Thursday, June 16, 2016
An Academy award. $1.3 billion in box office revenues. Millions of wide-eyed boys and girls. Disney’s Frozen is not only the world’s most successful animation feature film ever but also the fruit of an ingenious “postmerger rejuvenation.” How so? In 2005, Walt Disney was lagging in creative output and commercial traction. It then acquired a small but fast-growing animation studio, Pixar. Rather than absorbing Pixar into the Disney machine, Disney instead used Pixar as a stimulus for self-disruption, learning, and ultimately growth. This required both the confidence to allow some units to remain separate and the ingenuity to recognize where and how to use Pixar’s practices to stimulate Disney’s growth. Notably, Disney put Pixar’s leaders in charge of bringing new glory to its own fledgling animation studio, wholly rejuvenating itself in the process. The result: an annual total shareholder return of 22% and a series of blockbusters culminating in Frozen.