Three lessons from Bob Iger's reign at Disney for any business leader

"I don't know if the word disrupter was the right word to use back then, but I've always been willing to take some chances." That is how Bob Iger explained his approach to running Disney.

In his 15-year tenure Iger's bets have turned the Disney company from a moderately profitable business threatened by digital upstarts like Netflix and Amazon into one of the world's most formidable content-and-technology powerhouses. Profits quadrupled from $2.5 billion in 2005 to $10.4 billion in 2019. Disney's market capitalization rocketed from $48 billion to more than $230 billion.

Iger became one of the most lionized (and best-paid) corporate bosses on Earth.

Last week, Iger once again displayed a fondness for disruption by announcing his departure from the corner office, effective immediately. He had toyed with the idea of retiring several times, only to change his mind. In 2016 his heir apparent was pushed out. Iger has extended his own contract twice since then, and was expected to remain CEO for another couple of years.

He will remain as executive chairman, focusing on the firm's creative process, until the end of 2021 but has handed day-to-day running of the firm to Bob Chapek, a safe pair of hands.

The abrupt move sent the firm's share price tumbling by 4%. To ease investors' nervousness Chapek would be wise to heed three lessons from his predecessor. Other executives should pay attention, too.

Iger's first insight was that quality products matter. Iger had no truck with the notion, espoused by some pundits, that content would become commoditized as power shifted irreversibly from creators to distributors. This belief in content led Iger to collect one beloved franchise after another, in a buying spree that verged on the foolhardy.

The second thing to learn from Iger's reign is to trust acquired talent. At most firms in most industries, when a big company buys a small, nimble one, the buyer's managers defend their turf and foist headquarters culture onto the acquisition. Iger's Disney instead let Pixar lift its middling in-house animation team. This hands-off approach and respect for the achievements of others helped persuade control freaks like George Lucas, the founder of Lucasfilm, and Isaac Perlmutter, the reclusive chairman of Marvel, to hand over their cherished possessions.

The third lesson is also the most important. A bit of paranoia can be productive. No boss succeeds without supreme self-confidence, and Iger is no exception. However, he has shown time and again that he is willing to question his own judgment and to revise strategies as the business landscape evolves.

When on a visit to Disneyland in Hong Kong around the time he took over as CEO, Iger noted that Chinese crowds preferred newer Pixar character's to Mickey Mouse, he set reverence for Walt Disney aside and went about modernizing the firm's roster.

Nowhere was this clearer than in his embrace of digital streaming. Convinced that digital disruption was "not a speed bump" but an existential threat, he bet Disney's future on a shift from its historic business-to-business model of distribution to the fast-growing direct-to-consumer model pioneered by Netflix.

Last November, the firm launched Disney Plus, a streaming service, in the U.S. and a handful of other markets. By the end of its first day, it had 10 million subscribers. Since then it has chalked up another 20 million. Add a further 30 million people who pay to watch Hulu, an older streaming service Iger took control of in 2019, and more people fork over money to Disney every month than pay for cable TV from Comcast or AT&T.