Epilogue
The Magic Continues

Well, after 40 some odd years in the business, my greatest reward, I think, is I’ve been able to build this wonderful organization … also to have the public appreciate and accept what I’ve done all these years—that is a great reward.¹¹⁰

Walt Disney

From a young boy’s doodling to a worldwide empire with a host of magical characters that are instantly recognizable by both children and adults—this is The Walt Disney Company’s legend and legacy.

Would Walt recognize his brainchild as it is today? The physical plant has greatly expanded, of course. Disneyland now offers The California Adventure; and Walt Disney World, which didn’t open until after Walt died, is now composed of four separate parks, including the newest and highly celebrated Animal Kingdom. And Disneyland Paris, Walt Disney Studios Park, Tokyo Disneyland, Tokyo DisneySea, and Hong Kong Disneyland illustrate the company’s international reach. The Disney Cruise Line, Disney Vacation Club, ABC, and Broadway stage shows exemplify the variety of business activities that make up today’s Walt Disney Company.

Yet chances are that Walt would feel right at home. That’s because the culture and traditions he established—his dreams, his beliefs, his goals, and his style of managing the business — provided the direction that makes The Walt Disney Company one of the most admired companies in the world. The “good show” mentality, which dictates pulling out all the stops to exceed guest expectations and which demands superior performance from everyone, holds as much sway now as it did when Walt Disney first decreed it.

That The Walt Disney Company manages continually to top itself and delight the world with its magic year after year, decade after decade, is a tribute to its leadership, both past and present. Part of Walt Disney’s greatness was that he laid down a solid foundation of beliefs and values, including a standard of performance excellence and a mechanism (Disney University) for inculcating his cast members with these values.

Committed to Beliefs

The spectacle, the excitement, the breadth of product—all of these things contribute to the legend. Yet if there is one thing that keeps people coming back, it is the consistency of the experience. The Walt Disney Company is the master at creating controlled environments that never disappoint. Because the company goes to great lengths to communicate its beliefs and traditions to every cast member, the Disney product offers people a comforting familiarity that is hard to duplicate in today’s fast-paced world. That’s not to say that there are no surprises, merely that all the surprises are on the upside.

Disney’s insistence that customers be treated like guests continues to be of paramount importance in providing that always-positive, expectation-exceeding experience. Thus a visitor to any of the theme parks will find that a question is answered as pleasantly today as it would have been in the Disneyland of the 1950s and 1960s. Cast members are never too busy to stop and chat with guests; crowd control is performed with a smile; and lost children are pampered with small pleasures. The human touch is still very much in evidence.

Yet without a corresponding belief in and commitment to employees, the customer philosophy would soon flounder. The two go together, as the song says, like a horse and carriage, and you can’t have one without the other.

Maintaining the company’s focus amid enormous growth—the number of employees has more than tripled since 1984—requires that Disney be ever more vigilant about recognizing the significant role that each cast member plays and then emphasizing that all the pieces are needed to ensure the success of the entire team. By making cast members feel that their input makes a difference, Disney inspires further contributions.

Despite a decade of boardroom turmoil, honesty, reliability, loyalty, and respect for the individual are as much a part of the Disney culture today as they were in Walt’s day. And the way the company sees it, living those beliefs still means working hard to exceed a guest’s expectations and always delivering the “good show.” What’s more, if customers are the reason for being, it naturally follows that everyone—cast members, partners, suppliers, and so on—must be united in their effort to reach the goal. This is the Believe principle in action.

Thriving on Challenge

One of the initial decisions that Michael Eisner and Frank Wells made in the 1980s involved approval of the script for the decidedly “un-Disneylike” Down and Out in Beverly Hills, an R-rated film far removed from the studio’s typical family-oriented offerings. The studio had already begun to move gingerly away from its traditional fare before Eisner and Wells arrived on the scene, but with the exception of Splash, no movie produced by the previous management had been a hit. The early successes of Down and Out in Beverly Hills, Ruthless People, and a series of other film releases proved that like Walt, the team of Eisner and Wells had uncanny instincts for what audiences wanted.

After Wells’s death on Easter Sunday 1994, one of Eisner’s most daring moves, and one that left both critics and competitors sputtering, was the 1996 acquisition of Capital Cities/ABC for $18.9 billion. The marriage, which cemented a relationship that began when ABC helped Walt Disney open Disneyland in 1955, silenced critics who had questioned whether Eisner had the nerve to make a really big acquisition.

In another gutsy move, Eisner chose to renovate a seedy theater in New York’s bawdy Times Square area and to bring The Lion King to Broadway. At the time the commitment was made, no one could say for sure that a neighborhood known for its sex shops and drug trafficking could be successfully transformed. The musical has been sold out since opening and long ago recouped its estimated $20 to $25 million production cost.

Eisner made another bold departure from Disney tradition by sinking $800 million into the construction of Disney’s Animal Kingdom at Walt Disney World, which opened in April 1998. “It’s basically anti-Disney,” Joe Rohde, creative executive with Walt Disney Imagineering and lead designer of Disney’s Animal Kingdom in charge of the park, said in an I.D. magazine interview.¹¹¹ Not only does the 540-acre park feature live animals instead of the much more easily controlled animated ones, but it also strips away illusion in a fashion totally uncharacteristic of Disney.

That’s not to say, however, that there is no illusion. Disney is still in the business of creating magic, and the artfully crafted African savanna created out of Florida scrub has its quotient of illusion. But the very nature of a venue populated by 1,000 animals means that the experience can’t be tightly orchestrated in typical Disney style. If reviews are any measure, however, this daring new mix of reality and entertainment is meeting with typical Disney success.

A willingness to take calculated risks on innovative ideas means nothing if a company doesn’t have what it takes to follow through in the execution of those ideas. Disney has maintained its founder’s firm belief that execution requires extensive training, planning, communicating, and paying attention to detail.

The renowned Disney training program still turns out cast members who are thoroughly prepared for their roles. So successful is the program, in fact, that Disney now markets its methods to other organizations. And if planning and attention to detail are wanted, one need only look at the eight years of planning and $800 million worth of attention to detail that went into the Animal Kingdom—details so convincing that the South African ambassador to the United States was quoted in Time magazine as saying, “This is the bush veldt. This is my home.”¹¹²

The newly anointed “keeper of the keys,” Bob Iger, is not shy about accepting a challenge. Within the first six months of his role as CEO, he negotiated a deal to purchase Pixar and announced that Disney will partner with Apple to provide downloaded video content for Apple’s popular iPods.

But perhaps nothing so thoroughly evidences the strength of Disney’s execution as its unrivaled talent for synergy. As an analyst once told Kathryn Harris of the Los Angeles Times, “This is a great company in an operating sense … they’ve gotten everything out of the mouse but the squeak.”¹¹³

Thus, a new film begets an absolute deluge of new marketing possibilities, from domestic and international home videos and network and foreign television runs to pay-per-view and cable offerings.

And that’s just the beginning. Next comes new theme park rides and characters, new products for Disney retail partners (toys, clothing, books, games, records, CD-ROMs), new television spinoffs, iPod downloads, and programming ideas for Disney’s radio networks. Animated features become live-action films—like 101 Dalmatians—or Broadway stage shows such as The Lion King, Beauty and the Beast, and soon, The Little Mermaid.

Once the company decides to pursue a new idea, it immediately communicates that information to every segment of the company that might be able to exploit it in every other potential market or product. This notion of cross-pollination has become a major driver of the company’s profitability.

Lessons in Leadership

It has been our pleasure to get to know the leaders and staffs of our featured organizations and discover their own Dream, Believe, Dare, Do magic.

All are industry icons that set a standard by which others in their fields should be judged. For example, the dramatic results of the Downtown School illustrate the need for a dramatic paradigm shift in the American educational system. Why is it that over the past 20 years, with the countless reports citing the failure of our schools, few school districts have made an effort to rectify the situation? It has often been said of education, “If this was a profit and loss business, it would either change or die.” As Des Moines Business Alliance board president, Art Wittmack, said, “Businesses have long said, ‘Leave education to the educators; we’ll just take the product.’ Clearly the laissez-faire mentality of ‘We’ll let the legislature or the school board to address these issues’ has not been successful in the past.”¹¹⁴ Then it hit us—the trouble with U.S. education is not unlike the trouble with typical U.S. customer service: both are rooted in apathy and a “that’s someone else’s problem” mentality.

The University of Michigan business school’s National Quality Research Center compiles and analyzes the American Customer Service Index (ASCI). This study began in 1994 when the index for the retail sector was close to 75 percent, then 11 years later at 73.5 percent. Over the past 20 years, many other authors have revealed their disdain for the state of customer service in America. It still amazes us that even though Disney has been the “poster child” for “be our guest” service since the opening of Disneyland in 1955, painfully few companies have been inspired to emulate Disney’s culture. Yet, when Dell introduces the latest and greatest new feature on one of its computers, within 60 days, the HP engineers are able to incorporate their version of the feature into their own products. They are able to take apart a Dell computer and discover the secret. Yet, every day, The Walt Disney Company is wide open, and thousands of people around the world can actually see the “secret”—treat customers like guests in their own homes. They do this in front of the whole world, but few get it!

Our featured organizations masterfully apply Walt Disney’s definition of leadership to grow and nurture their cultures: “The ability to establish and manage a creative climate in which individuals and teams are self-motivated to the successful achievement of long-term goals in an environment of mutual trust and respect.” There are many striking leadership similarities between our featured organizations. Let’s consider the key elements of Walt’s definition beginning with “establish”. Like Walt, each of our leaders established or changed their organizations to create “magical moments” for their guests: an upscale casual dining adventure offering 200-plus menu choices; a truly unique five-star hotel experience based on The Golden Rule; a financial services firm where the staff cares for the client and the firm cares for the staff; a hospital that is patient-centered rather than physician-centered; a clothing store where wardrobe consultants live the “I Guarantee It” philosophy; a school where students take accountability for their own learning; a spa with “the Norm factor”—where everybody knows your name. As diverse as these organizations are, they all have a common thread—leaders who “dreamed” of a building something unique that differentiated them from their competition; “believed” in the value of their people; “dared” to take risks along the way; and then just “did it!”

The next key in Walt’s definition of leadership is “manage a creative climate.” Walt defined managing as “developing your people through their work and at the same time having fun.” Walt believed that leaders are responsible for developing and training people and providing them with the tools to succeed. All of our featured organizations are passionate about providing opportunities for their employees to increase their competencies. Ernst & Young has even achieved national recognition for its training, currently ranking as number three on Training magazine’s Top 100 list. Aside from “hard skills” training, our featured organizations are among the best at placing “soft skills” training at the forefront of their cultural initiatives. They all provide an orientation experience in which employees become immersed in their respective cultures and, upon “graduation,” are energized and self-motivated to live the vision and values of their organizations. It is also important to note that in each of these organizations, fun is not a dirty word. Sure, everyone has those days when everything seems to go wrong—when deadlines pile up, or when you wish you had called in to report that you were “sick.” But as one person told us, “I don’t always like my job when I go home at night, but I am always excited to get back at it in the morning.” When employees truly embrace the values of the organization, they not only feel a sense of pride but can also experience the freedom to be themselves … and yes, have fun.

Let’s consider the meaning of “self-motivated”. All these leaders have realized that when properly trained, their employees can and should be making decisions to create those special moments for their customers. Be it the doorman at Four Seasons, or the hairdresser at John Robert’s, or the manager at Ernst & Young—they all know that management has entrusted them with one of the most important elements of any business: the customer experience. An empowered workforce is a self-motivated workforce.

Like Disney, our featured organizations have a working definition of “long-term” that speaks volumes about culture. In the typical company, long-term thinking relates to a strategic objective for adding products, services, and perhaps new locations. Companies such as Four Seasons and The Cheesecake Factory define long-term thinking in terms of values and beliefs upon which their growth is based. They go to great lengths to ensure that their cultures can support new ventures and still remain true to their credos.

Arguably the most important part of Walt’s leadership definition is “mutual respect and trust.” Without exception, these two values represent a common thread woven through each of these organizations from The Cheesecake Factory’s five-year profit-sharing programs that rival many 30-year retirement plans, to the Downtown School’s teachers who never raise their voices in anger in their classrooms, to Ernst & Young’s “People First” philosophy, to Four Seasons Hotels’ Golden Rule strategy, to Griffin Hospital employees’ willingness to risk their jobs to retain their cherished leader, to John Robert’s relationship with the patients and families of Cleveland’s Children’s Hospital, to Men’s Wearhouse leaders who take responsibility when their employees fail.

Since the dawn of our new century, these seven organizations have cemented their “best practices” success. We believe that Walt Disney would be proud of their many accomplishments and especially for the proof that there is still magic in his original credo: Dream, Believe, Dare, Do.

In Tune with the Nation

Disney thrives on the business of making magic. Success of the magnitude Disney has achieved always brings out the critics and the fear-mongers, those who cry that the company is too powerful and wields too much influence in our society. But investors don’t share the angst; for the past 20 years, they have driven the price of the company’s stock higher and beat the S&P performance by over threefold. They sense that The Walt Disney Company has its finger firmly on the pulse of the nation, indeed the world.

There may be some disagreement as to whether the public’s blood is pumping with longing for a return to the old-fashioned values of family, hard work, and excellence that Disney symbolizes, or whether a public preference for escapism is at the heart of Disney’s popularity. (No one, by the way, disputes that the escapes Disney constructs are anything short of magnificent.) In any event, the crowds that flock to virtually every Disney venue would seem to bear out the assessment that Disney surely has the Midas touch, whatever its source.

Walt Disney’s legacy, then, flourishes at the astonishing institution called The Walt Disney Company. Like our nation, it is a restless enterprise, always seeking new and better ways to entertain its audiences, to put on the good show.

What’s more, every dream continues to be achieved with a management style that remains true to Disney’s original vision: a firm belief in core values backed up by hard work from a well-trained and dedicated team that relentlessly strives for perfection. The company today is a vital, living monument to the enduring power of Walt’s way.

We have examined the four principles that make up the Disney management style in separate chapters for the sake of our book’s organization, but it is their integration and interplay that work to change companies. As you envision their implementation in your company, think in terms of a holistic integration and imagine the benefits to be derived.

For example, giving employees a chance to dream and to express their creativity not only reinforces their value as people, but also inspires them to bring forth innovative ideas from which the company can draw. By the same token, a firm set of organizational beliefs not only ensures consistency in operations, but also encourages all parties—coworkers, partners, suppliers—to work cooperatively to further those beliefs.

Unshakable convictions, in turn, nourish the self-assurance and confidence in one’s instincts that are needed to overcome a fear of risk-taking. Daring to take risks encourages still further creativity and maintains the vibrancy of an organization. It creates a sense of fun and adventure that inspires individuals and teams to reach higher and work harder. And in the end, the factors that make it possible to follow through and turn the dreams into reality—that is, training, planning, communicating, and attention to detail—all double back to promote more creativity, more concern for customers, and more commitment to teamwork.

Figure E-1. The Dream, Believe, Dare, Do Process

We see the cycle as one that constantly reinforces itself, and we believe that by incorporating the basic elements of the Disney management technique, every organization can lift itself out of the ranks of the ordinary. Figure E-1 shows it all in simple graphic form. Ask the questions and take the actions as outlined in these chapters. And most of all—make your Dreams come true, Believe in yourself and your team, Dare to make a difference, and then … just Do it!