Ed Catmull explains how smart leadership sparks creativity

Think:Act Magazine “Sustainability”
Ed Catmull explains how smart leadership sparks creativity

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Think:Act Magazine

Munich Office, Central Europe
March 24, 2021

How management should encourage creativity


by Neelima Mahajan
photos by Chris Crisman

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Ed Catmull pushed Pixar Animation Studios to achieve cutting-edge creativity by leading with a management style to match. He speaks to Think:Act about the critical roles of ownership, trust and open communication in building a creative powerhouse.

A portrait of co-founder of Pixar Animation Studios Ed Catmull. © Chris Crisman
"If a powerful person talks, they're setting the tone in the room. And we don't want them to set the tone."

Ed Catmull

Pixar Animation Studios

Ask Pixar co-founder Ed Catmull what goes into running an innovative organization and he will list the same ingredients behind his recipe for creativity: radical honesty, trust and the willingness to take risks. His roll call of companies – Pixar, Walt Disney Animation Studios and Disneytoon Studios – bears witness to his dedication to the creative and commercial development of computer animation which has won him glowing accolades including Oscars and the Turing Award. In a wide-ranging conversation, he shares how Pixar fostered a working environment that put the company at the cutting edge of digital animation – and made its films box office gold.

At Pixar, you created an organization brimming with creativity – what most only dream of. How did you set about putting a creative culture in place?

The first part, before we made any films, was the recognition that this group – on the technical side – was very creative. When we added our artistic and storytelling people, we paid a lot of attention to ensure that they came in as equal partners. That's still the way it is today. I had observed a lot of companies where they didn't pay attention to a class structure inside their company, or they made bad assumptions about what worked or what didn't work. So it became very important for me, as we started, to be very introspective, to examine how we were doing and to challenge our assumptions.

How does that work in terms of the kind of structures or policies you put in place?

Ed Catmull

Ed Catmull is co-founder of Pixar Animation Studios and the former president of Pixar, Walt Disney Animation Studios and Disneytoon Studios. The former vice president of Industrial Light and Magic's computer graphics division, his pioneering work in computer animation was honored with a lifetime achievement award from the Academy of Motion Picture Arts and Sciences in 2009. His book, Creativity, Inc., was published in 2014.

Our people want to take risks, that's the good part. The part that's hard is that people also want to deliver – and [that] sometimes makes them conservative, trying to not fail. In order to address this, there's a few things we put in place. One of them was what we call the Brain Trust. We started off with five or six people who worked particularly well together and were very open and candid.

The Brain Trust evolved over time to the point where today, it is not a group of people: It's the way we run certain kinds of meetings. One [rule] is that the people who would be perceived to have a lot of power are not supposed to talk for 10-15 minutes. If a powerful person talks, they're setting the tone in the room. And we don't want them to set the tone. It's imperative that people be completely honest with each other, both in terms of what they say and what they hear. Another element is that it's peers talking to peers. It's not boss to employee.

We've often seen that as organizations grow, creativity and innovation get lost. How did you make sure that this doesn't happen with Pixar?

When we start, everybody's in agreement that we want to make something of high quality. And that we want there to be a certain amount of risk involved. But the implication, if it's an unusual idea – like a rat that wants to cook or an old man that floats away in a house with a balloon – is these are ideas that are high risk. And it also means that they're ideas that initially don't work. So we have to support what we think is a good idea, no matter what. It can be very hard. But when you do that, you're giving a signal to everybody that you want to do something unusual and that you'll do whatever it takes to make sure that the quality is very good. And the result, which is unusual for most companies, is that in the 22 films while I was at Pixar, we completed 21. We only aborted one film.

$5 million - The price Steve Jobs paid for Pixar, then known as Graphics Group, when he acquired it from LucasFilm in 1985.

It's about making people own the project, isn't it?

Yes. Personally, I feel like that's the best that you can get, when the people in the company feel like they have ownership. And it applies at all levels. If we have problems, then we tell people more than we should. By telling them about some of the more difficult problems, then we have just given them a message that we're including them in the inside. And the result is that they feel like they have ownership because they're trusted with information that they know should only stay inside the company. So all the time at Pixar, we've never had leaks.

Pixar had phenomenal success – a string of hits, one after the other. Did that create pressure within the organization to keep delivering?

Oh yeah. And it created some problems because of that. There were expectations on people ... for some people it was very explicit. And the other thing was that we realized that the Pixar films, when it came time to [be judged] by critics, they weren't comparing us against other films: They were comparing us against our films. It's as if we were a different category and they held us to a higher bar, but this was also true internally. One of the films that we made where the critics rated it lower, the employees did also. But that's what you want in your employees – if they feel we're not living up to our standards, we need to do better.

You've talked about this idea of cultural succession, that making sure that the level below you understands the values. Why was this important and what is the process really of getting this done?

At some point, it's time to turn the reins over to somebody else. But what I wanted was to turn it over to people who felt ownership of Pixar. These are also people who weren't looking at other people to solve the problems. For them, when they met together, it was all of their problems. What we have is a group of people who are working together to solve today's problems, which include, obviously, Covid-19 and the implications for working from home. It also includes changes in business models as streaming becomes more widespread. So, what you want is a very strong group with ownership to solve the new problems that are coming up. And in addition, technology continues to change.

It's interesting you've mentioned technology. With such fast changes in the environment, how do you make sure that you're succeeding today and also prepared for what lies ahead tomorrow?

Well, I think it's like a lot of things. You've got an underlying business – in our case, it's telling stories or making films – and there's a part of it which we know quite well. But I believe that you should always be taking on some risky new project. It doesn't mean that you do a high-risk project for every film. It just means, "Okay, this is our next big high-risk one, there's a bunch of small-risk ones." It might be stories. It might be the technology or the way we run things. It might be in short films.

It doesn't look like Pixar had a lot of failures. As you told me, just one movie was aborted. But when failures did happen, how did you deal with them?

For the people working on it, of course, it's very difficult. It's more than one time we've changed directors on a film because once we've committed to an idea, we're going to go ahead and make it. We did this with Ratatouille. In the case of the one that did fail, we actually did ask [another director] to take it over and that was Pete Docter. And Pete agreed because he liked the idea of the film and he made a pitch for how to make the story work. But then he said: "Since we're restarting, I've got another idea which I think might even be better. And it's a movie that takes place inside the head of a little girl."

It was clear that's what he wanted to do. And by our rules, if that's what they want to do, that's the direction we're going. So at that point, we aborted and I had to call [Disney's] Bob Iger and say: "We're setting this down." And so it was many millions and millions of dollars that we had to write off and because Bob knows we were always trying to do things that were right for the company, all he said was: "Well, I trust you to do what's right." And so then Pete went on to make Inside Out.

Pixar at the box office

Before the 1995 release of Toy Story, Pixar's first feature, executive producer Steve Jobs said if it could gross $75 million, at least they'd break even. It went on to gross $350 million, a drop in the bucket compared with the studio's top 5 highest-grossing films today:
Incredibles 2 ($1.24 billion)
Toy Story 4 ($1.07 billion)
Toy Story 3 ($1.06 billion)
Finding Dory ($1.02 billion)
Finding Nemo ($940 million)

So dealing with failure boils down to trust?

The thing about trust – which is important – is that it's not that you trust people are always going to do the right thing. It's that you trust them, even when things go wrong. Some people get that backwards and say: "I'm trusting somebody and they'll always do the right thing." No, actually people don't always do the right thing. Trust means: "I'm going to work with you and help because I believe. I may disagree with you on this one, but I know you and I know your intents." That's when trust comes in.

$7.4 billion - The value of the 2006 stock deal in which Disney acquired Pixar, issuing 2.3 shares for each Pixar stock.

Creativity is very often a messy process. Do you think some amount of controlled chaos is justified in a creative organization?

I define creativity sort of broadly: It's problem-solving. And it's like a lot of life – there is chaos and there are people who want to control it so there isn't chaos. Overcontrol leads to poor results in the long run. And with too much chaos, you can't get anything. So there's this process of chaos, of order and of the middle ground – of adapting. And “middle ground” isn't a single point: It's one in which you are going back and forth and changing and modifying and learning and bringing people along with you. And fundamentally, it is difficult.

As a leader, how did you see your role in this very creative organization? When did you step in?

The process I tried to consciously use was that other people were running things. I'm not in meetings all the time trying to dispense wisdom or tell people what to do. [Chuckles] I'd rather go out and have lunches with random people. And that was one of the things I did: Every other week, pick eight people completely random in the company, and we’d have lunch together with no agenda. It's just trying to be accessible. I've learnt that if somebody has a complaint or a problem, even if I don't agree or I think they're wrong, what I've learned is I never say so to begin with. I always wait. It's very important to hear them out because they're not going to raise an issue or problem if they didn't believe it were true.

Portrait of Neelima Mahajan
Neelima Mahajan
Neelima Mahajan is Editor-in-Chief of Think:Act magazine. She has been a business journalist for nearly two decades in various publications in India and China, including a stint in the founding team of Forbes magazine in India. In 2010-11 she was a visiting scholar at University of California, Berkeley, where she was also a recipient of a Bill and Melinda Gates Foundation grant for an Africa reporting project. Neelima has a keen interest in management thought and has done extensive work in the domain. She has interviewed several world-renowned management thought leaders, Nobel Prize winners and global business leaders. In 2010, Neelima received the Polestar Award for Excellence in IT and Business Journalism, one of the highest awards in journalism in India.
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Think:Act Magazine

Munich Office, Central Europe