Harvard Business School 9-490-010

October 20, 1989

Dennis Hightower and the

Walt Disney Company in Europe
“Go out and grow the business. Do something different from what has been
done in the past. Develop a strategy and bring it back to us in three months.” This
was the challenge Frank Wells, president and COO of the Walt Disney Company,
presented to Dennis Hightower, newly hired vice president of Consumer Products
for Europe and, (subsequently) the Middle East1. The time was June 1987.

The Disney Organization in Europe, 1938-1987

Europe was the first area outside the United States for the marketing of Disney consumer
products other than films. In 1938, Walt Disney personally visited Italy to initiate a licensing business
with a major Italian publishing company. After the war, Walt Disney hired his first country manager,
for France; the French manager hired all subsequent country managers. By 1987, there were eight
wholly owned business subsidiaries: Denmark (Copenhagen), the United Kingdom (London),
Belgium (Brussels), Spain (Madrid), France (Paris), West Germany (Frankfurt), and Italy (Milan).
These subsidiaries operated in 26 different markets and together employed about 102 people. In
addition, there were independent marketing licensees in Greece (Athens), Egypt (Cairo), and Israel
(Tel Aviv). Approximately half of these licensees’ business was Disney-related. Each subsidiary and
marketing licensees’ representative reported individually to Barton K. (Bo) Boyd in Burbank,
California, Disney’s world headquarters; country managers submitted budgets and indicated their
expected profits.

The Country Managers

By 1987, all eight country managers had spent substantial time in their positions. The French
manager, personally hired by Walt Disney, was 70 and had been in his role for nearly 40 years. He
was considered a “living legend,” being credited with having essentially built Disney’s European
business since World War II. He was also considered the titular head of Europe, although this status
had never been formally acknowledged by Burbank.

The Danish country manager was 61 and had worked for Disney for 24 years; the German
country manager, also in his sixties, had held his position for 30 years. The Belgian country manager,
60, had held his job for 35 years, and the Italian manager, also 60, for 26 years. The three youngest

Barbara Feinberg prepared this case under the supervision of Professor Todd D. Jick as the basis for class discussion rather
than to illustrate either effective or ineffective handling of an administrative situation.
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 490-010 Dennis Hightower and the Walt Disney Company in Europe

country managers, the Spanish at 44, the Portuguese at 41, and the United Kingdom at 41, had been in
their positions for 16, 10, and 15 years, respectively.

All the longer-tenured country managers knew the Disney family personally. Most had
known Walt, along with his brother Roy Disney, Sr. The Disney children were regularly sent to
Europe on vacation, where they would stay with the various country managers at their homes. Roy
Disney, Jr., the company’s current vice chairman, “learned the business” from the French and German
country managers when he became active in the company nearly three decades earlier.

Perceived as “senior senators,” the country managers for all practical purposes were Disney
in Europe. They were proudly independent, having effectively built a level of awareness of the
company that was critical throughout Western Europe.

Book and magazine publishing and a full range of merchandise licensing of apparel, toys,
housewares, and stationery, and the like had all been developed. Special events related to the Disney
characters’ birthdays and animated film releases were also staged. As a licensing-driven business,
little investment had been made in hard assets. Hence, it was an extremely high-margin enterprise,
with the rate structure based on the properties involved or the product categories. It was also a very
profitable enterprise.

Preparing for 1992

In late 1986, the Disney organization was negotiating to build a Euro-Disneyland; an

agreement was ultimately reached with the French government to build the theme park outside Paris,
to be opened in 1992. The recognition that both the park and the European markets were scheduled
to “open” in 1992 was a catalyst for rethinking Disney’s European operations. Opportunities would
undoubtedly be tremendous. It was also felt that European market penetration had lagged behind
the United States’ penetration, due to a lack of coordination among the country subsidiaries.

As a first step toward taking advantage of perceived marketing opportunities, Disney

management decided to establish a European headquarters, in Paris. A newly created position, vice
president of consumer products for Europe and the Middle East, would head the office; duties would
include profit and loss responsibility, marketing and business development, responsibility for salaries
and bonuses, and instituting performance measures. The country managers had been consulted on
this decision. The sentiment was that the new European head should not be a European; the notion of
an American who could “relate” to the studio (as the Burbank headquarters was called) and build
credibility locally was much more appealing.

Once the decision to establish the Paris office was made, it was announced worldwide:
throughout the entire Disney organization and to Disney affiliates and licensees. Everything
concerning the eight-country subsidiaries that had previously been managed by Burbank would now
be run by Paris.

The New Position Is Filled

The search firm of Russell Reynolds was hired to find candidates for the new European vice
president job; Dennis Hightower, head of Russell Reynolds’ Los Angeles office, was in charge of the
search. Hightower and Bo Boyd spent three weeks in Europe interviewing prospective candidates,
and discussing with each country manager to get a sense of both the business issues confronting each
group and what kind of person would generate confidence, respect, and trust for that group. Many
candidates were put forth for the role but, in the end, very much to his surprise, Hightower himself
was offered the job. He joined the company in June 1987. Before he had been approached, however,
Boyd called the three most senior country managers (Italy, Germany, and France) to share the
decision with them. Would there be any problems? Later, once Hightower accepted the position,

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 Dennis Hightower and the Walt Disney Company in Europe 490-010

Boyd told him of these conversations and assured him that the three managers had approved of the
choice.

Dennis Hightower, 45, brought a varied background to his new job. After college, he served
eight years as an intelligence officer in the Army, with assignments in southeast Asia and a specialty
in Eastern Europe. Subsequently, he earned his MBA at Harvard and worked at McKinsey during
four years. He then joined GE, becoming a country manager in Mexico. Recruited by Mattel as the
vice president of corporate planning, he was involved in that company’s expansion in Europe. Three
years later, he joined Russell Reynolds, where he worked primarily with international clients.

Accepting the Challenge

As Hightower contemplated his newly created job, he thought wryly to himself, “If you don’t
know where you are going, any road will take you there!” His task was to figure out where Disney
would be in 1992. What role should Disney play in Europe? What changes would that entail? He
mused:

These European managers have been running themselves for years. They
have been very successful; it is a very profitable business for Disney. It could have
been more profitable, but things were fine just the way they were.

So what do I bring to the party? Not only am I an outsider, I am a boss they

never had before and probably don’t want—no matter how much they may
intellectually agree to the need for one.

How am I going to develop a strategy that will unify Europe, grow the
business beyond any one individual area, and introduce critical thinking and creative
approaches—all in three months? Where do I begin?

3
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