"I have known no wise people who didn't read all the time — none, zero." – Charlie Munger

Creativity Inc.

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Pixar has a long history of changing hands and struggling to stay afloat, originally started by George Lucas with funds from Star Wars (his divorce forced the sale), narrowly escaping an acquisition by General Motors, then acquired by Steve Jobs, who poured millions into the company, and finally finding a more secure home at Disney.  For those who believe in long-term thinking, Pixar is an excellent example of how a great company can take more than a decade to hit its stride and build an enduring culture through the experience.  In the early years, the founders were pushed by investors and business executives into areas beyond their core vision of animated film (Pixar Image Computer), ultimately finding the most financial success in their original strategy of animated film.  Pixar stood out from the crowd in the early years, as large studios, including Disney were not focused on computer animation.

Lead by Ed Catmull and John Lasseter, the Pixar team built a culture that upholds the highest standards for the quality of the story while balancing the need to control costs and generate profits.  As the company expanded, Ed realized his core responsibility was constantly monitoring the company’s culture to ensure it does not drift into complacency and continues to foster debate during the creative process.  The book shares several key operating mechanisms that Pixar uses, including the Braintrust, an open forum for Directors to receive candid feedback on drafts of a movie.  The Braintrust came out of a fire drill during a Toy Story sequel and was a key mechanism for saving the film.  Ed is maniacal about his mission in maintaining the culture, even discarding a long conference table after realizing it was creating a perception of hierarchy that can stifle open feedback.  John and Ed applied many of the company’s core values to Disney after the merger, which returned Disney to creative success with films such as Bolt and Tangled (Disney’s second-highest-grossing film after the Lion King).  Disney had a number of mechanisms that were designed to reduce mistakes and added layers of oversight and costs.

As someone who is not involved in the creative process on a daily basis, I was surprised by the amount of structure and iterations required to produce a quality story and how much a story can evolve from inception to final product.  I recommend the book to people outside of the creative industry or in non-creative roles, as many of the culture values at Pixar are applicable to all companies.  Most notably, (i) the reliance on primary research to create authenticity and (ii) the application of the Toyota Production System concept of taking ideas from the workers on the production line – the people closest to the product and customer.

The final chapter in the book provides insight into Steve Job’s relationship with the company.  Ed notes that in early years, Steve sensed that there was something quite special going on at Pixar, but it frustrated him that he could not figure it out and he kept losing money on the investment in the meantime.  Ed talks about how Pixar was part of Job’s transformation in his last two decades, as he was proud of films that Pixar made to bring joy to the world, as Job’s also did through simple, beautiful products at Apple.


Notable Quotes

  • “I’ve made a policy of trying to hire people who are smarter than I am”
  • “Any hard problem should have many good minds simultaneously trying to solve it”
  • “Building a company was like being on a wagon train headed west. On the long journey to the land of plenty, the pioneers would be full of purpose and united by the goal of reaching their destination.  Once they arrived, he’d say, people would come and go, and that was as it should be, but the process of moving towards something – of having not yet arrived – was what he idealized” – On George Lucas
  • “We had made the mistake of confusing the communication structure with the organizational structure”
  • “Getting the team right is the necessary precursor to getting the ideas right. It is easy to say you want talented people, and you do, but the way those people interact with one another is the real key.  Even the smartest people can form an ineffective team if they are mismatched”
  • “When we trust the process, we remember that we are resilient that we’ve experienced discouragement before, only to come out the other side…the key is not to let this trust our faith, lull us into abdication of personal responsibility. When that happens, we fall into dull repetition, production empty versions of what was made before.”
  • “When experimentation is seen as necessary and productive, not as a frustrating waste of time, people will enjoy their work – even when it is confounding them”
  • “When it comes to creative endeavors, the concept of zero failures is worst than useless. It is counterproductive”
  • “The key is to view conflict as essential, because that’s how we know the best ideas will be tested and survive”
  • “The person who can’t change his or her mind is dangerous”
  • “If we allow more people to solve problems without permission and if we tolerate (and don’t vilify) their mistakes, then we enable a much larger set of problems to be addressed”
  • “If you don’t try to uncover what is unseen and understand its nature, you will be ill prepared to lead”
  • “The most creative people are willing to work in the shadow of uncertainty”
  • “A large portion of what we manage can’t be measured, and not realizing this was has unintended consequences”
  • Making the process better, easier and cheaper is an important aspiration, something that we continually work on – but it is not the goal. Making something great is the goal”

Key Takeaways

  • Pixar built a culture of (i) quality of the story, (ii) trusting the creative process and (iii) honest and candid feedback
  • The company has a number of mechanisms in place to maintain the culture, including Braintrust meetings
  • Pixar took years to achieve success – started in 1979 and did not release Toy Story until 1995
  • Pixar was able to apply these principles of a creative culture in the turnaround of Disney Animation after Disney acquired Pixar

Early Beginnings

  • Ed grew up in the 1950s idolizing Walt Disney and Albert Einstein and at an early age was fascinated by animation
  • He studied physics and computer science at the university of Utah and worked under legendary computer graphics professor Ivan Sutherland – conducted research under ARPA, the Advanced Research Project Agency started by the Department of Defense in response to Soviet technology advances
  • After Utah, he worked briefly for a wealthy investor in NY who was trying to bring computers in to the animation process in the mid 1970s, where Ed built a team – but they lacked the creative story tellers and looked to team up with film studios in Hollywood
  • Hired by George Lucas in 1979 to start a computer division at Lucas Films – he was interested in having computers add value to the film making process – either through digital optical printing, digital audio, digital non-linear editing or computer graphics
  • They created Pixar Image Computer, which had multiple applications including medical imaging, design prototyping and defense applications
  • Lucas was going through a divorce, so was forced to sell the company and they had a deal with General Motors and Philips, but Steve Jobs bought 70% of the company for $5mm in 1986
  • Steve Jobs sunk $54mm of his own money into Pixar and in 1987 and 1991 he decided to sell it twice to Microsoft
  • In 1991, they made a deal with Disney to make 3 films, which would be financed and distributed by Disney
    • They went public in 1994 to have cushion so they could better negotiate with Disney – raised $140mm
    • Toy Story was the first movie, Bug’s Life was second
  • Pixar was acquired in 2006 by Disney for $7.4bn

Culture and Strategy

  • Two very important tenants of Pixar’s culture – Story is King and Trust the Process (the creative process)
  • The Braintrust was formed out the Toy Story 2 experience that turned around the film and the Braintrust has two important features that differs from other feedback mechanisms:
    • The group consists of other directors that have a deep understanding of the process
    • The Braintrust has no authority – they only point out issues, but do not provide solutions
  • Failure, iteration, randonmness and the hidden
    • Embrace failure, but rapid failure and iteration
    • Stress the importance of protecting the Ugly Baby (new ideas) and not letting the Beast (business machine) destroy creativity
    • Embrace randomness and uncertainty – example of a developer who accidently deleted 90% of Toy Story 2 and the back-up system failed (they eventually found a back-up) – they focused on what to change to prevent similar issues and not who caused the error
    • Big problems and small problems are typically structured similarly and can’t avoid all of them, so its most important to set up a system for both by empowering employees to solve problems
    • Pixar is a complex environment and rather than try to understand everything that is going on in each (impossible), its better to set up techniques to deal with combining different view points
    • Directors draw heavy on visualization to get them through a film – running through a tunnel, going through a maze, archeological dig, climbing a mountain, chameleon
    • People on the movie get a cash bonus based on the success of the movie
    • Notes Day at Pixar came out of a challenge to reduce the costs of their films and was an entire day for all employees that took part in hundreds of open suggestions
    • The engineering department had two days a month for “personal project days”
  • Early Mistakes
    • Toy Story 2 – They made the mistake of staffing Toy Story 2 with less experienced Directors and did make a change soon enough – it was a disaster and the story was weak – the biggest flaw was that it was too predictable and not very emotional. As a result of the experience with Toy Story 2, they made a rule that a director will be replaced if he/she loses the confidence of their staff.   This was also an important experience for Pixar as they instilled the importance of quality.  Disney executives were OK with the first version, but Pixar insisted on remaking it to their standards and ended up performing better than the first Toy Story.
    • Example of finding balance between a fire drill and efficiency – After Toy Story 2 put the organization through an unhealthy fire drill, they vowed to change the process in Monsters, Inc, but it took 5 years to make. AS a result, with Finding Nemo, they tried to finish the script before they started production and it did not work at all and they ended up changing much of the story during production.  Many of the story components they thought were good required revision when they got into it and they realized they iteration during production was necessary to the creative process
  • Disney Culture and the Acquisition
    • Disney acquisition gave Ed the opportunity to test the Pixar creative culture principals at Disney Animation, although they kept them entirely separate
    • The drafted a Five Year Social Compact of all the things that would stay the same at Pixar – 59 bullet points, including things a detailed as the freedom of expression on business cards
    • Issues at Disney’s culture
      • No personal expression at employees desks
      • Undue emphasis on preventing errors
      • There was an executive suite upstairs, which was separated physically – this was torn out with Ed came in
      • Employees were spread out over four floors making it difficult for interaction
      • There were mandatory notes from different departments that were often conflicting
    • Changes
      • Total remodel – turned the executive suite into two spacious story rooms where filmmakers could gather to brainstorm about their films – John and Ed set in the second floor, right in the middle of things and removed secretarial cubicles
      • Eliminated the oversight group that was charged with reviewing production reports, but ended up eroding production staff morale
      • Created a version of the Braintrust and had the Disney team observe a version of the Braintrust
      • Ended employee contracts at Disney – contracts discouraged an open dialogue of issues
      • Started research trips – for Princess and the Frog, they sent the team to New Orleans
    • Important mechanisms at Pixar
      • Dailies or solving problems together – daily sessions for teams in sharing out their work in a high energy session
      • Research trips – For Ratatouille, they sent the team to France and spent time interviewing chefs, Finding Nemo team went to SF sewer plant and learned how to scuba dive, Monsters Inc went to Harvard and MIT campuses – this primary research creates originality and authenticity
      • The power of limits – Creative people have such a high standard they believe the only way to improve is to spend more time/resources and limits are required – this can backfire though as seen in the redundancy of the Production Oversight group at Disney. Limits can actually drive creative solutions (example of tech team working on problem in 3 days originally estimated at 6 months)
      • Integrating technology and art – Walt Disney was unrelenting in his use of technology and Pixar has found a way to use technology to enhance the artistic process – including the development of the Review Sketch Tool, that allowed Directors to provide mark-ups of animations (vs. verbally) also built the Pitch Doctor, which help Directors convey their stories in Braintrust meetings – helped accelerate the feedback loop
      • Short experiments – Pixar used to make short films, but for years they stopped this and then Ed tried to reintroduce them – although they did not create a lot of value for directors, they paid off in two unexpected benefits – they sent a message to employees that Pixar cared about art and they were a special treat for movie goers
      • Learning to see – Pixar University for all employees has an art section – art can help people see and get over the generalizations and misconceptions/short-cuts your brain uses – art teachers have strategies to help students see objects as they are  – putting an object upside down or focusing on negative spaces – objects around things
      • Postmortems – Hold meetings shortly after the completion of the movie – biggest benefit is that it forces reflection in preparation for the meeting
      • Continuing to learn – Pixar U has classes on sculpture, painting, acting, meditation, belly dancing, computer programing, etc.
    • Managing a Creative Culture (Last Chapter)
      • Give a good idea to a mediocre team and they will screw it up. Give a mediocre idea to a great team and they will either fit it or come up with something better.  If you get the team right, chances are that they’ll get the ideas right
      • Always try to hire people who are smarter than you. Always take a chance on better, even if it seems like a potential threat
      • If there are people in your organization who feel they are not free to suggest ideas, you lose. Do not discount ideas from unexpected sources. Inspiration can and does come from anywhere
      • It isn’t merely enough to be open to ideas from others. Engaging the collective brainpower of the people you work with is an active, ongoing process.  AS a manager, you must coax ideas out of your staff and constantly push them to contribute
      • In general, people are hesitant to say things that might rock the boat. Braintrust meetings, dailies, post mortems and Notes Days are all efforts to reinforce the idea that it is okay to express yourself
      • The first conclusion we draw from our successes and failures are typically wrong. Measuring the outcome without evaluating the process is deceiving
      • Change and uncertainty are part of life. Our job is not to resist them but to build the capability to recover when unexpected events occur.  If you don’t always try to uncover what is unseen and understand its nature, you will be ill prepared to lead
      • Don’t wait for things to be perfect before you share them with others. Show early and show often.
      • Be wary of making too many rules. Rules can simplify life for managers, but they can be demeaning to the 95% who behave well. Don’t create rules to rein in the other 5 percent – address abuses of common sense individually
      • Imposing limits can encourage a creative response
      • Engaging with exceptionally hard problems forces us to think differently
      • Our job as managers in creative environments is to protect new ideas from those who don’t understand that in order for greatness to emerge, there must be phases of not-so-greatness.
      • Don’t confuse the process with the goal. Making the product great is the goal.
    • Steve Jobs
      • Steve was a big believer in the power of accidental mingling as he knew that creativity was not a solitary endeavor
      • Steve designed the Pixar building with this in mind – lots of areas for cross traffic
      • Steve was largely uninvolved in Pixar day to day, but he had a bond with directors, as he knew how important it was to construct a story that connected with people
      • Steve employed a “Reality Distortion Field” – pushed reality and boundaries

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By BoardofBooks
"I have known no wise people who didn't read all the time — none, zero." – Charlie Munger

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