Shortly after being named Disney’s CEO, Bob Iger negotiated peace with then disgruntled and former board member Roy Disney (Walt’s nephew). Roy had just sued Disney over Iger’s selection and it easily could have derailed Iger’s effort to lead Disney in a bold new direction.
Iger wrote in his bestselling autobiography The Ride of a Lifetime: Lessons Learned from 15 years as CEO of the Walt Disney Company, that the:
“drama with Roy reinforced something that tends not to get enough attention when people talk about succeeding in business, which is: Don’t let your ego get in the way of making the best possible decision. . . .
I certainly could have gone to battle with them and prevailed, but it all would have come at a huge cost to the company and been a giant distraction from what really mattered. [We needed to] recognize that what Roy needed, ultimately, was to feel respected. That was precious to him, and it cost me and the company so little.
A little respect goes a long way, and the absence of it is often very costly.”
Here are more negotiation nuggets from Iger, plus my own thoughts
- Regarding a renegotiated partnership between Disney and Steve Jobs’ Pixar Animation Studio, “after each round of negotiations, [we would] ask ourselves if we were crazy to not just make any deal with Steve, but then we’d quickly conclude that any deal we made had to have long-term value.”
ML: It’s easy to lose sight of your long-term objectives in complicated negotiations. Don’t. Keep them front-and-center, ideally in a written Strategic Negotiation Plan that you can reference and update as the negotiations proceed.
- Iger then decided Disney should acquire Pixar instead. He wrote “[b]efore I dialed [Steve], I told myself that I should contain my enthusiasm. I needed to offer praise, because Steve’s pride in Pixar was enormous, but this might be the beginning of a real negotiation, and I didn’t want him to feel that I was so desperate for what they had that he could ask for the moon. The moment I got Steve on the phone, any semblance of a poker face collapsed. I couldn’t pretend I felt anything other than pure enthusiasm. . . . I hoped that my honesty would ultimately serve me better than any ‘shrewd’ pretense anyway. It could have seemed like a weakness – if you show that you want something so badly you’ll be made to pay – but in this case the genuine enthusiasm worked.”
ML: Don’t discount the true power of sincerity and enthusiasm and making true connections with your counterpart (especially creative types like Steve Jobs), even if it might appear to weaken your leverage.
- Disney later also acquired Marvel Entertainment, then controlled by Ike Perlmutter, “a legendarily tough, reclusive character, former Israeli military, who never appeared in public or allowed pictures of himself to be taken.” Before even meeting Perlmutter, Iger wrote that he knew that “if [Perlmutter] was going to be comfortable selling to Disney, he had to feel like he was dealing with someone who was being authentic and straight with him, and who spoke a language he understood.” Despite being from vastly different backgrounds, Iger suggested Ike and his wife join Iger and his wife for dinner. Iger indicated “[t]here wasn’t any business talk, it was just a chance to give them a sense of who we were and what was important to us, and for us to get a sense of who they were, too.”
ML: Rapport-building on issues unrelated to the business issues on the negotiation table was crucial.
- Perlmutter was a somewhat reluctant seller, though, and it took a call from Steve Jobs to move it forward. Iger wrote that “Steve told [Ike] that the [Pixar-Disney] deal far exceeded his expectations, because [Iger had] lived up to [his] word and respected the [Pixar] brand and the people. Later, after [the] deal closed, Ike told [Iger] that he’d still had his doubts and the call from Steve made a big difference to him. ‘He said you were true to your word,’ Ike said.
ML: This deal would not have closed but for Iger’s reputation as an honest and straightforward negotiator who made and fulfilled his commitments – and had former counterparts like Steve Jobs willing to tell others this. Iger’s reputation for ethics and integrity made a multi-billion dollar difference.
More to come in Part Two, including lessons from Disney’s acquisition of the Star Wars’ franchise from George Lucas – stay tuned!
Latz’s Lesson: Putting your ego in your back pocket, respect, maintaining focus on your long-term goals, rapport-building on issues unrelated to the negotiation, and a reputation for integrity. Each form fundamental elements of the most successful negotiations.
* Marty Latz is the founder of Latz Negotiation, a national negotiation training and consulting company that helps individuals and organizations achieve better results with best practices based on the experts’ research. He can be reached at 480.951.3222 or Marty@LatzNegotiation.com.