In Part 1 of this article I discussed the strategic reasons why Disney decided to launch Disney English, the chain of learning centers in China that it has recently closed. In Part 2, I discussed how Disney addressed some key issues—legal, safety, and brand integrity—through business design and the value of bringing on an experienced team to grow new capabilities. In Part 3, I described some key details of strategic implementation—how the micro supports the macro.
In this final part, I want to make this more personal by sharing a few important learnings I had during my tenure at Disney English and give some final thoughts on both its shutdown and its legacy.
Personal growth
Along with the crash course on strategic implementation, I learned other lessons that are table stakes for general managers, but which may be helpful for those transitioning out of purely functional roles.
Managing disparate teams. Prior to Disney English, I lead teams that sat within a single function—either strategy or finance. I could manage this team by managing the inputs: drawing from my own well of experience, training them to do things I could do, identifying their mistakes and correcting them.
At Disney English I managed a team with deep subject matter expertise in areas where I had none: construction, real estate negotiation, software, accounting systems—and during the strategic planning phase the blueprint for curriculum and content creation. To this was added the spin of operating in China, with its different culture, different legal system, and a language I could not speak.
With this kind of team, managing to outputs rather than inputs becomes paramount:
- Painting the vision of what the team is trying to accomplish so team members are inspired to leverage their individual expertise in its service.
- Managing by objectives so there is a common language on what tasks need to get done.
- Trusting that they know how to do their jobs but asking questions, exercising curiosity, and verifying the details.
- Listening to their concerns, providing a different perspective, helping them to reframe their own approach when necessary, and bringing them the support they tell you they need.
Humility. Among the most profound lessons I learned at Disney English was that while holding oneself to deliver exceptional results, one must at the same time handle one’s mistakes with equanimity. And the mistakes we made along the way loomed much larger when they escaped the confines of spreadsheets and slides and became manifest in the real world.
Among the most devastating for me was that we initially neglected to build a second staircase in our first center. This fire hazard required us to shut the center down for a couple of weeks to undertake a costly rebuild of half of the first two floors, including cutting a hole in the concrete slab and putting in steel reinforcements. This was not my finest hour, and it was an object lesson in exercising skepticism towards the advice you are given.
The other aspect of humility I had to learn was to curb my ambition. My work helped to create an enormous professional opportunity, and I was fortunate to be allowed to step into a new role as a key member of the team that would bring it to life. However, each new job is merely a stepping stone. When you are young and ambitious you want to jump all the way across the river by seizing as much responsibility as you can. But for the business, this is not always the best thing—and for you, there’s often a lot more to be learned by watching experienced hands do things than by fumbling through them yourself. And in truth, this is a lesson I’m always relearning.
Shutting down Disney English
I have been told that once Disney moved beyond investing in opening new centers, the Disney English business was solidly profitable. Covid-19-related closures have temporarily crippled the business, but Disney English isn’t an outlier in this—Disney’s businesses have been pummeled almost across the board due to the closed theme parks, cancelled sports, reduced advertising spend, and so much more. So why shut down Disney English for good?
I believe that shuttering Disney English was an inevitability; Covid-19 just moved up the closing date. The truth is that Disney is not good at growing new businesses. It’s a matter of focus: Disney is enormous. Small initiatives like Disney English require great commitment and care but do not move the earnings needle at all. To scale them can take a lot of investment—and when the time comes to allocate capital, as a simple matter of risk mitigation Disney places its bets the handful of categories in which it plays meaningfully: primarily filmed entertainment, hospitality, intellectual property licensing, and cable and broadcast. Consider the non-core businesses it has started up and shut down over the course of the past thirty years, including internet portals, sports franchises, videogame production, and (multiple times) education.
I saw this dynamic play out repeatedly at Disney English as we swiveled between the annual strategic planning and budget processes. The company wanted us to accelerate topline growth so that our contribution would matter. But getting there would require years of investment in fitting out new centers and ramping up operations. As a VC-backed company, we would have been able to focus investors on leading indicators of success: store growth, fill rates, customer acquisition costs, capacity utilization, and recurring revenue. Within Disney, the only metric that really broke through was the interim drag on earnings.
As a result, Disney ultimately slowed its investment in Disney English. Rather than the 200 centers we had envisioned, the company topped out at 44 and eventually scaled back to 26. The chain was profitable—but it never became profitable enough to be noticed. Its idiosyncratic dynamics took a lot of management attention to understand and would rarely if ever be discussed with stock analysts. It was an elective business that Disney had permission to operate—but not a business core to the company’s strategy. When the time was ripe, it was shut down.
The Legacy of Disney English
But despite its closure, I argue that it was a success for Disney. Let’s return to the rationale for launching the business that I reviewed in Part 1.
Strategic Advantage. Our belief that Disney could seize a premium position in the ELL space through its capabilities in content creation, staff training, and building environments were all proved out.
Licensing Revitalization. Disney English created a vast library of high-quality content—7 grade levels of ELL content including software, printed materials, audio, video, and songs—all keyed to the best educator-approved ELL curriculum in the industry. We built this content to be modular and have the potential for global use. It is likely that these assets will continue to nurture future products in the coming years and even decades, whether as licensed materials or the core for future vertical plays.
Gain Learnings in China. Disney English was the test balloon for Disney’s location-based business in China. Shanghai Disneyland was signed in November 2009, when Disney English had 6 centers up and running in Shanghai and more on the way. The company learned a lot from our initial forays into licensing, construction, and building a human resource pipeline.
Chinese Halo Effect. Over its 12-year lifespan, Disney English touched the lives of over 100,000 families in China and delivered them a great experience that was infused with Disney values and delivered on its core educational promises. Only a year after launching, we had already been named a top 10 educational brand in China. According to a former colleague, WeChat was flooded with thousands of positive messages from Chinese parents after the closing was announced.
Disney English will leave a legacy through its success on all these fronts. Furthermore, it was an intense, amazing experience for all of us who had the fortune to help build it.
So I come here not to bury this fascinating episode in Disney’s corporate journey, but to praise it. Long live Disney English!