Why does it take so long to complete a Disney project

[Goofyernmost]

So what I'm hearing is that indeed the bureaucracy has taken over. I understand that layers have built up, and I even sympathize to an extent. Yet Disney used to be known as a responsive company that reacted quickly to market demand, and wasn't bogged down in bureaucracy. If, for example, Disney could somehow get paid $1 billion for putting up a beautiful and working Ratatouille ride by October 13, 2018, could they do it? For that much money, I assume Iger would appoint a Rat Czar to make sure the $1 billion prize would be awarded to them. But if that were possible, then why can't they do it now?

Or is it not possible? Business books from "In Search of Excellence" through the seven steps have warned organizations that layers of bureaucracy can kill them. Once a business gets bogged down with committees, sign-offs, etc . . . that organization becomes stale, stagnant and ineffective. Rat is just one example, but the greater screaming monument is the fact that the Yeti in Expedition Everest has been in disco mode for nearly a decade. Excuses abound for not fixing it, but I have heard absolutely nothing as to why a better band aid than a $20 disco light was not installed these last 9 years. Shameful. Fine, the yeti is broken, but let's actually use a touch of imagination and ingenuity to put something better than a furry John Travolta in its place until we can actually get it fully fixed. Apparently no one had the ideas, authority or foresight to achieve that better band aid.

Of course, Disney has also allowed the limp Tomorrowland Transit Authority narration to continue for years as well even though there is not a single sane person in the world who believes the current version is better than the narration it replaced. Plus, it would be very easy and inexpensive to bring back the old narration. No one has the authority or foresight to fix it.

All of these are sad indications that Disney has become so huge and red taped that the once great ideas become watered down and stale before they ever make it to the public. In my experience, committees deflate truly great and imaginative ideas, and that unfortunately is what we are getting with all the rehashes, refits, and IPing of the parks. Where are the great ideas? I fear they are not coming from Disney right now. I hope I'm wrong, but I will have to consult with the Board, swing it past 5 committees, get 27 sign-offs, amortize it though the next fiscal year, and complete a few studies before I could tell you for sure.

That is why there is no real reason to continue on with all the what if's and the what for's. The fact is we do not know why the Rat isn't currently being built. Perhaps they have enough on the table now that is going to open around the same time and they don't want anything else to watch over. Sometimes it is possible to bit off more then one can chew. Perhaps the construction people that have the skills to build this are not available. There is not exactly a giant demand for theme park building. Perhaps they just want to wait and open it later to help balance out the crowds and the enhanced numbers of people running to new things.

The point is that guessing that there is some sort of "excess" bureaucracy that is holding thing up because of neglect, is just blowing air. They have their reasons and it wouldn't surprise me at all if those reasons made very good sense, business wise. Or at least a lot better then the 10 years that they didn't do squat.

The last time that one person had control of that company was previous to 1966. After that they had to answer to more then themselves. It's not all that simple to do. Reality plays a strong factor and even if it is a rule by committee society, what does that matter. It is what it is, things change, but, usually not at warp speed. Some things cannot be changed anymore then the sun coming up in the east and setting in the west. I would think that many would be just giddy about the company going from nap time to full speed with construction going on everywhere, but, heck let's focus on what isn't being done instead.

 

[Goofyernmost]

Not sure how DIsney does their accounting (there are a number of different accepted methods) but with my project I have to watch AFUDC - Allowence for Funds Used During Constuction.

AFUDC is an accounting practice whereby the costs of debt and equity funds used to finance plant construction are credited on the statement of income and charged to construction in progress on the balance sheet. The capitalization period for AFUDC shall begin when two conditions are present: (1) capital expenditures for the project have been incurred; and (2) activities that are necessary to get the construction project ready for its intended use are in progress. AFUDC capitalization shall continue as long as these two conditions are present.

No AFUDC should be accrued during periods of interrupted construction unless the company can justify the interruption as being reasonable under the circumstances.

It is basically a capililization of the cost of capital that is tied up in a project before the project realizes an ROI.

If I take $1M and use it to build a project that takes a year to complete before I can in service it, that $1M is tied up and not earning anything for a year. There is a cost of tying up that $1M, at the least I could have put it in a low risk investment. So using AFUDC you can capitilize that cost of committing the capilal, but only of you dont delay construction unnecessarly.

Engineering - welcome to the world of budgets.

But compared to the actual cost of the project... my guess is that we are talking parking meter change here when you look at the net worth of the company and the end worth of the project. It's like peeing in the ocean and expecting it to be noticeably deeper.

That last sentence is really the important one. Legally they cannot willingly delay construction just to be able to cash in a few perks. Those perks, btw, if they are doing the right thing are also chicken feed compared to potential income for the capital investment once it is operational.

 

[TXDisney]

Two big reasons stick out to me.
1. Disney has a a very high reputation. No sense of hurrying a project and have it less than perfect. They hold a high standard and that's what makes it so magical.
2. Why hurry? It's not like they're losing business while doing construction. The France pavilion is one of my favorite pavilions and it being Uber construction won't affect me hanging out back there at all.

The businesses you see hurrying up to get buildings up need the money and to get things rolling. WDW doesn't need that. So make it perfect than open.

 

[Ralphlaw]

Two big reasons stick out to me.
1. Disney has a a very high reputation. No sense of hurrying a project and have it less than perfect. They hold a high standard and that's what makes it so magical.
2. Why hurry? It's not like they're losing business while doing construction. The France pavilion is one of my favorite pavilions and it being Uber construction won't affect me hanging out back there at all.

The businesses you see hurrying up to get buildings up need the money and to get things rolling. WDW doesn't need that. So make it perfect than open.

True, but they already have a working and successful Ratatouille ride in Paris. Three years to build an American version in a pavilion that sports a film with actors in 1970s fashions? I guess urgency is in the eyes of the beholder. To most great companies, the France Pavilion would scream a need for urgency.

Thomas Friedman's That Used to be Us shows abundant American ineptitude when it comes to getting things done. A prime example: It took longer for workers to fix a broken escalator in a Washington DC suburban train station than it took China to build much of an entire Olympic village. Great book.

Plus, for synergy and marketing purposes, shouldn't the France Pavilion somehow peak one's interest in Disneyland Paris? Perhaps the Japan and China pavilions could do the same for Tokyo, Hong Kong and Shanghai. It seems to me that some subtle "not in your face" cross-marketing could be done. For a company that slaps a Vacation Club kiosk every hundred feet or so, some interest-inducing marketing in the overseas resorts would be a nice addition.

 

[lazyboy97o]

True, but they already have a working and successful Ratatouille ride in Paris. Three years to build an American version in a pavilion that sports a film with actors in 1970s fashions? I guess urgency is in the eyes of the beholder. To most great companies, the France Pavilion would scream a need for urgency.

Having an existing version reduces design time and can inform how to handle issues that arose during the initial construction. After that, it is not the same construction crew so for them this is the first time. Even if it was the same construction crew, the buildings are not actually identical.

 

[POLY LOVER]

You have been given several reasons, all valid and correct by a number of people not only tight with Disney, but familiar with large scale construction projects, and yet you don't believe them. Seems like to only answer you would accept is your preconceived notion that the Disney of old was great and the Disney of today sucks.

No, like I said there are many valid responses and I agree to some extent. However the condition of Epcot and DHS require some fast track projects. Like lazyboy mentioned ratatouille is not unique it is just being duplicated. It should come online alot faster than 2020. I say this because I care about Disney. If it's bean counter stuff and committee bureaucracy then that's an issue for the CEO to address.

 

[lazyboy97o]

No, like I said there are many valid responses and I agree to some extent. However the condition of Epcot and DHS require some fast track projects. Like one person mention ratatouille is not unique it is just being duplicated. It should come online alot faster than 2020. I say this because I care about Disney. If it's bean counter stuff and committee bureaucracy then that's an issue for the CEO to address.

The show is being duplicated. Duplicating the building would be financially irresponsible and potentially illegal.

 

[Master Yoda]

No, like I said there are many valid responses and I agree to some extent. However the condition of Epcot and DHS require some fast track projects. Like lazyboy mentioned ratatouille is not unique it is just being duplicated. It should come online alot faster than 2020. I say this because I care about Disney. If it's bean counter stuff and committee bureaucracy then that's an issue for the CEO to address.

Do they? You or I might want them now, but the rest of the public is still showing up so why spend the extra money to do everything "right now" when you can spread it out for several years.

 

[eliza61nyc]

Because a 40 story building is completely different than building a complex theme park attraction.

Agreed but we're not talking about some fly by night operation here. If anyone has the resources to get a project completed it would be Disney. How long have I been hearing about Star wars land?? easy five years. minimum. maybe the problem is that they announce these things way before the ever plan to start working on them.

 

[Dead2009]

They announce them ahead of time to gain peoples interest...

 

[cmb5002]

Some good responses in this thread, and many of them may be very accurate, but I prefer a much simpler response.

You can have a project with high quality, a project that is built quickly, or a project that's built inexpensively. Choose 2.

 

[lazyboy97o]

Agreed but we're not talking about some fly by night operation here. If anyone has the resources to get a project completed it would be Disney. How long have I been hearing about Star wars land?? easy five years. minimum. maybe the problem is that they announce these things way before the ever plan to start working on them.

Star Wars Land has had a long and protracted development process. Disney also announces projects early in the design process.

Some good responses in this thread, and many of them may be very accurate, but I prefer a much simpler response.

You can have a project with high quality, a project that is built quickly, or a project that's built inexpensively. Choose 2.

Except that Disney isn’t choosing two. Their projects still cost a fortune.

 

[cmb5002]

Except that Disney isn’t choosing two. Their projects still cost a fortune.

I don't know the budgets, so I can't speak to that with any accuracy. But I'll ask this: A fortune compared to what? Itself? Universal? There aren't many peers to compare them too and the projects do tend to be rather unique. For this specific project, sure you have the ride in Paris to compare with, but that was built 3-4 years ago on another continent with different workers, laws and materials.

I manage road projects for a living, and you'd be amazed at the different prices we see in bidding the same exact work.

 

[Phonedave]

But compared to the actual cost of the project... my guess is that we are talking parking meter change here when you look at the net worth of the company and the end worth of the project. It's like peeing in the ocean and expecting it to be noticeably deeper.

That last sentence is really the important one. Legally they cannot willingly delay construction just to be able to cash in a few perks. Those perks, btw, if they are doing the right thing are also chicken feed compared to potential income for the capital investment once it is operational.

Not really. All of this stuff matters. There is much more to managing the finanaces of a company the size of Disney, than saying "This project will cost $1M and will make $25oK per year, 4 year payback? Go ahead."

All of these "parkikng meter" things add up. As sombody else said in this thread, the bottom line is the stock price. Say that it is not the right thing to care about, but it is what it is, and for a pubically traded company, that is where the rubber meets the road. The street likes to see certain things, return on embedded base, capital expenditures vs. expense expenditures, write down and retirement of capital assets, free cash flow, EBITDA, debit exposure, diversication of product, market share, and a whole bunch of other items.

The truth is that none of us know exactly why projects are delayed or rushed or abaondoned, or fall below the line. There are a lot of people above my pay grade that make those decisions, and while me may call them bean counters or say that "this is why I would do, these people know nothing" clearly they must know something because they are in the C suite, and I am not.

-dave

 

[EricsBiscuit]

There's probably a lot of science that goes into when they want to open something. Probably lots of speculation about world events, politics, economics etc. that lead to a date they want a project to be open on or by.

 

[marni1971]

Some data points...

View attachment 237625

Darker blue are estimated dates.

While it certainly seems that Ratatouille is being slow-built, at the same time, the new resort towers are going up lickety-split.

Rat is actually classed as fast tracked.

 

[lazyboy97o]

Rat is actually classed as fast tracked.

If fast-track is describing the project delivery process then that is nothing new or unusual for Disney.

 

[marni1971]

If fast-track is describing the project delivery process then that is nothing new or unusual for Disney.

Fast tacked to open. Energy was orignally late 19. Rat had to replace it to try and deflect some DHS attention.

 

[Goofyernmost]

Not really. All of this stuff matters. There is much more to managing the finanaces of a company the size of Disney, than saying "This project will cost $1M and will make $25oK per year, 4 year payback? Go ahead."

All of these "parkikng meter" things add up. As sombody else said in this thread, the bottom line is the stock price. Say that it is not the right thing to care about, but it is what it is, and for a pubically traded company, that is where the rubber meets the road. The street likes to see certain things, return on embedded base, capital expenditures vs. expense expenditures, write down and retirement of capital assets, free cash flow, EBITDA, debit exposure, diversication of product, market share, and a whole bunch of other items.

The truth is that none of us know exactly why projects are delayed or rushed or abaondoned, or fall below the line. There are a lot of people above my pay grade that make those decisions, and while me may call them bean counters or say that "this is why I would do, these people know nothing" clearly they must know something because they are in the C suite, and I am not.

-dave

That is what I'm saying, maybe not well or clearly enough, but, the first knee jerk we always hear is EXTEND THE COST for tax purposes. That is the last reason any sane business man (especially one with money to burn) would have for delaying any potential income producing production. It is counter-intuitive and completely just a bunch of smoke screen that people spit out there so we have some unseen, uncomplicated villain for the time span. There may be a million reasons that things get delayed. I don't see that one as legitimate except in very rare and desperate cases.

 

[Ralphlaw]

About 1,000 days ago it was 2014. Back then, we were dealing with fear of an Ebola epidemic, Robin Williams had died, a robot landed on a comet, ISIS was heard of for the first time, the Sochi Olympics and the Crimea were joint areas of big news, and we were just trying to figure out why a Malaysian Airline had disappeared. That's quite a while ago, and I do not think any construction project that was underway then is still underway today, other than graduated projects such as freeways that are built in stages. Stadiums have gone from concept to completion in that time. Buildings were designed and built.

Walt hired top military people to build Disneyland--people who didn't abide excuses and knew how to get things done because "time is money". Time is still money, but I can't help but think that excuses are now abided. I can understand that ideas at D23 are very sketchy, and much work needs to be done before ground is broken, but it seems that this is just way too long to be at the drawing board. 1,000 days is a long time. Why can't a design be approved in, say, 6 months? Why can't a construction company be lined up in one year? Why can't the data from the Paris version streamline the whole process? Please, anyone, point out another project of this relatively modest size that took 1,000 days. Again, we're not re-inventing the wheel here. We have a working French version to draw upon.