Tough Times Bring Clients to Disneys Training Business

By Patrick Kiger

Mar. 16, 2009

Like many other prominent companies that have traditionally been seen as models of effective management, Walt Disney Co. has been hit hard by the economic downturn. With nervous consumers cutting back on their discretionary spending, the entertainment empire has been beset by declining DVD sales for its classic animated films, and attendance at its world-renowned theme parks has dipped.

But one segment of Disney’s business actually is booming as a result of economic worries. The Disney Institute, which offers other companies business leadership and customer service training based upon time-honored Disney precepts, is seeing a surge in demand for its services.

While Disney isn’t releasing specific figures, Disney Institute spokesman Terry Brinkoetter says corporate clients—which include hospitals, accounting firms and aircraft manufacturers—are signing up in greater numbers than ever for the institute’s various offerings. The curriculum includes three-day courses at Disney resorts where students get to observe Disney’s customer service techniques firsthand, and on-site training sessions in which Disney trainers work to customize Disney business approaches to fit other businesses’ specific needs and problems. The institute also offers a popular traveling series of $400-a-session Keys to Excellence conferences, which it has recently expanded to other countries.

“I think we’re probably going to be the brightest spot in the company this year,” Brinkoetter boasts. “We’re actually setting higher targets for business than in the past, and we’re still seeing enormous jumps.”

Though companies are under increasing pressure to cut expenses, training experts say that forced austerity may be driving organizations to spend what few dollars they can spare for training on one of the world’s most illustrious brand names. Disney, which has been in the training business since 1986, can draw upon its own fabled history for material. Institute instructors, for example, share the tale of how company founder Walt Disney bought dinner for his animators to boost their morale during the 1937 creation of Snow White and the Seven Dwarfs, at a time when the company was so short on resources that Disney and director David Hand worked with only a single light bulb lit to save electricity.

“Disney is an outstanding company,” explains Doug Lynch, vice dean of the University of Pennsylvania’s graduate school of education, who studies corporate leadership training. “These days, there are so few companies that big who have been around as long as they have. But what’s interesting about them is that they have that whole Imagineer, creative side of things, and they’re also perceived as very good at customer service and operational excellence. And they seem to be able to attract really good people and get them to be loyal, without having to pay through the nose. So it’s natural for me to say, ‘I want to be able to do that, too. Can they teach me how to do it?’”

Bruce Jones, the institute’s programming director, says corporate clients turn to Disney for help because they see customer service and efficient execution as ways to differentiate themselves from the pack in a brutally competitive economy.

Health care providers are major part of the institute’s clientele. “The point we make to them is that behaviorally, people don’t always understand the medical procedures and the technology, but they understand how family members are made to feel,” Jones says. “That’s something we know how to do. We try to make everyone feel like a VIP, and we can show them how to do it.”

For example: In the wake of a scandal involving shoddy conditions and patient neglect in 2007, Walter Reed Army Hospital paid Disney $800,000 to retrain 2,000 of its employees on-site in Maryland, according to a Washington Post report. Another institution, the University of Arkansas for Medical Services, spent $178,000 to bring Disney trainers to Little Rock for 17 training sessions last year, and the University of Iowa’s medical center paid two Disney trainers $3,000 for a one-day crash course in customer service, according to coverage in local papers.

Cheri Greenfield, director of strategic consultancy at Humana, the health insurance provider based in Louisville, Kentucky, says working with the institute’s detail-oriented trainers enabled Humana to develop a special program to deal with consumers who are referred to out-of-network specialists by their primary physicians. “Sometimes, the person goes to the appointment, and that’s the first time they realize that Dr. Joe is a nonparticipating provider,” Greenfield explains. “What we learned from Disney, though, is though it may not be our fault, it’s our problem. Now, as soon as we’re notified of the referral, within 24 hours we reach out to the consumer, educate them on the situation, and offer to guide them, if they desire, to a participating provider.” Greenfield says surveys show that 84 percent of its customers want to switch to a participating provider if given the opportunity.

Based upon Disney’s guidance, another client, Arkansas Children’s Hospital, adopted a “central casting” approach to hiring, with an HR staffer embedded in each department to learn its particular needs and then do the initial screening of résumés and interviewing. “That way, the manager doesn’t have to spend time doing all that stuff, which takes away from his or her regular job,” explains Scott Gordon, the hospital’s vice president and COO. “It has worked very well.”

Possibly inspired by Disney’s success, other corporate brand names, such as Motorola and Raytheon, also have ventured into training and consulting. “More companies are offering education externally; they’re not just doing it for money,” says New York-based training consultant Jeanne Meister, writer of the New Learning Playbook blog. “They’re also doing it to add to their brand.”

Perhaps Disney’s closest competitor is Washington-area-based Ritz-Carlton and its Leadership Center, which utilizes the company’s own hotels as classrooms for courses with titles such as “Legendary Service,” in addition to doing on-site consultations.

Like Disney, these days Ritz-Carlton is finding plenty of eager corporate students. “What’s happening is that companies are in dire straits,” says Diana Oreck, Ritz-Carlton’s vice-president of global learning. “They’re realizing that they need that service touch as a differentiator, and that they better get on it. We have everyone from automotive companies to health care to financial firms coming to us.”

Disney is hoping to stay ahead of the curve by offering “Leading Through Turbulent Times.” The new program draws upon Disney’s history—including Walt Disney’s experiences leading his studio through the Great Depression of the 1930s, and Disney’s struggle to operate its Florida resort complex after major hurricanes—to give clients insights on how to survive the current downturn. Disney was planning to roll out the product with a late-March webinar, which is intended to appeal to companies who are feeling too financially strapped to send staffers to Orlando, Florida.

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