Disney largely disbands strategic planning unit

[speck76]

Disney largely disbands strategic planning unit
Fri Mar 25, 2005 05:31 PM ET

LOS ANGELES, March 25 (Reuters) - Walt Disney Co.(DIS.N: Quote, Profile, Research) on Friday said it would largely disband its strategic planning division, and Peter Murphy, its merger and acquisition architect for years, would step down from his current role to become a senior advisor to CEO-elect Robert Iger.

The move is the first major change in the running of the media company since President and Chief Operating Officer Iger was named earlier this month to succeed Chief Executive Michael Eisner. Eisner will step down at the end of September, but Iger is already sharing CEO duties.

Disney said it would shift many of the planning duties to the theme parks, media networks, movie studio and consumer products units, keeping a smaller strategic team.

"This new structure will create efficiency with accountability and empower our business unit leaders," Iger said in a statement.

Strategic planning has been an important division for more than a decade at Disney, guiding acquisition strategy and producing senior executives, such as Chief Financial Officer Tom Staggs, who began in the unit.

Murphy, 42, who was key to Disney's acquisition of the ABC network, will step down as chief strategic officer and senior executive vice president as he switches to the advisory role.

"Peter's vast contributions during his tenure at Disney, particularly his leadership role in the acquisition of Capital Cities/ABC, helped transform Disney into a market-leading global media company," Iger said. "His extensive experience and knowledge of our businesses, technology and strategy will continue to benefit The Walt Disney Company."

 

[ogryn]

So what does that mean?

 

[speck76]

So what does that mean?

Iger had stated since being appointed CEO that he would de-centralize decision making......what this means is that the Theme Park division will make Theme Park decisions, the Studios will make studio decisions, ABC will make ABC decisions....instead of one central department having the overall authority.

THIS is a GOOD thing!

 

[ogryn]

Iger had stated since being appointed CEO that he would de-centralize decision making......what this means is that the Theme Park division will make Theme Park decisions, the Studios will make studio decisions, ABC will make ABC decisions....instead of one central department having the overall authority.

THIS is a GOOD thing!

I agree there. Thanks :wave:

 

[Shaman]

This is an interesting move...I think it a good one too...maybe Iger isn't so bad after all...I'll feel better when Eisner is gone for sure though...

Things seem promising I'll give ya that much...

 

[DarkMeasures]

Smart idea. It also means a chance at attractions like Beastly Kingdom and Western River Expedition may not recieve the "cut" as much. But I am sure there will still be many ambitious projects abandoned.

 

[Lynx04]

I guess we will have to see. I think this is a good time to restructure anything related to the theme parks with the 50th going on, and being in a more analytical period. I guess down the road we will see how they address the needs of the parks.

 

[DisneyFan 2000]

If this is where we're headed I can see the beginning of a new, better era! :sohappy:

 

[speck76]

More Info

Disney retools planning division
New chief Robert Iger shrinks the unit and gives more power to company businesses.

By Richard Verrier | Sentinel Staff Writer
Posted March 26, 2005


The man known among executives of the Walt Disney Co. as The Enforcer took a hit on Friday.

Chief Strategic Officer Peter Murphy, the rough-edged point man for Disney boss Michael Eisner, was removed from his powerful post and placed in an advisory job with diminished responsibilities.

Murphy's 30-person strategic planning unit will be dramatically downsized, giving more autonomy to Disney's division chiefs, some of whom have complained of being marginalized and disrespected by Murphy. Critics of his operation, which reviews all major Disney initiatives, have dubbed it "the business prevention department."

The overhaul was largely orchestrated by Disney's newly named chief executive Robert Iger, who does not officially take the helm until Oct. 1 but already has begun putting his stamp on the company, with Eisner's blessing.

Numerous Disney executives, as well as Wall Street analysts who track the company, had seen the internal unrest surrounding Murphy as an opportunity for Iger to score points with his troops while distancing himself from his predecessor's regime.

"This is a welcome change and long needed," University of Southern California business professor Warren Bennis said. "Too many decisions are made by Eisner and the strategic planning department, and it's why to a great extent Disney has lost a lot of talent over the years."

In an interview, Murphy defended his tenure and style, saying spirited debate with other executives was a necessary part of the process. "I did the job I was asked to do by Michael, Bob [Iger] and the board," he said. "It was not a popularity contest."

Murphy said he was consulted about the changes and added: "I feel great about it. It's the right decision for Disney and for me personally."

A source familiar with the new arrangement said Murphy, who'll report to Iger, was given a two-year deal with an option to leave sooner -- the most likely scenario.

For his part, Iger said in a statement that the new corporate structure "will create efficiency with accountability and empower our business unit leaders in their ongoing efforts to create new, differentiated and compelling entertainment experiences."

Murphy joined Disney in 1988 soon after earning an MBA from the University of Pennsylvania's Wharton School of Business.

He helped expand the Disney Channel worldwide and crafted a business plan for the acquisition of the independent film company Miramax Films. Murphy was promoted to his current job in 1998 after overseeing the $19 billion acquisition of Capital Cities/ABC.

Eisner relied heavily on Murphy and his group to keep tabs on the decisions of his top managers in the company's four divisions -- film, theme parks, consumer products and television -- giving him authority to veto investments his boss didn't like or pursue projects he did.

Richard Verrier can be reached at 1-800-528-4637, Ext. 77936, or richard.verrier @latimes.com

 

[TURKEY]

AHHHHHHH.

Points and laughs at all the people that hate Iger for being Eisner's top choice, without even seeing what would happen.

Man, what a waste of time and thought on something that already looks to have some positive things coming out of 2 week of being the CEO.

 

[DisneyFan 2000]

AHHHHHHH.

Points and laughs at all the people that hate Iger for being Eisner's top choice, without even seeing what would happen.

Yeah, I'm gonna go hide now! :king:

 

[CTXRover]

This sounds like a great move! The most common complaint out of nearly everybody here is how everything is run by beancounters who have no idea what they are budgeting. Giving each division back the power to make those decisions for themselves is definetly a positive and an obvious shift away from the micromanaging style of Eisner. Where is everyone who said Iger was just an Eisner puppet now? I'm a bit wary asking that because I know its WAY too early to make any rash judgements (good or bad), but even with Eisner still there, Iger is making an important change and in recent interviews has indicated he will run quite a different ship than Eisner did. Thankfully Eisner has already "passed on the reigns", so to speak, for Iger to start making CEO decisions now, and not waiting till Sept (something Eisner has already acknowledged to the media he has done)

 

[Mr. Eggz]

Best move Iger could have made. I'm very impressed. This changes everything.

The Stretigic Planning group have been "business destroyers." they have killed more WDI projects, TV Shows and Movies than you can imagine. They were Eisners "brute squade." If he didn't like something they found a way to prove that it was financially unsound. But if he liked an idea, they "proved" it wold work even if the numbers didn't add up (i.e. the purchase of ABC Family).

I've ranted and raved that Iger was a bad choice, but this is such a great move, that I feel I should just shut up and let Iger do his job. I wish him the best of luck.

 

[stingrock23]

I agree that this is a good idea. Better to leave decisions to those whose sole responsibility is to manage a certain section of the company.

 

[DarkMeasures]

Where is everyone who said Iger was just an Eisner puppet now?

I still think that. I just think though that Eisner is trying to give Iger a good start so his name doesn't get tainted like Eisner did. I think that is a very good idea because why should your successor be as unpopular as you are?

 

[CTXRover]

I still think that. I just think though that Eisner is trying to give Iger a good start so his name doesn't get tainted like Eisner did. I think that is a very good idea because why should your successor be as unpopular as you are?

I might just be understanding you wrong, but this was not Eisner decision to disband the unit. In fact, the strategic planning department was adored by Eisner. The decision to disband the department and to go away from the micromanaging style of Eisner and back to a more department specific team approach is all Iger's doing. He may not be the CEO officially yet, but Eisner's already said he is running the show now.

I don't expect a change like this to suddenly make any critics of Iger suddenly become avid supporters. But you've got to give him the credit when good changes are made. Its too difficult to tell what else he might do that differs from Eisner, but this is one very good step in the right direction, imo.

 

[maxime29]

It's a good start, but "the night is still young".

 

[Coaster3001]

Ok Iger you have my attention. Now bring back the animation department and we'll talk.

 

[Chernabog]

So the question I have (not being the buisness savy person I like to pretend to be)... if everything is de-centralized, does that make it more difficult for the parks to work with the film division and merchandising to get special shows/parades/attractions/merchandise? I think this sounds like a good idea, but I also think this could make it more difficult to pull off large scale special events? Am I incorrect in this thinking? Can anyone clarify?

 

[HennieBogan1966]

What about the downsizing?

Okay. I'm going to ask the question that no one else is asking here:

What about the statement regarding downsizing. I thought everyone here was against people losing their jobs? What happens to the people with the Strategic Planning Unit? Are they going to be "re-assigned" to lower paying jobs? Are they going to be laid off? Paid a severance package for their years of dedicated service to the company?

Where are all you people now?

Hey are they union? Non-Union?