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    Mar 2005

    Strat planning by Roy E. Disney

    Here is an article written by Roy in the early days of the SaveDisney effort. This really shows how significant Iger's move (to shrink Strat Panning) really was. I should also point out that Jay Rasulo, President of Parks and Resorts; David Stainton, President of Animation, and Tom Staggs, CFO are all graduates of the Strat Planning department.

    Just What IS Strategic Planning, Anyway?
    (Or, Creativity by the Numbers is an Oxymoron...)
    By Roy E. Disney

    When you don't know whether an idea is good or not (which happens often at Disney these days), what do you do? What do you tell the person who suggested it?

    There are, of course, a lot of possible answers to those questions, and it depends on what kind of idea you need to evaluate. Maybe it's a new ride for one of the Parks... Maybe a movie... Maybe a plan to revive a failing enterprise (say, The Disney Stores)... Maybe it's a whole new line of business someone's trying to push... or a whole old business they're trying to sell.

    It would seem that each of those things would take a different kind of appraisal, a different expertise, wouldn't it? Well, think again. To management, they all present the same problem...they need to make a profit, preferably from the very first day.

    Thus they all require the same treatment... they need to be processed by the "friendly" folks at Strategic Planning.

    When Strategic Planning arrived on the scene in the mid-1960s, corporate leaders embraced it as "the one best way" to devise and implement strategies that would enhance the competitiveness of each business unit. This "one best way" involved separating thinking from doing, and creating a new function staffed by specialists: Strategic Planners. Planning systems were expected to produce the best strategies as well as step-by-step instructions for carrying out those strategies so that the doers, the managers of businesses, could not get them wrong. It has not exactly worked out that way.

    Most large companies have their own departments of Strategic Planning. Disney's was formed in about 1985 or so, and probably at that time had about five people on its payroll. Its function was to evaluate "risk," to try to put numbers against subjective decisions (like many of those listed above) — not to make decisions, but to make decisions easier to make.
    Strategic Planning worked along those lines, relatively quietly, for a number of years...and slowly it grew, octopus-like, into every corner of the company, reportable only to Michael Eisner himself. Today it is believed that there are over one hundred people in the department, and nothing that happens escapes its oversight.

    In earlier times, it seemed innocent enough...This was a new kind of management tool. Oh, by the way, it had another use: if you wanted to tell someone a polite "no" but didn't want to say it yourself, you could just say "let's pass that by Strategic Planning and see if it flies," and of course they would provide the desired answer. A little bit of a deception, but fair enough.
    Ever so gradually, it became easier to just send everyone to the Strat Planners, so upper management found itself making fewer and fewer decisions, and Strat Planning was growing faster and faster, MBA by MBA (...and these are not small salaries, even for beginners — see below).
    But here's the catch - strategic planning is NOT strategic thinking. It is the thief of creativity. It is the manipulator, not the visionary. It is, in fact, the arch enemy of the business Disney used to be in.

    Let's look at a few of the kinds of decisions that Strat Planning has been making in recent times...and then we'll ask the questions: Just who is running The Walt Disney Company? Michael Eisner? Or the Strat Planners?

    * Strat Planning, in effect, "designed" Disney's California Adventure, by (1) setting a profit goal, (2) calculating how many people would attend, at what admission price, level of food consumption, and merchandise purchased, and then (3) capping the expenditure for the "show" at a figure which was almost guaranteed to produce a sub-standard park experience. The "real world" falls entirely outside of all these calculations, questions like "will I like this place?" or "Would I go there repeatedly?' simply are immaterial.
    * Strat Planning looks constantly at societal "trends" and their application to the Company's lines of business (I feel like yawning when I write a line like that) and predicts future money-making enterprises, like, say, Movie Beam, or, in earlier days, (both of which were merely reflections of what had already been done - and better - by others, and were thus doomed from the outset). The ABC Family Channel also falls into that category.
    * Strat Planning has, for years now, had a division called Brand Management (a subject I have written about before), which is charged with, presumably, the protection of the Company's most valuable assets, its characters. In fact, the division spends most of its time pasting their likenesses on every box top or toothpaste tube that will pay to do so (and with little regard to their established personalities), thus diluting and overexposing the very characters they are supposedly "protecting."

    Strat Planning, in other words, actually "plans" nothing — rather, it looks at the past and extrapolates trend lines into some infinite — and impossible — future. If some division is growing at, say, 20% per year, Strat Planning will make the case that it will grow at that rate for the next five years (to fit their five-year-plan scenario), and thus profits for those five years can be calculated with ease. If you want even higher profits, why then, you just cut costs (fire people, close rides, slash budgets) to suit the need.
    When there was a need to find a new head for Consumer Products, guess who was given the responsibility? Why, the head of Strategic Planning, of course.

    When a good friend made a presentation of a new idea to Strat Planning, he was told, very clearly, "we don't want to be the first into any new business... we'd rather be second or third, after the concept is proven." Try to be an innovator in that climate!!!

    Strat Planning also does the "research" that "proves" the validity of their assumptions. They "conceptualize" new products that fit market niches (whether needed or not). They come up with new devices that track all of your moves in the parks, or online, and find ways to make you purchase more stuff. Their surveys validate the predetermined theories that nobody can tell the difference between good and mediocre animation - or good and mediocre park design - or new ride concepts and off-the-shelf rides - as a justification for outsourcing everything outsourceable.

    The following excerpts are taken from a recruiting website describing Walt Disney Strategic Planning Group's hiring information (, "the most trusted name in career information," a by-subscription-only site).

    "The Disney Strategic Planning Group is a consulting firm in everything but name, and it shares little of the Disney corporate culture. It reports directly to Michael Eisner, and gets its directives ‘from the top.' As one insider reports, ‘Projects come to the group either through Eisner, or occasionally when a business unit asks for help. More often than not, projects are mandated from above.' This privileged position, however, can sometimes breed resentment among other Disney groups. The group's research often ‘showcases that [other units] are screwing up their businesses,' notes one respondent. ‘So that's a tough challenge. And they're not stupid, they know why you're gathering info, or at least they suspect, or they're going to assume a worst-case scenario. It's tough often to get people to call you back.'"

    "At the same time, the culture at the group may not be for everyone. Like at top-tier consulting firms, it is said to be very stressful, with 60-70 hour work weeks. Moreover, at least one respondent says it is very much a "type-A personality" environment, and that while the culture has changed from "a real work-hard, play-hard kind of mentality" in the late 1990s to a more family-oriented focus today, it is still a high-power, high-stress place to work."

    "The Strategic Planning Group also resembles McKinsey in exclusivity — as one respondent notes, the group ‘generally only recruits at Harvard, sometimes Wharton, sometimes Stanford.'"

    "Working for Disney has many benefits, and working for the Strategic Planning Group has even more. Salaries are competitive with the best in the consulting industry - the low $50,000 range for undergrads, the low $100,000 range for MBAs. ‘They're pretty consistent with consulting, and all that means,' says one insider. Benefits include up to a 3 percent matching contributions to 401(k)s; health, dental, and vision insurance; a discount at Disney stores; and a "silver pass," which allows employees to take up to three guests into a Disney-owned theme park for free, at any time."
    You can certainly infer from the above that the Strat Planners - mostly young, inexperienced, brash outsiders - aren't exactly the flavor of the month in the hallways. But over time, key executive positions across the Company have been filled with graduates of the Strategic Planning Group, pushing aside those with alternative views.

    In a recent New York Times article, one executive described the Group's importance as an outgrowth of Eisner's "looking for strategic change agents."
    Well, things have certainly changed...

    So what does all this tell us about who actually runs The Walt Disney Company? I think you can make up your own minds about this witch's brew...and who is in control.

    But there's one more fly in the soup that you need to keep in mind: The Finance people hold the purse strings, so they can tell Strat Planning how much money they can (or can't) have. Having reached the end of their "occupational efficiencies," they can't make their enterprises cheaper AND better anymore — just cheaper.

    What happens now?

    Mitchell has claimed in the press that management "is executing against their strategic plan." But looking toward Disney's diminishing future, we have to ask "What IS the plan, anyway?"
    Last edited by Mr. Eggz; 04-11-2005 at 08:00 PM.

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