This marks Pressler's return to the retail business. Before becoming president of Disneyland, and then Disney's attractions chief, Pressler was head of the Disney Store.
Pressler has caught hell from theme park fans worldwide for his management of Disneyland, and now, all U.S. Disney theme parks. Pressler was known for aggressive cost-cutting. Wall Street loved the cost savings. But theme park fans hated the lack of innovation, the lightly themed off-the-shelf rides, the cutbacks in staffing and service and the increasing number of closed or failed attractions.
Indeed, under Pressler's watch Disney lost its position as the quality leader in theme parks to Universal Studios, according to fans on this site, and others around the world.
Here are several stories about today's news:
Reuters
Financial Times
Dow Jones Newswire
But have we traded the devil we know for one we don't? Who will replace Pressler? An Eisner appointee? A yes-man? Another oblivious bean-counter?
Does Cynthia Harriss follow Paul and step up? Does Micheal find a way to, Lord please, get Jack Lindquist back in the fold?
Or does Eisner go for the home run, reviving Disney while hurting Universal, and make the phone call to Bob Gault?
Anyway, until Disney makes its announcement, we get to have some fun speculating.
Well, we can only hope that Pressler's absence will lead us to better grounds--we can only hope his successor (whoever he or she might be) is a lover of themeparks...
;-)
Seriously, though, the Disney Store rocked when Pressler was running it. The man's a great retailer, in my opinion. He was a lousy fit to run a theme park--where you need someone with more creative talent.
I hope Pressler can help improve the Gap, which has gotten pretty stale of late. And I hope Disney takes this opportunity to hire a talented, experienced show business pro to run its theme parks.
Pay attention, Disney investors. If Eisner picks another businessperson, an accountant, retail chief or MBA, to run the theme park division--sell. All of it. Now.
But if Disney hires a show biz pro, someone who knows how to tell a story and how to motivate a cast to entertain, Disney's stock is gonna be the best bargain on the street right now.
This is a make or break decision for the company. Sure, ABC's ratings over the next month are important. But this is the decision that will determine the long-term financial health of the Walt Disney Company.
Well, farewell to Pressler--may he go back to what he's good at doing--retail--because, clearly, he was a wash at themeparks...
What surprise me is that Eisner doesn't seem to have read Walt's biography.
Walt had very different values then Eisner
1- Never duplicate a story and make a sequel (a story is good once)
2- Stay different from noisy regular parks (Like Coney island) at the time
3- Tell stories
4- Do the business for the love of it not just the money
5- Make sure people are happy when they leave that's all I'm asking of you (Disney speaking to imagineer)
6- Create a secure, warm environnement
7- Touch the heart of people
I hope they will read again the Bob Thomas biography that they themself sell to us.
Walt and the money
Walt risked a lot of times is financial security to innovate. He invented many of the animation technologies.
He very often invested all the studio money to increase the quality of his animated movies. So why cutting cost instead of improving quality?
He wanted to be ahead of his time and take advantage of technology to improve the quality of the story telling experience.
He fought many times with his brother Roy to keep pouring the money even if he had pressure from bankers.
WHEN IS EISNER GOING TO STAND UP FOR WALT'S VISION AND VALUES AND GATHER INVESTORS TO SUPPORT HIM IN THAT DIRECTION INSTEAD OF BENDING OVER WALL STREET EXECUTIVES. WHEN HE IS GOING TO STAND TALL AND TAKE THE LEAD TO AFFIRM THE DISNEY CORE VALUES TO THE WORLD AND LIVING BY THEM?
Finally, Walt was a firm beliver that if you tell a good story in a high quality environnement that people would pay for that and come and come again
Let's wish upon a star that Eisner and his crew find back the faith Walt once had.
My message to the Diney executive
I'M A DISNEY FAN
COULD YOU PLEASE PUT MORE HEART IN THE BUSINESS. PLEASE HAVE THE FAITH THAT YOUR OVERALL PROFITABILITY WILL INCREASE IF YOU DO SO.
YOU DON'T NEED 30 MILLION DOLLARS RIDES BUT HIGH QUALITY STORIES THAT WILL TOUCH OUR HEART. IF WE ARE TOUCHED WE WILL GO BACK. DON'T WORRY. STOP INVESTING IN COSTLY TECHNOLOGY. YOUR TECNOLOGICAL HEART IS THE STORY NOT THE SUPER HIGH TECH EFFECT. THIS IS WHY WE STILL LOVE PIRATE OF THE CARRIBEAN AND SPLASH MOUTAIN.
Please do like ET Come back home.....
Thanks
MARC ANDRE
From Canada
Look for an announcement tomorrow.
I don't think it would happen, but the Bob Gault angle does bring up some interesting questions. Would he leave Universal? Would you if you were in that position? Think about it. At one time, Disney was THE place to work. ANYONE would have jumped ship. But how would you like to present all these fantastic ideas to a man that only understands dollar signs? If Eisner left, I would think about it. If not, I'd sooner work for Six Flags.
But we are the consumer community here. Reduced spending by Disney deprives us of much of the value we get for our admission dollar when we visit Disney's parks.
So we are entitled to, in fact, I'd argue, compelled to bitch, moan and generally complain whenever bottom-line oriented managers cut things that we like and want.
If the business community chooses to ignore our growing dissatifaction with a product in favor of a manager's short-term cost savings, so be it. But, in the long term, companies that cut costs and run up consumer dissatifaction always lose to companies that give us what we want.
Provided we have that choice.
So let Wall Street and the reporters that cover it love Paul Pressler. But smart business people (like Bob Gault, thank you very much) are listening to the consumer and finding ways to take market share away from the Michael Eisners and Paul Presslers of the world.
The Southern California theme parks have used Disney's extended vacation from revolutionary attraction development as an excuse to let their own parks go to heck.
The only one that's made an attempt to step up has been Magic Mountain, but, unfortunately for area theme park fans, Six Flags hasn't shown the ability to steer any world-class projects to completion, and after the X debacle, I doubt we'll see them try again anytime soon.
But I consider Universal Orlando very much to be major, mass-market competition. It will be interesting to see where the two Universal Orlando parks stand in annual attendance for 2002 relative to the four Disney World parks. At the very least, the UO parks have been closing the attendance gap with WDW. I would not be surprised to see at least one park, if not both, surpass one or more of the WDW parks in attendance for 2002.
Internationally, Disneyland Paris faces competition, not in the Paris market, but from the growing number of parks in Spain. As of now, none is of the quality that the Magic Kingdom provides. But if several good parks can be "clustered" in one area in Spain, that cluster might prove to be a more attractive vacataion destination for theme park fans that Disneyland Paris. But until then, you are right again, there is no significant competition to Disney on the continent.
Finally, Japan's a free-for-all, although that's not an appropriate judge of Disney management, since the Disney parks there are owned and operated by Oriental Land Co., under terms of a licensing deal that prohibits Oriental Land from ever saying "no" to Imagineering on theme park attractions.
Trust me, Imagineering wishes it had that deal in Anaheim and Orlando.
As for Disney not having competition in SoCal. Well, maybe Disneyland has no competition, but last time I checked DCA was getting the stuffing beat out of it. If freebies don't inflate the numbers there too much, expect at least USH to surpass DCA in numbers this year.
And exactly how well was his alleged marketing skills anyway considering the Disney parks have had problems for two straight years? Plus, DCA was supposedly ALL Pressler's idea and look how well that has turned out.
Pressler was hired for his previous work at the Disney Stores. If he was hired for anything beyond that, then whoever hired him is an idiot.
Reminder: The opening day of Disneyland was almost a mess. They called it black sunday.... They went out of beverage and a lot of things went wrong. But the overall promess (the result) was fullfilled (hapiness). It is easy to critic but i would like to see the critics in action. What would they achieve. Running a business is a TOUGH JOB TODAY. You need extraodinary skills (communication, creativity, leadership, financial...) Trying today to evolve, please people, bring the money, differenciate and so on is very difficult. If it was so easy, everybody would achieve their vision. When we know that only 5% of the total population achieve their dreams i have a tremendous respect for anybody running a company and trying to improve things. When something goes wrong, critics are the first to point them out. Why instead don't we start being constructive and make suggestions. If they are not taken into consideration and we are still dissatified, then we go somewhere else and put and end to bad mouthing. It is so conterproductive... Let's use our energy to drive our own dreams instead of complaining about others. We will fell so much better.
MA Routhier
Canada
So how will they get that message if we don't let them know about it in public forums??? Disney apparently ignores on-site customer complaints, yet when MousePlanet "bad-mouths" a Disneyland decision, often something is done about it. So there is proof RIGHT THERE that such activities are anything BUT counter-productive. Maybe we aren't as influential as MP, but there have to be some people out there paying attention.
If you care about a company or service provider and want them to stay in business so you can enjoy their services, you have a responsibility to provide feedback. That's what Kevin and a lot of other people on this site do - provide feedback. Some of it may be a little harsh, but when you've spent thousands of dollars over the years patronizing an establishment, you've earned the right to be a little harsh, especially when you feel you are being taken for granted.
Managers of businesses don't like dealing with complaints, but savvy operators know that customer loyalty is higher when a customer complains and has their complaint responsibly handled. The only problem is that some companies don't care when their customers are dissatisfied. They are too arrogant to admit to inferior products and services. Unfortunately that is becoming the image of Disney at many levels.
"The restaurant business, like every business, is a series of mistakes," he says. "If someone finds a screw in their risotto, they're going to tell everyone they know. I can't change that. But what I can do is make sure that when they tell the story they go on to say, 'But do you know how the restaurant handled that?'"
Some business owners do get it.
Anyway here is what i meant by no badmouthing.
Badmoutnhing is judgement made on people or things. Ex: you are an idiot, crasy, stupid, bigheaded,... This just provokes resistence, defensive behavior and has harmed more then solve problems. When expressing a comment there is a way to do it that will get the message across without getting the person to be defensive and closed to any suggestion (just think about arguing with your kids). Constructive commenting is an art that is not easy to master called : communication and intimacy.
I have tried to give positive and constructive feedback on this site. For example, I've been to DCA and was horrified by what i saw. Great dissapointment and disbelief that they could go against there own values. My first comments were DCA is not fullfilling my expectation of the Disney warm family entertainment. I gave recommandation that they should get rid of it and start fresh (the concept is simply not in line with Disney.)
It is important to give our opinion but in my perspective there is a way to do it.
1- Give a constructive feedback that starts with your own feeling (how you felt and what it did to you)
EX: I did not like x ride because it didn't made me feel.....
2- Give recommandation
Ex: I recommand that we should do this or that to correct this situation
2- Readress the concern
I'm dissapaointed that my message is not taken into consideration, i urged you to take action because i fear that my interest and others will start to faint over the next few months.
3- Recommand a global action if not satisfied (Ex: Boycott)
EX: As i don't feel listened to I recommand that all members of this site should not visit any DiseyParks in the next year
4- Take action if not satisfied
Go somewhere else and have fun where it is fun.
THIS WILL GIVE THIS SITE A HIGH LEVEL OF CREDIBILITY AND RESPECT FROM THE MARKET. IF WE LOOK LIKE A BUNCH OF KIDS KNOCKING ON DISNEY WITH JUDGMENTS AND A LACK OF CONSTRUCTIVNESS WE WILL NOT HAVE THE CREDIBILITY TO REPRESENT NORTH AMERICAN PUBLIC OPINION. WE WILL LOOK LIKE A BUNCH OF UNIVERSAL FANS THAT ARE PARTIAL. This is why i strongly recommand we make professionnel articles and comments backed by data to proove our point of view.
THE TRUTH AND PROFESSIONNALISM ARE EVENTUALLY RECOGNISED BY THE AUTHORITIES IN PLACE. IT TAKES TIME BUT IS THE BEST WAY TO MY OPINION TO BUILD OUR CASE.
Have a good day
MARC FROM CANADA
Marc is correct. Thoughtful, well-documented reporting convinces more people than hysterical rants and bitter accustations do.
Ultimately, my first goal for Theme Park Insider is to help inform other visitors around the world about what they can expect when they visit a park. But here, too, thoughtful reporting helps more than anything else. I shall always appreciate those folks who take the time to submit detailed trip reports and post thoughtful comments about the various attractions, restaurants and hotels indexed on the site.
But people in the industry do read this, and other, theme park Web sites. And to the extent our reporting and commentary can help the industry create better parks--great! I hope that they will take to heart the opinions offer hear, as well as on features such as Rate the Rumors.
Realistically, right now I know that more people in the industry will read what I write in the L.A. Times than what we do here. But the more thoughtful people we can attract to the site, keep around and convince to open up and post, the better the industry will receieve this site and consider what we say here.
This has already become a leading source, if not the leading source, for consumer information about theme parks. I'd welcome it becoming a resource for industry as well.
There is a big difference between making the customer FEEL they're always right, and treating the customer AS IF they're always right. Some business owners do get it, but not the way some think.
The object of business is to make profit. The challenge in making profit is to determine the right balance between cost (how much the business pays to provide the product or service -- which is a reflection of the qualities of the product or service) and price (how much the customer pays to obtain the product or service -- which is a reflection of demand).
The business of business is to make a profit. I agree with you there. To do that though they have to make and keep customers. The operative word here is keep because the cost to keep a customer is far lower than the cost to get a new customer. Using slash and burn business tactics works only so long as there are new opportunities to exploit.
To say that all customer feedback must be normalized in order for business to use it is ludicrous. I used to do customer surveys in a previous job. The data in the surveys was normalized, and on the surface it looked like we were doing a good job, but the boss wanted to know what the customers were saying. So he and I spent a lot of time doing one-on-one interviews with the customers. We got past the normalized data and found out where we could improve to really satisfy the customers. In other words, we used common sense and hard work to find the gems where we could really make the difference for the customers. Are you saying that common sense has gone out the window when it comes to making business decisions? Is the only valid data the sanitized versions on charts and graphs?
To say that customer loyalty is measured in terms of dollars is dangerous to the point of extinction. What is the value of a Kevin Baxter or a Robert Niles telling their friends and associates about the great time they had at a park like IOA? Conversely, what is the cost of the same people saying that Disney is getting cheap on the consumer and that you can get better value elsewhere in Orlando or Southern California? How do you measure that in terms of dollars and cents? I teach technology classes to a group of people who have a pretty fair amount of disposable income. Many of them travel to Orlando on weekend visits. I make a point of telling each class that I teach about the great time I had at IOA and USF compared to the time I had at Disney World. (Which was also good. Just not as good by a long shot.) My impressions of Disney and Universal have probably transferred tens of thousands of dollars of revenue from Disney to Universal. I’m not trying to hurt Disney, but I like to tell people about a company that gives me great value for my money.
Discounting the opinions of the people on this web site because we are theme park enthusiasts is not wise. Our observations may just be the tip of the iceberg, and it appears that our observations are slowly shifting into the mainstream. I’ve seen comments made on the discussion boards on this site echoed in the general press and in seemingly unrelated web sites like the Motley Fool and Yahoo. Many of us may have an unfavorable impression of Disney business practices, but soon the general public may have much of the same impression as we do. When that happens, the Disney executives will be saying, “We had no idea the public was so dissatisfied. The data didn’t appear in our charts and graphs and focus groups.”
I maintain that the best businesses are run by people who have a great deal of common sense. Give the consumer a great product at a fair price and the money will come rolling in.
I would like to add a few comments to what's been said. #1 Reason of being in business is making a profit: I disagree. This is one of the oldest paradigm that still exist in business. This is the reason why Disney is getting so cheap. Cutting cost to make more profit. This idea of a business is giving financial executives the right to treat a business like a financial statement. Corporate America has done so much of this over the last 2 decades that know companies are all look alikes having poor differenciation, no added value and make customers indefferent to their economic offering. Plus the team morale is poor and customer service no good.
The reason for being of a business (of successfull businesses see harvard business review) is the purpose, the mission. For example Disney's purpose is : To make people happy. This what drove Walt's partners enthousiasm. They had a vision and a misson. Of course making money was a priority but not the ultimate goal. Disney refused to make short term profit by cutting cost. He prefered to improve the quality of it's production. HE WOULD HAVE NEVER TOLERATE TO CUT COST LIKE PRESSLER DID JUST TO MEET MARKET EXPECTATIONS OF PROFIT. HE FOUGHT MANY TIME WITH HIS BROTHER NOT TO BEND OVER BANKERS DEMAND IN THE POST WAR ERA.
Profit is the result of the value brought to customer (here it is happiness). The happier you get, the more you will pay and the more profit we will generate if the operation is run properly (no waste)
2- Changing a business to adapt to market changes. I could not disagree more. As a business leader you need to implement the change and create the demand (leadership). If we had waited for a demand in microwave oven, we would never have seen it.
The market doesn't know what it needs because it hasn't been invented yet. Remember Disney is in the highly creative segment.
Creators should dictate the future by constantly bringing new product and offers that will influence the market. Disney knew that. He didn't make focus groups. He knew what made people happy and he invented rides, stories and so on to achieve his misssion of making people happy in a happy place. THIS IS MY DEFINITION OF LEADERSHIP : INFLUENCING THE MARKET BY INNOVATING IN ORDER TO BRING IT TO THE NEXT LEVEL.
We had enough look alike in corporate america. It is now time for our leaders to innovate and create the future instead of trying to please a pie chart statistic. Let's trust our creativity in America and LET'S trust the power of our ideas.
MARC
CANADA
Don't expect this attitude to change anytime soon either. Now that Jay Rasulo is in charge of theme parks, there will probably be much movement below him. Al Weiss, who SHOULD have gotten the job, could possibly end up leaving WDW because of this. Weiss has done a fairly good job at WDW, especially when you realize how little money he has been given to work with lately. Cynthia Harriss could leave DL also since she was a Pressler hiree. She might follow him right on out the door. Then what? The chances of some Eisner yespersons heading those operations becomes more and more likely.
With a corporate attitude like that, it will be a long time before DL is the happiest place on earth again.
There are many ways to make and keep customers. Some are expensive ways, others are more profitable. Managers are charged with making profit in the most efficient manner possible, rather than allowing the owners' money to be wasted. Placating customers who are, by all accounts, only interested in when the company spends lots of money in the absence of correspondingly large revenue streams generating therefrom, isn't in any good business' best interest. I suppose it isn't in vogue to say it in such a "Republican" manner, but there it is.
It isn't ludicrous to rely only on normalized data. What we found in our research is that in the last twenty years customers have learned how to despoil the usefulness of non-normalized data -- "stuffing the ballot box" if you will. That's why the market-survey industry has prospered as much as it has.
Many folks here are using such overly emotional words; not to pick on anyone, but just read this and consider: "To say that customer loyalty is measured in terms of dollars is dangerous to the point of extinction." I see no reason to believe that that statement, or others like it, are based on any accepted interpretation management science.
Disney makes it very clear what they're in business for: "The Walt Disney Company's key objetive is to be the world's premier family entertainment company through the ongoing development of its powerful brand and character franchises. The company's primarily financial goals are to maximize earnings and cash flow from existing businesses and to allocate capital profitably towards growth initiatives that will drive long-term shareholder value." [Emphasis added.] That is a responsible corporate mission statement. It is similar to thousands of others, focusing on what the company will do to make the owners more money. They don't say they want to be the "world's premier provider of family entertainment." That's not the priority. The priority is to be the "world's premier family entertainment company." That's capitalism. That's reality. That's the way successful businesses are run, and the only way that Disney can again become a successful business.
Again, I know how upset it makes people who deeply love something to have it regarded solely as an asset, but it is important, in the interest of keeping perspective, to make that clear.
I totally agree with you on one key thing when you say :
"They don't say they want to be the "world's premier provider of family entertainment." That's not the priority. The priority is to be the "world's premier family entertainment company."
I agree we need to focus on building a strong business and strong mean profitable, good ROI and growth
But HOW DO WE GET THERE?
HERE IS YOUR ANSWER: "The Walt Disney Company's key objetive is to be the world's premier family entertainment company through the ongoing development of its powerful brand and character franchises. The company's primarily financial goals are to maximize earnings and cash flow from existing businesses and to allocate capital profitably towards growth initiatives that will drive long-term shareholder value."
Everybody in corporate america is saying the same thing (Coke, MC Donald)
I used to work for ScottPaper and we used to get bored at listening to those empty, dull very analytical mission statement. That does'nt drive the team i can assure that. (Been there done it)
But yea: we all agree that this is the recipe to make money for the owners. But I think that where we don't agree is on the how to: drive shareholder value, developp the Disney brands, grow and maximise earnings.
Earnings are everything: they generate the shareholder value, the cash flow and enable us to invest in developpment. So we will stick to earnings:
There is 3 ways to maximise earnings: 1-increase revenus, 2- cut costs and 3- do both.
On cutting costs: The 90's have been spent on implenting best business pratices, improving processes, becoming best operators and so on. The Wal Mart of this world, and corporate gourou's have been preaching that for the last 10 years. The job should be done by now. Do we still have to be better operators at Disney? IF not what is left?
Increasing revenues : What drives revenus up? Increase sales and prices. What drives sales and prices up: repeat business and developpement of new profitable business offerings that will generate repeat. Without the repeat a business offering will not generate long term sales growth. That's why DCA might be profitable (low technology cost) but there is no repeat business. So that's why they have to invest to bring the customers back and there trying to get them to stay there by using all sorts of tactics ex: bring the electrical parade to DCA. People are not crasy. They go and see it and go back to the other park right after. I have seen it for myself.
Since repeat is so important how do we get it?
Answer: Customer attachement and generating profitable innovations.
Here in Canada (Québec) I have met the VP of Cirque du soleil and he told me that what has the most value for the Cirque is the public attachement towards them. He said "The customers keep coming back (repeat business) to see new shows (innovation) because they are attach to us (attachment)"
To my opinion this is what is building long term sales growth, profitability and return. As a customer you keep using a product/service/experience because you are attach to it.
Break this relationship, the trust, the attachment, you will need to invest in lot of discounts and marketing strategies to get them back.
A business depends on customers. Unfortunately we forget it when we become giant corporation. When you start as an entrepreneur you know that. When you have financial power, you tend to forget it and when you forget it, you can loose your power much sonner then you think.
To sum it up : I think the value of an entertainment business lies in the attachment built with the clientele and the capacity to innovate more and more adding power to the brand and reinforcing the quality of the offering (therefore you can move prices upand still generate sales and repeat business)
It took 35 years to build the Disney franchise, it could only take 10 year to loose it prestige status. When you loose the status, prices start to go down, and competition moves in.
Let's hope we won't see that happen.
MARC-ANDRÉ
Canada
Thanks again
Please keep giving your feedback. I love it and it help me grow and learn.
Thanks a million time.
MARC_ANDRÉ
The fact of the matter is, EVERY business succeeds in different ways. Take department stores. Wal-Mart and Nordstrom are at different ends of the scale, yet both do quite well. Well, Disney has been Nordstrom for more than 40 years and now it wants to be Wal-Mart. Well, Wal-Mart may be popular, but it started out as Wal-Mart. It was never Nordstrom and never wanted to be. Disney no longer wants to be Nordstrom, but wants its customers to treat it like it still is. No matter how long your thesis may be, it cannot explain how this is intelligent business in action.
The world has moved on.
Let's just focused one minute on 1982. What was wrong with Disney? Let's just recap here a little.
Question: Did it had to do with Walt's way of doing business? To my opinion no on the philosophical side, yes on the operationnal side.
Disney parks are built on old high maintenance technology (Ex: Jules Vernes diesel submarine) that needs a lot of maintenance and cost a lot to operate. They had litterally tones of studio animators because everything was done manually. Disney had an operationnal crisis. They needed to adapt to new technologies and developp ways to increase their ROI. That's why they hired Eisner.
But the problems had nothing to do with the magic, the Disney way. It all had to do with the management of the operation.
Eisner is a financial manager. He brought something Disney did not have. But financier can't run a highly creative business. They can assist the creator to run it. They can build efficient Wal Mart style operation but they need the Disney magic to be alive and strong beacuse that's what they run.
The only thing that has changed in the world is the lack of love, appreciation and warmth in business with the financial era. Now that companies are runned like super machines, with demoralised employees (new survey shows 70% of american don't like their work) what do we do? Making money to make money.
Is this the legacy of the babyboomer generation?
Since 1/2 of population getting close to retirement now everything that matter is the ROI? Is this the world we want? Is this the business environnement we want in the future?
Finally I don't personnaly feel confortable with your last comment : the world has changed. I honnestly feel some condescendance here. Maybe it is not the intent but i feel like it. It looks like : wake up guy the world is different get down to earth.
You know Bryan, that is exactly what Disney has worked againt all is life. He wanted us to "leave today and get in the past, magic and future world".
Just too bad we forgot it. Just to be we now consider business as an empty hearted, analytical, cold, data driven entity. It is too bad your vision of the business could not go against the traditionnal dicotomic paradigm : hearth vs head.
Why can't we integrate the two : put creation and profit together? If a creation is not profitable for the long term we don't do it. Why don't we agree that creation is as important as the money.
What makes me sad is that your proposed approach isolates, separates people (the operators and the creators). Separation is what cause internal war. This is exactly what is happeninng at Disney. When are we going to learn that a company is an entity that could not be separated? If you talk to imagineer they will say that the problem is not enough of it. If you talk to Eisner he will say bad cash management and so on. Who's right? Everyone. But that is not the point. The point is who should run?
Here is my proposition: A Imaginefinancier.....
Have a good day
MARC-ANDRÉ
There isn't any condescention intended, but it is difficult to communicate what it is I'm communicating without sounding like condescention. Objecting to idealism always sounds like condescention. I believe there is a place for the kind of idealism you're projecting, but blue-chip stocks isn't the place.
One assumption that I sense you are making about some of us is that we are the tail ends of the normalized data that you have so much faith in. We may be. Does that mean that we are wrong? We could be an indication of where market sentiment is heading. Like I said before, I’m seeing articles in the mainstream press which are echoing comments that I saw on this site 2 years ago. Will normalized and sanitized data reflect the right time and direction for making course corrections when the cost is relatively low? I’m not so sure.
You’re in the business of helping companies succeed. Doesn’t that color your attitude toward the consumer? After all, you get paid by getting executives to like what you are telling them. Hey, I bet there’s a lot of executives out there who are just dying to know that they were right not to trust those consumer comments. All those people complaining were just stuffing the ballot box so they could get something for nothing.
Since when did the consumer get so doggone clever?
I’m still amazed about the theory about the best indicator of customer loyalty is when a company consistently makes a profit from a customer. I wonder if the boys in Detroit held that attitude in the early 70s when the Japanese cars came on the market in America. I wonder if my cell phone provider had that attitude when he was overcharging me for cell phone service when he had little or no competition? The Big 3 almost went under. My cell phone provider did. Apple has great customer loyalty. Where’s the profit? Profit may be a trailing indicator of customer loyalty. It certainly won’t tell you what consumers are going to do in the future. That’s not based on interpretation management science nor is it based on emotion. It’s based on anecdotal observations.
Brian, most of us posting on this web site are not idealists. We’re consumers, and we’re willing to play by the rules. I for one would love to spend some more of my money in a Disney park. The only problem is that they’re not trying very hard to get me back there. They can build hotels and gift shops at a pretty rapid pace, but they really seem to drag their feet when it comes to building new rides. Well, hotels and gift shops are great for the bottom line and they merge perfectly with their mission statement, but somewhere in the process they forget the consumer. That’s why I keep forgetting them. There’s got to be some meat on that taco.
The world really hasn’t changed. We add population. We improve technology. We like to fancy that we’re smarter and better than our predecessors, but the truth is that we aren’t really that much different than they were. Management techniques may improve. Does that mean that our executives are getting better at running our companies? I wouldn’t bet the rent money on it. Consumers are not lemons to be squeezed for every drop of revenue. They are people who want a good product at a fair price, and over time they can usually tell when they’re getting a lousy deal.
"Right" or "wrong" depends on the definition of success. The owners of each company gets to define that for the company -- it isn't imposed by some external cabal, or even by the customers. Disney has done so; I reproduced their mission statement above. Therefore, I doubt there can be much dispute that "right" and "wrong" needs to be measured with respect to their definition of what their company's objectives are. If someone says they're an "actor," it makes no sense to evaluate how good of a barber they are, eh?
At any point in time you can find analysts recommending almost any perspective. Look at where the money is going -- THAT indicates what people REALLY think. "Put your money where your mouth is," is brusque, but appropos. And the most successful companies in the country, the "blue chip" companies, keep their eye on long-term shareholder value, to the exclusion of all other considerations, including what customers want. What customer want only matters to the extent it impacts long-term shareholder value, and no further that that. I don't see you tying your perspectives back to accepted principles of business management that would indicate that your perspectives would necessarily have a positive impact on long-term shareholder value. That's why I object to them.
Incidently, I'm no longer in the business of helping companies -- I retired from that career five years ago. (I was getting too old for all the travel! Regarding your othe rcomments, read "Funky Business" by Jonas Ridderstrale and Kjell Nordstrom. It explains, among many other things, how, when and why the "customer got so clever" and why an arms-race of competetion on product quality is a losing proposition for business.
This was to me a very interesting conversation and rich in content. Thanks a lot. Yes i'm an idealist. I have always been and probably will always be. Idealism has negative and positive sides to it. I guess i hope to walk away from conformism, traditionnal management strategies and reinvent the way things are done. Idealist creates the new. Managers run the business. We need both. Yes i do not want to get into a theorical debate with data to prove right. I'm able to do it. I could give you books talking about new approaches to generating long term shareholder value that do no say what you are saying. The science of business (in which i got a university degree with distinction) is in perpetual change because it is based on the generation of economic wealth that is the result of a complex mix of things : people, capital, products, investments, cash flow management.... Unfortunately for you, I do not want to get into a detail demonstration of the complexity of it and prove with the Disney stock that the strategy doesn't work over the long haul. Anyway you would certainly find data to prouve me wrong!!!! It is more of a philosophical debate I'm having and I see that you prefer the more pragmatic debate. That's OK. I appreciate your openess to share your beliefs. Yes blue chip stock does require an attitude towards profit. Yes retirement money need to be taken care of. By the way, Bryan, I don't think most managers are sleeping badly with the stocks big plunge over the last year. Most of them still recieved big bonuses. Most of them said it was due to the economic context and are not responsible. So where is this big commitment towards value. Over the long haul? So if i'm 55 and have stock with you i will have to wait until i'm 75 to get my money? My sadness doesn't come from my emotionnal state. It comes from the fact that the focus of Disney has changed from investing in rides and magic to investing in quick high return projects : DCA, Hotels, character objects: toothbrushes, t shirts,... nothing really making me feel like going back again and again. But i will respect that. Last subject: taking consideration of customers to run the business. I agree we can't please everyone and can't run a business trying to match all segment needs. I used to be a regional sales manager and undestand that perfectly. People were trying to push us to produce very limited quantities of new products to please a very specific segment. We said no many times. But you will have to show me how they intend to grow sales in the US without regenerating the offering? Do you think it is by selling toothbrushes with Mickey on it? What kind of growth strategy do they have because I don't see it. I assure you that running a business is not that tuff but growing it is a different story. How will they do it? Abroad? So forget americans that have given us enough money and keep coming back without any opposition let's invest in China where the market is huge and suck as much money as we can. The US market is mature so let's grow somewhere else and keep our customer asleep in the US. Is that the brillant strategy? People are no fool. Unfortunately there are too much people still going so management don't change strategies. I guess the effect of child memories temper the perception of the reality. Thanks for your participation MARC-ANDRÉ
And don't give me any bull about how times have changed and quality will no longer do it. Look at Universal Orlando. They surely aren't scrimping when it comes to attractions and now they are reaping the monetary rewards. Many people are turning to them to find the "magic" they believe Disney no longer offers. Say whatever it is you want, but that old axiom is being proven in UO: It TAKES money to MAKE money. The end!
When the market slowed down for the Disney classics, the momentum started to drop off. Thats when the the cost cutting started. We see the end result today; animation products like Return to Neverland and half day parks like DCA and AK. This is primarily the result of the so-called management theories currently in vogue. I disagree heartily with Brian about shareholder value being the primary consideration when running a publicly held company. The interests and desires of the shareholders, the company, and the customers must all be carefully balanced in order to have a successful company. If the interests of any one of the parties is held above the others then the company suffers and becomes unprofitable over the long term. This is apparent in the current environment of the market today. Many companies are suffering because they tried too hard to maximize shareholder value and used unwise tactics for short term increases in the market value. Many other companies are also suffering because of management excesses. Basically, the companies were run it seems for the sole benefit of the management team. Finally, many other companies are suffering because they also used shoddy tactics for short term increases in market share. They sacrificed the shareholder value in order to get more customers. All of these are bad. The world really hasn't changed. Long term success happens when a company builds goodwill with its customers and derives a fair profit from that goodwill. The folks at Disney might pay attention to that fact. The Disney corporation built goodwill over a 50 year lifespan. It has only taken about 10 years to destroy much of that goodwill. Who's happy with Disney these days? The consumer? The stockholder? The suppliers? The boardmembers? There's no quick fix here for Eisner.
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