(FORTUNE Magazine) – This spring, while rank-and-file recruiters were working themselves into a predatory frenzy at Wharton and Harvard, executive search types were drawing a bead on the class of '98 at Disney. They bagged some impressive trophies, including CFO Richard Nanula, now CEO of Starwood Hotels & Resorts, and ABC Broadcasting President Steve Burke, named to head the cable division of Comcast. Add to these some other high-level departures from Disney in recent years--like the CEOs of Penguin Books, Hilton Hotels, and Viacom's United Paramount Network--and you'll see why headhunters regard the company as one of the top real-world management schools in corporate America, almost on a par with General Electric. The difference is that at GE these days, people haven't been rushing the exits.

At Disney, by contrast, three other top execs have simply left, including Lawrence Murphy, the chief strategic officer, and Geraldine Laybourne, head of Disney/ABC Cable Networks. Laybourne, who'd built Nickelodeon into a hit for Viacom, bailed after only two years at Disney. Steve Burke had spent 12 years at the company and was widely seen as a possible successor to ABC President Robert Iger, if not to Disney Chairman Michael Eisner himself. Why are such people leaving? And given that they are, how can Disney be such a great training ground? The two questions have one answer: because of the way Disney is run.

The Disney system pits strong division managers against a strategic-planning unit that acts as a check on their power. Put in place by the late Frank Wells, Disney's president until his death in a 1994 helicopter crash, and former CFO Gary Wilson, now chairman of Northwest Airlines, it also fosters a high degree of centralization. The key is the strategic planning department, which mirrors the rest of the company, with its operatives assigned to a business unit and reporting back to their chief, who in turn reports to Eisner. Conflict is built in, because that's the way Eisner likes it.

"Michael will sit in on a meeting and listen to both sides," says one departed exec. "His feeling is that you put a lot of smart people in a room and listen to them duke it out, and the best idea will pop out--and it does." "You always have to fight your colleagues to show your worth," says another. "It's that Team Disney/court-of-the-Sun-King thing."

Typically, the executives who are now in such demand started out in strategic planning, where they were drilled in the art of financial controls and then dispatched to one of the company's operating units. Eventually they'd get to run a business on their own--to start a record company, say, or oversee book publishing. Then they'd get another assignment. And gradually a funny thing would happen: They'd get tired of constantly being pitted against the strategic-planning wonks. They'd feel ground down. And the headhunters would keep calling....

Then there are the people who come in from outside--like Michael Ovitz, the ex-superagent who lasted a scant 14 months as president. For them, it's all too easy to end up feeling like the reject in a thumb transplant. Things happen around you, but you only hear about them later. You have a job to do, but nobody will tell you when the meetings are taking place. And once you make it to the meetings, you'd better be able to defend yourself if you don't want to watch your ideas get spattered against the wall.

This last is where Gerry Laybourne ran aground. Hired to develop new cable offerings, she devised an innovative all-news channel for ABC just as Fox and NBC were starting theirs. Then she came up with ABZ, an interactive educational network for children, only to watch it succumb to repeated financial attacks. Of course, it's all but impossible to launch new channels today because cable systems are already at capacity. "If you put me in a room and said, 'Your job is to launch an analog cable channel,' " says another ex-Disney exec, "I would try to get out of the room."

But the pressures of success are so intense that it's hard to start anything at Disney now. The company throws off roughly $5 billion in investment capital every year. The $19 billion acquisition of Capital Cities/ABC took care of a few years' worth, but what do you do for an encore? You could start a cruise line, but the $1 billion Disney spent to build two ships in two years took care of about a month's worth of excess cash per year. "A billion-dollar investment for Disney is so small, it's meaningless," says one former executive. And the idea isn't just to shovel money out the door; you need investments that will pay off big. "Getting double-digit growth from a $22 billion base is very, very tough," says one well-placed observer. "It puts incredible pressure on the creative parts of the company. It means they need to generate another $2 billion or more next year--where is that going to come from?"

There are people at Disney who have some ideas, but they're not talking--not even to each other. They know the way to get things done is to fly under the radar for as long as possible, then head straight to the top while presenting a very small target. "My rule of thumb was, if you ever have a meeting with more than five other people, you're in trouble," says a veteran whose last big project got shot down. "Ultimately I decided it wasn't their fault, it's just the way things are. But there were times when I was ready to shoot either myself or someone else, I didn't know which."

The good news for Disney is that for every executive who leaves, three more step forward. And why not? As the Cinderella story of Hollywood, Disney has its pick of B-school graduates. Among insiders, the question is not how the company will replace the people who are leaving now--that's already been done--or even how it will find an heir apparent for the 56-year-old Eisner. (The board is not dumb, says a senior executive: "If something should happen, they know who the talent is that might replace him.") The real question is who, if anyone, can replace Frank Wells?

It's been four years since the demise of Disney's last COO, and people who know will tell you the place hasn't been the same since. As powerful as he was self-effacing, Wells was the guy who made the place work--who dealt with budget issues and intramural warfare, invited executives and their families to preview new movies at his home, made people feel like a team. The vacuum he left first claimed Jeffrey Katzenberg, the studio chief who walked out when Eisner wouldn't give him Wells' job, and then Michael Ovitz, who was the model of what a second-in-command shouldn't be. And that's just the problem: Lots of people want Michael Eisner's job, but no one wants to be his steward. "It takes someone with real stature and presence," says one departed Disney executive, "but people who have great stature and presence are not usually willing to be No. 2." Which means this may be one vacancy that even the best management school can't fill.