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Disney diaries: trouble in Neverland

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By now, you’re probably sick of the wretched saga at Disney. Be that as it may, court testimony about the mess still offers lessons about precisely how not to confer and administer authority.

Lesson 1: Don’t blow off legitimate questions. Once Michael Eisner decided to anoint his friend Michael Ovitz as Disney president, Ovitz asked: “How can this work when you put me on top of people who have been there for a long time?”

“You and I will be the bosses,” Eisner replied. “They report to us. And we will make it work.”

Lesson 2: Trust, but verify. Ovitz said he trusted Eisner and thought the feeling was mutual. He knew very well about Eisner’s feuds and his criticism of other top-level entertainment executives, but thought his friendship with Eisner put a different spin on things. Ovitz talked it over with his wife and, without nailing down the troublesome details of the business partnership, called Eisner and accepted the job. “I’m putting myself in your hands,” Ovitz told Eisner.

Lesson 3: Listen to your gut. You’ve heard this a zillion times, but it continues to elude even the smartest people. After Ovitz accepted the job, Eisner called the guy who was co-writing his autobiography and said, “I think I just made the biggest mistake of my career.”

Lesson 4: Don’t let your direct reports twist in the wind. Right after hearing of Ovitz’s appointment, Disney’s top executives met the newcomer. It was less than cordial. “Welcome to the company,” Disney’s chief financial officer told Ovitz. “I just want you to know that I’ll never work for you.”

“Me, too,” another said. “I’m not going to report to you.” Stunned, Ovitz looked to Eisner for support. Eisner said nothing. He failed to quell the mutiny and betrayed his second-in-command.

— Adapted from “Partners: Eisner, Ovitz, and the Disney wars,” James B. Stewart, The New Yorker.

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