Disney’s Not-So Magical Ride & What It Means for Your Company
Disney’s Not-So Magical Ride & What It Means for Your Company
Read the Full Case Study in our resource library.
At IGC, we’ve been following the Disney Case Study closely. It’s a prime example of how even the world’s top brands face challenges when navigating today's tumultuous socio-political landscape. We have a comprehensive case study with timelines, lessons learned, and more here; however, we also wanted to share a summary on the blog too.
The Broader Context
Modern businesses recognize their broader purpose, moving beyond solely financial metrics toward stakeholder capitalism. This approach values the interests of all stakeholders equally, from investors to employees. However, aligning with this broader purpose can lead to backlash, especially from elected officials that perceive the effort as "progressive."
Disney's Dilemma
Disney, a global beacon of entertainment and storytelling, prides itself on its commitment to fostering a world of belonging. Yet, this value faced a significant challenge when Florida, home to Disney’s HQ, introduced two contentious bills affecting the LGBTQ+ community.
Initially, Disney chose a silent behind-the-scenes advocacy effort. However, this method met with significant pushback, especially from employees and customers who wanted the company to take a public stand. Matters became further complicated when Disney's financial support of anti-LGBTQ political figures became known.
As public scrutiny intensified, Disney CEO Bob Chapek finally criticized these legislative moves. In retaliation, Disney's favorable tax and regulatory status came under threat from the state legislature. This seemingly back-and-forth of strategy caused Disney to experience a major fallout — it’s stock took a hit, employees staged protests, negative press was rampant, and a leadership shuffle ensued. Bob Iger, Disney’s former CEO, returned to steer the ship through these choppy waters.
Key Insights Your Company Can Gain from the Disney Scenario
Clarity in Purpose
Companies must be decisive about where they stand. Aligning an organization's purpose, values, and ESG (Environmental, Social, and Governance) strategy is crucial. Disney’s commitment to "creating a better world" was commendably articulated, but the real challenge lay in its application during crisis moments.
Executive Communication
Executive leadership should not only support but be able to articulate a company's socio-political standpoints. They must be prepared to address a range of issues, from financial reports to societal debates, like the ones faced by Disney.
Transparent Communication
Companies should be proactive in communicating their stance and actions. Disney's initial silence allowed narratives to be controlled externally, further intensifying the crisis.
Integrated Approach
Having a purpose is great, but ensuring its alignment across functional plans is vital. Disney's DEI (Diversity, Equity, and Inclusion) efforts were commendable on paper but lacked cohesive application in practice, especially when it came to communicating with employees, customers and investors.
Reporting with Transparency
Transparent and comprehensive reporting on corporate efforts is pivotal. Disney's current reporting on political influence, philanthropy and DEI lacks depth, missing out on metrics that ensure the walk matches the talk.
Conclusion
Disney's journey underscores the intricate dance of stakeholder capitalism in today's business landscape. It’s a lesson for all businesses: to not only articulate but to integrate, act, and transparently report on their broader societal commitments. At IGC, we aim to assist businesses on this journey, ensuring that the magic of purpose-driven business remains alive and well.