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The Messy Business Of Reinventing Happiness

Inside Disney's radical plan to modernize its cherished theme parks.

Bob Iger wanted approval. It was February 2011, and the Walt Disney Co. CEO gathered his board of directors inside an intimate theater at the company’s Team Disney headquarters in Burbank, California. There, just the night before, Iger held an early screening for the board of Captain America: The First Avenger months prior to its release. The soon-to-be blockbuster served as another sign that Iger’s bet on reinvigorating Disney’s movie business through his acquisitions of Marvel and Pixar was paying off big.

Now, with his directors reassembled and sitting in the first few rows of the theater, Iger set his sights on his next gamble, his boldest yet: to reinvent the brand’s most beloved asset, Disney’s iconic parks.

Iger planned to pump nearly $1 billion into this venture, called MyMagic+, a sweeping plan to overhaul the digital infrastructure of Disney’s theme parks, which would upend how they operated and connected with consumers. At the core of the project was the MagicBand, an electronic wristband that Iger envisioned guests would use to gain entry to Disney World and access attractions; make purchases at restaurants; and unlock their hotel room doors. It would push the boundaries of experience design and wearable computing, and impact everything from Disney’s retail operations and data-mining capabilities to its hospitality and transportation services.

Iger, who joined Disney when it acquired ABC in 1996 and survived the tumult of the late-era Michael Eisner reign to become CEO in 2005, knew MyMagic+ represented a huge risk. Privacy concerns aside, the project could prove a logistical nightmare, or worse, after years of investment, be rejected by visitors, who might not want technology intruding on such a traditional vacation experience. That’s why, on this sunny afternoon, Iger now sought the full support of his board, an intimidating group that included Facebook COO Sheryl Sandberg, the former CEOs of Starbucks and P&G, as well as the current head of BlackBerry and chair of Estée Lauder. (Apple CEO Steve Jobs, also a board member, was then too sick to attend, though he would play a role in MyMagic+’s development.)

For the pitch itself, Iger turned to Tom Staggs, the chairman of Disney’s Parks and Resorts division, who had overseen the MyMagic+ initiative for the last year. Staggs gave opening remarks about the program. His deputy on the project, executive vice president Nick Franklin, then took over, walking the board through the finer points of MyMagic+ while showing off prototypes of the MagicBand. They had a black display case, emblazoned with the words "Choose a Flavor," that contained 24 colorful MagicBand models, neatly arranged like a box of chocolates.

MyMagic+ MagicBandPhoto: Matt Stroshane, courtesy of Disney

The board, which had been provided materials breaking down the program’s costs, gave positive feedback throughout the presentation. Sandberg interjected at one point to ask whether MyMagic+ could be used to track her kids at the park, since she always worries about losing them in the crowds. "Sheryl, first of all, we don’t lose anybody’s kids," Franklin responded, wryly, as he recounts for me in a recent conversation. "And I can promise that we’ll never lose your kids."

The room erupted with laughter, and the rest of the presentation went off without a hitch. The board decided to back the project unanimously, and the room swelled with palpable excitement for what this historic decision could mean for Disney’s future. Iger himself talked about how important MyMagic+ will be for the company, according to people familiar with the meeting—how it will change the fundamental nature of Disney’s park experiences and have implications for the company’s broader businesses.

The board broke into applause, and the meeting came to its close. The directors were chatting and readying to leave when Iger, aware of the challenges still ahead for MyMagic+, regained the attention of the small room. He looked directly at Staggs. "This better work," he said, bluntly and sternly. "This better work."

The theater was quiet, the elation gone. Iger repeated, "This better work."

This is the story of what it took to deliver on those three simple words. It is not the story Disney wants you to hear, although the company did make certain key figures, like Staggs, accessible. It’s based on extensive interviews with dozens of current and former executives, employees, and outside partners involved with the development of MyMagic+. Most would speak only on the condition of anonymity due to non-disclosure agreements, and also because, as one source explains, "You don’t mess with the Mouse." It is a tale of corporate politics, personal feuds, and turf wars. But it also the story of a success, even though the project didn’t fully deliver on its massive ambitions. This is what happens when a huge corporation tries to reinvent itself. This is what you have to do when you better make it work.


Carousel Of Progress

Any effort to reimagine Disney World would need to be monumental, almost by definition. Disney World isn’t an amusement park: It’s a metropolis. Sprawled across 25,000 acres of central Florida, it contains four theme parks, nearly 140 attractions, 300 dining locations, and 36 resort hotels. Its monorail system zips along 15 miles of track, with a daily ridership of more than 150,000. The parks have their own power plant and security force, plus some of the world’s largest laundry facilities, cleaning 280,000 pounds of linen each day as well as dry-cleaning 30,000 cast member garments.

The theme parks play an essential role in Disney’s effort to cement its company, characters, and products into the lives of families around the world. The more Disney movies, TV shows, and characters permeate our culture, the more people go to the theme parks; the more traffic the parks get, the more demand is created for toys, apparel, DVDs, and sequels. The cycle works in both directions: Disneyland’s Pirates of the Caribbean ride opened in 1967, and inspired the movie franchise that since 2003 has generated $3.7 billion in global box-office receipts. The divisions connected by this roundelay—Parks, Studio Entertainment, and Consumer Products—account for more than half of Disney’s revenues and profits.

This virtuous circle of brand consumption has helped the company grow to be a $48 billion global media conglomerate. Not only is the Parks and Resorts division (which we’ll call Parks from here on) lucrative, it is also more reliable than the company’s efforts in movies, which are susceptible to creative failure and audience indifference. Parks’ footprint is global and diverse, with destinations in Anaheim, Orlando, Hong Kong, Paris, and Tokyo (a massive Shanghai expansion is set to open in 2016); a fleet of cruise lines; time-share properties; packaged vacation tours; golf courses; and luxury hotels. "The sun never sets on Disney," one employee tells me.

In the mid-2000s, however, Disney executives had reason to worry about the future of the business. Disney World, Parks’ crown jewel, seemed to be losing its luster. According to multiple sources, certain key metrics, including guests’ "intent to return," were dropping; around half of first-time attendees signaled they likely would not come back because of long lines, high ticket costs, and other park pain points. Simultaneously, the stunningly fast adoption of social media and smartphones threatened the relevance of the parks. If Disney wanted these more tech-oriented generations to love it as much as their parents, who had grown up with fewer entertainment alternatives, had, it would have to embrace change now. "We were failing to recognize key consumer trends that were starting to influence how people interacted with brands," says one former executive. Inside the company, Disney World became known as a "burning platform." As the former executive explains, "If we miss out on that next generation of guests, suddenly our burning platform is fully on fire—panic mode."

MyMagic+ MagicBandPhoto: courtesy of Disney

Expedition Everest

In 2008, the Parks division officially kicked off what became known as the Next Generation Experience project. Spurred by Jay Rasulo, who was then chairman of the division, Parks president Al Weiss and Disney World president Meg Crofton formed an exploratory team, following an initial round of technology research and financial modeling in 2007. The "founding five" were technology SVP Andy Schwalb, Imagineering executives Eric Jacobson and Kevin Rice, Parks VP Jim MacPhee, and business development VP John Padgett. By Valentine’s Day 2008, Rasulo and Weiss had gathered the team in strict secrecy, and told them, in so many words, to "reinvent the vacation experience—and keep [Disney World] relevant," recalls Schwalb.

While most observers view Disney’s parks as kingdoms of escapism, Neal Gabler, in his definitive biography of Walt Disney, argues that their success actually derives from "crafting a better reality than the one outside," with a reassuring "control and order" where all is "harmonious." But in the ensuing weeks, working from a trailer behind Epcot, the founding five started digging into the problems that made the reality of Disney World something less than "harmonious." There were the endless lines for rides, food, and bathrooms; parents juggling maps, hotel keys, baby carriages, and bottles of SPF 75; and kids pulling families on long treks to try to visit every attraction. The park was filled with complications, such as a tiered ticketing system with wonky rules.

Given Disney World’s ticket prices, families felt obligated to "divide and conquer," says MacPhee. The team created diagrams illustrating how families, seeking to maximize their time, would crisscross Cinderella Castle, the center of the park, as often as 20 times a day. Worse yet: the swarms of people. On average, 8,000 to 10,000 guests flow through the park’s main entrance every hour. "On the surface, we had super happy guests, but in reality, we were making them go through so much hassle at the park that down the road, they would simply say, 'No más!' " says one former longtime Disney manager. As MacPhee, who has the look of a Division II offensive coordinator, admits, Disney World was on the verge of becoming "dangerously complex and transactional." The team soon presented its ideas to Rasulo. He gave them the go-ahead to rethink everything, including turnstile entrances and paper ticketing. That’s when the project got its code name, Next Generation Experience, or NGE. The founding five soon found themselves on a perpetual shuttle between Burbank and Orlando.

On one early flight, Padgett, who looks as open and eager as the Toy Story character Woody, had a breakthrough. Flipping through a SkyMall catalog, he landed on a page featuring the Trion:Z, a magnetic wristband that promised to reduce muscle soreness while simultaneously improving one’s golf swing. The team started to consider whether Disney could create an electronic band that could digitally carry everything a guest might need—park tickets, photos, coupons, even money. It would give guests entry to Disney World, pay for goods at retail shops, and unlock their hotel room doors. It would be a virtual key to the Magic Kingdom.

The MagicBand, as the bracelet came to be called, became the centerpiece of NGE. To work as magically as planned, the team built an ideation lab inside an abandoned attraction called Body Wars within Epcot’s discontinued Wonders of Life pavilion. They called their wearable prototype the xBand (x being short for "experience"), and constructed a makeshift model out of a strip of velcro, plastic liner from Home Depot, and a small RFID tag, which would allow the band to wirelessly communicate with other devices. The group, growing increasingly excited about the potential of NGE, eventually sought resources to further build out a vision for the initiative.

Iger and Rasulo came through the Body Wars lab, and Iger had a chance to play around with their MagicBand prototype in an early NGE presentation. Wearing the device (which wasn’t actually functional at the time) on his wrist, Iger told the team according to several people in attendance, "This little thing is going to be special. If I gave you more money, could I have it faster?"


Discovery Island

Thanks to brands like ESPN and Pixar, much of Disney is known for a creative approach to business. Not the Parks division. "The rest of Disney is younger, more progressive—risk takers—but [Parks] is not," explains one former high-level company leader with strong ties to NGE. "It’s built to be industrial and resilient, for consistency and volume; it’s not built for change." Arguably, the division’s core competency isn’t creativity, but turning creativity into a predictable operation. While the parks do regularly introduce new rides, the division is intent on preserving the spirit of Disney’s tradition, the rickety nostalgia of rides like It’s a Small World, which has barely changed since its debut at the 1964 New York World’s Fair. "If it ain’t broke, don’t fix it": That’s how multiple company sources describe the division’s ethos.

Every corporate rule-breaker has to figure out a strategy to combat naysayers, the keepers of these traditional flames. The rebels of NGE knew that secrecy was critical if they were to build out the vision without interference from the broader organization. "Parks has tried big, transformational efforts before, but most failed because the culture killed them," the former high-level leader says. That’s partly why the NGE team went outside the company for help. Padgett, who led the development of the MagicBand, brought on third-party partners, including designers from the storied San Francisco firm Frog, who signed on in mid-2009.

The NGE team had big dreams for the MagicBand. It would need to interact with short- and long-range sensors that would be installed around the park. The short-range sensors would let guests scan their MagicBand at sales terminals in Disney park stores to pay for merchandise, for example, or to seamlessly check in at their hotel.

The long-range sensors would allow Disney to track guests as they navigated the park. The potential benefits were manifold. By monitoring where crowds were forming, the company could better optimize flow. Say the sensors noted that one section of Magic Kingdom was becoming overwhelmed with guests: Operators could immediately respond with a character parade around the corner, to disperse traffic and ease strain on cast members (as Disney calls all its Parks employees). This kind of traffic management wouldn’t just be a service to ­customers—it could also help Disney fit more guests inside its parks.

The MagicBand would also collect valuable consumer data. Insiders say the company historically knew little about its guests, even its most loyal ones. "We just treated everybody as a giant blob of people," says the former longtime manager involved with NGE. "It was time to figure out who our customers were so we could better serve them and stop delivering this one-size-fits-all experience."

The project eventually ballooned to include a collection of outside contractors, such as Accenture, HP, and Synapse, as well as smaller consultants. These teams, along with Frog and the NGE crew, dreamed up one innovative idea after another. They mocked up new payment portals, in the hope that guests could one day sync their credit cards with the MagicBand to buy goods. They imagined a digital reservation system for attractions, later called FastPass+, which would end the need for paper tickets. The traditional turnstiles at Disney World’s entrances could be replaced by sleek digital access posts, designed by Frog, which would grant entry after scanning a guest’s MagicBand and act as a checkpoint at each attraction. They planned a radical new restaurant, eventually named Be Our Guest, where patrons could preorder food online and have it "magically" delivered to their tables when they sat down. A character like Goofy, with access to real-time guest data, could even wish happy birthday to a child without prompting. For years, birthday boys and girls had worn a little button on their clothing to get such recognition. Disney had been mulling these kinds of forward-looking concepts for years. It seemed that the time had finally come to say farewell to old-school inefficiencies like birthday buttons.


Mr. Toad’s Wild Ride

It’s impossible, of course, for such a big project to remain secret. As other groups within Disney learned of NGE, "the pushback was huge," one source tells me. "You had operations pushback, security and fraud pushback, creative pushback. There was never any shortage of pushback."

There was much for naysayers to fault, starting with costs. For example, the earliest bill-of-materials estimate for the MagicBand was $35, 87,000% more expensive than the 4-cent paper tickets Disney historically relied on. "You had folks going, ‘Hey! This will drive up our costs! Hey! Why are you taking away our control at the turnstiles?’ " recalls one former senior member of the NGE team, which had grown to several dozen employees by late 2009. Whenever anyone would press Parks chairman Jay Rasulo about these concerns, this senior NGE team member recalls, Rasulo would respond, "Well, we're heading down this path. This is the direction we're going."

Insiders say the Frog team found the internal struggles withering. They faced opposition from a powerful corporate force: Disney’s Imagineers. The stewards of Walt’s creative legacy, Imagineers are responsible for the design and construction of the company’s theme parks, from the most obscure visual Easter eggs hidden on Tom Sawyer Island to the all-engrossing story experiences of such large-scale rides as Haunted Mansion and Tower of Terror. "The Frog industrial-design team really pissed off the Imagineers, stepping all over their toes and fighting turf battles," explains one insider. The Imagineers pushed back; at one point, multiple sources confirm, they demanded the individual résumés of each Frog designer assigned to the project, a move that some perceived as a personal attack.

The tussle over digital access points, where customers would use their MagicBands to enter each ride, was typical of the dysfunction between Frog and Imagineering. Frog envisioned a waist-high stand featuring the outline of Mickey Mouse’s head, with a MagicBand reader embedded. The idea was to help guests understand how to interact with the device, by touching "Mickey to Mickey," since the MagicBand would also feature the Mouse icon. If the access point’s Mickey glowed green once a guest touched it with a MagicBand, the guest could enter the ride; if it turned blue, that meant the guest required assistance from a cast member.

Imagineers argued that the uniformity of the access points would disrupt the spirit of their uniquely stylized attractions. For example, seeing Mickey’s face on every post would be disconcerting, since there were wide swaths of the park that had nothing to do with the Mouse at all. Ditto for those waist-high digital posts; what business did something looking like a shiny modern mailbox have in the foreground of a medieval castle? The Imagineers preferred designs that would be immersed in the theme of each Disney World ride: futuristic ones for Tomorrowland, Wild West–style ones in Frontierland, and so forth. Their preferences reflected their deepest goal, which is to protect the sanctity of children’s imaginations as they engage with real-life fairy tales at the park. Says veteran Imagineer Joe Rohde, "If I’m supposed to be living with fairies, fairies don’t have iPhones or MagicBands."

The Frog team was aghast. They felt the Imagineers’ criticism went against basic user-experience design. To them, the issues came down to usability and ergonomics; each access point needed to have the predictability of a light switch, so guests could locate them easily. They eventually compromised: access posts have consistent features, like the Mickey icon, but can also be designed with more thematic flourishes. However, the Imagineers did torpedo a number of other Frog concepts.

These early skirmishes signaled tougher battles ahead. "There were disagreements between Frog, Parks operations, and marketing folks; there were disagreements between hotel and theme park operations; disagreements between technology and infrastructure guys," says one former Disney executive closely associated with NGE. As another source puts it, "It was such a reactive environment."


Mad Tea Party

In January 2010, there was a change at the top. As part of a reported "bake-off" engineered by CEO Iger to see who might one day be better suited to succeed him, Tom Staggs and Jay Rasulo swapped roles. Staggs, who had served as Disney’s CFO since 1998, replaced Rasulo as the head of Parks; Rasulo became CFO. Staggs took over sponsorship of NGE from Rasulo, and followed through on Rasulo’s intention to appoint an executive vice president, Nick Franklin, to oversee the program day to day.

At this point, the project took on a new layer of complexity, as the NGE team felt the need to consistently dazzle the Disney brass. A key part of this was regularly showing off a complex prototype of the MyMagic+ experience. The team had outgrown its original home at Epcot and had moved to Disney World’s Hollywood Studios, inside a 12,000-square-foot soundstage. That’s where the NGE team built out its advanced R&D lab, or what Franklin calls a "living blueprint" that would "sell the vision."

With typical Disney flair, the soundstage became a storyboard brought to life, with a full-scale living room, including an iMac, which is where the archetypal family would book their Disney vacation via what’s now known as My Disney Experience, the website and mobile app for MyMagic+. The family’s set of MagicBands would then arrive by mail, in beautiful packaging designed by Frog. Next came the flight-arrival stage of the set, which simulated the experience at Orlando International, with actual seats that the NGE team had purchased from the airport. There, family members would first touch their MagicBands to a digital access point, before proceeding to a replica Magical Express bus. Then came the hotel set, with actual front-desk counters and bedroom furniture from Disney’s Contemporary Resort, to reflect the new MyMagic+ check-in process. There were also mock-ups of the in-park experience, including a main entrance; a mini version of the Haunted Mansion ride to demonstrate how attractions could be personalized with consumer data; a small version of the Be Our Guest restaurant concept; merchandising and retail shops; and even a stage exhibiting how MyMagic+ could influence Disney’s cruise line. "At Disney, you can’t just create a PowerPoint presentation and say, ‘Hey, give me $10 million to build this,’ " jokes Andy Schwalb.

"It goes back to Walt himself," explains a former top NGE manager. "The story carries the day." Often, sources say, the "theater" of selling an idea is more important than the idea itself. An NGE source recalls how once, right before a presentation, Padgett told one team member with a British accent, "When you’re presenting to these guys, sound and act more British. It’ll just make the presentation go better." He wasn’t joking.

The lab was essential for MyMagic+ to win buy-in from Disney World’s 74,000 employees. "We needed to get people’s minds wrapped around it all, from the finance and creative folks to the people running day-to-day park operations," Schwalb says.

Just three months into Staggs' Parks tenure, on March 30, the NGE team unveiled the detailed lab to him and Iger. (Many sources argue much of the vision work was complete by the time Staggs replaced Rasulo. "The ship had sailed in terms of front-end thinking," one source says.) Iger and Staggs were impressed, but Iger cautioned the team not to bite off more than it could chew, according to people in attendance; at one point, he recommended that the NGE team "cut [their ambitions] in half" and only worry about MyMagic+ at Disney World, rather than at other potential park sites or on cruise ships. By the tour's end, recalls former NGE leader Michelle Bentubo, "probably around nine of the executives ended up with Bob in the last room, and he [looked toward] Jim MacPhee, John Padgett, and Nick Franklin, and [said], 'It better work.' " The phrase had become an NGE team mantra often referred to as IBFW, or "it better frickin' work," a sentiment Iger would express in similar terms to Staggs at the board meeting.

Iger, Staggs, and also Rasulo went through the soundstage lab many more times. When the CEO would visit, team members would hide behind the soundstage curtains taking detailed notes. "If Bob said something, we would immediately go back that night and say, ‘How do we incorporate this?’ " one team member recalls. "When he came back, we would be saying, ‘As you suggested, we did this. What do you think?’ "

Members of the Disney board visited as well, with the exception of Steve Jobs, whose cancer was worsening. Sources say that, despite not seeing MyMagic+ in person, he pledged his support. "I love what you guys are doing," he is said to have conveyed to the group. "You won’t get everything right, but doing what you’ve been doing and believing that will remain the model for the next 20 years is also not right."

The NGE crew had visits from other luminaries in the Disney orbit. Pixar chief creative officer John Lasseter, inventor Dean Kamen, and filmmaker James Cameron—then at work on his Avatar-themed expansion at Disney World—all toured the lab. "These icons created momentum with Bob [Iger]," says a high-level NGE leader.

The NGE team presented so many different concepts to the Disney leadership that some wondered if their aim was simply to wow top leaders with the long-term potential of NGE through whiz-bang features. There was, for instance, Padgett’s concept for reengineering the airport arrival and departure experience. A team started designing a plastic cart for the guest’s luggage, so compact that it would fit through a special Disney x-ray machine without forcing passengers to separate and throw suitcases and backpacks on the conveyer belt. It was a sort of TSA PreCheck for baggage, which would seamlessly be transported straight to a guest’s hotel room. The team began discussing ways to reengineer airport x-ray machines, and Padgett even organized a meeting with TSA officials. "That project itself cost probably close to $500,000," says a source familiar with the concept work. "And I honestly don’t know: Was it real? Or was it just theater?"


Frontierland’s Shootin’ Arcade

In February 2011, the Disney board authorized a budget of nearly $1 billion for MyMagic+, and Iger told Staggs that "this better work." Sources say that the early target date to deliver MyMagic+ was February 2012. This was optimistic, given the infrastructure challenges and the fact that Disney would have to create and implement the new system while still operating its theme parks, which are open every day.

Many people wanted a piece of the big money flooding into Parks. "That was the big turning point," says one senior NGE contractor involved early on in the program. Each division seemed to have a claim. Should the software fall under IT? Should the merchandising division control the MagicBand? Since the project would completely alter park transactions—admission, payments, crowd flow—shouldn’t operations take charge? And what about the Imagineers?

The infighting grew intense. "Look, let’s put it crudely: People were protecting their jobs!" says one VP–level NGE source. Uncertainty about the consequences of MyMagic+ raised the stakes—that’s what new technology does to the status quo. For example, if ticketing were to get digitized, many jobs held by traditional ticketing folks might become irrelevant. One source deeply enmeshed in NGE's development at the time describes Disney as a "culture that is all smiles and happiness, and everyone is going in to give you a hug. But you have no idea who is working against you. You come out bruised and bloody." A former Disney exec says there was "land-grabbing, finger-pointing, and, quite frankly, a lot of yelling in closed-door meetings." But, this source adds, "disagreement was how we were going to get to the end result."

Staggs encouraged a policy that’s internally referred to as "constructive discomfort," which was meant to guard against cultural complacency by fostering collaboration. "People would say, ‘Okay, this looks a little bit scary because it’s different, but it’s been this way for years, and it’s worked really, really well,’ " he tells me. "That’s a recipe for stagnation."

Staggs did not engage in project politics. "He stayed above the fray," says the former Disney exec, approvingly. "Tom was right where he was supposed to be: You had to have someone stay in that role so he could come in and be effective when giving guidance." Staggs left it to Nick Franklin to manage day-to-day friction. A former Goldman Sachs banker, Franklin has the personality of a bulldog. "There is a great quote from Machiavelli that talks about how nobody wants change because most people are invested in the status quo," Franklin says. "Even the folks who are open to change don’t actually believe it until it’s real and in their hands. There were a lot of times [in this process] when people were like, ‘This is going to be so painful.’ "

Franklin managed to get some teams to collaborate well on the project, but many describe the internal politics as fierce. Sources who were present for early in-park tests of the MyMagic+ enhanced, turnstile-free entrances recall how some Disney groups had cast members attempt to sneak past the gates, in an attempt to prove the system wasn’t secure enough. (Others argue that this was a valid security test.) Several sources claim that during a test of whether long-range sensors at the Haunted Mansion ride could identify the MagicBands worn by customers going by at high speeds, Imagineers purposely sat on their hands as the ride zoomed along, to make it harder for the sensors to locate their bands. (A spokesperson for Disney says this was also a valid test, done not just by Imagineers, but by everyone.) Multiple sources indicate the Imagineers were exploring their own alternative to the MagicBand, as were other teams.

"Imagineering is an incredible organization but it has become as institutional as the rest," says a former high-level Disney leader. "They dream of building these big icons of their creative expression, but when a capital budget shows we’re going to invest in changing the established guest experience rather than spend on a big fixed asset, that doesn’t get met with love."

Other divisions expressed themselves passive-aggressively. "They might see a problem coming, but they don’t do anything about it, like, ‘Let them figure it out!' " says a former Disney manager. "Then, late in the game, these folks came in going, ‘We knew this was going to be a problem.’ We were like, ‘Really? Where have you been for the last three and a half years?!?’ "

The Orlando-based IT group, as it sought to control more of the project’s technology initiatives, was often at loggerheads with members of the NGE team as well as their counterparts in Los Angeles at the Parks online group. As IT gained a significant foothold into MyMagic+, some credit the group with ultimately improving the technical underpinnings of MyMagic+; others claim it took advantage of the situation to secure greater leverage and resources. "Everyone is trying to build the best possible guest experience," explains one former senior project developer who tussled with the IT group. "But [we all] had drastically different philosophies about how to get that done. I honestly believe [the IT group] just thought we built pieces of shit." The feeling was mutual. At one point, IT pushed the division to build its own Windows-based tablets, eventually named the 2400 and the 9000, for cast members. One source calls the devices "god-awful bricks. We didn’t need their $3,000, piece-of-shit, custom-made mobile devices." Parks eventually opted for iPod Touches and iPads.

As this dynamic played out, the company turned to outside software consultancies, all feasting on Disney's resources for the project, which one partner describes as a "cash cow." (According to a knowledgeable source, Accenture billed over $100 million for its role in developing MyMagic+.) Says a leader of one of these project consultancies, "We were basically chartered as a shadow organization [to the IT group], like a backup plan in case shit hits the fan."

The backroom dealing and finger pointing and glory hogging slowed the ambitious project. "Almost half the work was to support a political situation," says one executive at an NGE partner company. "At the beginning, we could move really rapidly, but when it got public within Disney, it changed the way we worked. It became more about fighting to survive another day."

The February 2012 target came and went.


Be Our Guest

More than 28,000 hotel doors needed their locks replaced in order to connect wirelessly with the MagicBand, even as some 80% of the rooms at Disney’s resorts, on average, were occupied. Two dozen workers spent eight months upgrading 120 doors per day. The company rolled out 6,000 mobile devices to support MyMagic+ in the parks. More than 70,000 cast members got MyMagic+ awareness training, with 15,000 learning service-specific tasks for, say, FastPass+ kiosks or MagicBand merchandising (guests would be able to buy Disney character–themed accessories to decorate their bands).

Disney World’s physical infrastructure, which was first built in the late 1960s, needed major capital improvements. Two hundred eighty-three park-entry touch points needed to be upgraded. Much of Disney World lacked a Wi-Fi connection, so in order for guests and cast members to take advantage of MyMagic+ and its mobile apps (which would offer a map service and real-time wait times for attractions), the company had to install more than 30 million square feet of Wi-Fi coverage. "They sure as hell had no ethernet networking, and didn’t even have a lot of power lines," says one source involved with the construction. "It was a huge effort to wire a communications infrastructure that was basically the same size as San Francisco."

On January 7, 2013, Disney finally made a splashy announcement revealing MyMagic+. In a story in The New York Times, Staggs called the project "transformational." Disney played up the ways guests would benefit, including how cast members could use data to know when to wish a guest happy birthday, and how a new Little Mermaid–themed ride would feature an animatronic seagull who could interact with guests wearing the MagicBand. "We want to take experiences that are more passive and make them as interactive as ­possible—moving from, ‘Cool, look at that talking bird,’ to ‘Wow, amazing, that bird is talking directly to me,’ " Imagineering chief creative executive Bruce Vaughn told the Times.

But even then, MyMagic+ was not ready for prime time. According to a source, one internal audit around this time found roughly 250 defects plaguing the parks’ MyMagic+ hardware and software systems. MyMagic+ would only roll out slowly, bit by bit, over the course of 2013. Meanwhile, the cost to redesign and integrate DisneyWorld.com with MyMagic+ soared to around $80 million.

There were bright spots. The manufacturing cost of the band came down to below $5. Be Our Guest restaurant, inspired by the fairy-tale dining experience in Beauty and the Beast, launched to glowing reviews. The restaurant was the epitome of what MyMagic+ could offer. Guests who preordered food online, or at a restaurant kiosk, could sit down and have their meal arrive automatically, thanks to sensors telling the waitstaff to deliver what food to what table. The seamless experience won top innovation honors from the National Restaurant Association.

But even this success story couldn’t transcend the hostility among Parks divisions. Working with outside partners, John Padgett's team had managed to deliver Be Our Guest early—only to find that other groups felt he did so at the expense of their projects. As a former employee involved in Be Our Guest says, "It really didn’t go over well with the traditional IT org. It was like, ‘Wait, you’re going to actually have a successful launch of a project on time, on budget, as you promised? Even though our [technical] components, which were supposed to support the system, aren’t ready?’ "

The carping weighed heavily on Nick Franklin. From the beginning of his tenure, he made efforts to generate goodwill and friendship among the various players, holding frequent team dinners so people who sources indicate didn't like each other could at least break bread and try to bridge their differences. During one feast on St. Patrick's Day, the team ate "deconstructed fisherman's pie" and "haute cuisine-style bangers and mash" paired with various Irish beers and whiskeys. "I made my team members know each other, and I mean, know who their kids are, where they grew up, and what they're passionate about," Franklin recalls. "Everybody on that team knew that John Padgett built his house himself, and that [technology SVP] Randy Brooks was a motorcycle guy who rode with his kids. That's what bridges the gap. At the end of the day, shit is going to get hard, and when you’re in the trenches, that’s the stuff that brings you back together."

Franklin's mantra was "we all cross the finish line together or we all fail." But as one VP–level Disney source describes, "[Executives kept asking], ‘When is this going to be done?’ ‘Oh, in two months!’ ‘No, three months!’ It became this slog with one group going, ‘We’re ready and you’re not!’ And the other group going, ‘No, we’re ready, and you’re not!’ "

According to a source, one Parks leader who helped Padgett deliver the MagicBand, Michael Jungen, would caution his team against playing the blame game because it was all just "booger flicking." Jungen told his team to not give anyone an excuse to "flick the booger back at us."

Disney didn’t complete its rollout of MyMagic+ until the first half of 2014.


Tomorrowland

This January, I made several trips to Disney World. With my MagicBand strapped on, entering and exiting my room at the Contemporary Resort is a cinch. I love leaving my hotel without worrying if I forgot my wallet, or even my phone; whether I venture to the Starbucks at the Downtown Disney shopping village or sit down for an extravagant dinner at the Grand Floridian Resort, I pay by simply flicking my wrist. At dinner one night, an elderly couple tells me they were skeptical of the MagicBand at first ("because we’re old!"), but that they have come to love its headache-free benefits.

There is no line at the main entrance to the park, where cast members and a row of polished, golden digital access points greet me, and it takes just seconds to stream through with my MagicBand. According to Disney, the MagicBand has cut turnstile transaction time by 30%. Park capacity has also increased. At the Magic Kingdom alone, Tom Staggs notes, MyMagic+ has allowed "north of 5,000 more people into the park for the same experience."

The creative potential of MyMagic+ is on full display at Test Track, an Epcot ride that lets visitors pretend to drive a concept vehicle through intense stress tests: swerves in bad weather, screeching halts, big bursts of speed. It’s extremely popular, often with 60- to 90-­minute wait times. But the queue seems to move fast, thanks to what Disney calls "scene ones," interactive moments designed to entertain waiting guests. Rather than fidgeting in line, I get to walk through an auto design studio with rows of touch-screen kiosks. Using my MagicBand, I digitally customize my own car, modifying its color, body shape, and engine capabilities. As I’m about to hop on the ride, I use the MagicBand again to integrate my personal vehicle into the attraction. Zipping through the track, display screens at the tail end of each section show a leaderboard simulating how my rig is performing. Afterward, I make a digital commercial for my car, one of a slew of experiences available to guests once the ride is finished.

Test Track has 197 touch-interaction points. Disney has measured the impact of effective "scene ones" on customers’ perception of waiting in line. According to Disney World SVP Jim MacPhee, "a 35-minute wait felt like a 15- to 20-minute wait."

Executives point to this kind of thing to explain why Disney’s intent-to-return metrics are up, though the company won’t provide specific figures. They also say they are seeing guests spend more money while in the park. And MacPhee lets slip that guest intent to recommend, another key Disney metric, is "really high, with overall satisfaction in the 70% range."

There are many other tangible results. The Be Our Guest restaurant has become incredibly popular. Kids are accessorizing their MagicBands with Frozen-themed tchotchkes, which are fast becoming a material revenue generator for the company. And with Disney’s slick PhotoPass service, photos and videos captured of guests shrieking down the Splash Mountain water ride are tied to their MagicBands and automatically uploaded to the My Disney Experience website, where they can later view and purchase prints.

During my return monorail ride back to the hotel one cool winter night, two exhausted parents, baby carriages in tow and a tuckered-out young girl wrapped around Dad’s neck, tell me the MagicBand is a lifesaver; they couldn’t imagine going back to the old system, with all those paper tickets and FastPasses. It is indeed a "better reality than the one outside," as Disney biographer Neal Gabler put it.

MyMagic+ MagicBandPhoto: courtesy of Disney

Fantasyland

"Honestly, it’s not so magical," one cast member tells me about MyMagic+, echoing a common sentiment I hear from park employees during my visit. "It’s just for your hotel room [door] and paying for things." When you look closely, there’s less to MyMagic+ than what some on the team had hoped for.

Few rides other than Test Track tap into the storytelling potential of MyMagic+. "When you go to the park today, you’ll say, ‘Where is it all?’ " says one former top NGE manager. "The Imagineers, the R&D group, they’re supposed to be the innovative team—they’re the Walt Disney Imagineers, for Christ’s sake! And yet, for this newest innovation, they simply didn’t deliver. Well, they delivered the barest, thinnest, most minimum creative support for NGE."

MyMagic+ was always designed to be a plat­form to build on, but even the elements the company publicly promised in The New York Times’ announcement are still missing in action. Though Disney executives still boast, inexplicably, that MyMagic+ lets cast members wish guests a happy birthday, the fact is that feature plainly does not exist. (When I point out to Staggs that cast members don't yet fully take advantage of MyMagic+, he mentions there may be ways in the future to acknowledge a guest's birthday through the program, but also tells me, "You know what, we’ve got the buttons, people put on the buttons [that say] happy birthday, and people say happy birthday, [and] they love it.") Cast members engage with MyMagic+ only in an operational capacity, predominantly at the park entrances, the FastPass+ kiosks, and the guest relations centers. They don’t even wear MagicBands. And that animatronic seagull on the Little Mermaid ride that was supposed to talk with guests wearing MagicBands? During my visit, it squawked on a loop to an empty room.

Disney executives are still figuring out how to talk about MyMagic+. When MacPhee takes me to the classic Dumbo the Flying Elephant ride, he says, "This, to me, is the poster child of everything MyMagic+ is about." But other than using a MagicBand at the entryway touch point, as one does at ­every attraction, Dumbo had nothing to do with MyMagic+ technology. The space was recently renovated, but mainly to add an area where parents can sit and relax in line while their kids play on a jungle gym. Cast members hand out buzzers, like the ones you might find at an Olive Garden. The buzzer vibrates when the ride is ready, so parents have time to collect their kids. (A Disney spokesperson asserts that MyMagic+ and the Next Generation Experience encompassed more than just technology, and thus that the Dumbo renovations fall under the NGE initiative.)

Later, I am shown a new meet-and-greet attraction. While I watch, a Venezuelan family is ushered into a small room, where a cast member, dressed in a full Mickey Mouse getup with automated voice features, kneels down to welcome and hug a shy boy. Without missing a beat, Mickey speaks Spanish, and the kid’s face lights up. ("Queso!" the multilingual Mickey squeaks as a set of family photos are snapped.) I assume that when the boy entered with his MagicBand, the cast member somehow received an instant and invisible notification that the child is a native Spanish speaker from South America. Not so. Afterward, MacPhee acknowledges that the system doesn’t use MyMagic+. The real trick—which my hosts only share on the condition I not publish it—is quite impressive, but almost goes out of its way to avoid taking advantage of the MagicBand.


Journey Into imagination

Shortly after my last Disney World trip, I go to Glendale, California, to visit the folks many NGE insiders blame for everything unrealized by ­MyMagic+. Ever since Walt first corralled a group of animators, writers, and engineers into his WED Enterprises group in 1952, the mission of the Disney Imagineers has been to transport guests into another world, to immerse them into experiences so delightful that they return again and again. So why did they resist MyMagic+?

The Imagineers speak about the project with enthusiasm, but also—always—with caveats. "There are a million ideas, like . . . I walk through the park, and my face is integrated into movie posters," says Bruce Vaughn, the chief creative executive. "Do you really want that? Is that special the third time I see it?" The group has always been wary of introducing technology for technology sake, although it is willing to experiment, such as with a short-lived interactive game developed in 2006, based on the Kim Possible cartoon series, which enabled guests to use cell phones to go on a virtual scavenger hunt of the parks. As one MyMagic+ partner points out, with admiration for the Imagineers, "A big part of the company culture is trying to guard against dangerous change. If Disney had followed every trend in the past 60 years, it wouldn’t be Disney anymore."

There certainly are reasons for caution. MyMagic+’s rocky rollout makes the Imagineers’ case for conservatism in the face of technological change seem sound. A slew of problems reared up after launch: The My Disney Experience app was buggy, digital access points would turn blue when they were supposed to turn green, hotel reservations were a mess, and guests griped that the new FastPass+ system was unintuitive and difficult to program. Many of these issues have since been fixed (the company tripled the size of its customer support department), but every time a guest has to raise her hand for help with MyMagic+, the Imagineers’ carefully crafted illusion is spoiled.

One former NGE executive believes the public won’t "see Imagineering leverage the NGE platform until the next wave of attractions." Even then, he believes, the group will never see MyMagic+ as anything more than another paintbrush at its disposal. "The Imagineers didn’t know what [MyMagic+ would become]," this source says. "So if you need to design it into a ride that has to handle thousands of people an hour, continuously, that can be really hard! The Imagineers wanted to wait to figure out how they want to use it in their storytelling."

Imagineer Joe Rohde, who sports a tribal-style earring that weighs down his left ear, speaks eloquently about the pros and cons of MyMagic+. We meet over a model of Avatar Land, the movie-inspired Disney World extension set to open in 2017. He tells me the Imagineers are trying to hit that sweet spot where the technology stays "subconscious," because he doesn’t want to see "switching behavior"—he waves his wrist around in front of his face—"in between the human and the experience."

I ask where MyMagic+ will influence ­Avatar Land, and Rohde turns my attention to the model, which is the size of three Ping-Pong tables. He swirls his finger around a tiny section. This little spot is where MyMagic+ will be put to use, in "the most intensive, interactive moments." What about the area’s two big attractions? "Less so," he adds.

What excites the Imagineers about Avatar Land? The robotics prototypes they’ve built, which they think represent the next generation of animatronics. MyMagic+ is just a tool that Imagineers tell me they don’t want to force on visitors. "We don’t want to say, ‘Hey, guest, go around and tap with your MagicBand to cause something magical to happen,’ " Vaughn says. "We never want to do it just because we can."


The Hall Of Presidents

On February 5, I am waiting outside Tom Staggs’s office in Burbank when two PR representatives walk over to me briskly to declare that my planned interview has been canceled. Bob Iger has just appointed Staggs chief operating officer of the Walt Disney Company.

That day, beat reporters covering Disney write that Staggs won the "bake-off" over CFO Jay Rasulo due in part to his success at ramping up revenue and profits at Parks. The latter had jumped 20% the previous quarter, helping Disney deliver spectacular earnings, which sent its stock to an all-time high. Most reports also highlight two major achievements: Shanghai Disneyland and ­MyMagic+. Iger himself praised MyMagic+ during the earnings call that week. "About 10 million guests have already worn the bands, and so far, what we’re hearing from them is overwhelmingly positive," he said. "What that basically tells us and what we have actually seen is that it is serving the purpose we set out to serve."

The following afternoon, Staggs meets me at Imagineering headquarters. He spends one day a week there taking meetings, an opportunity for the former Morgan Stanley investment banker to improve his creative chops. Outside his first-floor corner office, he greets me with a knowing smile as he apologizes for yesterday’s unforeseen schedule change. Staggs cuts a slim figure, a result of his intense fitness routine and healthy eating habits. He is relaxed and polished, with a cordiality rooted in his Minnesota upbringing. After walking past the poster of Captain Jack Sparrow on his door, we kick back on a sofa set in his neat office. Staggs, wearing jeans and a white button-down, rests his clasped leather shoes on top of the coffee table as we chat. He's exceedingly humble when I ask about what his COO promotion means for his future at Disney, and avoids any discussion about whether he might one day replace Iger, though he acknowledges nothing was promised. "I’ve been asked to do one job, the COO job, and that’s what I’m going to do, and whatever comes next will be subject to separate process," he says.

Staggs gives me an overview of the MyMagic+ development. He says the project was under budget ("not enough to do a victory lap over"), and claims it wasn’t delayed. "Since we said there’s no set schedule, it’s hard to really say whether we were on that set schedule," he explains. "I don’t mean to be at all glib with you. Truth be told, it might make better copy to write ‘delay’ than to write ‘certain aspects are taking longer than originally anticipated.’ "

MyMagic+ MagicBandPhoto: Matt Stroshane, courtesy of Disney

Eventually, the discussion shifts toward the future of MyMagic+. Key veterans of the project have departed, including executive VP Nick Franklin and the NGE cofounder John Padgett. "There’s a reason why so many NGE people have left Disney," says one NGE source involved with the program nearly from the outset. "The project basically has devolved back into the [traditional] business. Is there a next generation of Next Generation Experience?"

Like Iger, Staggs heralds how MyMagic+ will eventually spread to the other Disney theme parks. But when I press him on exactly what this means, Staggs says the company will roll out "variations on MyMagic+." He explains that this "doesn’t mean the MagicBand will be used in every [park]." MagicBand probably won’t come to Disneyland in Anaheim, California, because restructuring costs would be too high. Shanghai is expected to have such a high proportion of guests with smartphones, he says, that there wouldn’t be any need to export the MagicBand. A MyMagic+ app could essentially replace it.

Staggs seems to be suggesting that the Magic­Band may not be necessary in the future. That’s hardly a sign of failure. Staggs is quietly making a point that’s broader and more important than the carping of employees worried about the future of their project. Moving to a smartphone-based MyMagic+ infrastructure may now be more reflective of the realities of the rapidly changing technology landscape. Perhaps it would be foolish to try to keep up with the Apples and Googles of the world when it comes to wearables. "We help ourselves by being less precious, [like] ‘Gee, we invented this MagicBand, we’ve got to use that everywhere,’ " Staggs says. "We’ll use it everywhere it makes sense. But we don’t want to let something we think is cool and cutting edge become a legacy item that we’re trying to drag along."

For execs like Staggs, what matters most is that the big ship Disney is headed in the right direction. If "serving the purpose we set out to serve," as Iger puts it, is a mundane judgment of MyMagic+ that falls short of earlier, more transformative goals, that’s fine. Staggs explains that this is the "very beginning" of MyMagic+, and that "there is so much more that we can do there." He doesn’t go into specifics, but promises the company is learning widely from the MyMagic+ experience. "The key is the collaboration across literally everything from food and beverage, IT folks, online folks, our industrial engineers, our merchandise folks, our core operations team, the finance organization, across all of those," Staggs tells me. "It was a big project. I don’t want to appear overly proud of it, but we’re very proud of it happening at this organization. It would be folly to say that anything other than the collaborative approach we took would’ve been successful."

Perhaps Staggs is being coy. The Imagineers and Frog certainly did disagree during the MyMagic+ development, as did many others, and that disagreement had repercussions and costs. But it ultimately led to a successful conclusion. What Staggs calls "constructive discomfort" is what sophisticated collaboration is all about.

After all, he tells me, "[This was] one of the most collaborative processes that we’ve undertaken, and we tend to be pretty collaborative by nature."

Magic+ Kingdom: Disney World was a Technicolor—not high-tech—dream on Opening Day in 1971.Photo: Yale Joel, Life magazine, The LIFE Picture Collection, Getty Images

See the history of Disney's Princesses Brand in 200 sparkly seconds


[Illustrations: Ramona Ring; Photos: courtesy of Disney; Avatar: 20th Century Fox/Everett Collection; Zebra: iStock; Captain EO: Buena Vista Pictures/Everett Collection; Jim Henson Co.: Photos 12, Alamy; Epcot 1982: Roger Viollet, Getty Images]

A version of this article appeared in the May 2015 issue of Fast Company magazine.