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WHEN YOU DON’T INVEST IN YOUR PEOPLE: The Leadership Lesson Behind Disney's Top Competitor

In the late 1980s and early 1990s, Disney animation was unstoppable. Hits like The Little Mermaid, Beauty and the Beast, and The Lion King weren’t just beloved films—they were cultural phenomena that brought Disney back to the top of the entertainment world.

Behind these successes was a key figure: Jeffrey Katzenberg. Brought into Disney by CEO Michael Eisner, Katzenberg was instrumental in reviving the studio’s animation division. He helped spark what became known as the Disney Renaissance, reshaping modern animated storytelling and driving billions in revenue.


But despite his undeniable impact, Katzenberg’s story at Disney became a cautionary tale for leaders everywhere.

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The Missed Opportunity

After years of blockbuster hits and unprecedented growth, Katzenberg asked for what he believed was fair: equity in the company. A stake in the success he helped create.

Michael Eisner said no.

Instead of recognizing and rewarding Katzenberg’s contribution with ownership and continued investment in his growth, Disney let one of its most valuable leaders feel underappreciated. The result?

Katzenberg left.


And he didn’t just leave—he co-founded DreamWorks Animation, alongside Steven Spielberg and David Geffen. The studio that would go on to produce Shrek, Kung Fu Panda, Madagascar, and more—films that directly competed with Disney’s offerings and changed the landscape of animated entertainment.

 

The Cost of Undervaluing Talent

Katzenberg’s departure (and DreamWorks’ rise) offers a powerful leadership lesson:

When you fail to invest in, develop, and fairly compensate your people, they will take their talent—and their innovation—elsewhere.


And in some cases, they may even build your next competitor.

 

What Great Leaders Do Differently

  • Recognize contributions early and often. Don’t wait until someone asks for recognition or compensation—show them they matter while they’re still on your team.

  • Offer growth, not just gratitude. High performers want more than praise—they want opportunity. Invest in their development, challenge them, and provide a path forward.

  • Make fairness a business strategy. Fair pay and rewards aren’t just HR issues. They’re crucial to retaining top talent and protecting your competitive edge.

 

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Final Thought: Talent Lost is Opportunity Gained—For Someone Else

Michael Eisner’s decision not to invest in Katzenberg didn’t just cost Disney a talented executive—it helped create one of its fiercest rivals.


As leaders, we have a choice: build the environment where talent stays and thrives—or build the reason they leave.

 

Looking to future-proof your organization? The Talent Development Group partners with leaders to build strategies that grow, reward, and retain top talent. Let’s make sure your next innovation stays inside your walls.

 

 
 
 

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