Pixar's Secret Sauce

Pixar Animation Studios has a long string of firsts to its name, including creating the world's first computer-animated feature film (Toy Story, released in 1995).

To date, Pixar has released ten feature films: Toy Story (1995), A Bug's Life (1998), Toy Story 2 (1999), Monsters, Inc. (2001), Finding Nemo (2003), The Incredibles (2004), Cars (2006), Ratatouille (2007), WALL•E (2008), and Up (2009). All but three, Toy Story, A Bug's Life and Up, are in the top 100 worldwide box office grossing movies of all time. The first two are in the top 200. As for the third, Up, well, it's still in cinemas as we speak and if Pixar's track record over the past decade is anything to go by, it will also end up in the top 100. Up has already scored another first: it became the first animated movie to open the Cannes Film Festival in 2009.

So, what's the secret of Pixar's success?

Well, it probably helps that George Lucas and Steve Jobs were intimately involved with the creation of Pixar, but this alone cannot explain the success story that Pixar has become over the last 30 years.

In an article entitled "How Pixar Fosters Collective Creativity" published in the September 2008 issue (pages 64-72) of Harvard Business Review, Dr. Ed Catmull, Pixar's co-founder and President, reveals all. Catmull has been there from before the beginning--he was recruited by George Lucas from the New York Institute of Technology (NYIT), where he headed the Computer Graphics Lab (CGL), to start up the computer graphics division at Lucasfilm in 1979. In 1986, Steve Jobs bought the division for US$ 10 million and established it as an indepedent company called Pixar, with Catmull as co-founder and chief technical officer.

It's a fascinating article and worth reading in full, but here's my summary of Catmull's key insights on Pixar's principles and practices for managing creative companies:

• It's primarily about good people, not good ideas. Good people are more important than good ideas.
  
• The Nature of Collective Creativity:
• In complex product development, like filmmaking, creativity involves many people from different disciplines working together to solve numerous problems. It is not a solo act.
• Such a working environment requires a tolerance for risk (and possible failure), trust, respect, and a deep sense of community.
• Set and maintain the highest standards of service and product quality.
• Power to the Creatives:
• Creative power and authority must reside with the creative team's leadership, i.e., the film's producer and the director.
• A Peer Culture:
  
• Create internal peer review panels and processes to provide unbiased, unvarnished input to the creative team's leaders, but ultimate power and authority must resides with those leaders. At Pixar, this elite peer group of producers and directors is called The brain trust.
• The practice of working together as peers extends to all levels of Pixar, not just producers and directors. For example, daily reviews or dailies are a process for giving and receiving constant feedback in a positive way. People show work in an incomplete form to the whole creative team and everyone is encouraged to comment. The benefits are: (1) Once people overcome the embarrassment of showing work still in progress, they become more creative. (2) The leaders can communicate important points to the entire team at the same time. (3) People learn from and inspire each other. (4) It avoids wasted efforts. People's overwhelming desire to ensure their work is "good" before they show it to others increases the probability that their finished version won't be what the director wants.
• Technology + Art = Magic:
• Getting people in different disciplines to treat each other as peers is just as important as getting people within disciplines to do so. But it's much harder as a result of various barriers including: natural class structures (some functions consider themselves and are perceived by others as being more valued by the organisation); different languages spoken by different disciplines; physical distances between offices; etc. In creative businesses, all such barriers are impediments to producing great work.
  
• Making constant change, or reinvention, the norm in the organisation and blending technology and art, leads to magical things happening.
• "Technology inspires art, and art challenges the technology"--John Lasseter, Chief Creative Officer, Pixar Animation Studios
• Operating Principle #1: Everyone must have the freedom to communicate with anyone.
• Operating Principle #2: It must be safe for everyone to offer ideas.
• Operating Principle #3: Stay close to innovations happening in the academic community.
• Other barrier-breaking practices: (1) Pixar University--a collection of in-house courses open to anyone in the company and allows for training and cross-training of people. Reinforces mindset that everyone in the company is learning and it's fun to learn to learn together. (2) Pixar's building (Steve Job's brainchild) is structured to maximise inadvertent encounters and interactions. At the centre is a large atrium containing the cafeteria, meeting rooms, bathrooms, and mailboxes.
• Staying on the Rails:
  
• The history of the computer industry has many examples of companies that put together great people who produced great products and then, at the height of their powers, made stunningly bad decisions and faded into irrelevance.
  
• Catmull vowed to ensure Pixar would not suffer this fate by inculcating a culture of introspection and self analysis, systematically fighting complacency and systematically uncovering problems in the midst of success.
  
• The keys are: clear values; constant communication; routine postmortems; the regular injection of fresh blood, and strong leadership.
• Effective postmortems. Nobody likes to do postmortems, left unchecked they will be gamed to avoid confronting the unpleasant. Simple techniques to avoid this include: (1) Regularly vary the way you do postmortems. (2) Ask each group to list the top five things they would do again and the top five things they wouldn't do--this balances positives and negatives. (3) Employ lots of data in the review, including activities and deliverables that can be quantified (e.g., rate at which things happen, how often something has to be reworked, whether a piece of work was completely finished when it was sent to another department or not, etc.) These data show things in a neutral way, which can stimulate discussion and challenges assumptions arising from personal impressions.
• Fresh blood. There are two challenges associated with bringing in new people with fresh perspectives: the not-invented-here syndrome and the awe-of-the-institution syndrome. The former is less of an issue because of Pixar's open culture. The latter is a bigger challenge, especially getting young new hires to speak up. To try to remedy this, Catmull makes it a practice to speak at orientation sessions for new hires and to talk about the mistakes Pixar has made and the lessons it has learned. The purpose is to persuade them that the company haven't got it all figured out and that they want everyone to question why they're doing something that doesn't seem to make sense to them.

Catmull concludes:

For 20 years, I pursued a dream of making the first computer-animated film. To be honest, after that goal was realized - when we finished Toy Story - I was a bit lost. But then I realized the most exciting thing I had ever done was to create the unique environment that allowed that film to be made. My new goal became, with John [Lasseter], to build a studio that had the depth, robustness, and will to keep searching for the hard truths that preserve the confluence of forces necessary to create magic. In the two years since Pixar's merger with Disney, we've had the good fortune to expand the goal to include the revival of Disney Animation Studios. It has been extremely gratifying to see the principles and approaches we developed at Pixar transform this studio. But the ultimate test of whether John and I have achieved our goals is if Pixar and Disney are still producing animated films that touch world culture in a positive way long after we two, and our friends who founded and built Pixar with us, are gone.

Hear, hear.