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The Effective Executive – Episode 54
Four Lessons from Disney’s Decline
Lesson 1 – Entropy
Lesson 2: A Focus on Costs, Increases Costs
Lesson 3: Innovation
Lesson 4: Don’t Copy
[00:00:00] This is the 54th episode of the Effective Executive podcast and YouTube channel videos. And this week I have been ill. I mentioned that in the previous episode. You’re going to notice a little change of my voice if you listen to me often and I’m prepping for a visit to Disney, so I I thought about. Doing something about Disney in this particular episode.
[00:00:36] So I decided to call those four lessons from Disney’s decline. And some people may be saying, Oh, decline, you know what’s going on with Disney? Well, let’s talk about that a little bit.
[00:00:49] The the the first lesson that I think any executive can get from you, I’ll get into Disney’s decline is entropy, and it’s just a natural deterioration of things that happens within an organization. People leave processes, change things deteriorate over time unless they’re they’re kept up. And so one of the things with regards to Disney is they’re all about innovation and new things and buzz and being able to have. Yes. Be excited about coming to visit their particular theme park. And they have competition, they have Universal Studios. In fact, there’s a YouTube channel under Poseidon Entertainment that’s really been hitting Disney pretty hard about how they’ve been declining, which is where I got the idea of Disney’s decline, although I’ve seen it myself. And now Universal is is being more innovative and coming up with bigger ideas and things of that sort. So that’s lesson number one is entropy. And with Poseidon Entertainment, Bob Chapek, who’s the new CEO or relatively new CEO, has been in this gentleman’s crosshairs, talking about things that he believes Chapek is doing wrong as the CEO of Disney.
[00:02:24] And so the second lesson is that a focus on costs, increases costs. Now, I went to the Keys to the Kingdom tour. Maybe even almost two decades ago. And, you know, there were four keys that are really fundamental to Disney, and they are safety, courtesy show and efficiency. And two things stand out in my mind. One is that when we were going through the tour, they’re talking about, you ever notice how when you walk by storage, you can feel the air conditioning coming from the stores? And it was overly cool inside the stores and you could feel that cool air coming through the doors or often they were just open coming to the outside. And that was one way of showing courtesy to guess, you know, because it’s too hot, especially during the summer at Disney World and. And one thing I’ve noticed over time is that’s gone away. It’s not as cool walking by those stores anymore. And so I’ve often wondered, you know, are they focusing on reducing costs of air conditioning in order to compromise one of their fundamentals, their keys to Disney? But it’s something that I’ve noticed since I went on that keys to the Kingdom tour at Magic Kingdom. Another thing that stood out was of those four keys was show, which was that you were walking into a show and you could smell the popcorn when you walked into the Magic Kingdom.
[00:04:17] And so you knew you were walking to a theater and you were entering a show. And over a period of time that went away the popcorn at the beginning. Now it may be back now, but for a while there it had disappeared. So those were a couple of things that kind of stood out in my mind of that they reduced those where these cost cutting moves. Well, what was the reasoning behind it? And so anyway, you know, focusing on costs will increase costs of things because you’re compromising that experience that customers are getting.
[00:04:57] So the third lesson that I get was. Inner innovation that you get from really knowing your customer now, you’re not going to get innovation from your customers, they aren’t going to ask for the next innovation, you have to come up with that as the person provisioning any service or any product, but it’s improving that guest experience. And it’s something that. When you whenever I’d walk into. Disney World, any of the theme parks, I’d always go, boy, you know, only Disney would come up with us. That’s so big. It’s so, you know, in this this it doesn’t have to be the same for every company, but they’re in a unique business and you have to understand what the you need, what the uniqueness of of your businesses to. But you know, it seems now that everything is kind of scaled back. And this may get back into the second lesson of, you know, focusing on costs will increase costs, but we’re not getting the innovation that we used to to see.
[00:06:15] You know, Walt Disney, if you watch films about them, the one of the first things you learn about him was his vision was so big that his brother, basically the financial guy, would try and size everything down and Walt Disney wouldn’t have anything to do with it. He said, You know, you need to to size up your thinking. And so his dream of building Disneyland came about because he wouldn’t compromise on that dream. And you know, it never would have happened without Walt Disney’s vision and saying, Boy, this is something that is really not only big, but it is something that is needed in the in the marketplace. So innovation very big. That’s the third lesson.
[00:07:06] The fourth thing is, don’t copy. And in this Poseidon Entertainment videos that I watched talked about how Disney is looking for ways to reduce costs and their organization. And so again, lesson two comes into play a little bit, and in order to reduce costs, they they did a lot of screens and projections because that reduce maintenance costs. And so Disney said, Oh well, that seems to work great for Universal Studios. So we’ll we’ll do those types of things. So we get Mickey’s Runaway Railway and to some degree, rise of the resistance, which is to me, you know, some people were very excited about it. Me, it was an enhanced way of waiting in line. It just, you know, kind of be a walk through as a kind of a walking tour.
[00:08:01] I don’t know it just there were some neat things in it, but I wasn’t like, Wow, it was more like me after going through it. So that’s something that I never really expected. I haven’t been back to Universal for many years, but I think the last time was probably, boy, 13 years ago, maybe. And I liked it. It just didn’t have the same flavor of what Disney World had, at least for what I was looking for. But now, after watching some of these videos, I’m thinking, Well, maybe I ought to go back and see some of the things that they’re doing and get a sense of what maybe true innovation looks like. But anyway, I wanted to cover those four things. I’ve been planning this trip to Disney World, and I do it every year at least once we go. My wife and I go for the Food and Wine Festival. And, you know, even that used to be kind of a two month thing now it’s kind of like five month thing. So I don’t know too much of a good thing, maybe. But each year we go back and I think this is like our fifteenth year of going there, maybe even longer. We’ve done it consecutively, even COVID. Last year, we went ahead and went. But I’ll be reporting back, we get back from the Food and Wine Festival. You know, some of my observations and I’ll probably in upcoming trips up, hopefully go back to Universal Studios and just kind of compare what’s going on because Poseidon Entertainment, which again, I’ll put a link to down in the in the information below on the YouTube video and then also on my website for these this episode and take a take a gander.
[00:09:57] It was it was interesting to me that there was a lot more criticism kind of coming out. And I don’t know, maybe this person works for Universal Studios, but basically saying, you know, Universal Studios is going to eat their lunch. But I have noticed a certain entropy. I’ve noticed that there seems to be more of a focus on costs at Disney, at Disney World. I’ve noticed that some of the innovation hasn’t given me the the wow factor that I used to get when I go there and I wasn’t aware of the the copying, the potential copying going on. But I know that copying will always leave you behind. You know, once you start copying somebody else for whatever reason, you’re never going to get ahead of anybody by by copying what they do. You may be able to learn something from it, but your version needs to be better than than what what, what your competitor is coming up with, just copying what they do. Again, we’ll always leave you behind. So I’ll report back. After we attend, there’ll be a few weeks, but from the Food and Wine Festival, you know, if I have any additional thoughts since I have had just been there once one once I go, that’s it for this week.