Note: If you planning to complete this masterclass, watch at 1.5X speed. Also read: The Ride of a Lifetime: Lessons Learned from 15 Years as CEO of the Walt Disney Company - Robert Iger

  • A critical first step when you’re honing the strategy of your company—whether it’s a start-up in its gestation phase or an established business in need of refocusing—is to go buck wild. Seriously. When the time comes to brainstorm new directions in which you could grow, set aside space for a little no-holds-barred ideation sesh. For now, the sky’s the limit. Once you’ve explored the multiverse of possibilities, though, it’s time to rein yourself in. At this stage, you’ll want to develop a succinct list of priorities.

  • You can only have three priorities. That’s what one of Bob’s friends, a marketing and political consultant, told him, and it proved to be a solid idea. Any more than three priorities and your pitch begins to sag. Your vision for the company becomes muddled—to customers, to investors, to the board of your own company. For Bob, the three elements he decided to incorporate into his strategy for running Disney were:
    • Invest most of Disney’s capital in high-quality branded content (i.e., creativity).
    • Use technology to make more compelling content and to reach people in more. innovative ways.
    • Grow globally, deepening connection to markets around the world.

  • You have to be able to articulate [your priorities] very effectively… over and over and over again.

  • Stating your strategies isn’t a one-time thing. You have to become the living, breathing incarnation of your three strategies, and you must always be ready to explain how they apply to problems of all sizes. Sharp communication skills are essential: The better you can communicate your strategies verbally and in plainspeak (which is to say, not via email using corporate lingo), the more efficiently and effectively they’ll be implemented. You don’t want to be this Oz the Great and Powerful figure who hides behind a computer and urges their team to get pumped for synergistic approaches to workflow streamlining or whatever. You want to get in the room with your collaborators and tailor your vision to their actual workplace experience.

  • Another critical element of a good company strategy is feedback. Because, as much as you’re the captain of your own ship, a major part of your job is allowing those around you to own the vision. Requesting feedback both emboldens the people who work for you and also brings invaluable insight—you need that boots-on-the-ground perspective to keep your vision calibrated. This is why Bob, on a weekly basis, sits down with his direct reports over lunch to seek feedback and advice. It’s a give-and-take session that, as he puts it, “emphasizes the need to not only be accessible…but also to have the ability to be candid in the dialogue.” And this is where truth counts. You must create a culture where honesty and candor are encouraged. The more POVs you’re able to tap into—especially when it comes to gauging where the market is headed and how your company should adapt to it—the better you’ll be able to roll with the punches and thrive.

  • Clarity is essential for good leadership. So is focus.

  • Bob’s for-the-greater-good style of thinking shows that bold business leadership isn’t about self-aggrandizement and power. It’s about removing any conflation of your own identity with the company you run so you can assess situations as objectively as possible.

  • When it comes to dealmaking, one of Bob’s primary values is efficiency. And his strategy for getting deals done quickly is being candid.

  • To the novice, Bob might appear to be tipping his hand by being candid. But Bob believes that being up front with your needs is imperative. Not only does it save time by nixing the gamesmanship of negotiation, but it also gives the other party an opportunity to outline what they hope to gain from the deal. Bob’s strategy means you have to let go of zero-sum-game thinking. Instead of seeing yourself as the winner or loser of a negotiation, you instead open yourself up to the ways both parties are benefiting. For instance, when Bob first talked to Steve Jobs about acquiring Pixar, Bob was blunt about wanting to buy the company—not only that, but he explained why it was essential for Disney to do so. His honesty softened the negotiation, which in turn allowed for more authentic and efficient negotiating.

  • Bob approaches negotiations with the desired outcome in mind and tries to focus on efficacy and clarity of communication without letting his ego muddy the waters. The result has been an extraordinarily successful series of deals—the benefits of which, for The Walt Disney Company and its shareholders as well as for Bob, continue to compound.

  • The most important thing in terms of maximizing brand value or managing a brand is, first, to completely understand the essence of the brand.

  • What does Bob mean by “the essence of the brand?” Well, he’s talking about the attributes of your brand that evoke specific feelings in the consumer and signal certain values. If a consumer aligns with your values and recognizes you as “one of us,” your brand becomes a shorthand for those values in the marketplace. (Think of the way Disney unites generations by balancing novelty and nostalgia, or how Whole Foods aligns itself with wellness-obsessed consumers by highlighting organic and natural products.) Consumers, faced with myriad decisions each day, are able to cut through the noise by recognizing your brand and sticking with your product. They form an opinion about you once, and as long as you don’t betray that trust, their familiarity with the brand simplifies their decision-making process.

  • So what are your brand’s values—and what makes your brand valuable to customers? Now would be the time to pace around your living room with a dry-erase marker between your teeth and a blank whiteboard in front of you. Here are a few things that could be on your list of brand values:
    • Commitment to sustainability and the environment.
    • Integrity and transparency.
    • An insistence on simplicity and efficiency.
    • A casual, fun sense of accessibility.
    • Interconnectedness—the feeling of welcoming consumers into a community.
    • An emphasis on progress, on providing a cutting-edge product.

  • Once you’ve got a robust list going, ask yourself: Does every product under your brand umbrella embody these values?

  • If not, you’ll either need to rethink your unifying set of values or (more likely) adjust your products to universally support your brand. Once your products clearly align with your brand values, you’re golden. Now you have the opportunity to extend that consumer goodwill into other realms, gradually widening the scope of your brand to be leveraged in a variety of arenas. For Disney, this means that a great story like Frozen becomes more than just a movie—the brand bleeds into the realms of merchandise, theme parks, music, live theater, and more. If you can do this with a collection of brands, as Bob has with Marvel, Star Wars, Pixar, Disney princesses, et al., needless to say, you’ll be in great shape Until you’re not, that is.

  • Brand is a very, very careful balance between legacy, or heritage, and innovation.

  • Relationships can be repaired.

  • Respect the value of culture.

  • Because brand is inherently value-charged, there will be times when the values of the culture shift and you’ll have to adapt. In a changing world, stewards of healthy brands have to be on their toes, ensuring authentic relevance. We can spot disingenuity a mile away (hi and bye, Kendall Jenner Pepsi ad), so the secret here is actually recognizing how the values of your brand are pertinent to the values that consumers are currently prioritizing. To do this, you’ll need to look closely at the heritage of your brand, recognize its essence, and then innovate ways to allow that essence to speak to the current moment. This can be tough—especially if it seems like you’ve already got a good thing going. But change is inevitably required in order for a brand to stay healthy. Blind adherence to the way things were done in the past—a sort of backward-looking traditionalism—can become a hang-up. That’s what Bob is talking about when he says that Disney’s brand needed to be respected but not revered.

  • What’s the difference?
    • Reverence insists that the brand remains frozen in time, replicating the structure of past success with diminishing returns.
    • Respect recognizes the reasons a brand was valuable to begin with and brings those values forward, tailoring them to a changed world.

  • Optimally, you’ll never fundamentally change your brand’s values—think of Bob’s example of taking Disney in an edgier direction in an effort to match changing consumer tastes, even if the move would be a fundamental betrayal of Disney’s core brand values. By contrast, recognizing how some piece of the Disney brand can be amended to feel fresh while still remaining rooted in the original values—that’s growth.

  • Bob uses the example of updating the archetypal Disney princess for the 21st century. To do this, he had to consider the core attributes of the more passive Disney princesses of Walt Disney’s days—Snow White, Cinderella—and then ensure that those attributes remained intact while imbuing princesses like Moana and Anna with a spirit of independence. These newer princess movies—Moana, Frozen—reinforce the core values of Disney princesses without ever feeling stuck in the past.

  • In a negotiation where you know you will have to continue to work with the other party, don’t make it about your ego, and make it feel like both parties are walking away as winners.

  • When we acquire another company, we do spend time thinking about whether…the brand that we’re acquiring is going to be an enhancement to the image of Disney and its brand or whether it’s going to detract from it.

  • So, you’re thinking about doing a brand acquisition. (Okay, maybe not now, but eventually.) Even if the possibility feels far-off, it’s already time to develop deep enough familiarity with your own brand values to know what you’ll be looking for when that fateful day arrives. Bob will be the first to tell you that pulling the trigger on an acquisition is tough. You have to know exactly how the new brand will affect perception of your current brand. It requires crazy foresight.

  • When it came to considering the purchase of Marvel, Bob was faced with a dilemma: Did the Marvel brand enhance or detract from the Disney brand as a whole? On the one hand, given that modern superhero movies tend to be significantly more violent than typical Disney content, there was the peril of falling into the edgy pitfall—which would have amounted to a betrayal of the Disney brand. But upon closer inspection, Bob found that, on a core level, many of the values that defined Disney were also inherent to the Marvel brand. The trappings may have been different, but the essentials overlapped.

  • At the time of the acquisition, Marvel was making its own films, but those films were marketed and distributed by other studios (Fox, Sony, and Universal were all in on the action). Those studios wielded considerable control over the brand. When Disney bought Marvel, Bob focused on taking control of the company’s characters (well, except for Spider-Man, the X-Men, and a few other stragglers that were still licensed out to other studios) to better steward the brand. By doing so, Disney and Marvel could then ensure a uniformity of brand values across a variety of assets—and by assets, we mean stories taking place everywhere from the subatomic quantum realm to the savannahs of Africa to the decaying corridors of a dead giant’s skull in the farthest reaches of untamed space. The breadth and diversity of the Marvel Cinematic Universe is staggering, but each addition to the canon is innately recognizable as a Marvel movie—and that’s the power of a brand.

  • You’ve likely heard that great white sharks die if they stop swimming (something about obligate ram ventilators requiring a steady flow of oxygen), which is a good fact about sharks and a great allegory for business. This is especially the case in the mediasphere, where the constant threat of disruption means that even empires like Disney must, in the words of everyone’s favorite Pacific blue tang fish, “just keep swimming.”

  • If you’re running a business that refuses to change with the times—maybe that means forgoing an electronic Point of Sale system in your restaurant, or maybe it means turning a blind eye when your overhead costs get too high—you’ll find yourself fast- tracked to extinction. Stasis equals death. You have to know how to evolve. Which means you must be comfortable embracing risk, and with it, failure. Yes, failure is inevitable. And that’s okay. Consider Bob’s anecdote about Cop Rock, a 1990 ABC musical police drama that totally bucked the status quo of conventional TV and that also bombed—hard. Bob could have reacted to the show’s failure by wallowing in regret, but instead he embraced the shot taken as a point of pride. “I was always proud of the fact that we had taken such a big risk,” Bob says, “because creativity has inherent risks.” The way things went with Cop Rock could’ve soured Bob on cop shows entirely. But when Cop Rock creator Steve Bochco pitched Bob another cop show a few years later— one that was dark and gritty and unlike anything TV had ever seen—Bob gave it the go-ahead. He was greenlighting NYPD Blue, a procedural that became one of ABC’s longest-running shows. Why? Well, in part because the show was risky and stood out from the pack.

  • In the wake of failure, it’s easy to see the allure of regressing to something tried-and- true, but at some point, even your safeguards are bound to fail; someone else is going to come up with a fresh idea and leave you in the dust. Bold business leadership requires a tolerance for risk and failure and, perhaps most importantly, a capacity to forge ahead in the wake of defeat.

  • But before you take Bob’s wisdom as carte blanche to put your business (or your bank account) on the line, do your homework and make sure you’re proceeding with caution. Take calculated risks. Assess them carefully. As Bob emphasizes, thoughtfulness is as important to leadership as courage is. Careful study and calculated decision-making are what reduce the likelihood that your risks will blow up in your face. You have to do the cost-benefit math.

  • Healthy risk-taking is about coming to the table as educated and informed as possible—eliminating as much of the risk from risk-taking as you can. It’s a balancing act. Remember Bob’s discussion of value creation vs. value destruction? You have to know the core values and identity of your brand in order to assess how a bold move could bolster or damage its perception with consumers. Embrace risk, yes, but become an expert in the realm of your risk-taking first.

  • In the decade that led up to Bob’s leadership at Disney, the studio’s strategy for mitigating risk involved casting as wide a net as possible (i.e., making a broad slate of many types of films at various budgets in hopes that a few of them would be breakout hits). It worked for a time (movies like Armageddon and Good Will Hunting, made by Disney-owned Touchstone Pictures and Miramax Films, respectively, were huge successes alongside Disney classics like The Little Mermaid). But when Bob assumed his post in October 2005, the studio was on the brink. “[Disney] had made a profit of only $207 million on revenue of $7.6 billion—a margin of less than 3 percent,” says Ben Fritz, author of The Big Picture: The Fight for the Future of Movies. Bob’s solution—an approach that calcified over time—involved narrowing the studio’s focus to recognizably branded movies and nothing else.

  • It took a few years and a few misfires (RIP, Prince of Persia: The Sands of Time) for Disney to hit its stride, but the seeds of Disney’s second renaissance were sown in 2009, when Bob acquired Marvel Entertainment for $4 billion. Three years after that, Disney released its first Marvel movie, Marvel’s The Avengers, which grossed more than $1.5 billion; that same year, Bob finalized a deal with George Lucas to acquire Lucasfilm, home of the Star Wars and Indiana Jones franchises, for $4 billion. Shortly after, Disney began to do not only the unthinkable but the unheard of: Between 2013 and 2016, the studio’s profit margins skyrocketed, hitting 21 percent in 2014, 24 percent in 2015, and 29 percent in 2016 (“…a previously unimaginable high,” per Fritz). So how did he do it? Bob and his studio team, led by Chairman Alan Horn, dramat- ically reduced Disney’s number of releases, honed the studio’s focus, and delivered products calibrated to align with the specific brand identities of Disney’s various assets. In short, he found a way to nearly eliminate risk in one of the most unpredict- able businesses out there.

  • The acquisition of 21st Century Fox was accomplished with carefully articulated goals in mind: Namely, as Bob tells you, an emphasis on bolstering Disney’s ability to compete in the direct-to- consumer marketplace (a.k.a the Streaming Wars). When Bob analyzed the potential deal, there was one primary question at the forefront of his mind: How would Fox’s assets bolster the new strategy he was preparing to deploy with the launch of Disney+, a full-frontal assault on the streaming-services market? As he saw it, the acquisition of Fox was beneficial in three ways:
    • It would enrich Disney’s preexisting library of content by bringing brands like National Geographic and The Simpsons, as well as all content from FX and Fox Searchlight, into the mix.
    • It would increase Disney’s capacity for content creation by bringing 21st Century Fox’s infrastructure and creative teams under one roof.
    • It would grant Disney access to 21st Century Fox’s firm foothold in international markets like Europe, India, and Southeast Asia.
  • All of these pros were evaluated in terms of how they would further Disney’s current game plan. Notice that this isn’t Disney taking a hard left turn and trying to branch out into a totally new market; rather, the acquisition was carefully calibrated to work with the strategy Bob had already set in motion. So how do you best leverage new assets to grow your business? Remember, everything you do should reinforce the central strategy of your brand and company. Bob did this by listing out every single asset of both Disney and Fox and then grouping those assets into similar categories. This allowed him to see how the combined assets would propel Disney toward its future goals. The assets fell into three categories:
    • The actual content produced by both companies.
    • The physical means by which consumers engage with the brands— theme parks, cruise ships, toys, etc.
    • The platform for delivering content.

  • By plugging all new assets into one of these three categories, Bob was able to evaluate whether the deal was worthwhile. Once the deal went through, he was already ahead of the game because he already knew how to use Fox’s assets to further Disney’s goals.

  • It’s incredibly important for anyone in the business to have a foot in the present and have a foot in the future.

  • Prepare yourself for all possible outcomes when taking big risks. Know that it is okay to fail.

  • Restructuring can be good for your company.

  • Remember Blockbuster? Didn’t think so. In 2008, the CEO of Blockbuster—the now-bankrupt video-rental company—said, “Neither RedBox nor Netflix are even on the radar screen in terms of competition.” We all know how that one turned out.

  • No matter what industry you’re in, chances are there’s room for improvement (unless you invented sliced bread or something). And where there’s room for improvement, there’s always the potential for disruption. It’s worth taking a moment here to look into the origin of the word disruption as a businessy word. Harvard professor Clayton M. Christensen coined the term in the mid-’90s. Here’s how the Christensen Institute, a think tank devoted to continuing its namesake’s work, explains disruptive innovation: The theory explains the phenomenon by which an innovation transforms an existing market or sector by introducing simplicity, convenience, accessibility, and affordability where complication and high cost are the status quo. Initially, a disruptive innovation is formed in a niche market that may appear unattractive or inconsequential to industry incumbents, but eventually the new product or idea completely redefines the industry.

  • Be in the present while leading into the future.

  • Disruption is inevitable, so you’d better be prepared to fight fire with fire. As a first line of defense, Bob emphasizes the need to have one foot in the future, meaning you should always be iterating on your brand or company. Your goal is to suss out impending change as far ahead of time as possible. Your job is to be a futurist. Balance your focus between addressing the present needs of the market while also assessing what that market will look like years from nowIn the mid-’90s, ESPN was acquired via the Disney CapCities/ABC merger and became enormously profitable. It remains so—but only because of decisive reaction to disruption. Recently, ESPN was in danger of losing its viewership due to consumers severing ties with their cable companies and devoting their attention (and money) to streaming platforms and social media. Rather than watching ESPN’s business gradually decline, Bob saw the disruption as an opportunity: ESPN+ launched in 2018, and Disney ultimately created Disney+, a proprietary streaming service. (Now, you can buy a bundle that includes ESPN+, Disney+, and Hulu—the last of which Disney gained control of with its acquisition of 21st Century Fox.) This goes beyond the world of sports. Streaming, and Netflix in particular, has radi- cally changed the way people consume media. Instead of ignoring the trend, Bob has expanded Disney’s reach by investing heavily in streaming opportunities.

  • Once you’re established in your business, you’ll always be threatened by the disruption of the status quo. Seek out opportunities—even in success—to wield the power of disruption yourself. Be the disruptor instead of the disrupted.

  • 9 criteria that, to him, define healthy leadership:
    • THE ROLE OF HUMOR: “I like people that have the ability to tell a good joke or, you know, laugh every once in a while at a situation or even at themselves.” Easier said than done, we know. But the idea that humor is essential to bold leadership isn’t just a Bob thing. Dwight Eisenhower, who led the Allied forces in Western Europe during World War II, said, “A sense of humor is part of the art of leadership, of getting along with people, of getting things done.” If humor is essential to mobilizing the world to defeat the Nazis, you’d better believe it has its place in your workplace.
    • FOSTER CURIOSITY: “Being curious is vital to being successful.” Bob defines curiosity as having a desire to learn new things, have new experiences, visit new places, and meet new people. It’s a concept that taps back into his advice from Chapter 8: Anticipating What Consumers Want about the value of experiential research. Curiosity and exploration inspire innovation. Curiosity is not something that just happens. It’s a skill you have to cultivate. Dedicate some time to exploring: Go to a museum, go on a hike, take a class, get sucked into a Wikipedia vortex. Allow yourself to experience wonder.
    • BE AUTHENTIC: “When I talk about authenticity in leadership, what I mean is being honest, being straightforward, being genuine, being real—never faking anything, never saying anything… that isn’t rooted in the truth.” Authenticity involves the synthesis of the above two tenets: candor and optimism. You have to balance both. This extends to knowing your own limits: If you lack experience in a particular realm, own up to it (candor) and hire someone with more expertise who will ultimately guide you and your company or brand toward success (optimism).
    • OPERATE WITH INTEGRITY: “It’s vital that anyone in business operates with a high degree of integrity.” If you’re anything like Bob, you want to be the kind of leader who is defined by his or her high standards and unimpeachable character. This means you don’t cut corners, you don’t burn bridges or backstab, and you find creative, ethical ways to deal with challenging situations.
    • THE PURSUIT OF PERFECTION: “The relentless pursuit of perfection often means never accepting mediocrity.” As a leader, the success of your employees and ultimately your company is dependent on your commitment to yourself, your team, and your brand: At the end of the day, you get out what you put in.
    • BE FAIR AND OWN YOUR MISTAKES: “Give people an opportunity to state their case…to give you a sense of who they are.” Be present to the people who work for you, and show them that you have a vested interest in them: Find out who they are, and bring an attitude of empathy with you when you engage in criticism. When someone who works for you makes a mistake, learn to see when it can be turned into an opportunity for growth. Provide second chances when appropriate. In Star Wars: The Last Jedi, Force ghost Yoda says, “The greatest teacher, failure is.” Keep that in mind. When you fail, use that moment as an opportunity to establish a culture of resilience and optimism. This means taking responsibility for your actions. As tough as it is, making mistakes and subsequently owning up to them can in turn make you a stronger and more respected leader.
    • BE DECISIVE: “Second-guessing decisions is not something that I like doing.” First, a disclaimer: As a bold leader, you must make every decision carefully and non-impulsively: The Importance of Risk-Taking). However, you want to avoid dragging your team into the weeds of indecision. Do work behind the scenes to become the kind of person who can make decisions efficiently and definitively, and once you make a decision, stick to it. Even if the decision you’ve made is turning out to be the wrong one, don’t agonize over what could have been. Accept the consequences, embrace failure as an opportunity for growth, and move on.
    • PRACTICE CANDOR: “Creating a safe environment for honesty and candor and ease of communication is extremely valuable.” You should be clear in your expectations and evaluations of others, Bob says, but then you should also expect them to be candid with you. This includes a tolerance for hearing criticism, which can be tough. But it’s also essential. As a leader, you need to encourage your employees to be honest with you and accept responsibility for your failures.
    • PROJECT OPTIMISM: “A leader can be a realist, but it’s incredibly important to infuse some level of optimism into just about everything.” If your company is in hot water, own up to it. Then, when projecting your expectations for the future, learn to frame the tough situation as a learning experience and chart a course forward that guarantees growth. This kind of strategizing has to be genuine. Your employees will know if you’re doing this for the sake of trying to maintain positivity—so you have to have a realistic strategy for bouncing back. Your optimism must be rooted in the achievable.

  • To thine own self be true.

  • Bold business leadership, as Bob describes it, requires integrity, humility, and self- assurance in the face of both triumph and failure. As you chart a course for boundless success in your business, keep in mind the principles Bob lists out: the importance of fostering character traits like curiosity, candor, and optimism; the ability to set your ego aside when coming to the negotiating table; a readiness to evolve and foresee the future needs of consumers. Internalize everything you’ve learned in this class, and you’ll find yourself primed to lead in your industry.