Tag Archives: Negotiations

Bob Iger: Random Takeaways from the Executive Chairman of the Walt Disney Company

Notes based on Iger’s Masterclass and skimming his memoir:-)

Bob Iger Routine

  • Remember to try to find alone time; make a mental checklist, ie these are are things that I must do today. Write down the big items on your mental checklist.
  • Start your day with a workout: you do not want to be distracted; you don’t want too many external forces, because this is the clearest point in your day;
  • Arrive at the office 6:30am: early bird catches the worm, show up early which should give you more solitude.
  • 8:00am to 4:00pm meetings all day, people, people, people. Business and politics is about people. Be home for dinner and take that time to disconnect from work.
  • 8:00pm to 10:00pm and read a book that isn’t relevant to your work.
  • Be sure to infuse creativity in your day;

Focus is critical for leadership:

In 2004, the Board Members of Disney needed a new CEO. Iger was the only internal candidate. Find out what the company’s priorities should be an communicate with clarity on maximum 3 cores. There was a 9 month succession plan. How are you going to run the company needs to be communicated but also how will your vision translate financially (projections, vision and operations).

Bob Iger’s CEO bid was a kind of political campaign to try to convince voters / board members to elect him. He needed to articulate a few strategies: the more you have the less focus, and more spread out over time and capital;
1) Invest in creativity;
2) Embrace technology: use technology to reach new audiences;
3) Grow Globally.

Clarity is an essential leadership attribute: you must be very clear in your internal communications. There is a need to present, apply a face to face strategy. Why these are the strategies and then explain why this should happen and what the outcomes should be.

Disney Chairman and CEO Bob Iger revealed a scale model of Shanghai Disneyland and displays showcasing key highlights of unique attractions, entertainment, dining and hotels at a presentation held at the Shanghai Expo Centre. (PRNewsFoto/The Walt Disney Company)

Reinforcing Strategies:

Face to face interaction can be extremely effective. Every Monday morning, Iger has his 10 reports in a morning meeting. You could get called on to present where you are at. You had to be ready. Adjust to what is on his team’s mind; what they are seeing, what their needs are; it’s got to be a great give and take session to work.

Some folks probably didn’t want to be candid, accessibility and candor is critical; you need to be able to adjust to the marketplace. Evolve and adapt to the times.

Disney’s Acquisition Case Study – Pixar:

The Disney acquisition of Pixar was a major strategic win even if the price tag was high. Iger didn’t know for sure that they would end up acquiring Pixar. Disney Animation studios was not thriving with Tarzan etc. Iger needed to turn it around; all roads lead to people/creative talent. Steve Jobs was someone who believed in stopping everything to fix the story if it wasn’t working (ie. Jobs put story ahead of everything); there was a disruption over the prior Disney contract. Steve Jobs very publicly decided he was firing Disney given the distribution rights issue etc. So Iger had to repair it by first aligning with Jobs’ goals saying iTunes should be available on TV: iTune TV. Steve Jobs liked that alignment and pulled out a video iPod; so maybe there is a good idea: ABC TV. This facilitated an extension with the relationship with Apple.

Bob Iger told the Board of Directors during the process of selecting the next CEO that Disney Animation was in much worse shape then they believed or understood from Michael Eisner’s reign. Tarzan and Lilo & Stich were not great box office successes. So he set a bleak picture of the Michael Eisner era which did not sit well with an Eisner influenced board. Pixar couldn’t offer, you never know if a film would work; the stock equity was very high; if Iger could turn Animation around, then it would be worth the acquisition of Pixar. With the structure of the acquisition, Steve Jobs could also exert a lot of influence, and he could try to run the Disney;

Getting Steve Jobs on Board:

A great primer on Steve Jobs is here. Iger called Jobs in 2005 in his car sweating and explained the ‘crazy idea that Disney should buy Pixar’. There was a need to fix Disney animation and Pixar would bring the talent, technology and drive forward the legacy of Disney. Jobs and Iger met up in an Apple board room and started looking at 3 Pros and 20 cons to acquiring Pixar; the cons outweighed the pros in Iger’s mind while the pros outweighed the cons in Jobs’ mind. Iger credits Jobs with the ability to cut through at the essence of something. Also noteworthy is that Jobs was running on fumes with Apple and Pixar being part of his daily work cycle.

So of the cons of Disney taking over Pixar: Disney would destroy the culture, too process oriented, too conservative in story telling. Like a movie about rats working in a French restaurant…that was pure Pixar.Jobs had to talk to John Lasseter: the relationship at Disney had been somewhat damaged and Lasseter needed to be open minded about it. It turns out that Pixar/Jobs/Lasseter were keen. So keen in fact that the Pixar guys pitched a bunch of movie ideas: Cars, Wall-e, Up! and they pitched some great story ideas in the manner that Walt Disney and others always did. Telling the story from start to finish. Iger was excited.

Merging Cultures:

With Pixar, often the artists would challenge the technology people to enable their talents; they would see the technology guys as enablers.
often it’s the culture that is the reason that the company was successful to begin with. When you merge you want to merge quickly and assimilate, that allows for the continuous driving and creation of shareholder value, Iger was lucky that he had first view of what acquisition does to a company. So Bob Iger was aware of the process of merging, if Disney tried to kill the culture at Pixar it would be a failure. Bob Iger was able to tell how that first hand knowledge of the value of culture and thus that helped enable the Pixar culture to continue;
What’s the Pay Off? Just Go For It: Pixar deal was 14 years ago, it was a $7B acquisition and it is certainly worth it…..pre-Covid. We’ll let the Equity Researchers predict its future worth…the net present value of all future cashflows. Learn to love finance, by the way!

Negotiation Style of Bob Iger:

Iger believes that no two people have the same negotiating styles. But he biases towards getting deals done quickly. Approach the deal in a candid manner. Bob Iger likes to get the particulars out. He may even give away more than you want then you want them to know. There negotiations have to be two way. Iger is big on forging a personal relationship with the negotiation; George Lucas, Steve Jobs, Stan Lee and Rupert Murdoch. Don’t let ego get in the way of the negotiations.

Brand Is Important To Understand:

Brand has a price / value proposition. If you trust a brand to deliver, you will spend your time and money on it. Time is a finite commodity and so people make choices of how to spend their time based on pattern recognition, past experience (ie the same sub routine that informs decision-making elsewhere: racism, food preferences etc). Brand conveys what a product is what it is, trusting they will get value from that transaction. Brand reveals an emotional connection with the audience: Nike, Apple, Disney. You know what it stands for. Evergreen story telling,
Challenge of creating Disney’s brand to stay relevant, edginess would have ruined the Disney brand. If you revere a brand, then you might as well put it in museum casing, but if you respect it, it can grow and develop further.

Modernizing the Disney Princess:

What are the core attributes of a Disney princess?, he asks in his Masterclass. Snow White was the classic princess. Now it was time to show young women who are empowered. Walt Disney new the power of merchandise before George Lucas or anyone else. Maximizing your brand over businesses: coonskin caps for Davey Crocket, king of the wild frontier. Brands are relationship between a product and a consumer…
Managing the Brand, what is the essence of the brand, every time it is used on a product, what is very important; dynamism to be dynamic, abandonment of the brand in the name of profitability, it needs to be respected.

Marvel Acquisition:

Is it going to enhance the association, for purchasing Marvel, the brand attributes, violent Disney doesn’t like. We looked at the brand damage, the story telling is not necessarily damaging, Marvel is Marvel and Disney and Disney. Fan is short of Fanatic; Management of the brand is through creating brand value.

Anticipating the Audience Demand:

Disney has been universal in its appeal, the audience is far more broad, there needs to be relevance to those stories. Diversity of Captain Marvel (women) and Black Panther (black superhero) wouldn’t travel far was the theory internally at Disney. The film might not be embraced; the idea was to not spend that much money on Black Panther. But it turns out, it was a huge box office success and was nominated for best picture…a comic book movie!

The Limitation of Data:

Giving the consumers before the know that they want something, Bob Iger believes in gut research: Data collected about marketplace is mostly waste of time, looking at numbers on a spreadsheet is not that powerful. The better way to get to understand people is to go talk to them. Get a sense of their tacit engagement. “If you don’t go, you can’t grow!” Doing business in India, never going to learn about it unless you go live there for a few months. So get some real-time research: go meet your consumers. Data is also challenged by the problem of tacit knowledge and hard to measure inputs….

You need to take risks, do not adopt the status quo; so if you are going stray it is risky, but it is necessary. Don’t be risk averse. You should try to fail by daring greatly. Bo Iger’s best example of that is when he was at ABC daytime. He and a producer pushed a singing Police drama called Cop Rock. It was a failure. Creativity means to dare to do great things.

Don’t worry about failure: R Rates NYPD Blue: it was not R rated because of the commercial sponsors. You have to get back up and try again. There aren’t many rules in creative businesses, you need to be resilient to succeed. You need to take risks but you need to have a well thought out process. You need to have a knowledge of what the risk is if it does not pan out, so you aren’t surprised.

Disney 21st Century Fox Acquisition:

The challenges and compared the notes from the business, Rupert Murdoch was actually looking to sell 21st Century Fox. Strategic First Steps: the new strategy for the direct to consume business, our new interests was going to make sense for the company, we needed more content creation capability. The Simpsons, we were interested in international assets. Interested in the Europe and East Asia business; There was a bidding war strategy, but Comcast was interested in the valuation.

High Stakes:

It took a long time, it was about content: Strategically Dealing with the new assets…the platform unit Disney+ Then the restructure, and then they plugged them into the new structure. so in preparation for assimilating on group, you may have to resturcture your own company in preparation.

Managing Disruption -> Disney +:

You need to be look ahead and where the business might be going, years into the future. You need to also embrace change and admit it is coming. How media entertainment is changing over time is always in flux. ESPN was starting to change: because people had other means of getting sports. So they acquired the technology to bring ESPN into the future. They delivered BamTech, to harmonize audiences and sports. And so they took that platform to deliver Disney+. There are content engines that are building content. They had Star Wars Mandalorian which is their flagship show. The use of consumer data will have more personalized, will be based on prior use (skeptical).

Bob Iger’s what makes you successful metrics:

  • These tenets may not apply to every person:
  • Foster curiosity: you need to be curious, learn with new places, new people, you need to be curious about reality;
  • Be authentic: don’t fake things, admit that you lack knowledge and experience, be honest and candide about what you are doing, don’t try to fake emotional, people read through that;
  • Operate with Integrity: you need to have high standards, adhere to those high standards, get brains, energy and integrity;
  • The Pursuit of Perfectionism: try to create something great but never accepting mediocrity, you have to work hard that way;
  • Be Fair and Own Mistakes: be accessible, be present, express opinions and put yourself in their shoes.
  • Be Decisive: indecisiveness is harmful for an organization. You need to make timely decisions. Do not second guess, you need to have courage. Decision-making has to be quicker in order to get decisions through. The market place was reacting quickly to Rosanne Barr so Iger fired her quickly.
  • Practice Candour: make it clear what your expectations of them are, communicating good news is relatively easy, bad news needs to get to the leadership quickly, make sure it is a safe environment.
  • Project Optimism: people don’t want to follow a pessimist;
  • Have a sense of humour: don’t be always serious, be able to laugh at themselves, don’t take yourself too seriously. Be able to tell a good joke.
  • The further out you go into the future the less clarity; so you need to think about the future but set the parameters. We only look at 5 or 10 year horizons since any further is not within the scope of realistic prediction……

Negotiation Tactics to consider

(Based on MBA notes)

The goals of every negotiation are the following:

  • To ensure that the size of the pie i.e. the size of the deal is the maximum possible amount attainable
  • To ensure that the nature of the relationship of the two parties are not negatively affected, thereby ensuring a sustainable future relationship that is profitable for both parties
  • To ensure that you get as big a piece of the pie a possible, while at the same time reaching a pareto efficient frontier in the combined deal that is reached between the two parties

In order to achieve Pareto efficiency, it is essential that both parties share their relative preferences of the issues discussed. This way, both parties will have a clear understanding of each other’s’ interests, thereby helping the parties come to an efficient solution.

One of the ways in which the parties can achieve pareto efficiency is by working towards an integrative solution. This can be achieved by both parties negotiating in a manner that they try to achieve their highest priority issues, while conceding on the lower priority issues. This can only be achieved when both parties are willing to make concessions.

Making concessions is a useful negotiation tactic because of the following reasons:

  • It signals to the other party that you are willing to work towards attaining a mutually beneficial solution
  • It may motivate the other party to make concessions on their low priority issues as well, which can help you get a higher payoff / benefit
  • Making strategic concessions is one of the ways, in addition to MESO, post-settlement settlements and contingency contracts, by which the two parties can achieve pareto efficiency

Concessions should be made in a strategic manner, in the following ways:

  • The parties must ensure that they always make bilateral concessions i.e. always make concessions while demanding / getting something in return from your opponent. This ensures that you are not perceived as weak.
  • Only make concessions on issues that you know are not very important to you. Concessions cannot be made on issues that could possibly hurt you, or reduce your payoffs
  • Making smaller concessions is better than making one big concession. Using this method, you can ensure that you are moving in a calculated and strategic manner, as well as not exposing yourself to too much risk.

Best Alternative To Negotiated Agreement Explained

BATNA is defined as your Best Alternative to Negotiated Agreement. It is an alternative that you are guaranteed to receive in the case that negotiations fail.

BATNA can be viewed as a safety net, or a backup plan which can help in your approach towards negotiations. When a party knows what their BATNA is, it helps them think through various strategies to ensure that the outcome of negotiations is better than their BATNA.

Many a times, BATNA can be a source of power, and parties can use their strong BATNA’s to their advantage in negotiations.

BATNA’s can be used to calculate a party’s reservation price using the following formula:

Reservation Price = BATNA + Switching Cost

The reservation price can then be used to calculate a party’s value claimed by using the formula:

Value Claimed = Settlement Point – Reservation Price

Every party must ensure that they do everything to improve their BATNA before negotiations. BATNA’s can be strengthened by the following ways:

  • By identifying all the variables that go into calculating the value of the BATNA
  • Doing extensive research on what the possible BATNA’s could be
  • Having a strong understanding of the valuation of the BATNA before beginning the negotiations

Once a party has an exact understanding of their BATNA, it is imperative that they do not lie to the other party during the course of the negotiations about their BATNA’s. This could make them legally liable for wrongdoing, and could negatively impact their reputation.


A mediator is a person who is seen as a neutral party in any negotiation or dispute, and whose purpose is to ensure that the parties come to an agreement. As opposed to an arbitrator, a mediator does not pass judgement and decide who is right or wrong as per the legalities of the situation.

A mediator can be used during the following situations:

  • When there is a lot of anger between the parties
  • When parties are unable to communicate
  • When there’s a high level of mistrust or chance of misinterpretation
  • When parties need help identifying integrative potential

Mediators are effective third parties when:

  • They are successful in helping parties reach settlements
  • The settlement meets the needs of both parties
  • The settlement helps continue relationships between the two parties
  • The services of mediators are not needed in the long term

Compared to an arbitrator, a mediator has the following advantages:

  • Parties have a higher satisfaction of the outcome
  • The settlement that the parties agree on is reflective of a more integrative solution
  • There are fewer problems with the implementation of the settlement
  • There are fewer problems of recurrence of the problems

The sole purpose of a mediator is to ensure that the parties reach an agreement. A mediator is involved in multiple rounds of negotiations with the parties involved. In each round of negotiations, the mediator identifies the interests of the parties, as well as any concerns and issues they might have. The mediator then utilizes this information to approach the opposing party and identify if the interests of the two parties are identical in any way. The mediator formulates solutions for interests that are identical, thereby resolving a few issues, and then works on the unresolved issues. During these multiple rounds of negotiations between the opposing parties, the mediator tries to reduce the number of unresolved issues and formulate the clauses of a possible agreement.

It is important to note that the mediator is also tasked with resolving the concerns of the both parties as well, through an integrative approach. The result of these multiple rounds of negotiations is to reduce the talking points to a bare minimum, thereby coming up with a final proposal which is voluntarily agreed upon by all parties.

A mediator curbs the parties’ overconfidence and gives them a reality check of the situation. By focusing on the interests, and not on the rights and powers, a mediator comes up with the most beneficial solution for both parties. This solution can entail a longer and sustainable working relationship of both the parties.

Since acceptance of the outcome is voluntary, there tends to be greater satisfaction of the solution.


WISE stands for

W – Willing

I – Interest

S – Save Face

E – Exact

The four considerations in making a WISE threat are given below:

W – Willing

The parties must be willing to carry out the threat. The threat should not be made without the intention of actually walking away from the negotiating table and following up with the threat. It is important to be willing to carry out the threat because of the following reasons:

  • The credibility of the party is at stake, and the threat must be substantiated with appropriate action
  • In the situation that the threat is not carried out, the party making the threat is seen as weak. This affects the attitude of the opposing party at the negotiation table and can ultimately affect the outcome of negotiations

I – Interest

Threats must only be made after careful consideration of the party’s interests, and not positions. This leads to the conclusion that the interests of both parties must be discussed during negotiations. In the situation that a threat is made based on the position of a party, it will most likely not be a credible threat, and would result in the company not willing to carry it out.

However, if the interests of the party are affected during negotiations, and if a party feels that its interests are not going to be met, then a party may make a WISE threat.

S – Save Face

It is essential for the party making the threat to give the opposing party to save face. This means that the party making the threat should mention to the other party that there are certain actions that could be taken in order to the party not to carry out the threat.

Thus, it is important for any party to not push the opposing party in a corner, since during these situations, the opposing party might take actions that can be mutually destructive

E – Exact

A threat must be precise in its clauses. i.e. A party must make a threat only if certain interests are not being served. Those interests must be detailed in the threat. In the absence of being exact in the threat, the opposing party might get a sense that the threat being made has no basis, and they might be pushed to taking actions that are mutually destructive.


The key strategic errors made by P-9 during their negotiations with Hormel are as follows:


P- 9: The labor union wanted the following issues to be met by Hormel

  • Higher wages
  • Higher benefits
  • Worker autonomy – i.e. freedom to work as per their own directives as opposed to management control
  • Continued employment

Hormel: The company had the following interests:

  • Continued business operations
  • Profitability
  • Lower costs
  • Lower wages
  • Removal of labor unions



  • The labor union had to right to continue working in the factory until the end of the contract
  • They had the right to negotiate a new contract
  • The unions also had the right to strike work in case the negotiations did not occur favorably


  • The company had the right to terminate employment of the employees by giving them a 52-week notice
  • The company could terminate the contract
  • They could hire non-unionized employees at a much lower cost


P- 9:

  • The unions had the power to go on strikes
  • They could start picket lines
  • They could generate negative media coverage, thereby hurting the brand of the company
  • Disrupt production


  • The company could transfer production to other plants
  • They could hire non-unionized employees

Based on this framework, it seems that Hormel had more power in this case. Since the company could transfer production as well as hire lower wage workers. P-9 did not consider all these factors when they decided to go on strike. They used arm wrestling tactics, which brought in ego and spite. By failing to calculate their BATNA, which was loss of employment, as opposed to Hormel’s BATNA, which was lower wage workers and moving production to different plants, P-9 made numerous errors in their decisions.

Due to the fact that P-9 did not calculate their BATNA effectively, it resulted in incorrect decision to go on strike, which ultimately resulted in the losing their jobs. Only a small percentage of employees got their jobs back.

P-9 moved from interests to rights, which resulted in Hormel moving to power. Since the company had much more power, it followed up on their word, and they ultimately won. In hindsight, P-9 should have focused more on their interests and sought a mediator to work with the company to resolve issues amicably.

Also, P-9 used a representative with a different interest as compared to their own. This non-alignment resulted in inefficient negotiations.


Cultural relativism suggests that when in Rome, do as the Romans do. Thus, the company is more willing to concede on issues that might not be acceptable in their own countries.

Ethical Imperialism suggests that when in Rome, do as you would do at home. In this case, the company is not willing to budge on ethical and legal matters, which could result in the company losing out on many business opportunities.

However, in legal and ethical pluralism, the company would be willing to accept only those issues that are not illegal in their own countries.

For example, many countries have laws that make it illegal to bribe foreign government officials, hire child workers, or partake in environmentally destructive activities.

In such cases, the company do not involve themselves in these businesses, but are willing to overlook other less important ethical issues.