3 Ways Pixar Gains Competitive Advantage from Its Culture

To infinity and beyond: That’s where Pixar Animation and Walt Disney Animation Studios are headed, provided they maintain the type of leaders that have gotten them this far. Ed Catmull, President of Pixar Animation and Walt Disney Animation Studios, describes what he’s learned about leadership and corporate culture in his excellent new book, Creativity, Inc.: Overcoming the Unseen Forces That Stand in the Way of True Inspiration.

Pixar has been phenomenally successful with the likes of Toy Story, The Incredibles, Finding Nemo, and Up, to name but a few of its films. In 2006, Disney (NYSE:DIS) bought Pixar to boost its struggling Walt Disney Animation Studios unit. Catmull and John Lasseter, Pixar’s CEO, were appointed to lead the unit as president and CEO, respectively.  With the leadership change, Disney began to produce hits such as Tangled and Wreck-It Ralph.  If any doubt existed that Disney’s magic was back, it was put to rest with the 2013 release of the blockbuster movie Frozen.  Having earned well over a billion dollars in revenue at the box office in its first six months, Frozen became the highest-grossing animated feature ever and moved into the top-10 worldwide highest grossing movies of all time.

The success of Pixar and Disney Animation begs the question: what’s the secret sauce? In a word, it's “culture,” i.e. the shared attitudes, language and behavior that consistently produce excellence in a given endeavor.  With 70% of American workers disengaged today, Pixar and Disney Animation provide a model for engaging and energizing employees by making culture a competitive advantage.

Here are three ways Catmull and his leadership team create a culture that consistently makes great films.

1. Care about people first

Catmull describes a turning point that occurred during the making Toy Story 2. People at Pixar worked long hours, seven days a week over a grueling nine-month period to complete the movie.  By the end of the nine months, one-third of the staff had repetitive stress injuries.  On one occasion, an exhausted artist forgot to drop his infant son off at day care and left him in his car parked in the broiling Pixar parking lot for three hours.  When the child was discovered, he was unconscious (fortunately he was revived). The incident traumatized Catmull and others at Pixar. It forced them to ask the question: What have we become?

Pixar had drifted into dangerous territory by putting the movie ahead of the well-being of its people. The harm done to employees, and what could have happened to the child, was a wake-up call that solidified Catmull’s core belief that people must always come first.  He identifies three reasons.  First, it’s a leader’s responsibility to protect the people he or she leads from pursuing excellence at all costs and it’s irresponsible to do otherwise.  Second, no organization is sustainable that allows harm to come to its people. The best people will not be attracted to nor remain in a culture that ignores their welfare.  Third, ideas come from people so people need to be the priority.

2. Focus on a purpose that makes people feel proud

Pixar’s purpose is to “make great films.”  Its leaders are unambiguous about communicating this.  Making great films is what attracts people to Pixar.  It makes them feel proud and energizes them.  It’s why they stay.

Brad Bird, the director, and his producer, John Walker, made the critically acclaimed animated film The Iron Giant while working for another studio.  Pixar could see these guys were driven to make great films but knew they didn’t have access to the kind of technology Pixar had so they went after them.  The Incredibles, Bird and Walker’s first project at Pixar, was a homerun.

When Pixar focuses on making great films, profit follows.  Focusing on profit first would lead to compromising the purpose and sucking the passion and energy out of the organization.  This seems simple on the surface yet how many leaders truly understand this and act upon it?

3. Encourage self-expression and diversity of thought

In most companies the overwhelming majority of employees feel that senior management does not value their opinions and ideas.  Not so at Pixar.  Catmull says that great movies are made from the “tens of thousands of ideas” that go into them from beginning to completion.  As such, everyone needs to contribute their ideas and opinions, everyone’s work matters and everyone makes a difference in the quality of a film.

Catmull understands that creativity and innovation are maximized in a community with a rich marketplace of ideas.  The best ideas can come from anyone in the company so leaders must add to the environment whatever encourages self-expression and diversity of thought.  They also need to remove obstacles that diminish the marketplace of ideas.

No detail is too insignificant to Catmull when it comes to creating a culture that encourages self-expression and diversity of thought. Here are a few examples:

• Office design - Pixar’s office design builds community and contributes to developing informal ties and the flow of knowledge across the organization. The cafeteria, meeting rooms, employee mailboxes and restrooms are centralized to make it more likely employees will interact with one another. Catmull even replaced an expensive, long rectangular conference room table made by a famous designer because it kept people on the ends of the table from contributing to the conversation.
• Constructive feedback mechanisms - Catmull writes about Pixar’s “Braintrust” where directors, writers and heads of story come together every few months to review a film’s progress.  Following a screening of the film and comments from the director, his or her peers provide feedback about what they liked and what needed to be improved.  Candor is expected, as is a spirit of helping one another to make great films.  The director is free to act on the feedback or not.  Catmull describes the sessions as being characterized by “frank talk, spirited debate, laughter and love.”
• Open communications - During the making of Toy Story, production managers tried to force artists and technologists to follow the chain of command when discussing the project with others.  The artists and technologists rebelled and started acting disrespectfully to production managers.  It got so bad that production managers no longer wanted to work at Pixar. Catmull and Lasseter gathered the company and made it clear that going forward decisions made needed to respect the chain of command but “anyone should be able to talk to anyone else, at any level, at any time, without fear of reprimand...people talking directly to one another then letting the manager find out later was more efficient than trying to make sure that everything happened in the ‘right’ order and through the ‘proper’ channels." Although it took time for people to adjust to more open communications, by the time Pixar completed A Bug’s Life, production managers were viewed and treated with respect.  Connection, community and unity were restored.

Although earlier in his career Catmull was focused on creating the first feature film to be entirely animated on a computer, today he has found his new calling: to create a sustainable creative culture that will survive after Pixar’s founders are long gone.  “We’re in this for the long haul,” he says, and it’s a “day-in-day-out, full-time job.”  Senior business leaders are wise to follow Catmull’s example.