So if you've read my book, you know I'm a bit of a Disney buff. If I ever find myself with some extra time in LA, I try to swing down to Anaheim and at least wander through the giant "World of Disney" store at Downtown Disney. Finding myself in Orlando for a week, of course, provided ample reason to visit Disney property, and I again found myself strolling through the "mother of all Disney stores" at Downtown Disney Orlando.
Walking through one of these mega-stores packed with shoppers nearly non-stop every day from 10am to 11pm (11:30pm on weekends!), one is overwhelmed by the depth and breadth of product produced under the Disney name. Ten years ago, as I was trying to build my own Disney, my reaction was often "I want one of these!" I thought it all looked like tremendous fun, the sort of fun I had been seeking when I started Big Idea in the first place. The highest goal was cultural impact, of course, but I was also driven by thoughts like… "Wouldn't it be fun if I had a theme park like Disney's?" "Wouldn't it be fun if I had a giant store filled with cool stuff like Disney's?" "Wouldn't it be fun if we could buy an old movie house and restore it and turn it into our headquarters?" (If you've read my book, you know how that one turned out.)
So… 10 years later, I'm a little older, and, perhaps, a little wiser. So I'm wandering through the giant Disney store, looking at thousands (literally) of Disney products gloriously displayed for the happy Disneyphiles and their young offspring, and do you know what I'm thinking?
"This looks like a lot of work."
and…
"Someone is losing sleep right now hoping that this new line will sell."
and…
"If they're wrong, there are going to be layoffs."
Looking at all that stuff, all I could think about was the level of stress on the team behind it all. Stress that maybe they hadn't developed just the right new merchandise, stress that it wouldn't sell as well as expected, stress that one bad season might cost them their jobs.
You see, at a public company like Disney (or Viacom, or McDonald's, or GE), there is but one rule: No matter how much you managed to sell this year – no matter how well you did, next year you must sell MORE.
That's what makes the stock price go up. Growth. That is the ultimate goal of every public company. In fact, that is the premise upon which they go public. "We pledge to you, public, that we will grow. Forever. Amen." And so they go public, and, believing their promise, folks like you and me buy their shares. And the shares increase in value. And everyone is happy.
Until they stop growing.
Once sales stop growing, or even appear to stop growing, folks like you and me get frustrated and sell our shares. And the stock price goes down. And the board of directors, doing what they are paid to do on behalf of the shareholders, demands improvement. Change. So the company executives affix blame to whomever appears closest to the problem. Heads roll. A new team will get their chance to turn things around. Rinse. Repeat.
This dynamic just happened at Entertainment Rights, the latest owner of VeggieTales. After selling the board of directors on the notion that Entertainment Rights plus Classic Media and Big Idea would be worth much more than Entertainment Rights on its own, the founder of Entertainment Rights watched as his stock price fell from 32 British pounds per share to less than 8 in the year following the purchase. This sort of thing, in financial circles, is frowned upon. Stock prices are to always go up. Never go down. And going down 75% in one year means that something is horribly wrong.
So wrong that the board was required to take action on behalf of the shareholders, throwing the founder of Entertainment Rights out the window last March and replacing him with a new executive they believe will be able to "turn things around." (Since the replacement of the founder in March, the stock price has fallen from around 8 to as low as 4.75. Hmm.)
This is the dance of the public company, and this is the dance that the executives in charge of all that product at the Disney store know all too well. So every year, regardless of how well they did the year before, they must do even better. More. Bigger. Faster.
So this year they launched the "Bippity Boppity Boutique" inside the big Disney store – a reservation-only mini-boutique where 6-10 year-old girls can get high-priced Princess makeovers… just like mom. (I kinda wondered what would happen if you signed up your 10 year-old boy for a "princess makeover." Would they refuse him? And if so, could you sue them for "gender discrimination?")
So let's say the new boutique is a big hit. Sales grow 10%. Everyone smiles and slaps you on the back. Guess what? Next year you have to grow sales by another 10%. Somehow. And the year after that, and the year after that. Because that's how it works.
Sound stressful? Picturing George Jetson on that treadmill, yelling, "Jane – stop this crazy thing?"
That's exactly what I was picturing in my head as I strolled through aisle after aisle of shiny merchandise.
"This is insane!" I thought. "I actually WANTED this?"
Walking through this store a decade ago all I saw were the fun, shiny products. Walking through last week, I saw the stressed designers and executives behind each one.
I'm not saying there is no healthy way to do fun merchandise that kids will enjoy. I'm simply saying that it won't look anything like the giant Disney store. And it must be done in an environment that doesn't measure success in terms of infinite growth.
There is a correct size for a business. A size where that business can accomplish its mission without burning out its employees. There is a size where a company is "big enough." But not if the company is driven primarily by a profit motive and backed by either public investors or, for the most part, private equity. For a profit-driven company, the right size is always "bigger than last year." Forever. And ever. Until the company fails, or until the board concludes that the best financial use of the company's assets is to sell them off to an even bigger company. (As was the case with Classic Media last year.)
Why is all this relevant? Because I'm building a new company. And there is a treadmill over in the corner, just begging me to climb back on.
So now we must sing the "What We Have Learned Song," and stay off the treadmill. We can have wonderful fun creating great product that can impact kids lives. But there is a way to do this without burning people up – without stressing them out. Without hinging our existence on the annual race for "more."
I'm not sure exactly how we're going to pull this off, but I've got a much better idea than I did 10 years ago. Stay tuned and we'll see how it goes, okay?
I’ll stay tuned. I’m a plumber by trade, and after years of working for “the man”, I got big dreams of self-employment, freedom, and not to mention the “big bucks”. What I found was stress, paperwork, and lots of overhead costs…somehow this whole self-employment thing was a lot tougher than my dreams had told me. Ha! I amost lost it all literally. I “decided” that this wasn’t the right time, and so maybe when I’m a little older, and wiser I’ll try it again (after all I’m only twent-four). So, I stepped away from it and went back to work for “the man”, but this time with a smile.
Phil, have you seen “The Story of Stuff”?
http://www.storyofstuff.com/
Some of it’s a little political, but it’s a really eye-opening look at the cycle of consumption, which ties into your comments about stock prices.
Mr. V., I couldn’t agree more. 🙂
Jeremiah said in Chapter 10, verse 23, “O Lord, I know that the way of man is not in himself: it is not in man that walketh to direct his steps.”
Meaning, it’s not within a man to direct the course of his own life.
And yet we all want to do that so much. I’ve tried it in my own life in ways smaller than a big corporation, but it’s still the same thing.
Noah walked with God. And then, Noah received the plans for the ark. Every single detail was given to him, by God. God didn’t leave any details out of the plan He gave to Noah, and the plan worked beautifully, and accomplished what God wanted accomplished. God had the plan already in mind, and He had the person in mind to do the job.
The plans that man comes up with on his own may look great for a length of time, but they eventually will fail. But the plans of God that come from God’s heart, they will stand, because they are ordained by God, and God blesses them. (Of course, God has every right to change those plans, whenever He sees fit. But does He ever do anything without first announcing it to His people? No. The Bible says that God will do nothing unless He first reveal it.)
So by walking hand in hand with Him, we’ll hear Him when He says, “okay, plans are changing, Now I want you to go THIS way, and do such-and-such.” As we stay current in our fellowship with Him, we will always have a current plan.
Jesus said, “Take My yoke upon you” (His plans, His ideas, His course for my life) and He said His yoke was “easy.” If it’s His plan that I’m trying to accomplish, then it may be bigger than what I might think I can accomplish, but it’s never bigger than God. So I don’t have to get stressed out about it. It’s God’s plan, so He’ll see to it that it gets accomplished. All I have to do is walk with Him, and listen to His instructions.
But it takes seeking Him first, always. If we aren’t in close fellowship with the Father, we won’t hear Him when He says, “Hey. I’ve got something for you to do.”
“Go build an ark.” 🙂
Amen! The “Wal-Marts” of the world are just giving us what we’re asking for “lower prices at any cost and make my stock grow at the same time, please!” We drive them to grow our money even at the cost of our own jobs. When we lose our jobs, what do we do? Start shopping where things cost less b/c we lost our jobs. Rinse. Repeat (as you say).
I learned this first hand looking up from the bottom. Unfortunately, when I went to a smaller company run by Christians, they hadn’t learned the lesson and now I just got laid off again (and they’re all out the door also) by the new owners pushing for more, faster, cheaper!!!
Reading your book put my thoughts and experience in focus and also made me more pro-active about being away of trend towards/away from these things. I’m determined to keep things small despite what sales may imply needs to be done.
Best advice: pray.
Also, a wise man once wrote to me:
“Hold on to it very loosely. Put it in God’s hands, not yours. Always be open to walking away – moving on in a new direction. If you can’t imagine yourself letting it go, you’re holding on too tightly.”
That’s great to hear, Phil. That same mindset is one of the things that prompted me to come up with the whole “Missionaries by Mail” scenario. I was in a Christian book store wandering around the kids section and thinking, “Man! It’s expensive to be a Christian kid!” I started thinking about the poor kids and kids in other countries. What Christian-themed toys do they have a shot at?
I’m so glad that God has given you this new dream and new way of doing things.
My first professional artist position was at a t-shirt printer. The owner, a Christian, never wanted to grow. He had five employees and never failed to fulfill an order and never lost his shirt. He ran the business that way until retirement. I saw him working the checkout lane at a Meijer many years later. Looked only a little older. He saved himself MUCH stress and probably is enjoying retirement much longer than he might have otherwise. Rich? No. Thus the check-out job. Almighty God remained his pursuit, not the almighty dollar. Slow and small works. What a witness Don was, and is.
Have you heard of 37signals? Their philosophy, while not Christian, is very similar.
I disagree. I think growth is healthy, and natural (and scriptural!). Things that don’t grow should be pruned, to encourage growth. And if that doesn’t work… 😉
I understand where you are coming from (given BigIdea) and I think it’s important that you choose a healthy path for you. But leave room for God to make things big, if he wants to. There are people who can be good CEOs and COOs under your leadership, with a sense of stewardship and aligned values. There are people, like me, who are passionate about strengths-based organisations, and believe that an organisation that releases people to live and work in their strengths will always outperform the grinding, targets-above-people companies.
Fundamentally, I don’t think scale is the problem (or even the sharemarket/being publically owned). I think the problem is one of values. Which is why I respect what you’re trying to do 🙂
Just as those who are connected to the Creator should be the most creative, so those who are connected to the Leader should be running the best, healthiest, strongest (and even rapidly growing – but not necessarily the fastest 😉 companies.
God bless you 🙂
Phil Vischer: There is a correct size for a business. A size where that business can accomplish its mission without burning out its employees. There is a size where a company is “big enough.” But not if the company is driven primarily by a profit motive and backed by either public investors or, for the most part, private equity.
Ori: The proper capitalistic thing for a company to do when it does not make sense to grow is to give the profits to the investors in the form of dividends. This lets the investors have their money back without a change in control, and allows that money to be deployed more effectively.
Sadly, there are a number of factors that make it hard for public companies to do this:
1. The tax code. Dividends are taxed a lot more heavily than capital gains.
2. Lack of humility. It requires management to admit somebody other than themselves knows how best to use the money. It requires management to give up power by giving up the money.
3. Lack of respect for humility. A board of directors is more likely to appoint a prospective CEO who promises the sun and the moon than one who promises more modest things that can actually be achieved. This is similar to how a politician who makes grand promises is more likely to get elected than an honest one.
Here’s what it all comes down to: I was once ‘down-sized’ by a large Christian products company because they didn’t make enough profit and needed to streamline. Note ‘ENOUGH’ in that last sentence.
Several publishers this year did the same. The ones whose names on probably on the Bibles you all use. Yep, they need to grow and I don’t disagree that they need to prepare their organizations for a shift in the business environment that we’re just beginning to feel. But the drive to ever-increasing ROI is damaging us all a little bit at a time.
Phil’s right. There is a size that’s ‘big enough.’ It’s the same size where we make ‘enough’ profit to continue to provide products/services to our customers and take care of our employees, etc.
hey I haven’t read your book but I’ve read most of whats on your blog (And you probably know by now I’m the one from Down Under with lots of questions). I can remember back on theb old bigidea.com when it listed your 20 year BHAG. I was just excited about the porspect of a “christian disney” because I knew I would get entertainment which would suit me. And I always get excited about new Christian ideas that will reach heapos of people.
What I’ve learnt lately is that God wants me to start where I am. I need to love my mum and my sister at home. And home is a great place to learn how to love because you can make mistakes there. IP love what you said Phil oncve about just eing kind to the check out chick. That made an impression on me.
Keep it up! Or give it up to God I should say (There’s some Christanese for you… lol)
jonathan
Nathan, sure, growth can be healthy, but growth can be unhealthy too. I personally could “grow” by simply eating too much, but that wouldn’t be healthy.
Companies must grow to stay alive because no product or service has an indefinite life span. New products and services must be developed in order to replace obsolete ones. That’s pruning, just as you describe. That’s healthy growth.
But today’s marketplace doesn’t reward growth that merely maintains the status quo. Today’s marketplace, as Phil observes, only rewards companies that grow above and beyond what they did in the past. The new products you offer today have to not only replace past products, they have to outsell them. I agree with Phil that this type of growth is unhealthy in the long run. It forces companies to grow beyond what they can sustain.
I thought about this as I left Wal-Mart with about $50 worth of Wall-e tie in products. Pretty ironic, considering the message of the movie. I am surprized by your silence on Walle. Any deep thoughts?
Phil, I’ve followed Veggies since they came out, I still recall the first ad in a Christian mag. I read the book – nice job, by the way – interesting and honest. Watched the Jelly Telly video. My advice (like I know anything about this – I work on rockets) is continue to keep your eyes wide open and your mind engaged looking at the world around you. That’s helped you see children’s needs, understand how to reach them and the dangers of a the “American Business Model”. But keep your heart focused on God, and be around people who do that too. Whatever he says, however he wants it done – be a Gideon and just do that crazy thing, even if you think it will fail. I think the “whatever you can pay” model is evidence of that – reminded me of how Keith Green used to do that.
Praying for and being encouraged by you. – jim
There are so many ways to do things in this life “wrong.” And that treadmill is really tempting us in every area of our ministries, our relationships, our walk with God.. what we have to combat that stuff is this: desperation for God! For His truth and His Spirit- if we seek His face, He will glorify Himself in our lives (businesses & all).
Praying for you, Phil! Jelly Telly is a new “wineskin.” Your mind is being transformed and renewed daily through Christ, and you are changing from glory to glory in your pursuit of God— you will have everything you need to carry out this mission as you wait upon the Lord 🙂
God Bless Phil, and I’m praying for you.
Hey Brigitte and everyone else! It’s Tuesday again, and time for the Jelly Telly Prayer Team to go into action! May God bless you as you pray today!
What great thoughts to read. I’m getting a bit of a business education, too.
It seems more than coincidence that this article has been recently put up on ChristianityToday.com:
http://www.christianitytoday.com/le/2008/003/1.90.html
The writer is Ruth Haley Barton. She names specific steps a Christian leader can take when trying to discern God’s will. Specific things to pray for. It assumes the need for there to be a group of people praying together, meeting on a regular basis. It’s talking about church growth – do we build a bigger building, or just plant a new, smaller church? That kind of thing. It gets meatier as you keep reading.
I’m not a church leader or a business leader, but the Holy Spirit spoke to me through this article.
I will definitely stay tuned. I read your book, curious as to what had happened at Big Idea and found the answer as well as a lot that was relevant to my life. God, in many whispers (and some shouts) is trying to teach me the lesson of the jellyfish. I am so thankful for your willingness to share the lessons you’ve learned and am excited to see where God will lead you in the future.
I totally agree with you Mr. Vischer. I lost my job in the first of April because the big company I worked for decided it wanted more money. And so the whole dept. was outsourced to another company and only about 4 people out of 30 people in that particular dept. were able to keep there job. We were only one dept. in a huge company where there were lay-offs. The motivation and brain behind all these people losing there job was More Money. Of course with lay-offs going on in other companies it has made it impossible for me to find another job. But I know that the Lord will take care of me and He will provide for me, in His perfect timing. And your book is helping me stay focused and motivated and encouraged to not give up on the dream that the Lord placed in my heart years ago. Reading your story and seeing exactly why the Lord was wanting you to wait has really put me into perspective and to be patient because God knows what He’s doing. Thank you Mr. Vischer for writing Me, Myself, and Bob. 🙂
Hello Phil,
I met you in Orlando brielfy at ICRS. I had a booth and was trying to get my Christian Film Series for Kids, Click Clack Jack, a distribution deal and out into the market place.
http://www
You mentioned that you were doing something new and that you thought my live action film series might work with your Sunday Movie idea. Anyway, above is the link to a site that has the trailer and a scene. I did not know how else to contact you so here is my shot.
Ryan
Hi Phil. I really feel sorry for these people who are pressured to do more work, and improve all the time.
Life isn’t about deadlines, growth margins, or pleasing stockholders. We need to slow down, and let God do the work for us. I’ve been reading Hebrews 11 recently (and writing about it on my website), and I now realise that we have no reason NOT to put our faith in God. He has done so many wonderful things for us, and we really need to trust him for everything.
Slow and steady wins the race, more so if we have God helping us.
God Bless,
Anthony.
Christ’s “new command” was to love others, the way that He loved us.
How does the development and manufacturing of products play into this? In a highly developed, and complex, economy, answering this question is complicated.
Questions to ask could include:
1) Are people cared for during the production process?
2) What harmful pollutants are emitted during the production process?
3) How does the product benefit the target consumer?
4) Does the target consumer *need* another product?
5) What will happen to the product when the consumer wants to dispose of it?
In the 13th century, Cistercian monks were building new types of water wheels, and using these to power various industrial processes (such as the milling of wheat). It’s almost as if they looked at the way that creation functioned, and then tried to work with it (in a non destructive way).
Shouldn’t this be our focus when it comes to “product development?”
Phil, I really appreciate you leaving your thoughts and heart felt ideas on the board for the edification of others. I have thought about this often in some way. I love Disney but part of me wants to be Disney. I love to listed to rock star X but part of me wants to be rock star X. Part of the package in attracting a following seems to be selling the notion that the company is all that, and all of its people are living the dream. When you actually look behind the scenes there is a rude awakening to troubles, fears, bullying and dashed dreams.
I had to chuckle at your description of wandering the World of Disney aisles in Orlando. I was with the mouse for a couple of decades (I still do the occasional gig for them, with several friends still on the payroll), and you’re spot on. Disney survives because of its breadth. Business units (and delivery systems) come and go, but the characters and content remain. Disney does a lot of great stuff around the world, but only because it makes enough money to stay alive.
Christianity is more akin to socialism (in pure form, certainly not as practiced in this world) than capitalism, and therein lies the rub. Public companies simply cannot be as altruistic as they desire (even IF they desire), since they must serve too many masters. Quarterly reports. ROI. EBITDA (It all looks like HTML). It saddened Walt no end to go public in 1940. I remember thinking that very thing when I read your book.
No business is guaranteed an automatic lifetime pass. Money simply must be made for good to be done. They are certainly not mutually exclusive, but businesses that don’t make money are either well-funded hobbies (remember the line from Citizen Kane?) or destined to be very short term. Businesses are also tied to product and pop-cultural life cycles completely out of a founder’s or owner’s control. Preaching to the choir, I know.
Fortunately, God is eternal. And He can always bless another business idea, which I pray He does with your new venture.
BTW, we’re only one degree of separation apart on LinkedIn!
Phil wrote:
(I kinda wondered what would happen if you signed up your 10 year-old boy for a “princess makeover.” Would they refuse him? And if so, could you sue them for “gender discrimination?”)
Come on now. I just HAD to say, that there is NO way my son would EVER step foot in the “boutique.” I had to take him into Libby Liu to buy a gift and he about DIED!!
Okay, carry on…
You know, if any little part of that dream is still alive, InBev just bought anheuser busch, and said they would sell “non core assets”. Busch Garden would be a great Veggie World, and Sea World could be Penguin Land….