by Ray Keating
Commentary
DisneyBizJournal.com
September 12, 2022
If any major company was built on leadership and the idea of customer service, it would have to be The Walt Disney Company. Walt Disney set the bar high, and few entrepreneurs and CEOs will ever come close to his achievements. But there are times when one wonders just how far short Disney’s current CEO, Bob Chapek, might fall?
Chapek, of course, took over as Disney CEO days before COVID-19 shutdown the company, and he and Disney, like most other businesses, have been working to get back on track ever since. But Chapek heads up Disney, which often seems to be the most closely watched company on the planet given that it has so many dedicated fans, and many of them with video blogs and podcasts. So, to say that Chapek has been put under the microscope is to understate things.
Over the D23 weekend, however, Chapek attempted to put himself out there with his own, unencumbered vision of the company. The strange thing is that, based on two interviews he did – one with The Hollywood Reporter and another with the Los Angeles Times – Chapek still stumbled in odd ways, and by doing so raised some additional questions.
For example, in his interview with Hollywood Reporter, Chapek was asked about getting some blowback from “superfans” regarding price increases and whether that might create some problems for the brand. The “superfans” mention was hardly the centerpiece. Instead, this was a pricing question during a time of inflation. Here’s Chapek’s answer as supplied by HR, and I quote it in full given that he has received some criticism for this:
We love all our fans equally. We love the superfans, obviously. But we also like the fans that don’t have the same expression of their fandom. We want to make sure that our superfans who love to come with annual passes and use [the parks] as their personal playground — we love that. We celebrate that. But at the same time, we’ve got to make sure that there’s room in the park for the family from Denver that comes once every five years. We didn’t have a reservation system and we didn’t control the number of annual passes we distributed and frankly, the annual pass as a value was so great that people were literally coming all the time and the accessibility of the park was unlimited to them, and that family from Denver would get to the park and not be let in. That doesn’t seem like a real balanced proposition. I guess it’s possible that the superfans look at that as a disadvantaging of the way they consume the park, but we’ve got to make sure that not only are we heeding the needs of our superfans, but we’re heeding the needs of everyone who travels from across the country one time every five years. We have a real high-class problem: We have much more demand than there is supply. What we will not bend on is giving somebody a less than stellar experience in the parks because we jammed too many people in there. If we’re going to have that foundational rule, you have to start balancing who you let in. … Our ticket prices and constraints we put on how often people can come and when they come is a direct reflection of demand. When is it too much? Demand will tell us when it’s too much.
What’s most striking is that even as businesses across industries are being forced to raise prices due to inflation and labor market issues, Chapek seems to go out of his way to pick on annual passholders, that is, on the company’s most loyal customers. Yes, he says that Disney loves all its fans, including superfans with annual passes. But he walks the line by saying that annual passholders treat the parks as their “personal playgrounds” (yikes, poor choice of words), but again he says “we love that.” And then he decides to pit a family from Denver who visits once every five years against annual passholders. Why? What’s the upside? The answer: There is none.
He goes on talk about managing demand, etc. Obviously, Disney, like other theme park operators, has to figure out how to manage demand and not suffer from overcrowding. But again, why go out of your way to basically pick a fight with superfans, including annual passholders, or at least give the appearance of doing so? This either illustrates a disregard for certain customers (again, your most loyal), or a tone deafness on Chapek’s part as to how his words will be received.
On the matter of leadership, at another point in the HR interview, Chapek is asked about the Scarlett Johansson controversy. His answer for a CEO of a company was striking. He said, according to HR, “There were a lot of people that got a vote in how we handled that. And I was one voice, and I’ll just say that our relationship with her agency and her has never been better.” Hmmm, apparently, the buck doesn’t stop at Chapek’s desk.
As for the Los Angeles Times interview, Chapek was asked about the Florida so-called “Don’t Say Gay Bill” that Disney got itself entangled in. Chapek spun it as turning out to be “a big opportunity” to get input from employees. Really? In reality, it seems like no one came out of that pleased with how Disney handled matters, including assorted employees and many customers, and many shareholders, no doubt, weren’t enthralled with the company becoming a political football. The hope, with issues like this, is that they quickly fade in the public’s memory as many, if not most, political issues do. But this was anything but a stellar example of leadership.
Staying focused on customer service and leadership in these interviews – a good number of issues were covered – Chapek was absolutely right in declaring that the “consumer essentially dictates everything.” Now, has Disney’s CEO taken that to heart? On the job training is tough anywhere, but particularly as the CEO of Disney. And if customer service turns out to be seen as mere lip service, then, yes, consumers will punish a company accordingly.
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Ray Keating is the editor, publisher and economist for DisneyBizJournal.com; and author of the Pastor Stephen Grant thrillers and mysteries, and the Alliance of Saint Michael novels; and assorted nonfiction books. Have Ray Keating speak your group, business, school, church, or organization. Email him at raykeating@keatingreports.com.
The views expressed here are his own – after all, no one else should be held responsible for this stuff, right? Full disclosure: Keating is Disney shareholder.
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