Few businesses ever strive for excellence. Advantages, yes. Profits, undoubtedly. But excellence? Not so much. Thanks to a Christmas-break trip to Disneyland in California (not China), I now believe Walt Disney (NYS: DIS) is a notable exception to this rule, and I'm backing my thesis with a CAPScall.
Three things I learned on our winter vacation
When it comes to Disneyland, I don't surprise easily. I'd been to the park many times, having lived in Southern California for 18 years.
Yet this time was different. Despite a rush of holiday travelers, the lines were fast, the help friendly, the park clean, and the conveniences as available as they would have been any other day of the year. Impressive isn't a good enough word to describe Disney's performance that day.
Supercalifragilisticexpialidocious might be better. (Trust me, it's a word. Look it up.)
I have four theories for why the House of Mouse outperformed my expectations this time. First, because I hadn't been to the park since our youngest was a baby, my expectations might have been lower than they would have been otherwise. I'm not buying that, though. Here's a closer look at three other factors I observed during our trip.
1. Happy employees make for excellent stewards
We relied on Disney conveniences throughout. First, a snowstorm hit the Denver area where we live in the early afternoon of the day prior to our trip. As it worsened, we made the on-the-spot decision to take off for the airport and rent a room for the night in order to not risk the roads at 3 o'clock the next morning. But that also meant leaving without printing Disney tickets or anything else we'd need to prep for the park.
No matter. Most hotels in the vicinity of the resort have what are called "Disneyland desks" staffed by an employee. In our case, a young woman helped me print the digital receipts I'd received via email and which were still trapped on my iPhone when we left Denver.
OK, printing a ticket isn't all that special. I get it. What's interesting to me is that she volunteered more help than I requested. I'd only asked where I could print tickets, and when I might need to get to the park in order to keep the kids from going crazy waiting in lines.
The added assistance made me curious, so I asked how she liked working for Disney. "I love it," she said. Many others I asked would say the same. I'd have called the experience Stepfordian if not for the data collected by job review site Glassdoor.com, which rates Disney one of the 50 Best Places to Work based on employee responses.
2. Little things add up big-time
Disneyland is a feast of conveniences that bring a small sense of order to what is otherwise chaos. From the in-hotel desks to regular buses to the park to maps and strollers and electric carts for those who need to rest their feet, Disney has mostly figured out how to strip misery from the Happiest Place on Earth, as the company refers to its theme parks. Good thing, too: Parks and resorts account for 29% of Disney's revenue and 18% of operating profit, according to data supplied by S&P Capital IQ.
What surprised us most were the food options. Disneyland has a 12-page handout with details about resort-area restaurants with dedicated fryers for making dishes safe for our food-allergic son. Yes, food allergy awareness is on the rise, but our experience is that few restaurants outside of Red Robin Gourmet Burgers (NAS: RRGB) and Chipotle (NYS: CMG) knowledgeably cater to those who by necessity or for health reasons avoid gluten and other common food allergens. (Both companies have detailed information for allergy suffers at their respective websites.)
That Disney has joined Red Robin and Chipotle in the small fraternity of servers willing to absorb the cost of catering to a minority of patrons speaks to how highly the company values small conveniences that build loyalty.
3. Institutional understanding is powerful
I've been to parks that run inefficiently. Disney doesn't tolerate that, and its pursuit of performance shone through in every employee I ran into. In one particular case, two women were taking notes for how long patron it took patrons to pass through the line at Star Tours, a Star Wars-themed ride that combines 3-D with a flight simulator to recreate the experience of careening through space.
As I pressed for details about what they were measuring and why, I learned there's an institutional obsession for figuring out ways to reduce the time patrons spend in line because less time spent in line means more time enjoying rides and less pressure on adults to entertain impatient kids. At Disney, standing in line taking notes counts as valuable research and development time.
A Disney trip any investor could love
Ask my kids what their biggest thrill of their Disneyland experience was and they'll probably say shopping (our eldest son), It's a Small World (our daughter), and the Big Thunder Mountain railroad-themed roller coaster (our youngest son). Mine was seeing excellence at work. Well, that, and Pirates of the Caribbean. What's a trip to Disneyland without saying hello to a creepy animatronic replica of Johnny Depp as Captain Jack Sparrow?
How do you define excellence? Which companies do you think pursue excellence for the purpose of creating a competitive advantage? Please weigh in using the comments box below. You can alsoadd Disney to your Foolish watchlist.
At the time thisarticle was published Fool contributorTim Beyersis a member of theMotley Fool Rule Breakersstock-picking team. He owned shares of Walt Disney and Chipotle at the time of publication. Check out Tim'sweb home,portfolio holdings, andFoolish writings, or connect with him onGoogle+or Twitter, where he goes by@milehighfool. You can also get his insightsdelivered directly to your RSS reader.The Motley Fool owns shares of Red Robin Gourmet Burgers and Chipotle Mexican Grill.Motley Fool newsletter serviceshave recommended buying shares of Walt Disney and Chipotle Mexican Grill.Motley Fool newsletter serviceshave also recommended writing covered calls in Red Robin Gourmet Burgers. Try any of our Foolish newsletter servicesfree for 30 days. We Fools may not all hold the same opinions, but we all believe thatconsidering a diverse range of insightsmakes us better investors. The Motley Fool has adisclosure policy.
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