Inside Disney's Toy Factory

Imagine a small girl holding a brand new toy for the first time. The colors and contours light up her eyes; her mental gears crank as she examines the product, figuring out its purpose. Then, she smiles as she happily joins the new, imaginary world from which the toy was originally born.

Chris Heatherly, 34, and Len Mazzocco, 53, design toys that inspire such scenes on a daily basis for hundreds of thousands of children around the world. Together, the two help run Walt Disney's (DIS) toy division, under the Disney Consumer Products banner. The group, which includes other departments such as apparel and publishing, has doubled its revenue to $30 billion over the last five years—in large part due to the double digit growth in toy revenue that Heatherly and Mazzocco have drummed up each of the three years they've been a team.

Previously, the two had worked separately, Heatherly in charge of consumer electronics and Mazzocco overseeing Disney's toy division. Then, in June 2006, management combined their divisions and put the pair in charge of leading the revamped operation. As general manager and vice-president for toys, Heatherly, an alum of companies such as Apple (AAPL) and frog design, oversees marketing and business operations. Lauded toy designer Mazzocco, meanwhile, who worked at Mattel (MAT) and Fisher Price before joining Disney in 2001, is senior vice-president for creative on global toys.

Psychology and Play Patterns

The pair attribute their success to a process they've refined since joining forces: a systematic brainstorming and prototyping process that supports the continuous innovation necessary to overhaul toy lineups every six months. It matches Mazzocco's years of toy designing experience—a specialty that requires knowledge of child psychology and play patterns—with Heatherly's experience in designing software, electronics, and other core technologies. "Len's group is almost like an Ideo that we've set up specifically for Disney," says Heatherly, referring to the Palo Alto (Calif.) design and innovation consultancy.

People assemble 20 to 30 times a year for two-or-three-day brainstorming sessions at hotels around the world. The group of up to 50 people is always diverse: Disney designers, engineers, artists, salesmen, animators, video game designers, marketers, and theme park employees are handpicked by Heatherly and Mazzocco and split into teams. They're partnered with their counterparts from licensee companies that design and eventually manufacture the products. "The process is very democratic," says Tim Kilpin, general manager for girls, boys, and games at Mattel who has been to dozens of these sessions in the past few years. "It's designed so that we leave there with 50 great ideas we can take forward commercially."

Mazzocco and Heatherly point to three elements of the brainstorm sessions they say are crucial to success. The first is "icebreaker" activities—basically, fun contests that last anywhere from 10 minutes to a half-hour. When working on Club Penguin products, the teams held an igloo-building competition; for Disney Princess, they put on a fashion show. It sounds fluffy, but Heatherly and Mazzocco say the icebreakers break employees out of the workplace mind-set, help team members gain comfort working with one another, and ease the concerns of non-creative workers who might be intimidated by having to come up with designs alongside Disney specialists. "Some people want to cut to the chase. We tried it, and it just doesn't work," Heatherly says. "You really have to commit to the process. You have to have some decompression time to be creative."

Toys Designed to Play Off New Movies

After the icebreakers, teams hold 45-to-60-minute brainstorming sessions over the remainder of the retreat. They're charged with designing products under specific parameters—electronics for the Toy Story line, for example, or dolls to accompany the new Princess and the Frog movie. First, teams list as many ideas as they can and then vote for their favorites. Then, teams participate in a prototyping method Heatherly and Mazzocco say is the second critical element of the process: Disney artists assigned to each group draw detailed concepts of the toy ideas. The finished prototype is a comic book-like story board which can later act as an instant creative brief for the design team.

After the prototyping process, teams must present their ideas as a fully realized product pitch—the third crucial element in the pair's innovation strategy. This, they say, forces the teams to think about practicality and marketing or how a toy might be used and sold. Heatherly and Mazzocco say 50% of their products come directly from the process. "A lot of other brainstorms tend to hover at a conceptual level—there's high-level ideas, but there's not that pressure to get results," Heatherly states. "We're going to walk out of there with 5-10 actionable ideas that are going to make more money."

    Before it's here, it's on the Bloomberg Terminal.