Everyone Needs a Trusted Partner

REALTORS® Conference & Expo: Anaheim, Calif., Nov. 11–14

Michael Eisner will share leadership lessons and discuss how to thrive in difficult times.

When: Nov. 12, 4 p.m.

At 69, Michael Eisner says he’s having the greatest time in his career.  The man who led The Walt Disney Co. for more than 20 years—growing revenue from $1.5 billion in 1984 to $30.8 billion in 2004—has since quietly established his investment shop, The Tornante Co., focusing on the media and entertainment industries. Among other things, Tornante has provided seed money for a social media–based game called FameTown that’s part FarmVille, part Hollywood Boulevard. He recently published a book, Working Together: Why Great Partnerships Succeed (Harper Business, 2010), that explores great business and sports partnerships. Among the pairs he profiles are investment icons Warren Buffett and Charlie Munger and Home Depot cofounders Arthur Blank and Bernie Marcus. And since late 2008, the entertainment mogul has been investing in commercial real estate. “It’s a great time to buy,” he says. Eisner favors second-tier markets, such as St. Louis and San Antonio, over Los Angeles and Chicago, “but I’m open to any great deal and don’t have plans to stop buying.”

How does Eisner know a good deal when he sees one? “Instinct,” he says. That, as much as anything, explains the business success he has enjoyed over a 47-year career. “Instinct is the sum of many things,” he says. “You are not born with great instinct. It’s the culmination of education, trial and error, upbringing, history, knowledge, and acquired taste—and all that together creates a cauldron of information from which instinct grows.”

Eisner graduated from Denison University in 1964 with a B.A. in English and broke into entertainment with short stints at NBC and CBS. In 1966, he was hired by Barry Diller to help with programming at ABC; 10 years later, Diller recruited Eisner to Paramount Pictures, where Eisner served as president and COO. Under his leadership, Paramount turned out such classics as “Grease,” “Saturday Night Fever,” and the Star Trek movies.

In 1984, Eisner became chairman and CEO at Walt Disney, a company that, at the time, was primarily known for pioneering works of animation and amusement parks. Under Eisner, Disney grew far more wide-ranging with themed resorts and a new round of box-office hits, starting with “The Little Mermaid” and “Beauty and the Beast.” He fought a strong internal backlash to push the company into video sales; by the time he left Disney in 2005, home entertainment accounted for $6 billion of Disney’s revenue. In 1995, he added television to Disney’s empire, acquiring Capital Cities, owners of the ABC television network.

But Eisner’s departure from Disney was hardly a fairy-tale ending. In 2004, he fended off a hostile takeover and gave up his chairmanship after a 43 percent no-confidence vote by shareholders. “It hasn’t been a supercalifragilistic year for Michael D. Eisner,” said BusinessWeek magazine in a January 2005 article. That October, Eisner stepped down as CEO.

Eisner’s sanguine about his setbacks at Disney; he now enjoys the Magic Kingdom from a different vantage point, that of a grandparent. In a recent conversation with REALTOR® Magazine, Eisner talked about his experiences there and shared his thoughts on leadership, taking risks, and the importance of others in your success.

On being a leader. “Micromanagement has become a pejorative term and that is incorrect. To me, the term is synonymous with good management. A manager who plays too much golf is wrong, as is a manager who tries to do everybody’s job. But good managers have a sense of the details of their associates. They can congratulate when work is done well and understand better when it’s not done well.”

While at Disney, Eisner says he took the time to read every customer letter addressed to him. He then personally responded with a handwritten note to 20 of them every week, copying the executive who handled the area of concern. “I believe in the handwritten note,” he says, “The e-mail is too easy.”

On the importance of finding a trusted partner. “Everyone needs a business partner. Anyone who is operating completely solo and not acting with a governor to check [his or her] instincts is missing something. For real estate professionals, the partner is often their clients. But everyone needs one in business and life.”

The most important factor in a lasting partnership, Eisner says, is trust. “If you catch your wife sleeping with your neighbor, that’s a good time to end that partnership. Likewise, if you find your business partner getting jealous of you, making arrangements without your knowledge, and not filling you in on details, it’s time to break off that partnership. If you pick a partner correctly, those things don’t happen. A certain amount of second chance is appropriate unless it’s an ethical breakdown. Ethical breakdowns are almost never survivable. I have a one-strike policy for ethical breaches.”

On taking risks. “You should never make a decision that puts the whole institution at risk. You put your risk in a small financial box that makes sense. If you don’t have all the information, the best thing is to do no harm. Caution is not a bad thing.”

On making it through. “The biggest problem with the current recession is the unknown length of time. I saw, with my parents’ generation, people who searched for a job for so long that they gave up. The loss of self-esteem is traumatic when you can’t get a job or can’t get work. The answer is to do the best you can. It will come to an end. You might be a decade older, but it will come to an end. It’s important to remember that disruption doesn’t always mean failure. Disruption causes many partnerships to succeed enormously well.”