In Good Company with Nicolai Tangen - Bob Chapek CEO of Disney

Episode Date: November 2, 2022

In this episode, Nicolai Tangen talks to Bob Chapek CEO of Disney, the world’s largest media and entertainment company. They talk about the power of storytelling, the competitive streaming space and the importance of grit and perseverance!The production team on this episode were PLAN-B’s Martin Oftedal and Olav Haraldsen Roen. Background research were done by Sigurd Brekke with additional input from our portfolio manager Soumi Mitra.The conversation was recorded 10th October.Links:Watch the episode on YouTube: Norges Bank Investment Management - YouTubeWant to learn more about the fund? The fund | Norges Bank Investment Management (nbim.no)Follow Nicolai Tangen on LinkedIn: Nicolai Tangen | LinkedInFollow NBIM on LinkedIn: Norges Bank Investment Management: Administrator for bedriftsside | LinkedInFollow NBIM on Instagram: Explore Norges Bank Investment Management on Instagram Hosted on Acast. See acast.com/privacy for more information.

Hi, everyone, and welcome to our podcast, In Good Company. I'm Nikolaj Tangen, the CEO of the Norwegian Wealth Fund, and your host today. In this podcast, I talk to the leaders of some of the largest companies we are invested in, so that you can learn what we own and meet these impressive leaders. Today, I'm speaking to Bob Czapek, CEO of the world's largest and perhaps most loved media and entertainment company, Disney. and perhaps most loved media and entertainment company, Disney. We own almost 1% of the company, translating into 20 billion kroner or 2.2 billion US dollars.

This was a real adventure, so stay tuned. So, Bob, big thanks for coming on today. Disney is an incredible storytelling company, and you make magic kingdoms and utopian environments. In this modern world, do we need these kind of dreams? I think these dreams are what binds the world together under common values and common aspirations. The Walt Disney Company for decades has been something that brings people together.

And in our increasingly divided world, it acts as a source of hope and optimism, I think, for the entire world. And as such, we have an enormous obligation to continue to make sure that the company delivers on that for our millions of guests around the world. Why is storytelling so powerful? Storytelling is powerful because I think it represents, as I think you used the word, more of a utopian viewpoint of the world. the word, more of a utopian viewpoint of the world. And I think through our storytelling, we get to share our brand of optimism. And optimism is a great thing, you know, sort of

for everybody across the world. And I think that storytelling enables people to dream and aspire and to have a version of the world that may be ideal, but it gives us all something to shoot for. What's the key to a good story? The key to a good story is really having a hero and a force that delivers a challenge for that hero to overcome. I think if you look at all of our Disney stories, no matter what brand they come out under, whether it's Disney, it's Pixar, or it's going to be Lucas or Marvel or whatever, you'll see that it's really the hero's journey. And in many cases, and increasingly, that hero has got some challenges himself. I remember having conversations with Stan Lee about what made you know Marvel stories so powerful and it was always

the underdog story and I think it really binds people together because everybody in essence is an underdog trying to be a hero. That's very right. What's the best story you've heard? Boy, I tell you, we've got so many great films throughout the years. You know, I'm partial to, you know, originally Little Mermaid, which is one of my favorite movies. The original Pirates movie is fantastic. And Toy Story 3, one of my favorites, so emotional. And I think there's a sense of

emotion that we try to tap into, and it's present in all those movies. And then we've got another movie coming up in the future to celebrate our 100th anniversary here at Walt Disney, because next year we turn 100 years old, and it's called Wish. And while that film is still in development, I must say that it promises to be one of my favorites. Well, we look forward to it. Now, you are on the board of something called Make-A-Wish, which is sick kids who make a wish of somebody they want to meet and so on. And I believe that 50% of the wishes involves a Disney character.

That's astonishing, an astonishing number. It is astonishing. And I must say, you know, being with Disney now almost 30 years, I have certainly an appreciation for what our jobs mean to people and, you know, the stories that we tell and the products that we make. But I think the real inflection point for me truly understanding the power of this brand was when I joined the Make-A-Wish board. And now here are, you know, children and their families that can wish for anything they want in the world. And about half of them, a little over half, choose a Disney wish. And I think that says something. You know, yes, we're a commercial organization. Yes, we make products.

Yes, we make movies. Yes, we operate theme parks. But in the end, we sell magic and dreams. And I think those magic and dreams mean far more to people than most would ever realize. Changing tack a bit here and moving all the way back to the very start of your life, it seems like sport has been an important part of your upbringing. So how has sport impacted you as a person? Well, I think it's taught me a lot about challenges and establishing personal goals and a certain sense of resiliency. You know, the nature of competition,

whatever kind of competition there is, I believe is good because it forces people to be the best version of themselves that they can be. And while I was never a superstar athlete, I always set goals for myself. And I think the field of sport gave me the ability to be the best version I could be on whatever field of play I was in at that time. And I think business is very similar. You set personal goals, you have objectives. And I think pushing yourself is a good thing. And, you know, it always feels a lot better to win than to lose.

And so that's a personal motivator for me, both in my personal life and my business life. So when during your career has this willpower been the most important, do you think? Yeah, willpower to me is, I think, the strongest power in the world. It's affected my personal life. I've seen people in my family overcome tremendous challenges. I've seen friends overcome tremendous challenges, almost insurmountable odds. And I think, once again, that works in your personal life

and it works in my business life. Some of the biggest business accomplishments I can remember were done almost against insurmountable odds. And I think that power that we all have, that reserve, that battery reserve that enables us to go farther, faster, and deeper than we ever imagined is deep within each one of us. And it's about how we tap into that and use that in order to achieve whatever it is that we want to achieve. Now, just days after you became the CEO, because of the pandemic, you had to shut down cinemas, theme parks, cruise lines, film and TV production,

and with revenue down very, very sharply. What was your mindset like then? Well, the first week, my mindset when I got named CEO was really, it was a green field. It was pure optimism about the future and where we can go. And then there was a very harsh dose of reality when the first major business decision I had to make in this role was to essentially close down the great majority of the company. It had never obviously faced anything like the global pandemic and its impact on all of our businesses. But we then turned our sights after a very brief period to how do we make

transformative change for the Walt Disney Company given this, do I dare say, opportunity where the businesses are closed? And how do we position ourselves for even greater success moving forward, knowing that it was going to be a long period of time to dig out from the challenges? knowing that it was going to be a long period of time to dig out from the challenges. And I think we put some of those programs into place so that we now have wind in our sails, if you will, for the future. But you wake up one morning like that and everything is closed. You have basically no revenue and you just don't know what's going to happen in the future. How do you get through the day? What do you think about? What is driving you through that day? Well, you take each day at

a time, but you have a long-term goal. So I'm a big believer that you deal with today's challenges, but you have to have your eye on the North Star. And for us, our North Star is all about storytelling excellence, but it's also about innovation. It's about employing the latest technologies to create and deliver our content and experiences. Walt Disney had a long history of doing this, all the way back to the multi-plane camera. But it's all in service of our audience in the end. It really is. You know, there's so many constituents that we have. But once again, just like if you tell good stories, everything should be fine.

Well, I'll also say that if you keep the consumer in mind and engage them in more and more personalized ways, that everything else ultimately will take care of itself. So while you do have to deal with the challenges of the immediate day, i do think you have to have a vision and a north star that you go chase and those are north stars a lot of young people are really impatient when it comes to staying in their jobs now you have been in disney for 30 years that's for sure pretty patient what are the advantages and disadvantages of staying so long in a company yes no no excellent question uh i do believe patience is a virtue. And I believe patience is a virtue in a career. Now, that's not to say that if some young executive, some young business person, some young employee is in a job that they feel is not

meeting their long-term goal, that, you know, they shouldn't consider sort of a restart button, if you will. But I believe that I'm here because of perseverance, because of taking a long-term attitude. Just a few minutes ago, we talked about some of the qualities about, you know, how I approach, you know, the business in times of challenge. And I think a career is the same thing. Everybody has something they want to do in life. And I believe that we can all achieve the goals that we want. But if you move around in your career so much that you lose your North Star because you're chasing, you know, say a short-term increase in pay, then you likely won't achieve your ultimate goal. And for me, being in a company as great as Disney

didn't have much of a reason to move on. Changing takes a bit, and spending a bit of time on streaming, how do you view the competitive landscape now in streaming? Well, I think the competitive landscape in streaming is competitive. That's for certain. Yet at the same time, in the midst of all this competition, I think that we have a very unique set of assets. First of all, we've got a brand that's the envy of everybody in any industry. We've got tremendous franchises, which we can take advantage of by telling spectacular stories. You know, creativity is an endeavor that doesn't guarantee successises, you dramatically increase your chances of having a success.

And I think ultimately it's about, again, serving the consumers and giving them the flexibility to subscribe to a streaming option that suits their needs, depending on what they want out of it, where their interest levels lie, and what their budget is. And I think we have the ability as a Walt Disney Company uniquely to deliver on all those aspects. When you look at the content that you have coming out, how far out can you see? Well, you know, we plan our content at least five years out. And in some cases for longer development content, like animated movies or big franchises we look even further out than that so you know we have a pretty good view again knowing that not every single piece of creative endeavor you go into will necessarily be a big success but uh i think you know we have a pretty good view to what the next five plus years look like.

Moving on a bit to the Disney culture, how would you define the Disney culture? Well, I think it's one of optimism. It's one of collaboration. It's one of focus on Disney as our own source of energy. People that are successful at the Walt Disney Company realize that we all point towards what I call the capital D, the capital D in Disney. We may work at ESPN. We may work in cruise ships. We may work in hotels. We may work in one of our fabulous restaurants. We may work in the movie business. But everyone realizes that their work is in service of the greater Disney brand.

And when you combine that with that sense of optimism, you combine that with a sense of purpose, a sense of integrity, then you end up with everybody rowing in the same direction to try to make the overall enterprise as good as it possibly can be. Yeah. Now, how do you install this creative excellence in a company? Well, I think the key to creative excellence is having spectacular storytellers. And then to give those storytellers the creative freedom to tell the kind of stories they want. Let's take a look at one particular example. And the title that I'll use as an example is WandaVision. I don't think WandaVision, without giving our Marvel team full degrees of freedom to take chances and tell stories that they believe would be successful, but clearly are outside the norm would work. I mean, basing, you know, the story in a 1960s sitcom in black and white is certainly a bold move. And I think

it's enabled both by innovation in our distribution system with the streaming business, but also by trusting the creative judgment of the people who, you know who lead the way in our storytelling and giving them those degrees of freedom. I think it really is a recipe for innovation and continuing to push our own boundaries about how far the Walt Disney Company can go. Where do you find these creative people? Well, I think they find us. We always have our eye out in the industry for great storytellers, but they find themselves. They seek out a company like Disney because it's got the greatest assets in terms of franchises to tell stories in. a culture where we, again, give them lots of ability and resources to tell formidable, ambitious stories that advance the art of storytelling like they can get nowhere else. When you personally hire people, what do you look for?

When I hire people, I look for a sense of optimism. I look for what I call the best available athlete. I look for somebody that, while they may be a subject matter expert, also has the ability to think beyond their function or their line of business. So when you have people that are optimistic and at the same time, they look at the business from a very macro standpoint, I think that really is the type of person that we want here at the Walt Disney Company. Sure, you have to have integrity. Sure, you have to be good at the function of your job. But at the same time, people really excel here that are optimistic and do want to collaborate and do want to be part of a world-class team.

How do you build the teams? Well, you build teams first by having a common objective and then getting everyone to buy into achieving that objective. And then you rely on their own individual skill sets and their own abilities in terms of trying to get there. Now, in this world, how do you strike the right balance between the Disney values and the values of your staff? I mean, the world is increasingly politicized, polarized. Yes, I find that, you know, I have to, in my role, represent the Disney brand. represent the Disney brand. And that's my number one goal. And what I do has to be an assimilation of all of our constituents needs, meaning our cast members, 200,000 strong roughly, who even themselves have a diversity of opinions. And then I have to assimilate that with the needs

of our shareholders who actually own our company. And it's their money that they're entrusting us with. But even, you know, as you know, investors have a diversity of opinions on, you know, where investment should go or the type of approach that we as a company should take. And then you have the consumers, again, who are North Star, who themselves, by definition, have a broad array of interest. Certainly, there's diversity of points of view, but we try to really go back to our values and what we want to be as a company. And that then takes the number of opinions and the diversity of those opinions and the

number of constituents and tends to simplify things at least a bit. Bob, I'd love to ask you some questions on leadership. You say yourself that you like to over-prepare. What does that mean? Well, I certainly look at almost every project I get involved in, whether it's an earnings call or an annual meeting or a board meeting or some type of public forum that I'm speaking at and think of, you know, what's the overall message? What's the overall message I want to convey? But very quickly then, once I have that laid out in my mind, I then, you know, really turn to the idea that if I'm going to be fully prepared to speak on an issue or answer live fire questions,

that I better be prepared. And when you have a business as diverse as Disney, where we're in so many industries, you know, we're not a single industry business like a lot of companies. We have a broad diversity of businesses. I mean, when I do an earnings call, I've got to be up to speed on the world of sports. I've got to be up to speed on the world of sports. I've got to be up to speed on the world of travel. I've got to be up to speed on the world of entertainment. I've got to be up to speed on the world of hospitality. I've got to be up to speed on the cruise business. And in order for me to be able to address questions that people have, I need to be able to dig deep into each of those areas and not only be fluent, but to assimilate our own strategy and our own approach in each of

those businesses that, you know, in this ever-changing world tend to evolve very, very rapidly. And so, there is no substitute for preparing and over-preparing so that I reflect well both on the company and on myself. You say that you need to prove yourself every day. Now, what part of yourself are you trying to improve now? I think I'm trying to make sure that as the world gets increasingly complex that I steer this company towards its North Star of providing magic to our consumers through our storytelling and through our experiences. It sounds very simple, very basic, but as we have discussed, given the diversity of the world and the challenges that some of the social pressures are put on the company, I want to make sure that we are looking long term beyond sort of the issue of the day and really persevering towards this goal of creating magic in the lives of everyone, regardless of what country they're in or what business they tend to want to consume from the Walt Disney Company.

And think of ourselves as magic makers, because that's what our storytellers are. You said in a podcast I listened to that you don't like participation trophies. Now, how do you balance that with caring for each other? Well, I think it depends on what you define as success. And a core principle of the Walt Disney Company is about caring for each other. So if that's one of your goals, and it's certainly prevalent in our reward system for our executives here at the Walt Disney Company, system for our executives here at the Walt Disney Company, that inherently becomes part of your portfolio of what you're trying to achieve. At the same time, I think when people have a lot of pride in the work that they do, nobody wants to focus only in on I participated. I think we want people that forge a new path. We want people

that accomplish their goals. And I think this is a value that's prevalent throughout the Walt Disney Company. And it's one that I'm very proud of. I like to think that accomplishment of goals is a principal part of why we're employed here at this wonderful company. And I think when you have 200,000 strong people all rowing in the same direction and all achieving their individual goals, that the macro then tends to work out for the betterment of everybody. We have thousands of young people listening to these podcasts. What is your advice to them? My advice is to look at your own personal individual goals,

set a path towards those, understand that nothing's going to be instantaneous in terms of gratification. It takes a path. It takes time. It takes perseverance. It takes willpower because there will certainly be plenty of obstacles in your way. But if you have dogged determination towards the accomplishment of your goals and you have a goal and it's clear in your mind, then staying the course and being able to forge a path that is consistent throughout your career will come naturally. Well, Bob, thank you so much for your time.

Thank you so much for creating all these amazing stories and for safeguarding what is pretty much the world heritage of dreams and aspirations. So, a big thank you and all the best of luck going forward. Thank you so much. I appreciate the conversation and I appreciate your time. Thank you. the best of luck going forward. Thank you so much. I appreciate the conversation. I appreciate your time. Thank you.