Pixar‟s „Incredible‟ Culture

This case is about the unique organization culture at Pixar Animation Studio (Pixar).
Many analysts attributed Pixar‟s success to its unique culture marked by an informal
approach toward work and its Human Resource (HR) policies that built a motivated
and loyal employee base. The case highlights the company‟s hands-off management
style coupled with an artisan cultivation of the creative process, which helped it
become a benchmark against which the rest of the industry measured itself. The case
also discusses the cultural and HR management implications to Pixar as a result of it
having being acquired by The Walt Disney Company.
 Pixar‟s „Incredible‟ Culture
“There‟s a wonderful yin-yang at the foundation of Pixar. The art challenges the
technology, and the technology inspires the art. It‟s a drug. I mean, it just powers you
on.”1
– John A. Lasseter, Chief Creative Officer, Pixar and Disney Animation Studios,
in 2004.
“We‟ve made the leap from an idea-centered business to a people-centered business.
Instead of developing ideas, we develop people. Instead of investing in ideas, we
invest in people. We‟re trying to create a culture of learning, filled with lifelong
learners. It‟s no trick for talented people to be interesting, but it‟s a gift to be
interested. We want an organization filled with interested people.”2
– Randy Nelson, Dean, Pixar University, in 2006.

Can Pixar‟s Culture Prevail?

On May 5, 2006, The Walt Disney Company3 (Disney) completed the acquisition of
Pixar Animation Studios (Pixar) for US$7.4 billion. The Emeryville, California-based
Pixar is an award winning computer generated imagery (CGI) animation firm. Among
its best known computer animated movie productions are Toy Story, A Bug‟s Life,
Toy Story 2, Finding Nemo, Monster, Inc., and The Incredibles. In addition to this,
Pixar also develops and markets high-end 3-D computer graphics technology such as
RenderMan, an industry-standard rendering4 software used to generate high-quality,
photorealistic images.
With this deal Disney hoped that Pixar would bring some creative magic to Disney
once again, as Disney had, after 1994, produced a string of lackluster and forgettable
animated films. The deal made Pixar‟s chairman and CEO, Steve Jobs (Jobs), the
largest individual shareholder and a member of the board of directors at Disney.
Pixar‟s Executive Vice President, John Lasseter (Lasseter), a two-time Academy
Award5-winning director and animator, became the chief creative officer of Disney

1
Brent Schlender, “Incredible: The Man Who Built Pixar‟s Innovation Machine,”
http://money.cnn.com, November 15, 2004.
2
William C. Taylor and Polly Labarre, “How Pixar Adds a New School of Thought to
Disney,” www.nytimes.com, January 29, 2006.
3
The Walt Disney Company headquartered in Burbank, California, USA, is one of the
largest media and entertainment corporations in the world. It was founded on October 16,
1923 by brothers Walt Disney and Roy O. Disney as a small animation studio. The Walt
Disney Company operates in business segments like animation / motion picture production
and distribution, theme parks and resorts, television broadcasting networks, and consumer
products. It reported revenues of US$ 31.9 billion in 2005 and had around 133,000
employees worldwide.
4
In computer graphics, Rendering is referred to as the process of producing the pixels of an
image from a higher level description of its components. A pixel is one of the many tiny
dots that make up the representation of a picture in a computer‟s memory. 3-D Rendering is
termed as the process of producing an image based on three-dimensional data.
5
The Academy Awards, popularly known as the Oscars, are the most prominent film
awards in the US and most watched awards ceremony in the world. The Awards are
granted by the Academy of Motion Picture Arts and Sciences, a professional honorary
organization dedicated to the advancement of the arts and sciences of motion pictures.
(Source: http://en.wikipedia.org)

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Enterprise Performance Management

and Pixar animation studios. He also had the authority to approve films for both
Disney and Pixar, while Disney CEO Robert Iger (Iger) would have the final
approving authority. Lasseter would also serve as the principal creative adviser at
Walt Disney Imagineering, which designs and builds the company‟s theme parks.
Pixar‟s president Edwin E. Catmull (Catmull) became the president of Disney and
Pixar animation studios. He would report to Iger and Dick Cook (Cook), chairman of
Walt Disney Studio Entertainment. Even so, Pixar would remain a separate entity and
operate from its headquarters in Emeryville with its name intact. Branding of films
made post-merger would be under the “Disney Pixar” banner. “With this transaction,
we welcome and embrace Pixar‟s unique culture, which for two decades, has fostered
some of the most innovative and successful films in history. The talented Pixar team
has delivered outstanding animation coupled with compelling stories and enduring
characters that have captivated audiences of all ages worldwide and redefined the
genre by setting a new standard of excellence. The addition of Pixar significantly
enhances Disney animation, which is a critical creative engine for driving growth
across our businesses. This investment significantly advances our strategic priorities,
which include – first and foremost – delivering high-quality, compelling creative
content to consumers, the application of new technology and global expansion, to
drive long-term shareholder value,”6 said Iger.
Pixar has always had a unique organizational culture. Many analysts attributed Pixar‟s
success to its unique culture marked by an informal approach toward work and the
workplace and its Human Resource (HR) policies that built a motivated and loyal
employee base. As of May 2006, Pixar was one of the most successful animation
companies in the world with its six-on-six success record. Its hands-off management
style coupled with an artisan cultivation of the creative process helped it become a
benchmark against which the rest of the industry measured itself.
Pixar‟s acquisition by Disney raised concerns regarding the future of Pixar‟s unique
culture. Both Disney and Pixar stressed that Pixar‟s culture would be protected and a
steering committee was formed to maintain and spread the essence of Pixar‟s culture
within Disney. However, analysts were divided; some felt that the Disney‟s
bureaucratic style might threaten Pixar‟s culture and could throttle it, while others
were of the view that Pixar‟s culture would prevail to bring about a much needed
change at Disney.

Background Note

Pixar was originally founded in 1979 by Catmull and Alvy Ray Smith (Smith) as the
Graphics Group, of the Computer Division of Lucasfilm Ltd.7 (Lucasfilm) launched in
in the same year. Despite having contributed to successful films such as Star Trek II:
The Wrath of Khan and Young Sherlock Holmes, the group continued to remain
unprofitable. Lucas was not willing to continue with the cash flow losses and stated
that he wanted to focus on creating entertainment products rather than tools. But the
immediate trigger for his interest in selling off this division stemmed from the
personal financial difficulties Lucas was facing due to his 1983 divorce. A sudden
drop in revenues from the Star Wars licenses, following a lukewarm response the
release of Return of the Jedi, also contributed to this situation.

6
“Disney to Acquire Pixar,” www.corporate.pixar.com, January 25, 2006.
7
Lucasfilm Ltd., based in Marin County, California, USA is a film production company
founded by writer/producer/director George Lucas in 1971. It is best known for producing
the Star Wars film series, which comprised of six feature films. Some of the other box
office hits produced/ directed by George Lucas include the Indiana Jones franchise and
American Graffiti. (Source: http://en.wikipedia.org)

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 Pixar’s ‘Incredible’ Culture

In 1986, Pixar was purchased by Jobs, the co-founder of Apple Computer Inc.8
(Apple), for US$ 10 million. Jobs retained Catmull as the president and CEO, and
Smith as the executive vice president and director of Pixar. Jobs served as the
Chairman of the board.
Pixar began as a high-end hardware company with a core product Pixar Image
Computer (PIC). The PIC was a system which was primarily sold to government
agencies and the medical community. Later, Disney became a major buyer of PICs,
using the machine and the custom software to replace the laborious „Ink and Paint‟
part of its 2D animation process by this more efficient automated method. Though
Pixar‟s efforts to show off the capability of its device with short demonstration
animations, such as Lasseter‟s Luxo Jr.9 at the SIGGRAPH10, were well appreciated,
the device met with limited commercial success.
The poor sales of PICs forced Pixar to focus on the animation business and Lasseter‟s
animation department began producing computer-animated commercials for outside
companies. This move met with success as its campaigns for brands such as,
Tropicana,11 Listerine,12 and LifeSavers,13 were huge hits with the audience. In the
late 1980s, Pixar also helped Disney‟s animation division, Walt Disney Feature
Animation, in developing the CAPS,14 a computer-assisted animation post-production
software system.
In 1991, financial constraints forced Pixar to lay off many people in the company‟s
computer department. Smith too left Pixar following a spat with Jobs. In the same
year, Pixar made a US$26 million deal with Disney for the development, production
and distribution of three movies, the first of which was Toy Story, released in 1995.
Toy Story went on to be the highest grossing domestic movie of the year earning
US$192 million in the US and a total of US$362 million worldwide. Pixar‟s initial
public offering (IPO) in November 1995 raised US$140 million. In 1996, Pixar exited
its commissioned commercial business to focus entirely on movies.

8
Apple Computer, Inc., headquartered in Cupertino, California, part of Silicon Valley, is a
well-known manufacturer of innovative, attractively-designed computer hardware and
software such as, iMac and iPod. Apple played a major part in the personal computer
revolution of the 1970s. It was co-founded by Jobs, Steve Wozniak and Mike Markkula.
In 1985, following an internal power struggle at Apple, Jobs was removed from the
company and was on the lookout for new investment opportunities at that time.
9
Luxo Jr. was the first computer-animated short film produced by Pixar in 1986. It featured
two desk lamps, the larger one named „Luxo‟ and the smaller one named „Luxo Jr‟. Luxo
Jr. received an academy award nomination for Best Animated Short Film in 1986. Later
on, Luxo Jr. became the mascot of Pixar and appears in its production logo.
10
SIGGRAPH (Special Interest Group in Graphics) is the name of the annual conference on
computer graphics convened by the ACM SIGGRAPH, a New York-based Association for
Computing Machinery‟s Special Interest Group on Computer Graphics and Interactive
Techniques.
11
Tropicana is a brand of Tropicana Products, a Bradenton, Florida, USA, based company
which is one of the world‟s largest producers and marketers of orange juice. In 1998, it
was bought by PepsiCo, Inc.
12
Listerine is a brand name for antiseptic mouthwash manufactured and distributed by New
York City-based Pfizer Inc.
13
Life Savers is a traditional American brand of ring-shaped mints and fruit-flavored hard
candy. Life Savers was a subsidiary of Kraft Foods before being purchased by the Wrigley
Company in 2004.
14
The Computer Animation Production System (CAPS) is a proprietary collection of
software programs, camera systems and custom desks.

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Enterprise Performance Management

In 1997, Pixar made another deal with Disney for making five original animated
movies. Under this agreement, Pixar was responsible for production while Disney
took care of the marketing and distribution. The arrangement was very profitable for
both companies, and the five feature films collectively grossed more than US$2.5
billion in the US.
But after Toy Story 2, which was released in 2000, disagreements arose between
Disney and Pixar. Originally intended as a straight-to-video release, Toy Story 2 was
upgraded to a theatre release during production. Pixar demanded that the film be
counted in the five picture agreement, but Disney refused on the grounds that the
movie was not an original one. There was also a general feeling at Pixar that the
whole deal was disproportionately loaded in favor of Disney. In January 2004, Disney
and Pixar parted ways. Some analysts attributed this divorce to a clash of egos
between Disney‟s Chairman and CEO Michael Eisner (Eisner) and Jobs.
After the departure of Eisner, in 2005, the two companies tried to reach a new
agreement. Pixar wanted to control production and own the resulting film properties
themselves, giving Disney only the distribution rights in lieu of a 15-20% distribution
fee instead of the earlier agreed terms. It also wanted control over films already in
production under the previous agreement, including The Incredibles and Cars. In late
2005, in a meeting with Jobs, Iger showed his interest in buying Pixar. Subsequently
the deal was struck and on January 24, 2006, Disney announced that it was acquiring
Pixar.
Between 1995 and March 2006, Pixar registered six out of six blockbusters and the six
films grossed more than US$3.2 billion globally, besides winning 19 academy awards.
(Refer Exhibit I for Pixar‟s success story).
Exhibit I
Pixar‟s Success Story*

400
340
350
300
246 256 261
US$ million

250
192
200 163
150
100
50
0
Toy Story A Bug's Toy Story 2 Monsters, Finding The
(1995) Life (1998) (1999) Inc. (2001) Nemo Incredibles
(2003) (2004)
Films (Year)

Source: Susan Wloszczyna, “Pixar Whiz Reanimates Disney,” www.usatoday.com,

March 8, 2006.
* Revenues from North American Box office only.

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 Pixar’s ‘Incredible’ Culture

For the year ended December 31, 2005, Pixar earned US$152.9 million as compared
to US$141.7 million for the year ended January 1, 2005. Its revenue for the year
ended December 31, 2005 was US$289.1 million, as compared to US$273.5 million
for the year ended January 1, 2005. “2005 marks Pixar‟s tenth year as a public
company and, I‟m pleased to report, our most profitable year ever. With the proposed
merger of Pixar and Disney, this will likely be our last report as an independent public
company, and I‟d like to thank every Pixar shareholder for their support over the past
decade in helping us build this amazing company,”15 said Jobs. (Refer Exhibit II for
Pixar‟s key financials – 2005).
In May 5, 2006, the acquisition was completed after Pixar‟s shareholders had given
their approval.
Exhibit II
Pixar‟s Key Financials for the Year 2005
All figures in US$ million, except per share data

Quarter Ended Year Ended

Particulars
Dec 31, 2005 Jan 1, 2005 Dec 31, 2005 Jan 1, 2005
Revenue
Film 51.9 105.6 274.8 260.8
Software 3.7 3.3 14.4 12.6
Total 55.6 108.9 289.1 273.5
Cost of Revenue 4.1 13.3 39.4 29.9
Gross profit 51.6 95.6 249.7 243.6
Net Income 30.9 55.2 152.9 141.7
Earnings per share
Basic 0.26 0.48 1.29 1.25
Diluted 0.25 0.45 1.24 1.19
Source: www.pixar.com.

Pixar‟s Culture - The Early Years

In its early years, Pixar was a tightly knit group of about 40 people, many of whom
had been working together since the 1970s. Alan Deutschman, author of the book,
„The Second Coming of Steve Jobs,‟ describes the group as “a nomadic tribe of high-
tech gypsies moving from one multimillionaire‟s think tank to another‟s”.16
Pixar‟s employees were non-conventional. Many of them would arrive at work by
lunchtime and work late into the night. Some analysts described the culture at Pixar as
“anti-corporate” but even they appreciated the fact that this culture made the company
not only highly productive but also a laid-back fun place to work. They worked in a
shabby office, with employees moving around barefoot, some even bringing their pets
to work. They did not expect to make much money but stuck to their jobs due to its
unconventional atmosphere and with the dream of doing something completely new.

15
“Pixar Reports Record Results for 2005,” www.pixar.com, March 7, 2006.
16
Alan Deutschman, “The Second Coming of Steve Jobs,” 2001.

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Enterprise Performance Management

The company‟s philosophy was to „hire people who are better than we are‟. This was
evident when Catmull and Smith brought in Lasseter, an animator at Disney, in 1984.
Both Catmull and Smith were engineers and realized the need to infuse artistic talent
within the company. Smith later commented, “John was one of the first artists we met
who wasn‟t afraid (of technology).”17
There was also a “No Hero” culture and the team was given precedence over
individuals. “While supervising, you learn that it‟s not about you. It‟s about your team
and about making them successful by giving them the tools, the help and the creative
environment. Sometimes you have to support or criticize other people‟s work. But
retaining the respect of my peers is very important to me. They are so talented and
much smarter than me,”18 explains Dylan Brown, a supervising animator at Pixar.
When Jobs came in, Catmull and Smith tried to keep him away from the Pixar
employees as much as they could, as they had been forewarned about Jobs‟ darker
side. People at Apple who had worked under him felt that Jobs was erratic and
temperamental. Catmull and Smith tried their best to shield their hardworking and
highly motivated group from Jobs. Catmull and Smith preferred to make regular trips
to the NeXT, Inc.19 (NeXT) headquarters in Palo Alto for their monthly meetings with
Jobs, rather than having him come to meet them.
Catmull and Smith also resisted Jobs‟ suggestions to move Pixar to a more
geographically accessible location, closer to the NeXT facility. Jobs‟ public relations
consultant, Andy Cunningham recalled: “Pixar was geographically inconvenient. We
referred to it as the „hobby.‟ When Steve ended up buying Pixar, people thought he
was crazy. The Pixar crowd was always a very tightly knit group, and Steve (Jobs)
didn‟t mess with them because graphics wasn‟t his expertise. These guys were doing
something highly technical, and frankly I didn‟t think that Steve understood it. When
we did the PR. for Pixar, Steve wasn‟t even involved. With NeXT, he would review
every word, every picture. But Pixar was completely run by Ed (Catmull) and Alvy
Ray (Smith).”20
On a rare visit to the Pixar facility, Jobs discovered that the employees were
wandering around barefoot. Some of these employees hardly bathed which Jobs found
reminiscent of his own younger days. He immediately realized that this „merry band‟
(of employees) sensed that they were on a new frontier of filmmaking, and were
committed to doing things “out of the box.” “Pixar vision was to tell stories – to make
real films. Our vision was to make the world‟s first animated feature film –
completely computer synthetic, sets, characters, everything,”21 said Jobs explaining
that he was tuned in to Pixar‟s mission from the very start.

17
Ellen Lee, “The Dynamic Duo Behind Pixar‟s Big Success Lasseter and Catmull Driving
Force Behind Studios‟ Blockbusters,” http://www.sfgate.com, January 29, 2006.
18
Valeria De Napoli, “Pixar Perfect,” www.xpress.sfsu.edu, May 12, 2003.
19
NeXT, Inc. was a computer company, known to the public for its futuristic black hardware,
and to programmers for its outstanding object-oriented development platform. It was
founded by Jobs after he was kicked out of Apple. NeXT merged with Apple on December
20, 1996.
20
Alan Deutschman, “The Second Coming of Steve Jobs,” 2001.
21
Jaffrey S. Young, William L. Simon, “iCON Steve Jobs – The Greatest Second Act in the
History of Business,” 2005.

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 Pixar’s ‘Incredible’ Culture

Pixar‟s employees were loyal and committed to the company even when Pixar was
short of funds during its early years. At times, they had to plead with their peers at
Sun Microsystems, Inc.22 to lend them expensive equipment for free as Pixar could
not afford it. In 1988, when Jobs announced his intention to lay off a significant
number of people, the founders were very distressed as the bonding between the
employees was extremely strong. One of the participants in that meeting described the
decision of laying off the employees as the hardest meeting they ever had and likened
it to a “knife in their guts”.
Analysts opined that Pixar‟s founders, Smith and Catmull, had a profound influence in
nurturing the company‟s unique culture. Even after Smith quit Pixar, in 1991,
following a disagreement with Jobs, many employees felt that Smith had left an
indelible influence on the culture of Pixar. Smith saw himself as a “wild ass hippie”
accustomed to keeping weird hours. He believed that this natural clock called for a
twenty-six hour day. He stayed back late in the evening and acted as the ringleader of
the highly motivated non-conformist group.
After joining Pixar, Lasseter too played his part in fine-tuning the company‟s free-
wheeling culture. A self-professed “kid at heart,” with his trademark Hawaiian T-
shirts, ready laugh and infectious playfulness, he set the tune for the „merry band‟ at
Pixar. Catmull zealously guarded the culture and built on it through various initiatives
such as the Pixar University (PU). Thus, the top management played an active part in
developing the company‟s unique culture right from its early years (Refer Exhibit III
for some people who have shaped Pixar‟s culture …and some who could).
Exhibit III
Some People Who Have Shaped Pixar‟s Culture ... and Some Who Could
Alvy Ray Smith
Smith was a pioneer in computer graphics and the co-founder of Pixar along with
Catmull. They worked together at the computer division of LucasFilm on computer
graphics software, including early renderer technology. After the acquisition of
Pixar by Jobs, Smith moved onto the Pixar board of directors as a founding
member.
Smith considered hinmself a “wild ass hippy” - he had actually lived as a hippy for
a while after finishing his doctorate in mathematics from Stanford. His
unconventional lifestyle and approach towards work coupled with his sincereity
made him a much loved person at Pixar. He was a ringleader for the tight-knit
group, often working late into the evening. Together with Catmull, he helped
protect and nurture Pixar‟s unique culture. Though he left Pixar as early as 1991,
he left an indelible influence on the culture of the company.
Edwin E. Catmull
Catmull was the co-founder of Pixar. In his early years he was inspired by Disney
movies and dreamt of becoming an animator. But due to his limitations in drawing
skills, he instead focused on computer science programs at the University of Utah.
After leaving university, Catmull founded the Computer Graphics Lab at the New
York Institute of Technology. In 1979 he went to work for Lucasfilm. At

22
Sun Microsystems, headquartered in Santa Clara, California, in Silicon Valley, is a vendor
of computers, computer components, software, and information-technology services. It
was founded in 1982.

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Enterprise Performance Management

Lucasfilm he helped develop digital image compositing technology, used to

combine multiple images in a convincing way. At Pixar, Catmull was a key
developer of the RenderMan rendering system.
Over the years, Catmull has zealously guarded the unique culture of Pixar. Though
his personality traits were very different from Smith, he understood the importance
of the unique culture at Pixar and helped enhance it. He was instrumental in setting
up the Pixar University, which is considered by many as the most distinguishing
feature of Pixar‟s culture. As of May 2006, he was the president of the the Disney-
Pixar Studios. He was also in the steering committee that was formed with the
mission of protecting and spreading the Pixar culture at Disney.
John A. Lasseter
Lasseter was brought into the Computer Division of Lucasfilm by Smith and
Catmull in 1984. After graduating from the California Institute of the Arts, he
joined Disney. He was soon disillusioned by the rigidity and bureaucracy of
Disney. His love for 3-D animation made him join the Computer Division of
Lucasfilm.
Many analysts consider him to be the main influence behind Pixar‟s unique culture.
They credit him with developing the unique free-wheeling culture that was also
very productive. Lasseter who is considered by many as the “current Walt Disney”,
thinks of himself a “kid at heart.” Many analysts felt that he could bring back the
magic to Disney. His uncoventional and highly lovable personality traits made him
a big hit with employees at Pixar. As of May 2006, he was the Chief Creative
Officer of the Disney and Pixar animation studios. He was also in the steering
committee that was formed with the mission of protecting and spreading the Pixar
culture at Disney.
Steve Jobs
Some analysts believed that Job‟s biggest contribution to the unique culture at
Pixar was his decision of not to touch it. From the very beginning Jobs has been an
absentee owner at Pixar. They felt that that was because he did not know much
about animation. Whatever was the reason, in his absence, the Pixar culture
flourished.

But with Disney‟s acquisition of Pixar, his role in protecting Pixar‟s culture
became crucial. Being the largest individual shareholder at Disney, he had the
necessary clout to ensure this happened. He was also in the steering committee
formed with the mission of protecting and spreading the Pixar culture at Disney,
and had announced that Pixar culture would be spread in at least some areas of
work at Disney.
Robert Iger
Analysts opine that the future of Pixar‟s culture could also depend to a large extant
on Iger, Disney‟s CEO. Though Iger has pledged to protect and embrace the
culture, it is possible that the difference in cultures between the two companies
might be too difficult to bridge. Disney‟s bureaucratic structure and its tendency
towards micro-managing could lead to the end of the Pixar culture or an exodus of
talented people from the company. Iger was also a member of the steering
committee that was formed with the mission of protecting and spreading Pixar‟s
culture within Disney.
Compiled from various sources.

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 Pixar’s ‘Incredible’ Culture

Pixar‟s Workplace Culture

Pixar‟s phenomenal success in its relatively short history was an eye-opener for the
industry. Between 1995 and May 2006, it won 19 academy awards, and in the process
reinvented the art of animation. Analysts were of the view that Pixar with its 730 odd
employees had garnered a reputation as a place where creative genius thrived, and had
far outpaced the bigger and more institutionalized Disney in the years preceding the
acquisition. “For us now, the high-water mark is Pixar. I remember just a few years
ago when students wanted to go to work for Disney. Now they want to go to Pixar,”23
said Dug Ward (Ward), manager of the Animation Workshop at the University of
California in Los Angeles film school. Analysts attributed Pixar‟s success to its
distinctive approach to the workplace, which was in stark contrast to the Hollywood24
model.

No Employment Contracts
In the typical Hollywood setup, an ad hoc collection of actors, producers and
technicians were brought together for a film and then disbanded once the project was
over. The contract system was very much in vogue and professionals moved from one
project to another. Though business experts hailed this approach as the flat,
decentralized “corporation of the future”, offering maximum flexibility, it did not
build any loyalty.
The Pixar model was just the opposite. The tightly knit group at Pixar were employees
of the company; they had a long-term affiliation with the company instead of a one-
time contract, and they had stock options as well. They were a part of a team
contributing across the studio, rather than to just their own projects. They learned
from one another and strove to improve with every production. According to Randy
Nelson (Nelson), the dean of the PU, the Pixar model reflected a specific critique of
the industry‟s standard practice. He explained: “Contracts allow you to be
irresponsible as a company. You don‟t need to worry about keeping people happy and
fulfilled. What we have created here - an incredible workspace, opportunities to learn
and grow and, most of all, great co-workers - is better than any contract.”25

People-centered Business Model

Pixar‟s business model was people-centered - another departure from the idea-
centered model of Hollywood. Typically in an idea-centered approach, everything
revolves around the script whereas at Pixar, people were the pivots around which
everything revolved. “Computers don‟t create computer animation any more than a
pencil creates pencil animation. What creates computer animation is the artist,”26 said
Lasseter. Catmull explained, “If you have a great idea, and you give it to the wrong
people, they‟ll screw it up. If you have the wrong idea, and you give it to the right

23
Yuki Noguchi, “Pixar‟s Magic Touch,” www.washingtonpost.com, January 25, 2006.
24
Hollywood is a district of the city of Los Angeles, California, USA. “Hollywood” is often
used as a metonym for the American film and television industry, because of its historical
significance of being the center for famous motion picture studios and movie stars.
(Source:http://en.wikipedia.org/wiki/Hollywood)
25
William C. Taylor and Polly LaBarre, “Pixar Brings to Hollywood an Upside-down
Hollywood Model,” www.iht.com, January 29, 2006.
26
Ariella Budick, “Pixar as Art ,”www.jsonline.com, Dec. 27, 2005.

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Enterprise Performance Management

people, they‟ll fix it... So what‟s our priority going forward? Is it finding good ideas?
No. It‟s finding the right people.”27
This approach kept the employees interested as well as motivated. Moreover, the
“we‟re-all-in-this-together” workplace and the hands-off management style had the
additional benefit of providing emotional support and helped overcome creative
setbacks that were common in projects that ran over several years.

Culture of Innovation
According to Catmull the culture of innovation in Pixar came from the realization that
they could not be complacent and had to always stay ahead of the curve, as
competitors were quick to copy any new steps that were successful. Employees were
encouraged to think in terms of steps. Each new movie was likened to a stepping stone
where one could learn and try out new things to find out what worked and what did
not. Intense self-scrutiny ensured that Pixar benefited from all the experiences. “At the
end of each feature we do a brain dump. It‟s not a matter of blame for things that went
wrong; it‟s a candid self-assessment. Out of this self-assessment we come up with an
operating theory for the next film. During the next film we‟ll fix those problems, and
we‟ll discover new ones. You can never perfect the process,”28 said Catmull.
The employees were totally committed to the quality of the products they were
producing. For instance, when they were not satisfied with some parts of Toy Story 2,
they re-worked the whole movie despite tremendous time constraints. “You just have
to do your very best. Your success can‟t be a function of somebody else screwing up.
We‟re pleased when other people have successes too,”29 said Nelson.
Pixar believed in perfecting every detail in every production. Pixar‟s employees
realized the need for a full understanding of the world they were trying to animate.
Before every movie, the crew spent enough time trying to grasp fully the nature of the
environment and the characters in the production. Lasseter said, “I tell people that the
eye just isn‟t going to notice it, but they‟re going to feel it. They‟re going to notice it
if it wasn‟t there. It won‟t feel real.”30 Analysts felt that this eye for detail resulted in
flawless animations that appeared to raise the bar with each new film.
Pixar was also credited with bringing adult emotional appeal to a traditional medium
meant for children. This was possible due to its strong focus on the story. “We used to
be proud of ourselves for saying story is king, story is king. After a while, we realized
everybody else was saying the same thing too. People repeat what you say. But what‟s
nice, from a competitive point of view, is that they don‟t repeat what you do,” said
Catmull.31 Brad Bird (Bird), director of The Incredibles added, “My friends from 2-D
animation thought I was selling out to 3-D when I came to Pixar. I told them, Look,
I‟m not going to Pixar to work on computers. I‟m going because I know they will
protect and nurture the most important thing I‟ve got: my story.”32

27
Justin Martin and Ed Catmull, “Inside The Pixar Dream Factory a Co-founder of the
Studio that Brought us Monsters, Inc. Talks about the Cult of Innovation,”
www.money.cnn.com, February 1, 2003.
28
Justin Martin and Ed Catmull, “Inside The Pixar Dream Factory a Co-founder of the
Studio that Brought us Monsters, Inc. Talks about the Cult of Innovation,”
www.money.cnn.com, February 1, 2003.
29
“How Pixar Conquered the Planet,” www.arts.guardian.co.uk, November 12, 2004.
30
Richard Saethang, “A Blueprint for Perfection,” www.usc.edu, Spring, 2006.
31
“How Pixar Conquered the Planet,” www.arts.guardian.co.uk, November 12, 2004.
32
Austin Bunn, “Welcome to Planet Pixar,” www.wired.com, June 2004.

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 Pixar’s ‘Incredible’ Culture

“Hire People Who Are Better Than We Are”

In the early days, people were carefully chosen to fit into the culture of Pixar. Later
on, time constraints posed by tight production schedules led to the tendency to hire
people who had reached a certain skill level, people who assuredly could do the job.
Pixar changed this mindset and started hiring people who were on the „growth-curve‟
in their careers. They also started hiring based on potential rather than their position
with their existing employer.
Their corporate philosophy was to “hire people who are better than we are.” Industry
watchers noted that when Lasseter hired Andrew Stanton (of Toy Story fame), Stanton
could do things that Lasseter could not. When Bird was hired, he could do things that
other people in the firm could not. This was a departure from the general tendency of
managers to hire down because they didn‟t want to be threatened.
Pixar also changed its approach and was not afraid to hire people whose work culture
was quite different from the one at Pixar. In fact, the outspoken and high-spirited Bird
was deliberately hired by Pixar as they thought that he would be an unsettling
influence on the team at Pixar. Bird who called himself “the first virus let into this
climate-controlled atmosphere”, recalled the words of Jobs, Lasseter, and Catmull
when they approached him for the job: “„The only thing we‟re afraid of is getting
complacent. We need to bring in outside people so we keep throwing ourselves off
balance,‟ So I was brought here to cause a certain amount of disruption. I‟ve been
fired for being disruptive several times, but this is first time I‟ve been hired for it.”33
Preventing Burnout
Pixar realized that the nature of the work done by its employees took a lot out of them
and lack of replenishment would lead to burnout and hamper the quality of work. So
Pixar took care to prevent burnout and help their employees enjoy a long and
productive career. Employees were given periodic breaks to recharge their batteries.
There was a soccer field, volley ball courts, a gym, and an Olympic-size pool inside
the compound and a badminton court in the lobby. Classes in Yoga,34 T‟ai Chi,35 and
Pilates36 were also conducted for the general well being of the employees. Pixar also
boasted a full-time dedicated ergonomics expert to make sure that people had
comfortable workplaces and that their computer keyboards were in the optimal
position. Doctors and masseuses visited the compound once or twice in a week so that
employees could identify any potential problems early on, and take steps to minimize
further aggravation of the problem.
“No Hero” Culture
Though there were various star performers in Pixar, there was a “No Hero” culture.
The team was always given preference. The company recognized that moviemaking
was a collaborative process, and when a project succeeds, it wasn‟t usually due to any
one person‟s contribution. (Refer Exhibit IV for the Pixar process). Though the star
performers got higher salaries and received larger blocks of options, when a film did
well, everybody would be given a bonus.

33
Austin Bunn, “Welcome to Planet Pixar,” www.wired.com, June 2004.
34
Yoga is an ancient system of practices that originated in India. It uses specific postures and
breathing exercises, which are aimed at integrating the mind, body and spirit, inorder to
enhance the health and well-being of the individual. (Source: www.nature.com)
35
T‟ai Chi, is an internal Chinese martial art comprising of a series of meditative and self-
healing movements. The study of Tai Chi involves three primary subjects – health,
meditation and martial arts.
36
The Pilates is a physical fitness system that was developed in the early 20th century by
Joseph Pilates. It is an exercise program that focuses on the core postural muscles that help
keep the body balanced and are essential to providing support for the spine. (Source:
http://en.wikipedia.org)

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Enterprise Performance Management

Exhibit IV
The Pixar Process
A Story Idea is Pitched
A Pixar employee pitches his or her idea to other members of the development
team. The real challenge for the employee is to get the audience to believe in the
idea and see the possibilities in it.

The Text Treatment is Written

A treatment is a short document that summarizes the main idea of the story.
Sometimes, many treatments of the same idea will be developed in order to find the
right balance between ideas and open possibilities, which will be filled in later by
development and storyboard artists.

Storyboards are Drawn

Storyboards are like a hand-drawn comic book version of the movie and serve as
the blueprint for the action and dialogue. Each storyboard artist receives script
pages or/a “beat outline,” a map of the characters‟ emotional changes that need to
be seen through actions. Using these as guidelines, the artists envision their
assigned sequences, draw them out and then pitch their work to the director.

Voice Talent Begins Recording

At first, temporary “scratch” voices are recorded by Pixar artists for the storyboard
reels. Later, when the story and dialogue are further along, professional actors
begin recording the character voices, reading from a script and improvising. Actors
must record lines several different ways, and the best reading is eventually
animated. If scratch voices are good, they are not replaced.

Editorial Begins Making Reels

A reel is a videotape that allows the cleaned up storyboard sequence to stand alone,
without a pitch person to tell the story. A pitch can be successful because the
storyteller is strong, so reels are essential steps to validate the sequence and are the
first instance that the “timing” of the sequence is understood. Editorial uses the
information to fix the length and other elements of each shot in a sequence.

The Art Department Creates the Look and Feel

Based on the initial text treatment, storyboard and their own creative brainstorming
and development work, the art department creates inspirational art illustrating the
world of the movie and the characters. It also creates sets, props, visual looks for
surfaces and colors and “color scripts” for lighting, which are impressionistic pastel
illustrations that emphasize the light in scenes.

Models are Sculpted and Articulated

Using the art department‟s model packet – a set of informational drawings – the
characters, sets and props are either sculpted by hand and then scanned in three-
dimensionally, or modeled in 3-D directly on the computer. They are then given
“avers” or hinges, which the animator will use to make the object or character
move.

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 Pixar’s ‘Incredible’ Culture

The Sets are Dressed

After the sets are built in 3-D they must be dressed in prop models, such as chairs,
curtains and toys, to create a believable world. Set dressers work closely with the
director to ensure that the director‟s vision for the environment is being realized.

The Shots are Laid Out

Translating the story into 3-D scenes, the layout crew choreographs the characters
in the set and uses a virtual camera to create shots that capture the emotion and the
story point of each scene. Layout often produces multiple versions of shots to
provide the editorial department with choices for cutting the scene for maximum
storytelling effect. Once the scene has been cut, the final version is released to
animation.

The Shot is Animated

Pixar‟s animators neither draw nor paint the shots, as is required in traditional
animation. Because the characters, models, layout, dialogue and sound are already
set up, animators are like actors or puppeteers. Using Pixar‟s animation software,
they choreograph the movements and facial expressions in each scene. They do this
by using computer controls and the character‟s avars to define key poses. The
computer then creates the “in-between” frames, which the animator adjusts as
necessary.

Sets and Characters are Shaded

The shader is separate from the surface to which it is attached, i.e., the shape is
determined by the model, while the surface colour and texture is determined by the
shader. The shading process is done with “shaders,” software programs that allow
for complex variations in the color or color shaping. This process allows the color
to shift in different lighting.

Lighting Completes the Look

Using “digital light,” every scene is lit in much the same manner as stage lighting.
Key, fill and bounce lights and room ambience are all defined and used to enhance
the mood and emotion of each scene. Lighting takes the inspiration from the moody
color scripts created by the art department.

The Computer Data is “Rendered”

Rendering is the act of translating all of the information in the files that make up
the shot – sets, colors, character movement, etc. – into a single frame of film.
Pixar‟s Renderfarm is a huge computer system that interprets the data and
incorporates motion blur. Each frame represents 1/24 of a second of screen time
and takes about six hours to render, though some frames have taken as many as 90
hours.

Final Touches are Added

Editorial oversees the completion and addition of the musical score and the sound
effects. Effect animation adds special effects. And the photoscience department
records the digital frames to film or to a form appropriate for digital projection.
Source: www.pixar.com.

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 Enterprise Performance Management

Analysts noted that the hallmark of Pixar‟s culture was that they recognized both the
artistic side and technical side as being equally important. In other places generally
one group was given priority over the other. The decision makers at Pixar felt that
when either the artistic or the technical side dominated, it was unhealthy and could be
counter-productive for the organization. “One thing that‟s unique about our culture, I
think, is that we recognize that the artistic side and technical side are equal. We‟ve set
it up so that each has the potential to earn the same compensation. We have had
threats to that structure in the past. We‟ve hired people, for example, who have tried
to bring in the class structure of other places. But we‟ve kept the culture at parity, and
that‟s healthy, I think,”37 said Catmull.

The Organization Structure

Pixar‟s organization structure had three parallel groups - technology development,
creative development, and production. Catmull encouraged and insisted that these
groups talk to each other constantly. As a result, there was open communication
between these groups and the system worked very well. For instance, a producer of a
scene could deal with the animator without having to go through higher-ups first. Or a
technologist could talk directly to the director if he had an idea for a new visual effect.
The system worked so well that reportedly the U.S. Navy sent some top organizational
experts to Pixar to look for ideas to improve communication within its own
organization. (Refer Table I for a schematic diagram of the open communication
between different groups at Pixar).
Table I
Schematic Diagram of the Open Communication between different
Groups at Pixar

Technology Development Creative Development Production

Delivers computer-graphics Concocts stories and Coordinates the whole
tools characters and animates them filmmaking process

The three parallel interactive groups

Open flow of communication

Adapted from Brent Schlender, “Incredible: The Man Who Built Pixar‟s Innovation Machine,”
www.money.cnn.com, November 15, 2004.

37
Justin Martin and Ed Catmull, “Inside The Pixar Dream Factory a Co-founder of the
Studio that Brought us Monsters, Inc. Talks about the Cult of Innovation,”
www.money.cnn.com, February 1, 2003.

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 Pixar’s ‘Incredible’ Culture

Short Films as a Training Ground

Though Pixar had many successful movies to its credit, it still made short films.
According to the company, such films were produced for training purposes and to try
out new technology without the risk of a major failure. If the experiment was a
success, it could be used in the movies, if it failed, the people could be wiser from that
experience. The new technologies developed in such short films were used in movies
such as The Bug‟s Life and Finding Nemo.

Art as a Team Sport

Pixar succeeded in making art a team sport, marked by collaborative action where
everybody helped and even rescued the other. According to Bird, directors looked
over each others work and helped each other to sharpen the knife without imposing
their tone or style. At Pixar, all the employees were encouraged to be a part of the
filmmaking process.
This unique atmosphere also helped Pixar retain talent. Sarah McArthur, executive
vice-president of Pixar production, commented, “We have the lowest turnover rate in
Hollywood history. People just don‟t leave. That‟s one of the things I‟m most proud
of. We created the studio we wanted to work in. We have an environment that‟s really
open, a culture that‟s wacky. It‟s a creative brain trust: It‟s not a place where I make
my movies – it‟s where a group of people make movies.”38

The Habitat

The physical environment of the workplace, which Pixar called the „Habitat,‟ was
distinctive. The outside of the main building had a curved metal roof so that it
resembled an airplane hangar. It was surrounded by a large expanse of green space.
Visitors were greeted by life-size versions of characters from Pixar‟s movies. The
office was also decorated with different types of toys.
In the centre of the custom-designed building lay an open, inviting common area in
the building‟s main atrium where the employees could meet with each other. It served
as the main reception, eating area and market square. It also had the main cafe and a
number of coffee shops, employee mailboxes, pool and foosball tables39. To get
anywhere, and to eat, the employees had to go across this place. “Anybody needs to
be able to talk to anybody else. Creativity doesn‟t follow titles, it just comes from
where it comes from. You‟ll make chance encounters. You don‟t have to arrange to
see somebody. You‟ll cross them in the hall, stop and have a discussion, talk about
something you haven‟t had time to talk about, and that can change the course of
things,”40 explained Catmull. For this reason, Jobs even insisted for just a single wash
area for the 700-odd employees.

38
Marc Graser, “Pixar‟s Payday: Toon Town Teaches H‟wood a Lesson,” Variety magazine,
December 22, 1999.
39
Foosball is also known as Table Soccer, Table Football or Tournament Soccer. A foosball
table can vary in size, but is typically about 4 feet long and 2 feet wide. The table usually
contains 8 rows of soccer players, which are plastic figures mounted on horizontal bars.
Each team controls 4 rows of figures, and teams of 1 or 2 human players compete to kick
the plastic foosball into the opponent‟s goal.
40
Chris Warren, “Innovation Inc.,” www.americanwaymag.com, December 15, 2004.

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Enterprise Performance Management

The animation department and individual offices were highly customized to reflect the
tastes and interests of the people who worked in them. Instead of bland cubicles,
animators worked in decorated open-fronted mini-cottages. For instance one such
mini-cottage was in the shape of a castle and housed a native of Scotland. Employees
moved around the office on foot-propelled scooters. Seeing employees roller-skate
and skateboard through the halls was not uncommon. Office dressing was casual with
not a tie in sight.
The company recognized that the right office environment could help nourish and
sustain a creative culture and thus the environment and the routines of Pixar were
designed to foster the creative impulses of the employees.

The Pixar University

According to Professor Sir Ken Robinson, internationally-renowned expert in the field

of creativity and innovation in business and education, the most distinctive features of
Pixar‟s organizational culture was the PU. This was a continuing program of lectures,
workshops, courses and events that went on every day at the Pixar facility. The unit
was headed by Nelson whose prime responsibility was to help the employees express
their creative ideas, collaborate among themselves, and meet project deadlines. As of
January 2006, PU offered more than 110 courses, including a complete filmmaking
curriculum, classes on painting, drawing, sculpting, and creative writing. According to
Nelson, these courses were the equivalent of an undergraduate education in fine arts
and the art of filmmaking. Classes were offered in diverse skills such as
improvisation, storytelling, and even karate, juggling, and belly dancing. Every
employee took at least half a dozen or so courses in a year.
The PU was started in 1997, when Catmull asked Nelson to start an internal education
program, on the lines of what Disney did in the 1930s and 1940s. What they came out
with was really unique and Catmull considered it his proudest achievement.
According to Nelson, they had to continuously ask themselves how to make art a team
sport. One of the initiative was to get all the employees, even those who never had to
pick up a pencil to perform their job - shade technicians, programmers, and
executives, including Catmull, together - to draw out sketches in a drawing session.
“So this is Pixar: people taking their lunch hour (two, actually) to risk looking
talentless in front of each another and the boss,”41 said Austin Bunn, a freelance writer
based in New York.
Once the initial anxiety about revealing themselves through their works was over, the
employees came out with their minds opened. “You get over the embarrassment (of
showing your work) because you‟re doing it everyday, everybody is doing it. When
you get over the embarrrassment, you become more creative,”42 said Catmull. The
system prompted them to be more willing to take risks - a vital component of
creativity. Nelson explained: “If you don‟t create an atmosphere in which risk can be
easily taken, in which weird ideas can be floated, then it‟s likely you‟re going to be
producing work that will look derivative in the marketplace. Those kind of irrational
what-ifs eventually lead to something that makes you go, „Wow, I never would have
thought about it.‟”43

41
Austin Bunn, “Welcome to Planet Pixar,” www.wired.com, June 2004.
42
Chris Warren, “Innovation Inc.,” www.americanwaymag.com, December 15, 2004
43
Jessi Hempel, “Pixar University: Thinking Outside the Mouse,” www.sfgate.com, June 4,
2003.

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 Pixar’s ‘Incredible’ Culture

All employees were entitled to spend 4 hours each week of paid work time taking part
in the Pixar University. Participation wasn‟t limited to the „creatives‟; it was open to
all staff, at every level and in all functions of the company. The courses they took did
not have to have any direct relation to their work. They took whatever caught their
interest. According to Nelson, these classes are not considered as a break from the
routine, or perks for a creative workplace, but an important part of the job itself. The
idea was to make art a team sport by having people do it together and fail publicly at
it. Nelson commented: “You have to honor failure because failure is just the negative
space around success.”44
The program had two major purposes and benefits. Firstly, it provided a constant flow
of new ideas and experiences that enriched the individual lives and minds of the staff
and this made Pixar a more attractive company to work for. The process also fed the
creative culture of the organization as a whole. Secondly, it promoted direct personal
contact and informal communication across the company. “The skills we develop are
skills we need everywhere in the organization. Why teach drawing to accountants?
Because drawing class doesn‟t just teach people to draw. It teaches them to be more
observant. There‟s no company on earth that wouldn‟t benefit from having people
become more observant,”45 said Nelson.
According to Nelson, the PU‟s primary objective was to build morale, spirit and
communication among employees. Some analysts felt that the enabling resources and
management support for these courses sent out a signal that creativity matters, is
encouraged, and may be rewarded. It also showed that creativity can involve moving
beyond one‟s starting skill set, whether on an individual basis or in combining people
with different starting skill sets into teams. Apart from offering various creativity-
enhancing activities, the PU contributed to the company‟s human resources policy by
promoting employee retention. Nelson said: “If you could create good filmmakers
who would work here for 25 years, their first five years of film would be really good;
their next five years would be amazing. By the time these people worked together for
25 years, you would just not believe the things that would happen.”46

Some Criticisms

Though Pixar‟s unique culture has earned it lot of accolades, some critics felt that
there was a downside to such a strong internal culture. According to them, any strong
internal culture, even one designed to promote collaboration and creativity could turn
into a disadvantage for the company. They believed that a self-contained organization,
such as Pixar, without links to external perspectives could encourage homogeneous
values and an insular view of the world. This in turn had the potential to discourage
the criticism or controversy that was often useful in information technology and
creative practices (ITCP).
Others felt that Pixar‟s policy of retaining the same team over the years could lead to
stagnation of thought and ideas. They believed that its organizational culture and its
reliance on the same core group of animators were not necessarily a good thing. If its
movies failed at the box office because people got bored with the Pixar-style movie,

44
Austin Bunn, “Welcome to Planet Pixar,” www.wired.com, June 2004.
45
William C. Taylor and Polly LaBarre, “Pixar Brings to Hollywood an Upside-down
Hollywood Model,” www.iht.com, January 29, 2006.
46
Jessi Hempel, “Pixar University: Thinking Outside the Mouse,” www.sfgate.com, June 4,
2003.

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Enterprise Performance Management

Pixar would be blamed for relying too much on the same core group of people - unlike
other Hollywood companies who constantly circulated new creative talent through the
production process.

OUTLOOK

With the acquisition of Pixar, Disney would have to figure out how to bring together
the two biggest names in animation without diminishing either. Iger was of the
opinion that Disney would benefit from embracing the culture of Pixar. “I‟m very
sensitive to what can happen when a company gets bought. I‟m really deeply
committed to seeing to it that Pixar is allowed to exist in the form it existed,”47 he
said.
A steering committee consisting of Catmull, Lasseter, Jobs, Iger, Cook, and Tom
Staggs, Disney‟s Chief Financial Officer, was set up with the objective to maintain
and spread Pixar‟s culture within Disney. The committee planned to meet at the Pixar
headquarters at least once every two months. As a part of the deal, it was also agreed
upon that Pixar‟s HR policies would remain intact, including the lack of employment
contracts.
Nevertheless some analysts had doubts as to whether the two companies could work
together given the difference in cultures. In their opinion, Disney represented the “old
media conservatism” and had a stolid culture whereas Pixar was the epitome of
innovativeness with its free-wheeling culture. The difference between the two cultures
was palpable and could be difficult to bridge. They feared that Pixar‟s free-wheeling
culture and innovative streak would be hampered. “Sometimes, entrepreneurial and
creative types have a hard time fitting into a corporate culture, especially one as
traditional as Disney,”48 said Fred Lipman of Blank Rome LLP.49 “A fear a lot of us
have is . . . if Disney takes over Pixar and micromanages every detail, they will
strangle the golden goose,”50 said Ward. Critics argued that it was Disney‟s rigidity
that prompted talented people like Lasseter to quit and join Pixar.
In such circumstances, a steering committee could do little to preserve a culture. Some
analysts suggested that Pixar should be looking at cultural adaptation rather than
preservation as preserving a culture only made sense if the new situation still
warranted that culture. They also felt that major changes in a company require a
sensitive acknowledgment that things had changed, a period of coping, and then a
careful adaptation of the culture to include its essence while honestly evaluating what
would no longer work in the new environment
The big challenge for Pixar now would be to adjust to life under a new owner and also
sustain its enviable record at the box office. Analysts felt that the onus lay on Disney
to keep the Pixar people happy as the equipment alone would be of little use. Disney
needed to realize that the startup costs for the “next Pixar” would be minimal and the
need for keeping the talent happy was paramount. They felt that if Disney tried to
impose its culture on Pixar, it could prompt the best talents to pack up and go
elsewhere.

47
Yuki Noguchi, “Pixar's Magic Touch,” www.washingtonpost.com, January 25, 2006.
48
“Disney‟s Gambit on Pixar,” www.oligopolywatch.com, January 26, 2006.
49
Blank Rome LLP is a law firm in Philadelphia, USA, specializing in the field of mergers
and acquisitions.
50
Yuki Noguchi, “Pixar‟s Magic Touch,” www.washingtonpost.com, January 25, 2006.

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 Pixar’s ‘Incredible’ Culture

Some analysts felt that Jobs would be able to ensure Pixar‟s independence. As long as
he remained interested in it, Pixar culture would be safe. Otherwise, it could be
weighed down by the bureaucracy of Disney, and Pixar‟s quality of work would
suffer.
A few other analysts said that acquiring Pixar represented a big strategic shift at
Disney - a shift that could have far-reaching implications on the very way the industry
worked. Specifically, how major studios organized talented people to do their best
work. Steve Anker, dean of film and video at the California Institute of Arts
commented, “I would hope that the odds are Pixar will change Disney more than vice-
versa.” He added, “I think Disney is getting the better part of the deal.”51
In some ways, the coming together of Disney and Pixar was a sort of return to the
roots for Pixar. According to some analysts, Pixar‟s culture was in many ways very
close to the historical Disney culture which had a strong focus on story and a real
sense of cultivating the individual talents of employees. “It (Pixar) felt like the way
Disney used to be, the same culture I had enjoyed so much when I was a kid,” 52 said
Floyd Norman, a story artist who worked under Walt Disney in Jungle Book, then
later joined Pixar to produce Toy Story 2.
“Pixar‟s culture of collaboration and innovation has its roots in Disney Animation.
Our story and production processes are derivatives of the Walt Disney „school‟ of
animated filmmaking. Just like the Disney classics, Pixar‟s films are made for family
audiences the world over and, most importantly, for the child in everyone. We can
think of nothing better for us than to continue to make great movies with Disney,”53
said Catmull. Lasseter said it was the magic of Disney that influenced many of the
employees including himself, to pursue their dreams of becoming animators, artists,
storytellers, and filmmakers. Pixar animators acknowledged that Disney had helped
them to develop their talents through the seven-year co-production partnership that
ended in 2004. Animation industry historian Jerry Beck commented, “(Pixar) led the
field in a way that no one has, since Walt Disney‟s time. I think there is going to be a
sense of mission here, a renewed purpose: „We already conquered CG (computer
generated) films, now let‟s return and restore Disney to what it was when I was a
kid‟.”54
Nevertheless, some analysts were keeping their fingers crossed regarding the future of
this acquisition itself. They felt that though everything seemed to be hunky dory at the
moment, the very presence of the outspoken and overbearing Jobs on the Disney
board might lead to conflicts in the relationship.

51
Ellen Lee, “The Dynamic Duo Behind Pixar‟s Big Success,” www.sfgate.com, January 29,
2006.
52
Ellen Lee, “The Dynamic Duo Behind Pixar‟s Big Success,” www.sfgate.com, January 29,
2006.
53
“Disney to Acquire Pixar,” www.corporate.pixar.com, January 25, 2006.
54
“Disney, Pixar Trying to Work Together,” http://movies.yahoo.com, May 9, 2006.

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Additional Readings & References:

1. Marc Graser, “Pixar‟s Payday: Toon Town Teaches H‟wood a Lesson,” Variety
Magazine, December 22, 1999.
2. Alan Deutschman, “The Second Coming of Steve Jobs,” 2001.
3. Justin Martin and Ed Catmull, “Inside The Pixar Dream Factory a Co-founder of the
Studio that Brought us Monsters, Inc. Talks about the Cult of Innovation,”
www.money.cnn.com, February 1, 2003.
4. Valeria De Napoli, “Pixar Perfect,” www.xpress.sfsu.edu, May 12, 2003.
5. Jessi Hempel, “Pixar University: Thinking Outside the Mouse,” www.sfgate.com,
June 4, 2003.
6. V Sarvani, A Mukund, “Steve Jobs – The Silicon Valley Pioneer,” www.icmr.icfai.org,
2003.
7. Austin Bunn, “Welcome to Planet Pixar,” www.wired.com, June 2004.
8. “Innovation Inc,” www.evelynrodriguez.typepad.com, June, 2004.
9. “How Pixar Conquered the Planet,” www.arts.guardian.co.uk, November 12, 2004.
10. Chris Warren, “Innovation Inc.,” www.americanwaymag.com, December 15, 2004.
11. Ken Robinson, “Innovation on Demand,” www.criticaleye.net, March-May, 2005.
12. Ariella Budick, “Pixar as Art,” www.jsonline.com, December 27, 2005.
13. Jaffrey S. Young, William L. Simon, “iCON Steve Jobs – The Greatest Second Act in
the History of Business,” 2005.
14. Tom Hormby, “The Pixar Story: Dick Shoup, Alex Schure, George Lucas, Steve
Jobs, and Disney,” www.lowendmac.com, January 23, 2006.
15. “Disney to Acquire Pixar,” www.corporate.pixar.com, January 25, 2006.
16. Yuki Noguchi, “Pixar's Magic Touch,” www.washingtonpost.com, January 25, 2006.
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24. Richard Saethang, “A Blueprint for Perfection,” www.usc.edu, 2006.
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