The Disney Business: What Would Walt Say?

"It's not hard to make decisions when you know what your values are."—Roy O. Disney

"My biggest problem? Well, I'd say it's been my biggest problem all my life. MONEY. It takes a lot of money to make these dreams come true. From the very start it was a problem. Getting the money to open Disneyland. About seventeen million, it took.

"And we had everything mortgaged, including my family. But we were able to get it open and in the ten or eleven years now we have been pouring more money back in. In other words, like the old farmer, you have to pour it back into the ground if you want it to grow. That's my brother's philosophy and mine, too." – Walt Disney

Last week, I tried to argue that today the Disney business is not being run the way that Walt Disney would run it. That's not necessarily a bad thing. CEOs Michael Eisner and Bob Iger pushed the Walt Disney Company into greater diversity than Walt could ever have imagined with some notable successes.

Without them, there might never have been a cruise line, a presence on Broadway, a vacation club, prominent movie franchises, theme parks around the world and much more.

Of course, another column might be written about while the movie franchises may have enhanced the financial aspect of the company, it may have in fact damaged the philosophical foundations that established it in the first place with characters and storylines that do not align with the Disney brand.

It is important to understand the difference between the Disney brand and the Disney business. The Disney brand is the characters, the way you feel when you are in a Disney theme park, the music, the memories, cleanliness, friendliness, family values and more. The Disney business is just like any other business and is responsible to its stockholders to show a growth in income each year.

You can love the Disney brand but still have concerns about how the Disney business is being run and if it is hurting the brand. However, it is important to remember that the business needs to be healthy in order for the show to go on.

For decades, I have been locating the actual words of Walt in interviews, letters and more and trying to verify that these words were in fact Walt's thoughts and not just a construct of the publicity department or writers like Marty Sklar and Joe Reddy.

Walt Disney laughs in his office.

So perhaps the best person to talk about the Disney business is Walt himself. We too often think of Walt as just the "creative guy" and his older brother Roy as the "money guy." We believe that Walt didn't care about money and that is totally wrong.

He cared very much about what money would allow him to do and he felt he could generate it by producing quality product.

He spent many sleepless nights worrying about how he was going to be able to meet the payrolls at the Disney Studio and Disneyland. His wife would wake up in the middle of the night and see him standing with his head bowed by the dresser in the bedroom because he was so concerned.

He tried not to spoil his two daughters, often making them wait for something they wanted like a bicycle even when he could easily afford it, so they could understand the value of money.

However, he did his best to try not to let finances limit his dreams. It was often said that Walt dreamed castles but Roy had to find the money to build them.

Walt said, "I'm not interested in money, except for what I can do with it to advance my work. The idea of piling up a fortune for the sake of wealth seems silly to me. Work is the real adventure in life. Money is merely a means to make more work possible." ("A Silly Symphony Becomes America's Slogan: Three Little Pigs Change the Psychology of the Nation—Walt Disney Tells How He Makes Animated Cartoons" by Alice L. Tildesley for the San Francisco Chronicle newspaper December 31, 1933)

Twenty years later, he felt the same way: "People have said: 'Look, the guy has no regard for money'. I have had regard for money. But it depends on who's saying that, you see? There's some people who worship money as something you've got to have piled up in a big pile somewhere. I've only thought of money in one way and that is to do something with it." (Interview with Pete Martin for Saturday Evening Post June/July 1956)

In terms of the business, Walt said, "I made up my mind that if this business was ever to get anywhere, if this business was ever to have a chance to grow, it could never do it by having to answer…to someone with only one thought or interest – namely profits." (Walt Disney speech to employees at the Disney Studios February 10, 1941)

The Disney Brothers Studio began in Los Angeles, California on October 16, 1923 and became the Walt Disney Studio in January 1926 with the move to their new building on Hyperion Avenue.

The company became Walt Disney Productions (WDP) in 1929 and had its first public stock offering in 1940. Until that time, it was solely a family owned and operated company.

Under the direction of CEO Michael Eisner, the company was renamed The Walt Disney Company in 1986 and remains so to this day. It is often just referred to colloquially as "Disney" or the "Disney Company", in the same manner as Walt Disney World is sometimes just called Disney World.

The company is a global leader in family entertainment including animation, live-action films, theme parks, resorts, publishing, consumer products and much more among its many business subsidiaries and affiliates.

Roy and Walt Disney.

Roy O. Disney was considered the CEO of the company beginning in 1929, although the official title was not given him until 1968. He also shared the role of chairman of the board with Walt from 1945 until 1960 when Walt dropped the title to concentrate more on the creative aspects because he felt "my time was being wasted just signing all those papers".

On one of his last public interviews with Bob Wright on NBC television in 1966, Walt famously said, "Well, by this time, my staff — my young group of executives — are convinced that Walt is right, that quality will win out, and so I think they will stay with this policy because it's proven it's a good business policy.

"Give the public everything you can give them, keep the place as clean as you can keep it, keep it friendly — I think they're convinced and I think they'll hang on after — as you say, 'after Disney'."

Today the Walt Disney Company is being run by people who were not even alive many years after Walt Disney passed away.

Just like Kentucky Fried Chicken eventually ignored how Harland Sanders prepared and served chicken but kept all the outer trappings of the business, some of those Disney executives seemingly believe that Walt's business philosophies are comparable to believing in Santa Claus' business practices.

"We haven't any president or any other officers. In fact, we are not even incorporated. I guess you couldn't call us a company. We just get together the bunch of us, and work things out. We voice our opinions and sometimes we have good old-fashioned scraps but in the end things get ironed out and we have something we're all proud of." ("How Silly Symphonies and Mickey Mouse Hit the Up Grade" by Florabel Muir in the New York Sunday News December 1, 1929)

Walt Disney gesticulates with a cigarette in his hand.

"I get together with my group and we bat things around. Whatever we accomplish is due to the combined effort. In my organization, there is respect for every individual, and we all have a keen respect for the public.

"The organization must be with you or you don't get it done. They just say to heck with him, let him do it himself." ("The Wonderful World of Walt Disney" by Bill Balantine from Vista II magazine Winter 1966-67)

"My brother is president of the company. I'm not an officer of the company at all. I don't hold any office in the company. My brother is the president and chairman of the board, and he worries about the finances and the distribution and the corporate matters.

"My sole concern is production – production and the show, as we call it, at Disneyland. I don't even attend the board of directors' meetings if I can help it. It's two separate worlds, the one of production and creation and then the business world. (Interview with Stan Hellenk for Canadian Broadcasting Corporation July 22, 1960)

"That's always the constant battle. Production versus the banking side. Anybody with a banking mind…it must be a tangible in front of him, you know. But in our business, we're dealing with intangibles, which we hope to turn into tangible – two separate worlds, you might say." (Interview with Stan Hellenk for Canadian Broadcasting Corporation July 22, 1960)

"To comprehend our place and problems, the industry must be understood as a business – the business of wholesaling the merchandise of visual delights to millions. We began to realize that our community of influence embraced the whole population, not just a local segment. We had to be all things to all men." ("Film Entertainment and Community Life" by Walt Disney in The Journal of the American Medical Association July 12, 1958)

"I felt very sorry and I'm always sympathetic to (my brother Roy) because he has to sit with the bankers. He has to sit with the money men. He has to fight with these stockbrokers who come in and harass you and say 'Why …I haven't turned any Disney stock in six months. Now, DO something so I can turn it and make a profit.'

"You know? He had to sit with them. And I had to tell him lots of times, 'You have to get away from those guys. You sit with those fellows and they beat you down!' I said, 'You have to stay as far away as you can.' I told him one time in New York when they had him down, I said 'Come on, the sun is shining in California!'" (Interview with Pete Martin for Saturday Evening Post June/July 1956)

"It is my belief that if this is to be a strong, self-sufficient organization, it cannot be run by one man. I do want this organization set up so that it would not function without me, merely to please my ego. This organization must perpetuate itself. It must be able to carry on if anything should ever happen to me.

"If the organization was small enough for me to work with and have contact with all the men, it would have to be a rather small organization. After all, I'm only one guy and I'm only human.

"The future of all men who have given their time and effort to this business cannot be jeopardized by any selfish attitude on my part, or any desire to be the big shot. We have been trying to find men who could be recognized as leaders, not by the wearing of a badge, but by the respect of their fellow-workers. We need those men to carry this business on." (Walt Disney speech to employees at the Disney Studios, February 10, 1941)

"The public will pay for quality and the unseen future will take care of itself if one just keeps growing a little every day." ("Growing Pains" by Walt Disney, The Journal of the Society of Motion Picture Editors, January 1941)

"It's been our policy to reinvest. Everything that is earned here by pictures, or in any other way, always goes back into the business, goes back to improve our studio facilities, to improve the operations of any one of these things, like Disneyland. It's always going back into the business." (Interview with Hooper Fowler for LOOK Magazine January 1964)

A pensive Walt Disney.

"We had grown considerably as craftsmen as well as having grown big in plant and numbers, a growth that is only important in proportion to the quality it adds to our product in the long run.

"The large profits had all gone back into the business. It was brought on by what might reasonably be called reckless expenditures. Yet, looking at it our way, it is these expenditures that have put us in shape for the storm." ("Growing Pains" by Walt Disney, The Journal of the Society of Motion Picture Editors January 1941)

"I've always maintained you just can't coast. If you do, you go backwards." (Interview with Pete Martin for Saturday Evening Post June/July 1956)

"I could have got most of my costs back (on building Disneyland) with beer concessions alone. A lot of adults will come here, but Disneyland is primarily for children and I don't think kids and liquor mix." (Article by Florabel Muir for the Daily News newspaper July 10, 1955)

"No liquor, no beer, nothing. Because that brings in a rowdy element. That brings people that we don't want and I feel they don't need it. I feel when I go down to the park I don't need a drink. I work around that place all day and I don't have one." (Interview with Pete Martin for Saturday Evening Post June/July 1956)

"My business has been a thrilling adventure, an unending voyage of discovery and exploration in the realms of color, sound, and motion.

Walt Disney's formal office.

"It has been a lot of fun and a lot of headache. The suspense has been continuous and sometimes awful. In fact, life might seem rather dull without our annual crisis. But after all, it is stress and challenge and necessity that make an artist grow and outdo himself." ("Growing Pains" by Walt Disney from The Journal of the Society of Motion Picture Editors January 1941)

"We've never hired a wizard in our life, you see? And we never believed in geniuses. And we just feel that it's a matter of good common sense and certain things that we put our faith on. Like I said, never let the public down if you can help it. And that's what I try to do. I have things laying on my shelf that I've never finished and wouldn't put out because I just said, it would do us more harm than good." (Interview with Pete Martin for Saturday Evening Post June/July 1956)

"We try to set up a good, strong, fair administrating organization. I try to have good people in each spot. Then I expect those people to do the job." (Interview with Hooper Fowler for LOOK Magazine January 1964)

"Sometimes I think of myself as a little bee. I go from one area of the studio to another and gather pollen and sort of stimulate everybody. I guess that's the job I do. I certainly don't consider myself a businessman, and I never did believe I was worth anything as an artist." ("Pollen Man" from The New Yorker November 1, 1941 and later quoted in "The Magic Worlds of Walt Disney" by Robert De Roos National Geographic August 1963)