The most distasteful management article I ever read was this one published by the Wall Street Journal last December about how Disney CEO Bob Iger undermined Bob Chapek, the executive he handpicked to succeed him. The Journal called it a “coup” and provided fly-on-the-wall details about how Iger essentially created a Disney CEO office in exile and leveraged his allies within the company to sabotage Chapek’s unpopular initiatives. I suspect Chapek still doesn’t know what hit him.
Christine McCarthy, Disney’s CFO, delivered what possibly was the deciding blow to Chapek’s leadership. The Journal reported that McCarthy informed Disney’s board that she had lost confidence in Chapek and that she played an instrumental role in luring Iger back as CEO. That obviously didn’t require much of a sales job, as Iger clearly wasn’t ready to step down in the first place.
Karma is a bitch, a lesson that McCarthy has learned. Disney announced this week that McCarthy was stepping down, ostensibly taking a “family leave.” That immediately led to speculation that McCarthy’s departure related to her husband’s known illness, but the Journal reported that care giving responsibilities had nothing to do with McCarthy’s surprise announcement.
“A person familiar with her situation said there have been no dramatic changes in her life recently that would require her to step back,” the Journal reported.
The Journal didn’t identify “the person familiar” with McCarthy’s situation, but rest assured it was someone who views McCarthy quite favorably. The Journal made a point of singing McCarthy’s praises, noting that “she delivered financial results for Disney to analysts for decades in a robotic voice that belied her sharp tongue, quick wit and strong opinions.”
McCarthy no doubt appreciated the Journal‘s kind words.
Unfortunately, McCarthy’s “strong opinions” made her increasingly unpopular, even with Iger. The Journal reported that McCarthy clashed with Iger and other top executives over strategy, including the amount of money Disney spends on content and a recent restructuring that she felt didn’t go far enough to streamline the company, according to “a person familiar with the matter.”
The Journal didn’t make clear whether it had multiple sources “familiar” with McCarthy’s motivations, or just one.
While I’m unaware of who leaked to the Journal the real reasons for McCarthy’s departure, it’s telling that her displeasure found its way into the media. The universe of people who could speak with authority about McCarthy’s reasons for stepping down as CFO is quite small. It’s hard to believe their motivations for blabbing to the Journal were to promote Disney’s best interests, as opposed to McCarthy’s and possibly their own.
McCarthy dutifully was quoted as saying she would “always be rooting for the success of my extended Disney family.” Iger, who owes his return to Disney to McCarthy, said that her impact on Disney “cannot be overstated.” A spokeswoman was too tongue-tied to comment beyond Iger’s statement.
What led to Chapek’s downfall was his aggressive cost cutting, which made him unpopular with the company’s creatives. Almost immediately upon Iger’s return, he reorganized the company and created three main units: one for theme parks and consumer products, another for ESPN, and a Disney Entertainment unit that houses movie and television operations, as well as streaming services Disney+ and Hulu.
McCarthy pushed for the Disney Entertainment unit to be further consolidated to improve profit margins and give Disney a leaner structure more akin to Netflix, putting her at odds with the unit’s leadership, the Journal’s person “familiar with the matter” said.
Iger seemingly has demonstrated that he’s ultimately more skilled wielding a corporate knife, which is why he remains Disney’s CEO and McCarthy will finish out her Disney career as a “strategic advisor.”
Former CNN president Jeff Zucker, who resigned in disgrace because he was having an affair with a senior subordinate, is another corporate backstabber extraordinaire. Zucker’s displeasure with his successor Chris Licht was widely covered in the media, and the New York Times reported that he was “serving as a kind of grievance switchboard for current and former employees of the news network.”
News that Jake Tapper, Erin Burnett and Anderson Cooper were among the CNN personalities who voiced their concerns about Licht’s leadership found its way to the Wall Street Journal.
CNN’s ratings decline happened under Zucker’s watch, and he was the genius responsible for hiring McKinsey, which recommended that CNN invest $1 billion to launch its ill-fated streaming channel. Admittedly, Licht was an executive so clueless that he allowed a reporter from the Atlantic to witness his workout sessions with a personal trainer, but Zucker and his CNN allies helped bring him down.
Like McCarthy, I expect Burnett and Tapper will eventually learn about Karma’s impact. CNN is a rounding error for Warner Bros Discovery, and as New York Post columnist Charlie Gasparino predicted, CNN’s corporate parent will likely unload the ratings challenged network, possibly to private equity whose bean counters are oblivious to negative media coverage. Burnett and Tapper have bull’s eyes on their backs to anyone looking to restore CNN’s credibility and broaden the network’s audience.
“Zucker’s minions will then be ruing the day they defenestrated Chris Licht,” Gasparino said.
Employees increasingly are looking to sabotage their companies and bosses, and Elon Musk isn’t immune to the undermining.
The New York Times recently reported that Twitter’s U.S. advertising revenue for the five weeks from April 1 to the first week of May was $88 million, down 59 percent from a year earlier, according to an internal presentation the publication obtained. Twitter has regularly fallen short of its U.S. weekly sales projections, sometimes by as much as 30 percent, the document said.
The Times reported “that performance is unlikely to improve anytime soon, according to the documents and seven current and former Twitter employees.
Elon Musk has a low regard for the legacy media, particularly the New York Times, whose Twitter feed he dismissed as “the equivalent of diarrhea.” When reporters from the Times and other corporate publications solicit a comment from Twitter, they receive an automated response with a poop emoji. That Twitter employees engaged, let alone leaked confidential information, to reporters from the New York Times was corporate treason.
Musk reportedly has trimmed Twitter’s workforce from more than 5,000 employees to about 1,000 workers, but obviously there are employees who remain that want to undermine him. He would be wise to take a lesson from his deputy at SpaceX, president and COO Gwynee Shotwell.
A year ago, some SpaceX employees leaked to the Verge that an open letter was circulating within the company criticizing Musk’s behavior and saying it was “critical to make clear to our teams and to our potential talent pool that his messaging does not reflect our work, our mission, or our values.” Shotwell quickly identified the employees responsible for circulating the letter and fired them.
That’s the danger of corporate backstabbing. There’s an art to the craft, and executives like Iger and Zucker are corporate warriors extraordinaire – that’s why they reached the highest rungs of the corporate latter.
Many years ago, I worked in a newsroom where one of the corporate owner’s top executives understood that some senior editors were looking to undermine me. One day he approached my cubicle and handed me a book with the caveat, “You need to read this.”
The book? The Art of War, an ancient Chinese military treatise by Sun Tzu. I’m not alone in saying the book should be required reading for MBA students looking to advance in corporate America.