Executive Summary: Disney’s Knowledge Sharing and Innovation
The purpose of this group consulting project is to analyze Disney’s achievements in knowledge sharing and knowledge innovation. This report analyzes how Disney changed from traditional painting animation movies to CG animation movies, and how Disney got the inspiration for new movies. Disney started the transformation from traditional painting films to CG animated films by setting up its own internal CG film group. After that, Disney acquired Pixar’s perfect animation film technology through the acquisition of Pixar and completed the industrial upgrading through internal knowledge sharing. At the same time, Disney encourages employees to boldly innovate and share knowledge, which is the inspiration for countless new Disney films.
Introduction
Disney’s classic animated film began in 1937 with Snow White and the Seven Dwarfs. (IMDb, 2022) The success of Disney animated films comes from the open and collaborative environment and knowledge sharing within Disney. It can be said that Disney’s success is the success of knowledge sharing and knowledge innovation. The following article will first focus on how Disney creates an open discussion environment for employees so that employees can collaborate and constantly create excellent opinions. And how Disney perfectly arranged the control rights of various departments to unify creativity and business judgment. Second, it will analyze how Disney completes technological innovation. Faced with the impact of new technology in the new era, Disney decisively chose to keep pace with the times and acquire Pixar Company, a mature CG film animation technology. Disney has been established for 99 years. Such a company, which started with simple hand-drawn animation, gradually entered the film industry, and developed into the leading animation film production company in the United States. Eventually, it will become a giant with prevalent cultural influence worldwide. Disney’s success depends on knowledge sharing and innovation, and it is of great significance to study a company that is still making progress.
Description
Analysis
The Disney Company has created and maintained its market position through the efficient development of resources, innovation, and capabilities. By using resources, knowledge, technology, and so on to create an inevitable status of theme park around the world and create an absolute competitive advantage (Roy, 2020). The Disney Company mainly used the following three methods to manage knowledge and innovation as an outcome in different fields.
Firstly, knowledge management for employees. The Disney Company will provide opportunities to all who are interested in this job, regardless of any religion, color, race, etc. Provide a wide range of training opportunities for employees before they formally get into work, so that their knowledge and skills can be improved. Disney does less performance estimation because it often leads to unfair outcomes that dampen employee motivation, loyalty, and engagement. They arrange employees in different departments according to their expertise. Employees in the same field can communicate with each other and promote mutual growth. In addition, the company also offers rewards packages for all employees, such as offering time off, health and financial welfare, and employee discounts. This can help them be more motivated at work and live a better life. The knowledge management of employees makes the innovation power of enterprises no longer rely solely on individuals, but on the collaborative operation of organizations (Walt Disney Employee Management Theory, n.d.).
Secondly, innovation management in cooperation. Good brands or companies seek to cooperate with others and an alliance of brands can create greater opportunities for the company. Disney Company is an open innovation company that cooperated with many famous companies such as Marvel, Lucasfilm, Hollywood Records, 21 Century Fox, and so on (Lakritz, 2020). The cooperation I want to highlight is Marvel. Disney brought Marvel in 2009, which completely changed the industry. This kind of cooperative innovation allows the two companies to get more media publicity, it diversifies the content and elements and attracts more target customers. Marvel helps Disney stand out in a highly competitive industry, which is undoubtedly a win-win cooperative innovation management (COOK, 2022).
Thirdly, innovation management in the product. Disney takes customer experience as its core and satisfying customers’ needs is the driving force. The entertainment content and facilities are supplemented and updated every year, constantly giving tourists a sense of freshness. For example, Orlando Disneyland in Florida created a fully immersive Star War-themed Park. This part of the details is one of their most ambitious projects in terms of creativity, technology, and so on. It was what consumers wanted to see and satisfied their needs for Disneyland (Alderton, 2021). The successful product innovation strategy of Disneyland illustrates the fact that the theme park can extend its life cycle as much as possible only by continuously innovating products and services according to changes in the needs of the target market.
All in all, The Disney Company has become a leader in the world’s theme parks through imaginative products, unique filmmaking, and through a unique combination of entrepreneurship, creativity, innovation management, training and relentless efforts (Cox, 2020).
Identification and presentation
Disney has the IP advantage. The company has strong name recognition that allows it to make consistent profits. However, it is also one of the reasons that limit its development. Disney needs to keep adding innovation so that customers don’t lose their sense of freshness. The reality is that its innovation is limited, and it is difficult to make better changes in diversity. To solve this challenge Disney began to try to experiment in various areas. COVID-19 has also hit Disney parks around the world hard. They had to close the park to support the countries’ restrictions. To meet the challenge, Disney has also made a lot of effort. For example, the “Disney House” in China sells small household items to stimulate the interest of visitors. “According to reports, tourist interest rose in the wake of the authority’s statement. For example, searches for “Shanghai Disneyland” increased sixfold on Ctrip, one of China’s largest online travel sites.” (Disney China Opens Furniture Store, 2022). The acquisitions of Pixar and Marvel have made Disney more diversified. They profited from Avatar, and Iron Man.
Aggressive experimentation in various fields can also lead to failure. The streaming business has gained a huge number of subscribers worldwide, and the Disney+ service has gained 235 million subscribers but lost money. At the same time, the investment in the metaverse also showed failure. In the fourth quarter of 2022, Disney presented weaker-than-expected earnings. These losses offset strong earnings at theme parks. Coping with the failure of the bet and the impact of the pandemic, Disney had to make layoffs to cut costs. In order to change the status quo, Disney needs to improve the company’s ability to compete. IP is valuable to organizations. It means that Disney needs to continue to innovate IP to improve its brand image to create the impression that Disney’s products are preferred. Streaming is something that needs to be continued even if it is costly. Disney+ has most of the movie and TV content from Disney, Marvel, and Peart. The convenient platform allows Disney fans to find the content they want to watch faster. Copyright is the foundation of Disney. As time accumulates, the benefits will gradually cover the original cost issue. In the age of new media, web services are a necessity. A convenient network simplifies the process and increases efficiency. It is a necessary option for both internal companies and customers. “The number of Disney+ subscribers reached a new high of 164.2 million in the fourth quarter of 2022. Walt Disney’s combined direct-to-consumer subscriber count, including Disney+, Hulu, and ESPN+, amounted to around 235.7 million, surpassing its competitor Netflix in terms of subscriptions.” (Stoll, 2022). People who love Disney movies will be more inclined to use Disney+ to watch videos. This is evident from the increase in the number of subscribers each year.
Discussion and Analysis
Connected the knowledge we learn from the class and the company we searched. There are some connections between them. These points show knowledge important is useful and important in our life.
First, as a famous company around the world, Disney have many people from different religion, with different attitude and behavior pattern. This created Disney company organization culture. In the company they share their idea with other colleagues. To development their company, they change their individual knowledge to other colleagues and groups, doing SECI model transformation cycle in the company. The communication and meeting workers joined, the information people get is also a process of people’s organization learning, after learning, they can follow the three motivates to finish their task with high efficiency.
Second, Disney company has today’s market shows they caught many chances to expand their market. At beginning, Disney’s market is small, they created cartoon character to satisfied children’s market. After they corporate with more and more different fields companies, share each other technologies and knowledge. More and more customers come and buy their products to their children. Under this kind of operating styles, it looks like, before each of them has a small group of customers. Then they started corporate, all of them sharing the whole market that each of them used have. It shows an open innovation in the knowledge we learn in this semester. Here is a great example. Few years ago, Marvel is one of the famous superheroes creating company. Many famous superheroes are controlled by Marvel. These heroes have a great influence in teenagers’ market. Such as comic, movies, games, models etc. The Disney company acquired Marvel company, and add Marvel’s new movies and tv series into Disney+ media platform. In this way, they can propaganda each company chrematistic together. Combined Disney’s market with Marvel’s, almost people’s half-life hobbies are concluded in their market. This is a successful application on open innovation. According to analysis part, we know that Disney acquire Marvel in 2009, so I compare the Marvel revenue between 2008 and 2018 to show the benefit that open innovate brought. “Highlighting our financial achievements, revenue hit an all-time high of $37.8 billion, a 7 percent increase over the previous year.” (Company, 2008) “Marvel posted $676 million in revenue in 2008, up 39 percent from $486 million in revenue in 2007.” (Staff, 2009) Although there are 10 years interval, it’s a great time to see company’s development.
Third, Innovation is the last important point to company’s development. Innovation is a way to make differentiation with other competitors’ ability. It’s good to increase company’s top line revenue. Then it goes to a virtuous circle. Management level can make decisions to create and try more interest products and services. According to the news I saw on the Internet, it’s easy to see, they are doing a incremental innovation, slowly expand in different place and collecting recent topics that consumers like.
Recommendations of solutions
The pandemic has forced Disney to consider its challenges over the next two years amid a sluggish economy, declining theatrical ticket sales, and flattening growth in streaming video. To improve the performance of Disney’s employees and always maintain enthusiasm for their work, the best employees on a stage will be commended and awarded bonuses. Reward productive behavior and provide incentives for idea-sharing, help-seeking, and help-giving in group tasks. Recognition and reward represent the company’s most tremendous respect and appreciation for employees. Improve employee trust and loyalty to the company, which in turn improves efficiency, increases productivity, and reduces employee turnover. From the survey, 79% of employees said recognition made them work harder, and 78% were more productive after receiving a reward. (Hamlin, 2019) Recognize employees’ efforts positively and make sure they are creative. However, an unfair, unscientific, and unreasonable organizational incentive system will affect the organization’s harmonious atmosphere. Proper competition promotes creativity while undermining communication and cooperation among employees.
Disney provides an open and transparent communication environment where every employee, regardless of seniority, can freely express their views. In addition, creating a diversified group communication platform and acquiring new knowledge through internal discussion is also an effective measure to improve organizational performance. Encourage employees to put forward innovative ideas and establish internal and external communication. Through socialization with other knowledgeable employees on the knowledge-sharing platform new knowledge is synthesized. This is the knowledge management process that facilitates the transformation of individual knowledge into organizational knowledge. Employees can be inspired by the sharing of other experienced employees and reduce the time spent looking for useful information in the database.
For example, Disney executives promoted an idea-pitching process known as “The Gong Show” during which all employees presented their story ideas in the 1990s. (Mcgowan, 1996) It is an atrium center that maximized chance encounters and employee interaction. As a tacit asset, the technical and experiential knowledge possessed by the employees should be effectively utilized by the organization to play a maximum role in technological innovation and knowledge innovation. However, creative ideas are easily leaked because of employee turnover and inadvertent disclosure. Timely application for patent protection and copyright has become particularly important.
Alignment between business strategy and knowledge management helps enhance organizational performance. Make knowledge management the central strategic plan of the company. Not only should it be implemented in a company-wide manner but also with the support of senior management. Disney, as a global company, has about 220,000 employees in various positions. It is difficult for them to break through cultural barriers and communicate effectively. Therefore, the establishment of a shared understanding of organizational learning and organizational culture has become the primary goal. Establish the core values that adapt to the development situation and discuss and summarize in the company’s internal management. Publish and publicize the organizational culture content and encourage all employees to learn and understand it. Help organizations optimize by organizing regular training classes and development meetings. But companies need to face the risk of investing a lot of money in a brief period. Eventually, the return on investment will be increased to enhance organizational performance through smoother communication and professional management systems.
Conclusion