This Disney cautionary tale is one all non profits should heed. (Thanks to Roy Williams for the reminder).

Michael Eisner came to Disney in 1984. He initially made Disney extraordinarily profitable at a time when competitors were stumbling. His strategy? Turn Disney’s greatest movie treasures into direct to video sequels of old classics like Cinderella. Did you ever see Cinderella II: Dreams Come True? In an article called Magic Restored, The Economist likened this approach to selling Disney’s version of frozen food.

Soon after Eisner’s arrival, video sales became the cash cow, providing almost all the profits for Disney’s movie division. The creativity and magic that had been core to Disney’s vision since it’s founding had been sidelined for what The Economist calls a “factory-like process for animation in which a business-development team came up with ideas and allocated directors to them.”

In the early 2000’s — with competition from Pixar heating up — Disney’s well ran dry. 

In 2003, Roy E. Disney resigned from his positions as Disney vice chairman and chairman of Walt Disney Feature Animation, accusing Eisner of turning the Walt Disney Company into a ‘rapacious, soulless’ company.

Eisner left Disney under pressure from stakeholders in 2005.

The lesson? A company — or non profit — that loses sight of its core values will stumble. Under Eisner, Disney had none of the whimsy, none of the adventure, none of the imagination that had guided the Disney brothers. While making a ton of money doing direct to video sales, Eisner had abandoned the values and traditions of Disney. It caught up with him.

Non profits do this all the time. A blatant example is when Audubon moved away from championing conservation through the lens of birds during the 1990’s (they have since, under the leadership of David Yarnold, righted this disastrous course).

What are the values and traditions that guide your non profit? Does every one who works for you understand your core guiding principals? Are these guiding principals shared and valued by your donors? Are you communicating them internally (staff training and core programatic offerings) and externally (advertising and marketing)?

These are important questions to ask and to answer.