Pixar and Disney

by Don Harkey



Last night, I watched "The Pixar Story", which is a documentary on the history of Pixar Animation Studios. This documentary should be required material for all business schools. I will summarize the story as best as I can remember (with some help from Wikipedia).

Pixar was originally founded in 1979 as part of a division of Lucasfilm. The group worked on how to use computers for special effects and made contributions to a few movies such as Star Trek II: Wrath of Khan. In 1986, Pixar was ready to spin off, but needed some capital. Enter Steve Jobs, the co-founder of Apple. Jobs purchased Pixar in 1986 and funded the company with $10,000,000. Steve Jobs was one critical component of the company.

A few years earlier, a former Jungle Cruise skipper turned animator named John Lasseter had the opportunity to preview scenes from the movie Tron. Seeing the potential for computers for use in animation, John began several projects for Disney which lead to the production of a computer animated short-film called The Brave Little Toaster. Lasseter showed a Disney executive the film and the executive asked him how much it cost him to make the film. Lasseter replied that it cost about as much as a standard animation film. The executive shot back, "unless it is faster and cheaper, we don't want it!". Minutes later, Lasseter was fired from Disney.

Pixar, still pre-Jobs, had great computer people onboard, but they didn't have any real animators. Lasseter connected with the group at a computer conference and was hired immediately. Soon after (in 1984), Pixar created its first animated short-film. This began a long series of film shorts and commercials that continued as Steve Jobs took over a couple of years later.

Losing $1,000,000 per year for 5 years, Jobs knew they needed to do something different. He saw the tremendous potential in the new medium and was a very unusually patient investor. Realizing that they needed help and more capital, Pixar teamed with Disney to produce a full-length animated film directed by Lasseter. The result was "Toy Story", which earned $361,000,000 and four academy awards.

What is striking about the story was the culture that Pixar created. Pixar was really a creative mix of people working in an area where they had no real experience. Their office was described by one early employee as a college dorm room for 200 people. People rode scooters around had impromptu story meetings in boardrooms where they freely exchanged ideas. Newcomers found the culture intimidating at first, but eventually found it very free.

The resulting culture, which worked very hard under Steve Jobs to avoid becoming absorbed into Disney's culture, worked. It worked extremely well. This little studio has produced 9 films total with Toy Story being their least grossing movie. These include Bug's Life, Toy Story 2, Monsters Inc, Finding Nemo, The Incredibles, Cars, Ratatouille, and Wall-E. These films used a combination of proven directors and non-proven directors (including the first 2 animators hired by Pixar straight out of college - one directed Monsters, Inc and the other Finding Nemo!) to produce hit after hit.

If you want to see true success and how it was achieved, I highly recommend getting the DVD "The Pixar Story" (it is also available OnDemand on Mediacom for free). It shows a company focused on their passions that allows their people to create and feel true pride for what they do. They don't focus on pay structures or benefits or organizational design. They focused on the process that made them successful. It wasn't Steve Job's vision that made them successful, although his ability to see potential and his patience played a huge role. It was the combined vision of everyone in the organization.

Meanwhile, the industry giant who is frequently used as a success case study, Disney, struggled with bureaucracy and a lost vision. Their approach has been to partner with Pixar and continuously try to change their culture to match Disney's, even though the Pixar culture is the key to their success. Disney eventually purchased Pixar in 2006 hiring back the same man they had fired more than 10 years before as the Chief Creative Officer for Pixar. We shall have to see what the future holds for Pixar!