Move ‘Em! Shake ‘Em! Manage ‘Em!

WDWNT Author on February 20, 2009

The recent changes in the entire “Disney Parks and Resorts” management structure has brought about some interesting additions and repositioning in Walt Disney World management. From the Orlando Sentinel:

The number two executive at Walt Disney World is being bumped up to run newly merged resort functions between Orlando and Anaheim, Calif.

Erin Wallace, who has been the senior vice president of operations at Disney World since August 2006, moves to the new position senior vice president of operations integration/line of business for Walt Disney Parks and Resorts.

Disney announced the move Thursday, one day after unveiling a broad restructuring of its U.S. theme parks designed to consolidate operations between Disney World and Disneyland. The company, which has been hit hard by a sharp drop in consumer spending, will cut an undisclosed number of jobs in the coming weeks as part of the streamlining.

In her new role, Wallace will oversee a series of combined functions at Disney’s domestic parks. They include merchandise development, entertainment and imaging, attractions, lodging, animal programs and environmental initiatives.

Wallace, 49, has been with Disney for more than 23 years. She began in the resort’s industrial engineering department, and her assignments have included vice president in charge of the Magic Kingdom, Disney’s flagship theme park.

Wallace will report to Al Weiss, president of worldwide operations at Disney’s parks and resorts division.

Disney also said Thursday that it has named Dan Cockerell to run Epcot, the second-busiest of Walt Disney World’s four theme parks. Cockerell, previously a general manager in the Magic Kingdom, succeeds Jim MacPhee, who will now oversee special projects at the Orlando resort.

Each of the vice presidents overseeing individual theme parks will continue to report directly to Walt Disney World President Meg Crofton. So will MacPhee and the executives in charge of Downtown Disney, golf operations, sports facilities and transportation.

Crofton will continue to report to Weiss.

At the same time as it combines operational functions at its U.S. parks, Disney is also consolidating real-estate and business development functions into one unit and all of Walt Disney Imagineering, the company’s attraction-design arm, into another unit.

The goal, a Disney spokesman said, is to develop “a three-pronged team” within Disney’s parks division, with one charged with developing new initiatives such as new parks and expansions, another with designing and building the infrastructure, and the third with running day-to-day operations.

Disney’s parks division, which accounts for more than a quarter of the Disney Co.’s total revenue, has taken other streamlining steps. Last week, the division announced that Disney Cruise Line and the Adventures by Disney packaged-tour business would be merged into a single department “focused on operating the businesses that take the Disney brand to new places.”

“One-Disney”, Multiple Layoffs

WDWNT Author on February 19, 2009

While we provided you with Disney’s side of the story yesterday, the Orlando Sentinel is offering a fresh perspective into the entire shake-up going on throughout the domestic “Disney Parks” in both Orlando and Anaheim:

The Walt Disney Co. on Wednesday said it will eliminate an undisclosed number of jobs as part of a sweeping corporate overhaul at its domestic resorts, which includes plans to combine back-office operations at Walt Disney World and Disneyland. Disney would not say how many jobs it intends to cut or how much money it expects to save through the moves. The company employs about 80,000 people at its U.S. resorts, including 62,000 in Central Florida.

With the shake-up, Disney will consolidate East and West Coast “operating infrastructure” — responsibilities ranging from procurement to menu-planning to merchandise — under Al Weiss, the president of worldwide operations for Walt Disney Parks and Resorts. The plans also call for uniting disparate creative engineering and business-development units under single executives.

In a statement, Disney said it was forced to speed up corporate streamlining plans by the worsening global recession, which has eroded revenue at its theme parks and elsewhere across the Burbank, Calif.-company’s media and entertainment empire.

“These changes are essential to maintaining our leadership position in family tourism and reflect today’s economic realities,” Parks and Resorts Chairman Jay Rasulo said in the statement. In a separate memo to employees Wednesday, Rasulo wrote that “organization changes require difficult decisions, including the elimination of some roles.”

“These decisions were not made lightly and we know this will be a challenging transition. The people affected are our friends and colleagues, and they have made valuable contributions,” Rasulo added in the memo. The announcement comes the same month Disney revealed that its first-quarter profits fell 32 percent. Operating profit in the parks-and-resorts division fell 24 percent during the three-month period, which ended Dec. 27. It also follows Disney’s decision last month to offer buyouts to more than 600 executives at its domestic resorts. A spokesman said Disney received “a satisfactory response” to the offer, though Disney would not say how many executives took the buyouts.

The risk of over-cutting

John Gerner, managing director of Leisure Business Advisors, a Richmond, Va., consultant firm, said Disney likely will be able to make deep cost cuts by consolidating operations.

“I think it definitely has quite a lot of potential for savings. . . . As far as the theme parks go, there’s definitely economies of scale in being able to merge all those operations together to the extent that they can and centralize them,” Gerner said.

But Gerner said Disney, which relies on a constant infusion of fresh content to fuel everything from park attendance to DVD sales, must not cut too deeply in creative areas.

“They’ve got to be careful because there are so many very specialized people that work for Disney, especially on the creative side, that would be very difficult to replace once things turn around,” Gerner said. “That’s what a lot of creative companies, not only Disney, have to rely on.”

In addition to steering “operating infrastructure” at the Orlando and Anaheim, Calif., parks through Weiss, Disney said that its Walt Disney Imagineering unit would be reorganized into a single practice reporting to Bruce Vaughn, executive vice president and chief creative executive, and Craig Russell, executive vice president and chief design and project-delivery executive.

A new ‘global’ team

The company also said it would establish a new “Global Business Development team” headed by Executive Vice President Nick Franklin, which will be charged with combining existing business and real-estate development functions. The unit will be responsible for focusing growth strategies at existing parks-and-resorts businesses and identifying new opportunities around the globe. Vaughn, Russell and Franklin all are based in California.

Disney said other departments will make “appropriate changes” in the coming weeks.

As an example of what it hopes to achieve through the streamlining, Disney pointed to the simultaneous development of Toy Story Mania! attractions at both Disney’s Hollywood Studios in Orlando and Disney’s California Adventure in Anaheim, which helped hold down design costs.

The corporate overhaul means fewer employees will now report directly to Meg Crofton, president of Walt Disney World, and Ed Grier, president of Disneyland.

Major Announcement: Four Parks, “One-Disney”

WDWNT Author on February 19, 2009

If you weren’t a fan of “Disney Parks” combined branding, then you’re not going to like the next major step that was taken today. Here’s the press release from Disney:

BURBANK, Calif. – February 18, 2009 – Jay Rasulo, chairman of Walt Disney Parks and Resorts, today announced organization changes to deliver a “one-Disney” experience by simplifying the Parks and Resorts operating structure, streamlining decision-making and eliminating redundancy.

“We know that our Guests want a ‘one-Disney’ experience and we must organize around that expectation,” said Rasulo. “The long-term success of Parks and Resorts depends upon our ability to adapt and innovate and respond to Guest preferences. These changes are essential to maintaining our leadership position in family tourism and reflect today’s economic realities.”

Today’s announcement accelerates the evolution of the Parks and Resorts management structure by creating seamless behind-the-scenes operations across domestic Parks and Resorts, while preserving the uniqueness, character and culture of our individual destinations.

In a memo to employees Rasulo explained: “In 2005, we announced a new Walt Disney Parks and Resorts operating structure. We transformed our organization to match consumers’ expectations: ‘one-Disney,’ regardless of how or where they experience our products. We put in place a new leadership team, integrated key business functions and implemented a consistent set of best practices. This allowed us to more rapidly and efficiently roll out new creative projects and better anticipate changes in travel trends.

“We’ve already seen innumerable benefits. Prime examples of our successes are the establishment of many maintenance and safety practices, holiday castle lighting that began in Paris and expanded into our other theme parks, the speed with which we integrated the High School Musical shows into our parks around the world, and the simultaneous openings of Toy Story Mania at Disney’s Hollywood Studios and Disney’s California Adventure.

“We have made significant progress. However, the long-term success of Parks and Resorts depends upon our ability to continue to adapt and innovate, to respond to ever-changing Guest preferences, and to implement an organization and cost structure that meet today’s economic realities. We must accelerate the evolution of our business and further refine our structure to work in a more integrated and effective manner.

“We know that our Guests want a ‘one-Disney’ experience and we must organize around that expectation. Our new structure will enhance our ability to Identify and Develop the next great Disney experience, Create and Build Disney destinations that incorporate our rich storytelling heritage and Operate them in a way that delivers a unique, memorable experience that transcends geography. Economic realities require that we do this in a simplified and streamlined manner that eliminates redundancies.”

Organization Changes Announced Today

A new Global Business Development team led by Executive Vice President Nick Franklin will combine the existing development functions of business and real estate development. The team will be responsible for driving growth by working with existing businesses on their development strategies, while also exploring new business opportunities around the globe.

Walt Disney Imagineering under the leadership of Bruce Vaughn, EVP, Chief Creative Executive and Craig Russell, EVP, Chief Design and Project Delivery Executive, will be reorganized into a single practice merging resort development with attractions and entertainment development to bring the creativity of Disney storytelling to the design and delivery of products at all Disney destinations.

Al Weiss, President, Worldwide Operations, will lead the work of merging the operating infrastructure at Walt Disney World and the Disneyland Resort to create a single domestic organization and “back-of-house” operation.

In the coming weeks, other functions will review their organizations and make appropriate changes.

In his memo Rasulo acknowledged the challenges inherent in a large-scale reorganization: “Organization changes require difficult decisions, including the elimination of some roles. These decisions were not made lightly and we know this will be a challenging transition. The people affected are our friends and colleagues, and they have made valuable contributions.”

The changes announced today are effective immediately.

What this basically means is that more attractions and entertainment offerings will be developed for both the Walt Disney World and Disneyland Resorts, rather than just for one of them. This announcement would lead us to believe persistent rumors that attractions such as “Radiator Springs Racers” and “The Little Mermaid: Ariel’s Adventure” that are going to Disney’s California Adventure as part of the billion-dollar expansion plan will also find their way to one of the four Walt Disney World theme parks sometime in the not-so-distant future. Stay tuned to WDW News Today as we get more information on this announcement and what it means to the future of the Walt Disney World Resort.