Disney this week announced Josh D’Amaro, its parks chief, as the winner of its very public race to be its next CEO; he’ll take over for outgoing chief executive Bob Iger in March. But along with the glory of the CEO crown and the monumental task of running the complex entertainment giant, D’Amaro faces a tricky personnel challenge: becoming the boss of his former peer. Dana Walden, Disney’s TV and entertainment chief, was reportedly a fellow CEO contender he beat out for the job.
The Fortune 500 is littered with examples of wanna-be CEOs who left their companies after being passed over for the top job. And leaving can be a natural response to such a snub. Famously, when GE named Jeff Immelt CEO in 2001, the three other internal candidates eventually departed the company for top jobs elsewhere. Former Apple retail chief Ron Johnson left to become CEO at J.C. Penney when the tech giant named Tim Cook CEO in 2011. Just last month, Walmart announced that its international CEO Kathryn McLay, considered a CEO contender, was leaving the company following the appointment of John Furner as the retail giant’s next chief.
But in Disney’s case, Walden seems likely to stick around, at least for a while. In announcing D’Amaro as CEO, Disney also promoted Walden, a respected Hollywood insider, to president and chief creative officer. She’s the first to hold that title in the company’s 102-year history, and it gives her oversight of all of Disney’s movies and streaming series. Along with praising Walden’s creative and storytelling bonafides, the Disney press release notes that she “will report directly to D’Amaro,” the guy who beat her out for the CEO job.
And there’s the rub. Even for the most self-assured executives, that dynamic could prove awkward. The CEO runner-up has to nurse a dented ego while answering to the succession race’s ultimate winner. The incoming CEO, meanwhile, has to manage a team that includes someone who wanted their job.
On paper, at least, Disney has set up D’Amaro and Walden to navigate the many pitfalls such a scenario poses by giving the new CEO and chief creative officer roles that are distinct and complementary.
“She’s on the creative side, whereas D’Amaro is more on the financial and parks side,” says Susan Sandlund, a managing director at Pearl Meyer who leads the firm’s leadership consulting practice. Walden “brings value in a whole different way than D’Amaro does,” she says. “In combination, it’s a pretty powerful team.”
It could be argued that Disney’s new double-barreled leadership arrangement, which draws on the executives’ strengths, is akin to a co-CEO structure but better, Sandlund says. “You have one reporting to the other,” she says. “The minute you have equal CEOs, you are begging for ambiguity and potential conflict.”
Still, distinct titles and designated realms of influence won’t guarantee a smooth partnership. The onus is on D’Amaro to settle on a common, shared goal that he can rally his new team around and to delegate meaningful tasks to Walden, says Emma Zhao, an assistant professor of commerce at UVA’s McIntire School of Commerce. “That helps put aside some of those individual concerns and motivations.”
A wildcard in all of this, for course, is Walden’s personal feelings about the situation—her ambition and whether she’s determined to one day be a CEO. If that’s the case, her new position and a one-time award with a target value of $5.26 million may only keep her at Disney for so long.
Sandlund, who has counseled executives in Walden’s position before, suggests her best strategy is to sit tight. “My advice is don’t make any rash moves right now. A lot of people will be calling you for other CEO roles, which you could jump at immediately,” she says. “But if an executive really likes where they are, they love the culture, they’ve been there a long time, then they often want to see, what can the company do that would make it worth sticking around?”
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