How Disney and Google Are Preparing for the Business World To Come

Right now, we are watching business chess at the grandmaster level.

Leaders must be supremely confident about where they’re taking their organization, or at least look like they are, in order to be effective. Who wants to follow someone who’s lost? One of the most engaging parts of studying leadership is watching leaders decide where to go – the process of forming grand-scale strategy. It plays out over years, highlighted by moments that brightly illuminate the giant forces that leaders must judge and contend with. For leaders in two industries, we’re in one of those moments now.

As everyone who wasn’t in a coma is well aware, Walt Disney’s Star Wars: The Force Awakens just had the greatest opening weekend of all time. Disney CEO Robert Iger looks like a genius for his big investment in the Star Wars franchise. But the world barely noticed something else that happened last weekend: Disney’s stock price plunged. From the market opening on Friday to the close on Monday, the stock dropped about 5%. What gives?

While most people were watching the box office numbers (or the movie), investors were focused on big-picture strategy. On Friday morning, analyst Richard Greenfield of BTIG Research downgraded Disney stock to “sell” because he’s worried that ESPN, the locomotive that drives Disney’s dis profits, is headed for long-term trouble. ESPN extracts billions of dollars annually from cable TV subscribers who are forced to buy programming in bundles that include ESPN regardless of whether they want it. But cable TV is in trouble as millions of viewers cancel their service (or never sign up) in favor of buying exactly the programming they want online. This “over the top” model was widely dismissed as insignificant just a few years ago. Now Reed Hastings’s Netflix nflx , delivered over the top, has about the same market cap as Jeff Bewkes’ Time Warner twx . In the business that we used to call TV, who sees where they’re going most clearly?

Several media outlets are now reporting that Google and Ford are in talks about developing autonomous cars. A source has told Reuters that Ford f CEO Mark Fields and Google googl co-founder Sergey Brin met earlier this month in California to discuss the possibility. The idea of self-driving cars was widely dismissed as impossible only a decade ago, and even two years ago several mainstream “experts” said it was decades away. Google’s Brin, CEO Larry Page, and former CEO Eric Schmidt saw where they were going more clearly than any auto industry CEO. Fields looks smart for possibly getting in on the trend with the leading player, but we don’t know if any deal will happen. Nor do we know what Apple’s Tim Cook may be thinking; he hasn’t even commented on widespread reports that Apple aapl will introduce an autonomous car in 2020 or so. But it’s already clear that no auto industry CEO saw that one day a car’s software would be more valuable than the physical vehicle.This is business chess at the grandmaster level. We rarely get to glimpse what’s going on in the minds of leaders as they decide where to take their organizations. It’s a lot of fun when, at moments like these, we do.

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