Motley Fool Hidden Gems Investing - “The Ride of a Lifetime” Book Club

Episode Date: July 24, 2023

Before Bob Iger was the Disney CEO, he was the Disney CEO. For the latest edition of the Motley Fool Money Book Club, Deidre Woollard, Mary Long, and Ricky Mulvey read Bob Iger’s memoir, “The Ride of a Lifetime.” They discuss: The machinations that happen to make acquisitions and win over board rooms Key differences between Bob Iger and Steve Jobs Why businesses do well when they prioritize creativity  Companies discussed: DIS, AAPL, NFLX If you’ve read “The Ride of a Lifetime,” share your takeaways and quibbles with the team at [e-mail] or on Twitter @motleyfoolmoney.  Guests: Deidre Woollard, Mary Long, Ricky Mulvey Engineer: Rick Engdahl, Tim Sparks Learn more about your ad choices. Visit megaphone.fm/adchoices

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book was a good reminder of just how personal a lot of this ends up being, and it's not based on an exact formula. I'm Mary Long, and that is esteemed Motley Fool Money book club member, Ricky Mulvey. To cap off our weekend of entertainment-focused shows, I sat down with Ricky and Deidre to talk through Bob Iger's 2019 memoir, The Ride of a Lifetime. We discuss the difference between being a dealmaker and being a visionary, what it takes to bring big deals to the table and see them through to fruition, plus some leadership advice from Bob Iger that Bob Iger himself may want to consider. If you've read The Ride of a Lifetime and have takeaways or quibbles that you'd like to share,

let us know at podcasts at fool.com or on Twitter at Motley Fool Money. We're open to recs for the next book club. We all want to believe we're irreplaceable. The trick is to be self-aware enough that you don't cling to the notion that you are the only person who can do this job. Those wise words from Bob Iger's memoir, The Ride of a Lifetime, which we are discussing today for Motley Fool Money Book Club. Joining us for it, Stedra Willard and Mary Long. Good to see you both. Good to be here, Ricky. Yeah, I'm excited here. I'm very excited. I've been buzzing about this episode, but before we dive in, because I know

there's going to be a take quick. We have plenty of takes on the book. Let's get a high level summary of the book that is not a memoir, but kind of a memoir. Yeah, Ricky, you took the words right out of my mouth. I was going to say, you called this a memoir. And I think Mr. Iger, were he here, would step in and correct you. He's very clear from the get that this is not a memoir. But I think all three of us might disagree on that. So I will continue and call it what it is, a memoir. Basically, the book is divided into two sections. One, Bob dubs learning. The other, leading. Learning is basically his early career, plus him at Disney and the path to becoming CEO, pretty much right after that becomes a guarantee. We switch over to the leading aspect.

The learning part, Bob Iger started his career in 1974 with ABC. He was a studio supervisor then, kind of moved his way up into the ranks. There's a story early on where he has a run-in with a boss who is kind of a shady character and ultimately gets fired for embezzlement. This shady character tells Bob Iger that he is not promotable, which forces our young protagonist to find new work in the sports department. And he finds himself at ABC Sports. And that's kind of where he makes a name for himself, working at the Winter Olympics in the 80s and ultimately becoming VP at ABC Sports and moving on as ABC gets acquired by a smaller company, Capital Cities, which proves to be a pretty moving experience for Bob Iger and something that he carries with

him far into his career as he goes on to become Disney CEO and leads many acquisitions there, which are all covered in detail in the leading section. I feel like learning is that first half of the book is Bob Iger's history, more or less, and leading is really Disney's history or more recent history. So, yeah, I think that about covers everything. We'll dive into more of the details as we quibble and share our takeaways. All right. So now let's move to some of the big takeaways from the book. Deidre, what were some of yours?

I think my big takeaways were about Bob Iger as a leader. And he's got an interesting relationship with perfectionism, I'd say. So he talks a lot about this balance between being fair and motivating people to do better while still being the common man, which I kind of think he fails at. But it sort of gave you an interesting view of what it takes to be a leader. But I think it's what it takes to be a leader from a very specific personality type. Yeah, I think it is tough to come off as the common man right now. There was a sort of blistering Wall Street Journal profile about him, where perhaps during the writer's strike, he is showing off a new yacht that is 30 feet longer than his previous yacht and also handling things with the writers and the actors in a talent, maybe not so talent friendly way, especially from someone who's famous for his relationships.

There are parts of this book I really liked. One, the section on not being petty. And it sounds small, but it's like if you're facing problems at a company, never think of small problems. Think of if you start small, you seem petty. And I think that that's a reminder for me because sometimes I do the same thing. And there are worthwhile management work lessons in this book, as much as I will pick it apart in a little bit.

Yeah, I agree. And I think one of the most interesting threads throughout this was Bob Iger's focus on creativity and the way in which he consistently seemed to prioritize that throughout his various roles at the company. Which, OK, given everything that we just said in more current context about the writer's strike and the actor's strike and comments that he's made about that and how, quote, unrealistic some of the asks there are. That doesn't so much jive with this focus on creativity and putting the creatives first. There's a whole section in the book where he's asking creative

supervisors to step up as Disney is transitioning to streaming and trying to develop this platform where they can offer content directly to consumers. And you see Bob Iger going back to his board and saying, hey, for the first time, we're asking creative people to really play a hand in how the businesses run and we need to compensate them as such. And he negotiates this whole stock deal with the board that sounds like it was really a win for the creatives that were involved in that. And so this book paints a really lovely picture of what that balance could ideally look like and maybe has looked like in the past. But it's interesting certainly to read at this more modern moment where, okay, and it's not even that much more modern. It's only a few years down the

road, right? Where Iger is in the news for yes, stepping back into this role in Disney, but also for kind of making some comments that, shall we say, raise some eyebrows about how he prioritizes the creatives today. There are a few events too, where I think you can see that explain his behavior in beneficial ways to the reader, just how much the Pixar and Lucasfilm acquisitions shaped him, especially with Pixar. He didn't know if he'd have support for it. He had a previous CEO, Michael Eisner, calling the board in order to sabotage the deal, saying that it was too expensive. And I think you see that play out now where perhaps with the 21st Century Fox deal, hey, that's going to be way too expensive. You don't really know what you're getting.

He'd heard that before with Pixar, Lucasfilm, and Marvel. So the question becomes, Is that a hot streak coming to an end or is this a lesson that he knows media better than a lot of the commentators? Yeah, I think that's interesting. One of the things that I liked about this book was that you really got a sense of the machinations behind the scene and what it takes to get a board to agree and all of the different pieces that kind of come into play with leadership transitions. And so I think you get a real sense of him as a dealmaker. And that's really his strength. He is a very good dealmaker. He's very good at understanding what people want and trying to strike a balance.

He also is pretty good, I would say, at least earlier in his career, like understanding what the problem is and being able to just focus on it without worrying about the external factors. After Eisner, Disney was on a string of animation, both middling successes and flops. and that this is a reminder that that is sort of the heartbeat of this business no matter the the acquisitions that they've taken on now maybe actually maybe that's changed since marvel maybe marvel characters have sort of become the heartbeat of marvel but i think that explains a lot of the reaction to bob chapek when he started putting and uh pixar movies direct to streaming

and eiger was really not in favor of that right like the number one rule of being the ceo of Disney is don't screw up animation. There are two really interesting points with the acquisitions and the negotiations that it takes to make the acquisitions happen. One, Ricky, you mentioned how the Pixar and Lucasfilm acquisitions shaped Iger. But earlier on in his career when he was at ABC and that was acquired by CapCities and then Disney bought CapCities slash ABC, Iger took those experiences from early on in his career and really applied them to acquisitions when he was negotiating with the heads of these other companies. He was saying, I know what it's like to be acquired by a bigger company and by a smaller company.

We are buying you because your IP, you are what makes you special, and we don't want to eat that up. We can be stronger together. And that was a point that he made consistently with every acquisition. And so just, again, that ties back to this focus on creative and understanding that storytelling is the thing, really kind of shines throughout. And Deidre, to your point about, I love how this book gives you a backdoor, a glimpse into what machinations are going on to make a deal happen. But I was also struck by how casual some of these conversations were, like that Bob Iger saying, oh yeah, when I bought, the day I became CEO, I called up Steve Jobs and said, hey, let's talk. And the relationship was on its way to being repaired, is kind of mind

boggling that you know that these people have amazing Rolodexes of contacts, but to be reading in a book and notice how casually these big names are dropped and that what it takes to get a deal on the table is really just a text message that's like, hey, should we get lunch? Question mark? Yeah, I think as public market investors, we often see the result of a deal, which comes down to the cash and stock option for it. But I think this book was a good reminder of just how personal a lot of this ends up being. And it's not based on an exact formula. Granted, maybe more so in the creative business versus, let's say, a biotech company. But I'm sure threads apply throughout the public markets. Any other big takeaways before we move on to some quibbles?

I think the only other thing I would say in the dealmaking thing is the role of charisma. And I think that Iger's a very charismatic guy. I feel like Eisner, less of a charismatic guy. And the role of charisma in making some of these deals. And yes, this is a creative industry, but I think the role of charisma of a CEO and the ability to make those deals happens all across all kinds of industries. I think so as well. And it's also just a small thing. He really remembers what people bring him to eat. There are several direct shots. It's someone not basically bringing lunch for themselves at an interview, but not him. And then also a very, I don't know the tone of it, but a note that Ike Perlmutter,

when he was running Marvel, brought him a banana from Costco. How reshashare? Or how exotic? Excuse me. One of the things about that is he's a detailed guy. So he notices everything. And that's part of the strength. That's part of being a good dealmaker is noticing all of those little things and understanding who the person is. The Ike Perlmutter example is so great because he notices that his office doesn't look like a CEO's office and uses that to give him an insight to who this is and how he can position himself. I'm sure we have some quibbles on this text. Oh, maybe. The ride of a lifetime. Only a few. Deidre, what you got? Well, the thing about petty, because part of the flip side of being observant is, oh my goodness, this man is petty. This man will detail all of the things that someone did to make him upset. He's got lists. I imagine that there are lists somewhere of the actual grievances.

Because even Steve Jobs, who he talks about so much in the book and loves Steve Jobs, very clearly close relationship, he has a list of things that Steve did that make him mad. So I think the flip side of being detail-oriented and seeing a lot of things is that he also – he's got a list of grievances. That is probably my biggest quibble with the book. And I think you see so much of it, especially in that first learning section. I called it earlier, the history of Bob Iger. I feel like, really? It's the history of the people around Bob Iger and how he does... It felt very gossipy to me. I kept asking myself, oh my gosh, I had to go back and check when it was published. And it was on his way out as CEO, because I was thinking, what are the politics of continuing to run a company after you've

kind of aired your dirty laundry about all of these people throughout the entirety of your career in this very public manner. And after he, especially in a section dubbed learning, and especially in a book that he insists is not a memoir, but is a leadership book, I want to see the writer be a little bit vulnerable and introspective and say, hey, this is when I messed up and that's how I learned. And instead, it felt like everything that Bob Iger learned. He learned from other people's mistakes, which is certainly a way to learn, but it just feels pretty inauthentic. And then by the time that he's CEO, I kind of found myself asking, wait, how did you get to be here just because other people left their jobs and

people kept picking out you and saying, oh, he's special? Yeah, you can see sort of the arms go up covering the face, if you will, I think, especially in discussing the Lucasfilm acquisition. Basically, what had happened is George Lucas, this is his personal legacy, and he's very hesitant to give it up. And immediately before the deal puts Kathy Kennedy in charge to run the company. On this, Iger writes, quote, Kathy is a legendary producer and has been a great partner. And this was one final way for George to put someone in whom he trusted to be the steward of his legacy.

End quote. That tells you nothing. This guy just put someone in charge of the company that you just bought. Like, surely you are thinking in a little bit more detail than that. One other quibble in terms of, yeah, the memoir thing is a bit odd where he's like, this is not a memoir now for some reflections on my childhood and into the mistakes point that you made, Mary, he, the times that he's admitting to mistakes, they're often decades ago. So one was putting cop rock on the air, which was a infamous flop where it was a musical

based on a very serious cop drama. There's a little bit on like bets that didn't work out with like Twin Peaks and Young Indiana Jones, even putting Who Wants to Be a Millionaire on ABC for five nights a week. These are pretty far in the past. And even the Who Wants to Be a Millionaire example, I'm not entirely certain that the lessons have been learned from that as we see the increased production of very similar Marvel material. It's on page 43 of my version, which is the large print version, bear with me.

So it's probably even earlier in other books, but it's on page 43 when he becomes like the president of ABC. And I just think, wait, I want to hear stories of like you early on in your career, messing up in the mail room. I want these images of what it was like to actually be early in your career and how you got visibility from people apart from just being in the right place at the right time. That transition, which takes over a decade for him to get to that spot, happens so fast in my mind. And I don't know, this is the editor in me, but we just really missed out on what could have been some really cool storytelling. I think you also see the writing lessons and incentives might not align. One example is he

has lots of discussions about how leaders need to bring in people who disagree with them, who dissent, who are willing to push back. In the introduction of Disney+, he also negotiates contracts in a way where executive stock grants and how they vest and how much they get would just be based on his subjective opinion. So there might be some mixing of incentives when executives would like Bob Iger to like them as much as possible in order to get these stock grants. And I would say, though, while we have discussed the pettiness and sort of taking shots and gossipy, I thought it made the book more entertaining than other executive memoirs. Just as a reminder, Michael Eisner was not a fan of Finding Nemo. Just drop it in some of those

little those little uh those little um slights if you will i know some of the movies that he called flops i okay i lilo and stitch lilo and stitch mulan i was like mulan was the first first movie i ever saw in theaters that is not a flop and then would catch myself and think okay well you weren't really diving into the financials of the movie at that time but still it was offensive to some of these movies yeah really struck me in my core to see some of these movies called Flops that I love. But is that him positioning in some, you know, I started to wonder as I was reading this book, what does he want the reader to feel? What is the reason for writing this book? You know, he talks a little bit about his political aspirations. I wondered

if that was part of it. I mean, you figure at the point that he's writing this, he's done with Disney, but he's obviously not done with his career. It felt a little bit like he was positioning himself for his next phase, which he did not see to be Disney, but here he is again. Yeah, you can see the talking points he would like readers to note, one of which is the success of Shanghai Disneyland. It is how this book starts. Don't forget, he was there since the inception of the project and the only person to do so. It's also in the recent interview with David Faber that's been getting a lot of buzz. He's quick to remind viewers, don't forget the success of Shanghai Disneyland. I would say I have a couple big quibbles as well. There's one,

It's the story of sort of a mentor to him named Rune, who was like an executive producer at ABC and was first his boss. And then Iger became his boss. And this guy was very detail oriented, focused on the stuff he was making. And it gets to the point where Iger is visiting this man on his deathbed. And Rune is complaining about the sound coming from an ABC broadcast. Like, we need to get the people on the phone in order to fix this. In reality, this guy was like at the end of his life. And that's why that there was a sound issue. I think that the lesson, and I could be wrong, I think the lesson he was trying to impart was like, see, this guy really loved his job and was dedicated to it. My takeaway was like, we need to retire sooner and have a little bit of a disconnect from the work we do for a living.

Yeah, his relationship with Rune Arledge is sort of interesting because there's another point in the book when the tables turn and Rune is sort of working for him and he talks a little bit about that awkwardness. His relationship with authority is sort of interesting because I get the impression that he will defer to people, but he will also remember that he deferred to people. Yes. Yeah. Hey, don't forget I deferred to this person. There's also some questionable, I would say, connections in terms of the lessons he's learned throughout his career. Iger was one of the first people to license media on. Yeah, Iger was the first person to license media onto the video iPod, which kind of laid the groundwork for both for streaming in good and bad ways. many of the contract discussions you see today. However, he says, quote, when Kevin Mayer came on stage to demonstrate how Disney Plus would work on a smart TV, on a tablet, on a phone, it was impossible not to recall Steve Jobs standing in my office in 2005, holding out the prototype of the new video iPod, end quote. I think that's a tenuous connection at best, considering there was already Netflix. This is not the first streaming service. The video iPod was the first thing. It was groundbreaking. This is a competitive offering

to other streaming services that already exist. But isn't part of that just that he wants that Jobs connection so badly? He talks about Jobs so much. I feel like he wants to be seen in the same way. He talks about talking to Steve Jobs' widow and her saying that how much Steve loved Bob Iger and how, and, and, you know, how important that is to him. He's very much trying to align himself as that sort of leader, but I'm not, I don't know if he's that kind of leader. What do you guys think? If he's a Steve Jobs type leader? Yeah. I think the personalities are too different, right? Jobs was, this guy's an, he's an entertainment executive and he's very good at it because he's, he's a good deal maker and he's good with creatives. Steve Jobs was famously

acerbic, didn't like, wasn't afraid to just kind of almost punch people in the mouth verbally, right? And I think that Iger doesn't have that dog quite in him. And that's also benefited him as the CEO of Disney. You don't want the Mickey Mouse guy acting like that. I'll also say, Steve Jobs is first and foremost, an inventor. That, to me, is his image. And Bob Iger, though he has many admirable qualities, is not, in my mind, an inventor. He made really strategic acquisitions and has a vision, but it's a very different type of vision than what... I don't know that I would call Bob Iger a visionary and mean it with the same stuff that I do if I were to speak of Steve Jobs that way. It's dealmaker versus visionary. I think

Steve Wozniak might push back on the inventor claims. Any other quibbles before we get to the section of advice from Bob Iger that perhaps Bob Iger today might want to take. I will just say one thing. There's a line that he repeats quite frequently in the book about advice that a mentor had given him earlier in his career about don't get into the business of selling trombone oil. And I might be being a bit contrarian, but I want to push back on that because we are an investing podcast. And our book club prior to this was about Peter Lynch's one up on Wall Street. I feel like I get what Bob Iger is saying and what his mentor was saying. If he's speaking to someone who ultimately becomes the CEO of a company, don't focus on

this super niche thing. But as an investor, I feel like finding the trombone oil can sometimes put you in a pretty healthy position. You found someone who's cornered a small and healthy market and it's a passionate audience. I think Peter Lynch, a member of this book club, might say, I've been finding trombone oil my entire career. Or if you're delivering entertainment, finding niche audiences is a good thing. In fact, Guardians of the Galaxy has been one of the best successes of the Marvel Cinematic Universe, all of which feature extraordinarily niche characters. Granted, it was for a broad scale audience, but I think to your point, Mary, it's a good idea to search in the niches to find new ideas, especially when you're in the entertainment business.

Yeah, that's a great point, Ricky. You want to find a passionate audience, even if that audience is small. And Disney thrives off of that, right? You need passionate audiences if they're not just going to watch your shows and movies, but they're also going to go to your parks and shell out a lot of money to buy a ticket to that park to partake in rides, etc. Let's look to some of the advice because Iger gives a lot of advice to the reader. And I also think that Bob Iger may enjoy some of the advice that he has written. I'm happy to kick us off. This is one of my favorites. Quote, it's not good to have power for too long. You realize the way your voice seems to boom louder than every other voice in the room. You get used to people withholding their opinions until they hear what you have to say.

People are afraid to bring ideas to you, afraid to dissent, afraid to engage. This can happen to even the most well-intentioned leaders. You have to work consciously and actively to fend off its corrosive effects. I think that's wonderful advice. One of the ones I like was that it should be about the future, not the past, which I'm not sure he completely follows that advice. But I do think that that's true, is to move on and be in the present and not get too mired in the past as a person or as a company.

Great advice from Bob Iger. Mary Long. He says this becomes especially important when he's battling for the CEO position and having 15 some odd interviews with the board. But at the end of that whole saga, he says, it's easy to be optimistic when everyone is telling you you're great. It's much harder and much more necessary when your sense of self is on the line. And part of me feels like you hear that all the time, but it bore repeating. All right. Let's not start petty. Let's not N. Petty, let's get to the overall review of the book. Deidre, do you think this is worth

listeners' time? If you're a Disney shareholder, you're interested in Disney, absolutely. If you're interested in deal-making and understanding maybe a little bit about how boards work and how succession plans work, yes, absolutely. I'd agree with that. As a piece of literature, maybe not so much, but I'm a Disney shareholder. I think media stories are interesting. The collection of stories about Iger essentially getting jobs to agree to have Disney content on iPods and repairing the relationship with Michael Eisner, I think in and of itself made it worth the read. Yeah, for the historical aspects of it and getting that close-up look of how Disney operates,

how the entertainment landscape has changed over the years, I think it's certainly worthwhile. as a leadership book, which I think it really wants to be while we've all called out kind of important tidbits and things that stuck with us that were resonant. I enjoyed those bits, but I wouldn't bill this as a leadership book. I feel like it's an interesting read if you want to learn more about Disney, how it's grown, how it's changed, and how Bob Iger has played a hand in shaping that. But this would not be recommended reading for like a how to be a better leader class necessarily. And with that, we will end the book club. Deidre Woolard, Mary Long. Appreciate it. Thank you. Always, Ricky.

As always, people on the program may have interests in the stocks they talk about, and The Motley Fool may have formal recommendations for or against, so don't buy or sell stocks based solely on what you hear. I'm Mary Long. Thanks for listening, book clubbers. We'll see you next time. Bye.