Disney’s Succession Fail: A Family Business Lesson

Did you know that Disney lost over $200 billion in market value during its last failed leadership transition?

Most headlines fixated on the dramatic return of Bob Iger as CEO, overlooking a deeper issue. What happens when a leadership handoff lacks alignment, trust, and preparation? The consequences go far beyond public perception — they erode value, destabilize culture, and create lasting uncertainty.

A strong succession planning process isn’t just about the future; it protects your legacy and business value. Disney’s recent challenges show what can go wrong without a strong plan. For family businesses, where family members often hold emotional and financial stakes, the pressure during transitions is even greater. As Ryan Beesmer of Rawls Succession Planners says, succession can lead to new growth—or undo years of hard work.

The Cost of Getting It Wrong

Disney is a large company, but its leadership struggles are similar to what many family businesses face. Leadership changes often trigger emotions, create power struggles, and disrupt company culture. This is especially true when legacy, family roles, or public pressure are at play.

Just like in a family business, misalignment at the top can ripple through every layer of the organization. The stakes may differ in scale, but the principles are strikingly similar.

The Importance of Succession Planning

Succession isn’t just a box to check — it’s a cornerstone of long-term success. Whether or not you’re ready to step away, having a plan in place is essential. Large corporations like Disney dedicate entire committees and invest millions to manage leadership transitions. Even then, things can go off course.

For family businesses, the stakes are even higher. According to PwC’s Family Business Survey 2021, only 34% have a well-documented and clearly communicated succession plan. That means most are facing one of their business’s most important moments without strategic plans—and simply hoping for the best.

What Strong Succession Looks Like

Strong succession planning doesn’t just prevent disaster, it builds momentum. It includes mentorship, role clarity, and clear communication with all stakeholders.

For example, one multi-generational agricultural business worked with advisors to create a 5-year succession timeline. The outgoing CEO stayed involved as a mentor, while the incoming leader gradually took on more visibility and authority. This eased tension, built team confidence, and preserved the founder’s legacy while empowering the next generation.

Case Study: Disney’s Leadership Transition

• Leadership Transition and Tension: Bob Iger stepped down in February 2020, and Bob Chapek took over as CEO. Insiders reported tension over company culture, decision-making, and effective communication shortly after the planned transition. Chapek cut costs and took more control, especially in creative teams. This caused tension with Disney’s creative leaders.
• Employee Morale and Public Image: During Chapek’s tenure, employee morale declined, and creative divisions grew strained. His handling of politically charged issues led to employee protests and negative public attention. These missteps, along with wider market and business pressures, raised concerns about Disney’s leadership and direction.
• Share Price Decline: Disney’s share price did fall significantly during Chapek’s leadership. When Chapek became CEO in late February 2020, Disney’s stock was trading around $140 per share. By the time Disney removed him in November 2022, the stock had fallen to about $91 per share—a drop of roughly 35%. This is a major drop and shows the market’s lack of confidence during his tenure.
• Board Intervention: In November 2022, Disney’s board fired Chapek. They brought back Bob Iger as CEO to steady the company and restore strong leadership and strategic direction.

Lessons for Family Businesses

Disney can survive a $200B stumble. Most family enterprises can’t.

This makes succession not just a milestone, but a make-or-break moment. Key takeaways:

• Vet successors based on merit, not proximity.
• Prepare them for the real world, not just the boardroom.
• Build internal support systems — without them, the strongest leaders flounder.

Choosing the Right Successor

One of the key lessons from Disney’s experience is the importance of selecting the right successor. It’s not enough to choose someone based on their last name or position within the family. The successor must earn the role by showing leadership development, not just holding a title. Businesses should also assess their internal talent pool when planning for leadership transitions.

An effective successor:

• Commands respect from peers and teams.
• Handles conflict, change, and crises with confidence and skill.
• Embodies the family values — but with modern execution.

You’re not just choosing the next CEO. You’re entrusting the family’s legacy to someone who must lead in an increasingly volatile world.

Beyond skills and experience, emotional intelligence, resilience under pressure, and openness to feedback are non-negotiables. Warning signs include avoidance of conflict, lack of accountability, or reluctance to engage others. If the successor can’t unite teams or earn trust, the title won’t hold weight.

Preparing the Next Generation

Preparing the next generation to lead isn’t just about naming a successor. It’s about mentoring, gradual responsibility, and exposure to real challenges.

Involving them in strategic discussions early builds confidence and competence. Encourage them to ask questions, test ideas, and learn from failure. When successors feel supported and challenged, they’re more likely to grow, handle pressure well, and earn trust from others in the business.

Opportunities in Succession

Despite the challenges, succession also presents opportunities. New leadership can bring fresh insights and invigorate the organization. Strategic and intentional succession planning can lead to a thriving future, ensuring the business’s legacy continues.

For family businesses, this means moving beyond mere tradition and focusing on strategic alignment. Successors should lead with clarity and confidence, ready to manage the pressures of both family and business. A structured leadership development program can help prepare them for this responsibility.

Good succession planning helps avoid conflict, boosts team morale, and makes the business stronger for the future. It also builds trust across generations and creates a shared sense of purpose and direction.

Protecting What You’ve Built

The story of Disney’s succession challenges serves as a powerful reminder of the importance of effective planning. For family businesses, the stakes are high, and the need for strategic succession planning is paramount. By learning from the mistakes of large corporations, family enterprises can safeguard their legacies and ensure continued success.

You’ve spent years—maybe decades—building something meaningful. That effort deserves protection.

Succession planning isn’t about stepping back; it’s about stepping forward with purpose. It ensures your values, culture, and vision carry on. It gives your team and family clarity, direction, and confidence in what’s next.

How The Rawls Group Helps Family Businesses

For more than 50 years, The Rawls Group has helped family businesses plan for the future, grow strong leaders, and stay successful over time. Our advisors bring a multi-disciplinary approach that blends family dynamics, organizational development, and financial foresight — helping clients protect what matters most. If you’re getting ready to pass on your business, bring your family together, or make sure your business lasts, we can help. We provide clear guidance and proven experience to turn succession into a strength.

Ready to protect your legacy and plan for the future with confidence? Contact us today to start the conversation.

FAQs

Why is succession planning important for family businesses?

Succession planning helps family businesses keep going and stay strong as they pass from one generation to the next. It helps in selecting the right leader who can uphold the family’s legacy and adapt to changing market conditions.

What went wrong with Disney’s leadership transition?

Missteps and external challenges disrupted Disney’s transition from Bob Iger to Bob Chapek. Chapek struggled to lead and respond to the market. As a result, Disney’s stock dropped, and the board brought Iger back.

How can family businesses choose the right successor?

Choosing the right successor involves an honest assessment of potential candidates’ strengths and capabilities. It requires moving beyond family ties and focusing on strategic alignment with the business’s goals and values.

Start with clear criteria. Define what success looks like in the role—both from a business and family perspective. Then assess your candidates through honest feedback, leadership experiences, and outside coaching. Look for flexibility, shared values, and the ability to bring people together.

A decision based on clear thinking and good preparation—not emotion—leads to better results.

What role does professional guidance play in succession planning?

Professional guidance provides family businesses with the expertise needed to navigate complex succession challenges. Advisors help with leadership changes, family alignment, and business planning to ensure a smooth and successful succession process.

NextGen leaders can feel like they are stuck between and rock and a hard spot.  Working to fulfill expectations of leadership as well as making their mark on the organization to earn respect.  Click the following links for more drill-down resources on Successor Preparation.

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