If there is anything for which the Walt Disney company is known, how to manage the customer experience is it. From movies to parks to retail stores, the company has established an iconic reputation for making its 'guests' so comfortable that they spend more than they intended - and walk away seeming genuinely pleased about it.
Having applied this knowledge to improving its own business, Disney was surprised - and then gratified - to discover that other companies began asking if it would teach them how they do it. And would be happy to pay for the privilege. Business has doubled over the past three years, in the depths of the worst recession in recent memory, because institutions like hospitals, school boards and the National Football League understand that the competition for attention and revenue has become more intense and complex. Disney is not just competing against other adventure parks, but against video games, athletics and cultural misunderstanding.
In the post industrial economy the availability of good data from technology will sharpen every vendor's instincts for product and service. But only those who can convert knowledge into effective execution will prevail. JL
Brooks Barnes reports in the New York Times:
Maryland teachers were instructed to engage children by crouching and speaking to them at eye level. Chevrolet dealers were taught to think in theater metaphors: onstage, where smiles greet potential buyers, and offstage, where sales representatives can take out-of-sight cigarette breaks.
A Florida children’s hospital was advised to welcome patients in an entertaining way, prompting it to employ a ukulele-playing greeter dressed in safari gear. These personal service tips came from the Disney Institute, the low-profile consulting division of the Walt Disney Company.
Desperate for new ways to connect with consumers, an increasing array of industries and organizations are paying Disney to teach them how to become, well, more like Disney.
Revenue from the Disney Institute has doubled over the last three years, according to Disney, powered in part by its aggressive pursuit of new business. Over the last two years alone, 300 school systems across the country have sought its advice.
Other clients range from very large entities — Häagen-Dazs International, United Airlines, the country of South Africa — to small ones: three Subway restaurants in Maine, a Michigan hair salon, a Boston youth-counseling center.
The Disney Institute recently hired a network of field representatives to sign up clients and started dispatching its executives to companies wanting help; before that, advice-seekers traveled to Walt Disney World here or Disneyland in California.
“We’re putting our people on planes all day every day, domestically and internationally,” said Jeff James, who runs Disney’s consulting branch. “Some clients are in great shape and want to improve even further, and some are truly clueless.”
Mr. James said the up-and-down economy had put pressure on companies to pay more attention to consumers’ needs. He also cited the importance of the Web, which “gives unhappy customers a megaphone.”
Disney, which employs 64,000 people in Orlando alone, has its own employee difficulties, of course. Union spats arise, and some cast members — Disney-speak for employees — chafe at the company’s strict rules, although it recently lifted a facial-hair ban and now allows women to forgo pantyhose. Disney’s sugary customer service can also startle visitors who aren’t used to such uniform cheerfulness.
But vast numbers of consumers love it, and the company is routinely showcased in business books, like “The Disney Way: Harnessing the Management Secrets of Disney in Your Company,” for its hospitality and efficiency. For instance, the company has spent so much time studying its park customers — more than 120 million of them globally last year — that it places trash cans every 27 paces, the average distance a visitor carries a candy wrapper before discarding it.
That attention to detail is what compelled Frank Supovitz, the National Football League’s senior vice president for events, to hire Disney to help with this year’s Super Bowl, following a seating debacle at the 2011 game. Disney devised and executed a training program for the game’s 20,000 staff members and helped coordinate crowd control.
“We wanted those 20,000 people to internalize a sense of pride in their part to play,” Mr. Supovitz said, adding that he planned to hire Disney again next year.
Sometimes the Disney influence is more noticeable. Florida Hospital, a 22-campus chain, now employs that ukulele-playing greeter and exhibits what Tim Burrill, a vice president of the chain, called “calming video art” elsewhere. The hospital installed recessed lighting in hallways after Disney researchers found that patients on gurneys didn’t like staring at fluorescent bulbs.
Disney has been marketing its services to hospitals in advance of a new government requirement that patient satisfaction surveys be reported online; starting in October, billions of dollars in Medicare reimbursements will be linked to the scores.
In 2009 Florida Hospital’s children’s unit had patient satisfaction scores in the bottom 10 percent of the country. It hired Disney and by the end of 2010 ranked in the top 10 percent. (Last year, the hospital opened a new $75 million expansion; Disney’s philanthropic arm contributed $10 million and was given naming rights of the children’s wing.)
Disney is competing against more well-known consulting operations like McKinsey & Company and the executive management programs of business schools like Harvard. But it stays low key in part because its ubiquity can bring sarcastic publicity.
“Meet the Nets’ new coach — Mickey Mouse,” The New York Post wrote in January about Disney’s advising the Nets on their future basketball arena, the Barclays Center in Brooklyn.
A couple of years ago, the University of Iowa Hospitals and Clinics came under fire for a plan to spend $130,000 on Disney advice while laying off staff members. The Iowa City Press-Citizen described state legislators as “understandably appalled.”
Alan Batey, vice president for Chevrolet sales and service, said: “Some dealers were very skeptical. We had to explain that this was about taking the best things about Disney and applying it to our own culture. We’re not going to be building castles and dressing people up in costumes.”
About 3,000 Chevrolet dealership employees are going through Disney-led workshops that emphasize five principles: leadership, training, customer experience, brand loyalty and creativity. Sessions are custom tailored.
“We needed some help figuring out how we can really excite our customers by doing lots of little things really well,” Mr. Batey said. So far, ideas include improving children’s play areas and returning vehicles to owners with dealer-branded bottles of water in the cup holders.
When clients send their employees to Disney for training, as Chevrolet is doing, some time is spent in seminars on topics like “purpose before task.” They also get tours of the parks, where Disney managers demonstrate their tricks in action, like giving directions by pointing with two fingers instead of one (it’s more polite). A behind-the-scenes stop at “textile services” (the laundry) might emphasize how managers are taught to show appreciation for lower-level workers by pitching in to complete menial tasks.
Disney got into the consulting business by accident after being featured in the 1984 best seller “In Search of Excellence: Lessons from America’s Best-Run Companies,” by Thomas J. Peters and Robert H. Waterman. So many corporations started asking for tips that the company created a program in 1986 called “The Disney Approach to People Management” and formalized the business a decade later with the Disney Institute’s creation.
Mr. James would not say how much the institute earns, but it is a drop in the bucket for a conglomerate with annual sales of $41 billion. Fees range from $900 a person for a one-day workshop to hundreds of thousands of dollars for intensive on-site work.
“Companies come in and say, ‘Just make my employees smile more,’ ” Mr. James said. “But you can’t take Disney and just plug it in. We can advise them on how to change, but the heavy lifting is theirs.”
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