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3 O'Clock High: Walt's Revenge



Legend has it that Walt Disney was frozen and stored in Disney Land, under the Pirates of the Caribbean, after his death in 1966.

Inspired by the story, Mrs. Jeffmacke and I made a reasonable effort to contact the Walt-cicle during our adventures in the Magic Kingdom last week. Specifically, we tucked a Ouji board under Mrs. M's $600 Snow White Commemorative (see also: "Fetishist") dress and held a séance in the line for Pirates of the Caribbean. I quietly sang "I'm Mister Heat Miser" and eyeballed the surprisingly saucy verite of the wife's outfit. I figured that any type of heat is good when communicating with the frozen semi-dead.

Unfamiliar as we were with Ouji's inexact targeting system, we had to sit through some awkward moments with Ted Williams. "Yeah, sure, you want to talk to Walt Disney. Everyone wants to talk to Disney." the baseball legend offered, by way of introduction. "I'll tell you punks one thing, Teddy Ballgame was shooting down Migs when that pinko Disney was back home making his doped out Fantasia crap. Listen, sugar britches, I could hit .300 off today's pitching right now; .350 if you let me have a gallon of hot coffee and a fist-full of Greenies . Snow White, grab a bat and let me show how we used to swing it in the old school..."

As we fled, shrieking, through the netherworld we found ourselves racing through a nearly endless labyrinth of weaving crowd control chutes. Under some magic sway we exchanged our credit cards (and PIN numbers) for lead-based beads; painted to look much like jelly beans.

Having appropriately given our tribute, we were granted 5 minutes of Mr. Disney's time.

The Issues

I had come to ask Walt his thoughts on the state of his kingdom. From where I was sitting (floating), the Kingdom was getting creaky while the corporate parent focused on other, sexier initiatives, generally with poor results. Though the stench of burning disposable income was still thick, millions were being left on the table. The place was demanding (and still getting) top dollar but they were giving back upper-mid level entertainment. Something had to give and the smart money was betting that it would be the public's willingness to pay up.

Walt's park is starting to screw-up on the details in a way that simply wasn't tolerated under the founder's regime. I wanted to know what he would do about it. I wanted the rules we could draw from studying his artful capitalist dictatorial rule. And I wanted it packaged in a way that I could turn into an over-priced management tips, Attila the Hun rip off I could write in two days then live off for years.

The Iceman Cometh

Walt delivered big (after sniffing out my book scheme and holding out for 75% of the gross).

It was a small price to pay. With the below Rules of War I can fix Disney Land. I can have it humming for less than what Michael Eisner spent per year on gilded mouse ears. I can even do it without killing any of the "little people" who do the actual wet-work of creating magic. I'll do it for a chunk of the profits over the first 10 years of my dictatorship (and, of course, whatever's left of the book profits).

Disney won't do it because the parks aren't seen as sexy. Ross Perot has said that he lived his investing life by the credo "never go into a business that depends on the weather." Theme parks get buffeted not only by weather but also oil prices, terror threats and any mental or physical sickness (abductions to bird flu) which happens to be running through a society on any given day.

Parks are expensive to build, a nightmare to maintain and an endless wellspring of liability.

You could get thrown out of most self-respecting business schools, let alone a place like McKinsey for suggesting that Disney do anything more than sustain the theme parks. "Spend as little as possible and mine them for cash". The sad history of just how that cash has been spent in the past (Couple hundred million here for instance) ) does little to change that strategy.

Digging through EDGAR, Parks and Resorts accounted for roughly 25% of Disney's revenues and operating income for 2004. For comparison purposes, the portion of the company with which the Street is fixated, Media Networks (ESPN, ABC etc) had revenues of $11.8B vs. 7.8 from the parks and resorts. With ESPN giving Disney controversial levels of pricing power with MSO's, Media has been a better growth story in recent years. The theme parks will remain an afterthought for the foreseeable future.

That's wrong. As long as Disney is part of the operation, ABC needs to keep the parks Perfect. Media trends come and go; an image should be thought permanent. I think an argument could easily be made that "Corporate Warriors seeking to retain the customers of the land while stealing those of the enemy should study Dynastic Warlord Emperors of the past. Let the lessons of the biggest Media Cheese the world has ever known guide you to the Magic Kingdom of Success in the world of Customer Service!"

In fact, that's exactly the type of garbage I intend to put on the sleeve for my book based on Walt's tips!

Walter Disney's Rules of War (and how they will be used to save the theme parks in the Coming Age of Macke)

  • Empires die not because of tyrannical practices, they die for *want* of tyranny.

Young Princess Lou and her heroic father (me) got no-showed by Winnie the Pooh.

We had ridden Pooh's eponymous ride twice, consecutively. I had to talk the girl out of riding for a third time because the bear himself was due at 10. In the darkness of my pocket, my wallet grimaced in anticipation of floods of outflow to secure Pooh-related merchandise. At the very least, I was committed to a $20 picture of the kid on Pooh's lap (more if I could get the bear to tickle Lou's stomach so I could later make jokes about his attempting to gut my daughter (before I shot him)).

But the freaking bear stood us up.

Don't promise that which you can't deliver. Don't run ads when you don't have product in stock. Don't create a frenzy when you don't have anything to sell (Microsoft, are you listening or are you busy getting the bugs out of your still-sold-out Xbox360s?).

Both the kid in the Bear suit and the "Castmembers" who told us we could meet Pooh at 10 should be caned then summarily fired in the park at a mandatory-attendance "Team Meeting". As a bonus, you could charge the parents who got stood-up to watch ("Slightly more if you'd like to do some of the caning yourself!").

The Happiest Place on Earth isn't about the employees being happy. They can show up pretty much whenever they feel stoned enough to really sell the Bear's back story. It's about the customers being happy. Making customers angry is punishable by however close to "death" you can get without unwanted legal attention.

• Confuse not "tradition" with "antiquated". Keep your weapons of selling at the bleeding edge of technology

I hadn't been to Disney Land Resort in 22 years. In that time Disney has added the ill-conceived "Disney California" park, an ESPN Zone, about 5 other theme restaurants and an enormous walking shopping mall through which all guests are funneled.

With the exception of a cheap DVD player and a buggy internet connection, my actual hotel room was exactly as it was 2 decades ago. Right down to bedspreads.

This company owns ABC, ESPN and the best catalog of characters on earth yet when you get in your room, usually with a bone-tired, played-out child you can't order up a cartoon. Your choices are basic cable or (which is, I'm sure, the idea) choosing one of the many DVD's in the gift shop, all available for just $24.99 (about 80% over what you'd pay off-site).

You can kill a sheep once but you can fleece him a hundred times. We signed up for "Fleeced" when we reserved our rooms. That was the implicit agreement we had when I initialed the rate at check-in. "Wow, you guys are simply torturing my wallet but, hey, I could use the pampering and it's all about the kid, anyway."

Fleecing guests by charging them $5 to watch is acceptable. You are killing guests when you price a product (by way of example THIS, on sale at the resort for $25) they can find anywhere for 1/3 the price unless they want to try to get their kid to unwind in front of Wolf Blitzer (with commercials!). Disney should pay people to saturate themselves in Disney Entertainment in an exhausted state. Beyond customer service, this is simply brain-washing 101.

Instead, Disney made me mad. They disrespected me in the same way Wal-Mart (WMT) and Kmart (SHLD) keeps offensively dirty stores. They disrespected me the way DirecTV (DTV) insults me by noting I'm one of their "most valued customers" (must be all the TiVO boxes) after keeping me hanging from the gallows of an endless phone tree for 30 minutes. The same way Blockbuster (BBI) taunts me simply by existing.

You don't need to suck up to anyone who walks in the gate. You need to respect them at a level roughly in-line with what you are asking them to spend with you. When you are given bad service, when you are actively disrespected, it's evidence of a weak management. Manage and invest accordingly.

Walt was just getting warmed-up with his chilling leadership insights. In order to stoke the fire of demand for the forthcoming book I'll share a few more tomorrow, along with some impressions from the retail battlefields I've been wading through for the last week.

By way of a teaser for that work: The Gap (GPS) remains dead.

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