give me an example of gut vs. research when you are about to place a big bet, someone has done an exhaustive study, when do you bet on gut or research?
A: Never bet on the research, I can’t stand research. I like exit research, ask someone who comes out of a movie, demographic research is fine. Past research is fine. Why would you ask someone coming out of a grocery store what they think the next best movie would be? Don’t give them the last thing they liked. I’d go with the cab driver or my own gut or a massively expensive thing.

Q: You talked about creativity today, we witness a visible brand battle if you will as we see our presidential candidates come out. How would you inject creativity into the political campaign, is there room for creativity?
A: Creativity and politics, I think there is a lot of creativity in politics, that’s one of the problems.