Testifying in a Delaware court last month, Stanley P. Gold, a former Walt Disney Co. director, joined a long list of company executives who had dirty laundry to air regarding the 1995 hiring of Michael Ovitz as Disney's president and his subsequent firing in 1996. Gold and others detailed how Ovitz had clashed with Disney CEO Michael Eisner and other executives, how he had tried to cut deals the company didn't want and how he had failed to fit into the Disney culture. The situation eventually deteriorated to the point where the only way to refocus the company and end the disputes, said Gold, was to fire Ovitz.
"This was two big volatile egos banging against each other and they just didn't get along," Gold testified, referring to Eisner and Ovitz. Terminating Ovitz, the once-mighty talent agent, just 14 months after hiring him cost the company a $140 million severance package, not to mention ensuing legal fees and distractions brought on by a shareholder suit against the company's board for failing to properly scrutinize Ovitz's contract.
"The severity of the clash at Disney is unique," says Michael Useem, head of Wharton's Center for Leadership and Change Management, which is planning a conference on leadership in San Francisco. "At that level, the executive search firms and internal company procedures are so exacting that it would be unlikely such different styles would enter a top executive suite. Having said that, executives do come in and sometimes they just don't work out with those who are already there."
The dysfunctional Disney team may have been an aberration -- both in scale and cost. Yet while the Eisner/Ovitz scenario presents an extreme case, it contains all the elements of what companies seeking to build successful management teams should avoid.
The Root of Executive Team Clashes
Other major companies over the past decade have had their share of dysfunctional executive teams, says Useem.
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