Disney's strategy map

Studying the strategies of some of the world's most successful companies is a part of what we do. There are obviously always new approaches that can be learnt from a deeper understanding of how great companies craft their own philosophies of success.

Kottke recently republished one of their old posts that takes a look at Disney's legendary recipe for success, which conveniently has been elegantly captured in a detailed systems diagram here.

This diagram - published in 1957 - was apparently drafted by Walt Disney himself and serves as “a recipe for making a Disney animated movie”. What it also offers is a detailed account of the Disney strategy that has been in play for decades.

What the map clearly demonstrates is that value creation at Disney is thanks to a coherent, interconnected system of carefully considered elements that produce the franchises and brands that the business is famous for. The system itself is the strategy and offers, no matter who ends up running or working for Disney, a clear guidance as to how value is created in the Disney-way.

Writing about this recipe in HBR, Todd Zenger adds this key piece of insight as to what else is critical for successful ongoing innovation:

First, there is foresight about an industry’s evolution, including relevant technological change or evolving consumer preferences. Second, there is insight about the distinctive and valuable assets and resources of the firm. Finally, there is cross-sight — the ability to identify adjacent assets uniquely valuable to your firm or assets with value that others are simply unable to perceive.

The big strategic play however that Disney is consistently focused on is the building of franchises and brands.

A franchise-driven studio

Disney’s dominance can be boiled down very simply to one word: franchises. Or rather, an “incessant focus on franchises” in the words of former Disney CFO Jay Rasulo.

“Everything we do is about brands and franchises,” Rasulo told a group of financial analysts last September. “Ten years ago we were more like other media companies, more broad-based, big movie slate, 20 something pictures, some franchise, some not franchise. If you look at our slate strategy now, our television strategy, almost every aspect of the company, we are oriented around brands and franchises.”

Far from this strategy now being a bit dated, Disney's very latest reporting alludes to the fact that this unique appraoch is still very much in play today.

Good example of this successful approach is the stellar performance of Inside Out 2.

The rest of the report is a master class in how to build compelling creative assets and then leverage the opportunity created for years to come. Disney+ is far from just serving as yet another streaming service, it's a powerful marketing channel for the company that customers also pay for.

This is strategy. Not plans or wish-lists or random M&A, but rather a set of coherent choices that creates a desired future for the business supported by a credible and unique theory.