Once Upon a Time Warren Buffett Predicted Bob Chapek’s Fall

During the 2022 Berkshire Hathaway Shareholders Meeting, Warren Buffett was asked what advice he had for investors and employees alike during periods of high inflation. “The best thing you can do” when times get tough, he said, “is to be exceptionally good at something.”

In his estimation, people will always compensate the best at what they do, so long as the best at what they do continue to deliver. The best heart surgeon will always be in demand, as will the best defense attorney, the best hairdresser, the best chef, and so on.

According to Buffett, the best at what they do will feel the impacts of a struggling economy less severely because cash-strapped customers will continue to spend money where they know some return is all but guaranteed.

Just before the Thanksgiving holiday, Disney announced that Bob Iger, former CEO, would temporarily return to his role atop the company. Bob Chapek, the short-lived and deeply unpopular CEO, was out.

Had Bob Chapek heeded Warren Buffett’s advice, his tenure may have extended beyond just two short years.

Disney is a massive corporation with multiple business streams. It seems all were negatively impacted by Chapek’s quantitative leadership philosophy. According to reports, “Chapek earned a reputation for cost-cutting, price hiking and just about every Scrooge McDuck-like behavior in the books,” across the enterprise.

(It's worth mentioning, I predicted here that Chapek was in for a rocky ride exactly one year before his firing.)

Chapek’s excuse for the austerity was that times were tough: the pandemic temporarily shuttered movie theaters and parks, the company muffed its handling of Florida’s controversial “Don’t Say Gay” bill, its streaming platforms lost money… cuts had to be made.

Whiffs of this toxic mindset spread quickly to customers, specifically at Disney World, arguably the crown jewel of the company. Sources indicate that Chapek’s “most visible and unpopular moves” were indeed in the theme parks, “where endless cost increases were paired with declines in quality.”

Instead of cutting when times got tough, Chapek should have listened to Buffett and leaned into what the Disney Corporation is best at.

Disney World touts itself as “the happiest place on earth.” It’s one of the few places in the world where every single employee is doing everything in their power to bring you joy, and they’re exceptionally good at it.

Disney World average annual attendance tops 58 million people, making it the most popular vacation resort in the world. Tickets aren’t cheap, but parents willingly scrimp and save to see that iconic Disney smile radiate across their child’s face.

If the best thing a person – or company – can do during difficult economic times is be exceptionally good at something, and Disney is exceptionally good at making people happy, then it is no secret why Chapek failed. 

Thankfully, Iger has indicated that under his leadership, decision making authority will return to the hands of Disney’s creative teams, most notably the Imagineers, who play an integral role in delighting park goers with their knack for creativity, innovation, and storytelling.

As for Chapek, the story of his tenure as CEO does not end happily, but he was the author. All it would have taken for a different ending was some creative thinking.

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Co-authored by David Brendel and Ryan Stelzer, Think Talk Create: Building Workplaces Fit for Humans was published by the Hachette Book Group under the PublicAffairs imprint on September 21, 2021. Now available to order!