Page 128 - Harnessing the Management Secrets of Disney in Your Company

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color, and sound. And even though the film was, at the time, a financial failure,
Walt viewed few things as absolute failures. He knew that even unsuccessful
ventures provide valuable lessons, and such hard-won knowledge can be put
to use elsewhere.
Taking its cue from Walt, The Walt Disney Company does not consign
failed projects to the trash heap. Rather, it considers them to be assets of the com-
pany that may be tried again later or perhaps utilized in a different capacity.

Partnerships Can Secure Prosperity

Partnerships were obviously an integral part of Walt Disney’s business strategy,
often serving as lifelines in times of financial distress. In the 1930s alone, a
string of partnerships—ranging from an exclusive arrangement with Technicolor
and licensing contracts that put Mickey and Minnie’s faces on toys and
clothes to deals for a syndicated newspaper comic strip and a deal for the
publication of the Mickey Mouse Book—pulled the company back from the
edge of bankruptcy. At this particular time in Walt’s career, the cash flow from
cartoons was little more than a trickle (he often had to wait months to be paid
by his distributors), and the partnerships were crucial to survival.
During the building of Disneyland in the 1950s, Walt again found him-
self short of cash. Even though ABC invested $500,000 and guaranteed a
bank loan of $4.5 million, the price tag for finishing the park came to some
$17 million. Walt cashed in his life insurance policy and then began to search
for ways to close the financing gap. The novel solution he came up with was
corporate sponsorships, which, in effect, are another form of partnership.
Disney signed agreements both Coca-Cola and Frito-Lay, giving them exclu-
sive concessions at Disneyland. He also brought in small, unknown partners,
even allowing a corset maker and a real estate agent to set up shop in the
Park. Walt partnered with Art Linkletter and asked him to emcee the gala
grand opening of Disneyland. In those days, Art was one of the best-known
celebrities in Hollywood. When Walt told Art that he would love for him to
emcee the event, but that having invested everything he owned in the con-
struction of Disneyland, he was sure he could not afford Art’s fees. Art recalls
the discussion: “Walt said, ‘I’m at a great disadvantage in talking to you. Why
don’t you have an agent like everybody else?’ I said, ‘Well, Walt, I just do my
own stuff. . . . We’re friends. I’ll do it for practically nothing.’ He said,
‘Will you?’ I said, ‘Certainly. We do things for our friends. Now, for instance,
you have some things you are going to contract out. You aren’t going to do