SECA 7: Cost Structure/Leadership

As a front-line manager at the Walt Disney World Resort, one my main responsibilities is to manage the amount of labor being utilized in relation to the attendance in our theme park. This is the main cost leadership strategy I use.

It is actually a fairly simple strategy. Each morning, the opening manger on the team will log into our network and run a labor report, allowing them to see the daily attendance forecast and the amount of labor hours being utilized at each of our attractions. They will then e-mail this report to the rest of the team, allowing us to see where we stand from a labor perspective at the start of the business day. Typically, each attraction will be several hours over budget at the start of the day, as we build in extra labor in anticipation of Cast Members arriving late or calling in sick for their shifts.

Later in the day (usually 5 hours after the opening manager arrives), when the next manager arrives, they will run the report again, allowing us to see how much closer to our budget we have come. At this time, we will also be provided with a revised forecast for our park attendance. If the forecast has risen or stayed even, little to no action is required on our part as a leadership team. If the attendance forecast has dropped however, we must start granting Cast Members early releases from their shifts, as our labor budget will drop as well.

This is an efficient strategy because when attendance is lower than expected, it usually means revenues will be lower than expected as well. For this reason we will shed labor to compensate for the difference. For example, if attendance was originally forecasted to be 72,000 on Saturday, my team will make sure we staff our attractions appropriately. At the Jungle Cruise attraction, this high attendance forecast means we will have all of our efficiency positions up, including fastpass distribution, fastpass return, wheelchair assist, and stroller parking while running ten boats on the river. These positions will allow us to accommodate our guests in the most efficient manner. However, by mid-day the attendance forecast has dropped to 59,000, I will now drop these positions earlier or not utilize them at all. There now may only be a need for 8 boats on the river and one Cast Member can handle fastpass distribution and return by themselves.

Shedding labor based on our attendance figures helps us remain profitable on a daily basis. It also allows us to remain as efficient as possible. Think about this, if  it is forecasted to be a busy day, I will staff my attractions accordingly. If that forecast drops by mid-day however, would I still need all of the same positions? No. In fact, if I were to keep them, my Cast Members would most likely distract themselves, engaging in idle conversations due to the lack of guests and overbalance of Cast Members on the clock. They would be tripping all over each other!

In this case, our cost structure goes hand in hand with efficiency, which are two areas of focus Disney excels in.