It's time to trust Bob Iger at his word (and data) when he endorses Bob Chapek as his successor and everything that comes with Chapek. Iger's successor is a data-centered decision that will be another win for the data-centric Walt Disney Company.

Most of my readers have probably heard the news, but one of the most powerful people in media, Bob Iger, stepped down as Chief Executive Officer of the Walt Disney Company on February 25, 2020. Iger isn't going away completely, however, as he will serve as the Company's Executive Chair until December 31, 2021. In the intervening time, Iger will help transition former Disney Parks, Experiences and Products chairman Bob Chapek into his new role as CEO, and also spend most of his time directing the Company's "creative endeavors." After the news broke, Disney (NYSE:DIS) shares fell about 2.5% after hours.

Bob Iger's impression on the Disney Company has been indelible to say the least. An ardent figure at the Company since 1974, Iger's humble start was performing menial labor on ABC television sets for $150 a week (over $700 adjusted for inflation). Assuredly, he rose through the ranks and came to Disney as part of the Company's acquisition of Capital Cities/ABC in 1996 having also guided the merger, then was eventually installed by Disney as CEO in October 2005.

While commenting on Iger's transition, Susan Arnold, independent Lead Director of the Disney Board, said, "Over the past 15 years as CEO, Mr. Iger has transformed The Walt Disney Company, building on the Company’s history of great storytelling with the acquisitions of Pixar, Marvel, Lucasfilm and Twenty-First Century Fox and increasing the Company’s market capitalization fivefold. Disney has reached unparalleled financial and creative heights thanks to Mr. Iger’s strong leadership and clear strategic vision."

Full disclosure: I have worked intermittently at the Disney Company since 1993, each role being a progression. Starting off directing cars in the vintage Disneyland 1990s "pre-Disney California Adventure" parking lot while I was also a web developer/musician making my way into media/marketing analytics. Then I moved up into an e-business analyst role for Walt Disney Parks & Resorts Online (WDPRO) in Anaheim, continuing on with other Fortune 100 and Fortune 500 companies for a while, then landing my most recent role with Disney at Walt Disney Studios in Burbank, CA for five years as a Sr. Data Analyst.

The Rational Bob Iger

During my years on the Disney Studios lot, we all had our occasional Bob Iger sighting at the Commissary or him initiating a 'hi' to you as you walked to and fro on the lot. But the real substance of the man was his relentless pursuit of knowing exactly where he was within the business landscape. He was acutely aware that he was blind without objective data being at the center of every decision he made. Combined with charisma and business savvy, data-centricity is still Bob Iger's secret weapon.

Echoing through the halls of Disney in Burbank and beyond, Bob's friendly yet clear mantra was for us to make data-guided recommendations and decisions. Everyone arrives at this in their own way, but his inspiring influence seemed to be: Trust the data, find and analyze the facts, be clear in your storytelling toward outcomes, execute, move the needle. The way I heard it was: Keep data at the center because everything outside of the center can and will change – be it apps, services, or even people – but data facts will remain and tell the truth. If you're worth your stuff, the needle should move in the right direction.

Image credit: Stratio.com | Alfonso Fernández

What Iger did was position his people and the Company for the future by being guided more by data than driven by opinion. His track record has been stellar using this approach. Recall how successful the Company has become since 2005 under Iger's leadership.

Bob Iger has positioned the Company to be guided more by data than driven by opinion.

I assert that Iger's data-centered principles helped influence the Board of Directors to choose Bob Chapek over other candidates – as great as the other candidates were, including former Disney COO, Tom Staggs, also Kevin Mayer from Direct-to-Consumer & International – and this is precisely why I am completely comfortable with Disney's CEO choice. Again: Trust the data, find and analyze the facts, be clear in your recommendations, execute, move the needle. Therefore, having analyzed the factual data in his track record, the Board made an informed long-term decision and felt most strongly that Bob Chapek will forge the Company ahead for the better. It's a data-centric decision by a data-centric Disney.

The Heir Unapparent

The selection of Bob Chapek as CEO took many on Wall Street by surprise because of his very low profile outside of Disney, to which Susan Arnold assured, "We believe Mr. Chapek’s leadership and commitment to [Iger's] strategy will ensure that the Company continues to create significant value for our shareholders in the years ahead."

Iger added: "Bob will be the seventh CEO in Disney’s nearly 100-year history, and he has proven himself exceptionally qualified to lead the Company into its next century. Throughout his career, Bob has led with integrity and conviction, always respecting Disney’s rich legacy while at the same time taking smart, innovative risks for the future. His success over the past 27 years reflects his visionary leadership and the strong business growth and stellar results he has consistently achieved in his roles at Parks, Consumer Products and the Studio. Under Bob’s leadership as CEO, our portfolio of great businesses and our amazing and talented people will continue to serve the Company and its shareholders well for years to come."

Chapek held roles leading Walt Disney Studios Home Entertainment, Disney Consumer Products, Walt Disney Parks and Resorts, and most recently Disney Parks, Experiences and Products. His list of accomplishments is already long and quantifiable.

Before joining Disney in 1993, Chapek worked in brand management at H.J. Heinz Company and in advertising at J. Walter Thompson.

Chapek then reassured: "I am incredibly honored and humbled to assume the role of CEO of what I truly believe is the greatest company in the world, and to lead our exceptionally talented and dedicated cast members and employees." Chapek continued, "Bob Iger has built Disney into the most admired and successful media and entertainment company, and I have been lucky to enjoy a front-row seat as a member of his leadership team. I share his commitment to creative excellence, technological innovation and international expansion, and I will continue to embrace these same strategic pillars going forward. Everything we have achieved thus far serves as a solid foundation for further creative storytelling, bold innovation and thoughtful risk-taking."

Fan Community Reaction

The choice of Bob Chapek disappoints many hardcore Disney Parks and Resort enthusiasts, most of them annual pass holders. They point to the cost-cutting initiatives and revenue enhancements at Parks and Resorts and worry that he will initiate such strategies in parts of the Disney Company that he does not yet touch. Most loathed are increased profits through price increases, new revenue opportunities, and simultaneous budget cuts.

What many of the aficionados might not be aware of is how much the market changes right under Disney's feet as a global entertainment conglomerate. It's doubtful that Chapek takes any pleasure in disappointing the paying Guest. And if the data didn't require such strategies, he wouldn't need to approve such measures.

Price Adjustments ... A Necessary Evil

Many of the die-hards lament, "Walt Disney would be rolling over in his grave" or "Disney is greedy," but the Company as a business is obligated to its shareholding public to survive and thrive. I say all of this from my own perspective and I do not speak for the Disney Company. But quite simply, Disney must respond to market and economic forces that are both in and out of its control. A complex set of variables determine prices for tickets, passes, food, merchandise, room nights, experiences...everything, even parking. Most importantly, Bob Chapek isn't arbitrarily raising admission prices on a whim and definitely not because of "greed."

For the layperson, here's how it probably works: A team of analysts has access to very robust economic, historical performance, and consumer data (that your consumer behavior generates) which drives complex tools to help those analysts determine price equilibrium. Analytics teams recommend the pricing changes, executives approve, and Chapek is aware and signs off. If price adjustments are not made, it's at the peril of income loss, failure of the business unit and its employees. And so much of that income is reinvested back into the business in the form of operating expenses...the various costs of doing business. After all costs and operating expenses have been deducted, we're left with a net income, also known as revenue – the lifeblood number that justifies a business's very existence. When it comes to price: either adapt or die.

So ask yourself: What would happen if Disney didn't update their prices in an economy where the Company enjoys seemingly inexhaustible demand and competitors are hot on Disney's trail, endlessly chasing them and wanting to be them? It wouldn't be pretty.

Speaking of demand, did you know that more than half a billion people went to theme parks worldwide in 2018? This is equivalent to 7% of the world's population, and the number keeps growing. Just five years ago, the market capture of the industry was only 5% of the global population. Guess where most of that half-billion goes? Disney Parks, of course! More than 157 million went to Disney parks worldwide in 2018 according to the Themed Entertainment Association (TEA). The top theme park is the Magic Kingdom at Walt Disney World with a 4.9% attendance growth year-over-year. Second place is Disneyland Park in Anaheim with 2.0% growth.

Ask yourself: If you're worried about overcrowding at the same time you're worried about ticket/pass prices, what would happen to attendance if Disney lowered admission prices and relaxed the blockout calendar? Would the Guest experience get better or worse? The data would certainly say worse.

Theoretically, if the hard-core fans owned Disneyland and were responsible for everything that happened there, what would they have to do in today's world to get it back to a perfect Guest experience and nearly empty park? They'd be doing exactly what Disney is doing now: raising prices.

Suppose Walt and Roy were around today (ages notwithstanding) and they had the chance to develop with the times and gain current-day sensibilities, does an intellectually honest Disney lover really believe they would ignore rational data and let the competitors overtake the Company just because "this is how we've always kept our prices and run the business?" If this happened at the macro-level, does the die-hard believe Walt and Roy would allow the Company to be raided and sold off – as what almost happened because of passive leadership prior to the Eisner, Wells, and Katzenberg era? History and data say no. The Disney Company almost ended (or at least completely changed) because of soft leadership in the 1970s until 1984.

Like the fans, I sure miss the old days when crowds were low, and prices were even lower. It was a simpler time with relatively equitable wages. But the world has changed drastically, and that stark reality has forded the moat and stormed Sleeping Beauty Castle – change that can't be ignored or obscured even by a reality-proof berm. It could arguably be said that Disneyland's adoring fans have loved it into un-affordability for many. As demand goes up, so do prices. As prices go up, higher spending vacationers tend to remain as they plan and budget ahead. And as much as Disney loves the locals, lower spending impulsive visitors tend to decrease. The data likely spells this out.

What about the cutbacks in attractions and entertainment that Chapek made prior to the opening of Star Wars: Galaxy's Edge? My article on Disney's seemingly "evolutionary design" principle fully allows the addition of attractions and entertainment at a later time, if feasible. As you may recall from Disney history, Disneyland Park was far from perfect during its opening season as well. In fact, the press predicted the worst for Walt and his Park. But they couldn't have been more wrong.

"In God we trust, all others must bring data"

-W. Edward Deming

The Disney Social Imperative

Accused of cost-cutting its front-line Cast Members, Disney has done well to emphasize their importance instead. Although it occurred at the end of a labor battle to get the terms right, Disney agreed to pay minimum wage employees $15 and hour which started on January 1, 2019. Further, the Disney Aspire education program was developed to fund 100% tuition up front at network schools for programs that include high school completion, English and Spanish language learning, skilled trade diplomas, undergraduate degrees, Master's degrees, and more. It's no accident that Disney was No. 1 on Forbes' 2018 World's Best Regarded Companies List.

Looking Forward

All of these moves by Disney are guided by data-centered decisions. The more often Company leaders depend on rational, data-centered decision-making, the better it is for all Cast Members – from Bob Chapek and Bob Iger to the front-line employees. The data is rational, unifies, and treats everyone the same. If Bob Chapek continues Bob Iger's evangelization of data-centeredness, which Chapek's history suggests he will, then the Disney Company will do well even after Iger.

Keep in mind that Bob Iger worked very hard to earn your trust by acquiring Pixar, Marvel, Lucasfilm, 21st Century Fox, seeing through the creation of Disney+ and by racking up a mountain of wins that we couldn't have even dreamed of when he started in 2005. Don't lose hope in Iger's judgement now! The reason you like Bob Iger will be the same reason you'll like Bob Chapek. Trust Iger that Chapek will take the Company to places and heights that we're not even dreaming of yet.

If you're so inclined, please react to this article by giving it a "like." Also let me know what you think by leaving a comment below. I have an open mind, and I love data.