Metue.com

In the animation world, Pixar has been king for the past decade.  After spinning off from  Lucas Film in 1985, being bought by Steve Jobs, and eventually going public, the company found its footing in the mid 90’s and became a dominant player in CGI animation.  Pixar’s string of hits started with Toy Story in 1995, and has followed with commercial and licensing successes for nearly all its major releases since:  A Bugs Life in 1998, Toy Story 2 in 1999, Monsters Inc in 2001, Finding Nemo in 2003, The Incredibles in 2004, Cars in 2006 and more on the way.

On January 31st, Ed Catmull co-founder and former President of Pixar, one time CTO of Pixar and now head of the joint Pixar Disney Animation Studio (following Disney’s $7.4b acquisition of Pixar last year) spoke at Stanford’s Graduate School of Business Entrepreneurship Conference.  

In his presentation, Dr. Catmull spoke about process and culture at Pixar; Effectively, things that are part of the company’s recipe for success that have been learned with trial and error.  Many of these points, along with others made in an interview with some students (found here) translate across business markets and seem smart managerial practice. 

While he gave the speech some time ago now, there are 4 management lessons I took from his speech and interview which  I’ve been wanting to put to paper:

Look for what’s wrong, not just what’s right:

Early on, Pixar created a structure with programmers, animators and producers that differed from standard practice in the industry.  The thought was a more equal peer system coupled with an “open door” “easy access” process would make for a healthy culture.  Turned out, there were problems lurking and they were almost missed. 

A discussion after Toy Story revealed that there was a growing rift with animators feeling stifled by producers and producers feeling animators thought of them as second class citizens (a problem not too different from similar issues between “suits” and “coders” that sometimes happens in software development).   Catmull’s conclusion was that in enjoying success it was easy to look at what works and focus on it’s replication but that for the health of the company it was equally if not more important to ask “what isn’t working.”   Since Toy Story, after every project Pixar has a detailed,  open dialogue to consider parts of the process, or areas of the company, that need fixing.  Catmull characterized the communication as “difficult” but valuable.

Respect your customer/audience:

The old saying is that ‘the customer is always right.’  Embedded in that is the inference you understand and appreciate your customers’ needs.  It’s partly for that reason that Pixar movies intentionally are made to appeal to both adults and children.  “[children] are used to hearing things they don’t understand and they listen to things over and over again because they’re trying to figure out the world.  If you talk down to children, they know they’re being talked down to, and adults can’t listen to it.  So instead, we make films that we can enjoy.  By the virtue of the fact they’re animated, we do put in physical humor, which children love, and we don’t put in things that would turn families off, clearly.  But in terms of the dialogue, we put in things that adults understand.  And by putting in things that we enjoy, that we want to see, and then having it for the physical comedy that all of us like, then it has a, it touches people in a very broad way.”   That broad appeal expands the target market which is shrewd business  but it’s also very attentive to the customer’s needs; that is, needs of both parent and child.

Build a good team, trust them to do their part and take care of them:

In the Venture Capital industry there is a saying sometimes used that “it’s better to bet on an A team with a C level idea, than an A level idea with a C level team.”  whether by design, or coincidence, Pixar has tried to employ the same logic in their business practices when it comes to hiring.  They put Human resources issues near the top of their priorities and focus attention on finding, hiring and retaining talent.  Almost echoing the VC expression Catmull said “If you give a good idea to a mediocre group, they’ll screw it up. If you give a mediocre idea to a good group, they’ll fix it.”

Pixar trusts the teams they build to do their jobs and gives them the freedom to do them well.  Executives don’t go to story meetings, they recognize that is a job they’ve hired artists for and they trust the artists to do it.  there is little micromanagement.   More than just managerial style, everything at Pixar is designed to encourage collaborative and efficient work, even the building layout (the design for which was largely overseen by Steve Jobs- who’s notable design credentials also supposedly include personal oversight of the original, and subsequent, iPod user interfaces).

To keep highly motivated staff from working too hard, to prevent burn out, the company even limits the number of hours people can work and hired a full-time ergonomist and masseuse.  That’s a dramatic contrast from the churn and burn mentality that exists in many industries where a company will take all that talent can give them until there is nothing left to take.

Don’t Copy Successes:

In a creative industry for certain, and arguably in any industry, there is temptation to look on past successes as a recipe and try and copy them moving forward (I’ve referenced this behavior before in a post on investing).  It’s similarly typical in the movie and television industry, for example,  to see sequels and clones of past successes over and over again.   (When’s that next Indiana Jones movie due out? How many twists on reality programming can we have? Is there room for CSI  Boise?). 

At Pixar, the company’s logic seems to be that copying success exacts too high a price from innovation.  Instead, the company views each new project as “director driven” – guided by the vision of the staff.  They intentionally try to keep each movie fresh and distinct when compared to other films in their library.  This intent to innovate rather than replicate arguably is a big part of the company’s ability to consistently reign at the top of the animation world.

It will be interesting to see how Dr. Catmull’s style translates to the joint Pixar Disney animation studio. The two companies have very different cultures, historically. Pixar’s been an unquestionable success, and proof positive of the merits of their management techniques. Whether it will work equally well with mouse ears will be proven over the coming years.