No Short-term Stupidity at Pixar

The focus on short-term results has become the primary motive for most business leaders today. A dozen years ago, the average tenure of a CEO was 10 years; today, it is less than 5 years. Wall Street expects a new CEO to implement a new strategy in his or her first 100 days on the job. So, instead of investing in future technologies and growth, CEOs are manipulating costs; eliminating jobs and training; ignoring new markets and R&D; and compromising quality… all for the next Wall Street analyst’s meeting.

Pixar and Disney Animation Studios president Ed Catmull gets it! He recently wrote, “Managers who focus on maximizing short-term profits end up driving out things that generate long-term value – like R&D. They use all sorts of excuses when they make those decisions, including to please Wall Street and create shareholder value. But they are just excuses for poor thinking.”

Pixar director Brad Bird echoes Ed’s thoughts: “It is never about cheaper and faster. It’s creating for the long-term. People here love the characters and they are aware these films, if done correctly, are living things.”

During the last half of Michael Eisner’s tenure as CEO of the Walt Disney Company, he totally lost sight of their long-term vision “to provide the finest in family entertainment.” During the late 1990s, Disney released more than one dozen “formulaic” animated feature films. A formulaic film is one that capitalizes on a prior storyline with little or no original creative thought. The Lion King II and 102 Dalmatians are classic products of this time of “stagnation” in Disney’s history. Prior to purchasing Pixar in 2007, Disney and Pixar were in partnership (Disney financed and distributed the Pixar films). After the phenomenal success of Toy Story in 1995, Disney advised Pixar to make Toy Story II as a formulaic direct to video, cheap feature. Luckily, Pixar leaders Ed Catmull and John Lasseter (now chief creative officer of Pixar and Disney Studios) refused to compromise quality. John said, “These were the people that gave us Cinderella II. We believe that the only reason to a sequel is if you have a great story, period…We want these (Pixar) films to be at the same level of the films that Walt Disney made.”

In The Disney Way, we wrote about Disney’s current CEO Bob Iger: “Having been on the job for less than four months, Bob Iger surprised the business community by purchasing Pixar (in 2007) for $7.4 billion.” This was a critical junction in the Disney organization’s history…and Bob was the leader who would steer them back on the track to long-term success. Bob had had a revelation while watching the opening day parade of Hong Kong Disneyland. Not one of the new characters were from Disney…they were all born in the creative storytelling playground we have all come to know as Pixar! Bob realized that the last ten years at Disney had been a failure and he vowed to resurrect the passion that Walt once brought to every project, from features films to theme park attractions.

Bob Iger continues to impress us with his long-term mentality. In Innovate the Pixar Way, we cite Bob’s response to an entertainment analyst claiming that many of the Pixar films lack the commercial success to create merchandise franchises: “We seek to make great films first. If the film gives birth to a franchise, we are the first to leverage such success. A check the boxes approach to creativity is likely to result in blandness and failure.”

Today’s business leaders must embrace the long-term genius of the likes of Walt Disney, Bob Iger, Ed Catmull and John Lasseter. Of course, long-term thinking does not mean that you should ignore the short-term job. Pixar’s brand of self-motivated talent is always in a “want to” mode – enthusiastically improving everything they do. The lesson is to constantly plus your short-term efforts while working to accomplish your long-term dream. Never comprise long-term results for short-term gains. Would you rather provide a knock-your-socks-off product that your customers will remember like Toy Story II, or the unimaginative, forgettable product like 102 Dalmatians?

TUCSON LAUNCHES INNOVATE THE PIXAR WAY

Yesterday, Bill spoke at the Loft Cinema in Tucson to an enthusiastic audience. In attendance was Amanda Shauger from KXCI Community Radio who was there to record clips for a radio show featuring Innovate the Pixar Way.

In a follow-up email message to us, she wrote, "last night through the magic of Google, I discovered an article about my girl scout troop from 1975. It described our awards dish dinner at a local park. Our badges were acknowledged and the one I remember best was from our skating lessons. It was a little trip down memory lane and I remembered how fun that was and how proud I was...didn't think too much about it until during the talk when Mr. Capodagli said that his greatest finding of Pixar was to look at things through the eyes of a child."

We hope everyone who reads Innovate the Pixar Way will remember the importance of doing just that! Thank you, Amanda!

TOP5 SPEAKER on MANAGEMENT - BILL CAPODAGLI

Thanks to all of you who voted for Bill as Best Speaker at Speaking.com. They announced the "Top5 Speaker" honorees for 2010 and Bill has been awarded the Top5 Speaker designation in Management!

Fail Early, Fail Often and Learn Fast!

Last month, Pixar president Ed Catmull spoke to an enthusiastic audience at USC’s Ray Stark Theatre. (named for the legendary Hollywood producer of such hits as Night of the Iguana and Funny Girl)

The message? “Fail early, fail often and learn fast.” It’s great advice for those of us who are making New Year’s resolutions! Whether it’s personal development, diet plans, or creating new products and services, there’s always the possibility of frustration and failed goals. It’s what we do with that failure that’s the key.

Ed Catmull endeared himself to the attendees by delving into the particulars of a Pixar “failure” – allowing a novice director to direct a Pixar short film costing $2 million rather than giving him or her the reigns of a feature film that could have cost up to $180 million! Ed said, “Our take on it was that it was better to have a train wreck with model trains than with real ones.”

People typically view problems and failures as unwanted events. We admit, it’s counter-instinctive for people to accept failure, much less court it by taking risks. When failure occurs, don’t ignore it – learn from it and try again. Why not give a prize for the dumbest mistake of the month! Then don’t be surprised if the lesson it teaches triggers some major success. It’s better that team members ask forgiveness for errors than beg permission just to try. Don’t forget that the first steamboat was initially dubbed, “Fulton’s Folly.” And, behind Walt Disney’s back, people referred to Snow White as “Disney’s Folly.”

As we write in our new book, Innovate the Pixar Way, Randy Nelson, Dean of Pixar University, explains, “You have to honor failure, because failure is just the negative space around success."

Roy E. Disney, Walt's Nephew Dies at Age 79

Yesterday, Roy Edward Disney died of stomach cancer. Although he lived in the shadow of his famous uncle and father Roy O. Disney, he never wavered in his commitment to protect their legacy of creating arguably the most powerful entertainment empire of all time. As chairman of Disney animation, Roy E. Disney helped guide the studio to a new golden age of animation with an unprecedented string of artistic and box-office smashes that included The Little Mermaid, Beauty and the Beast, Aladdin and The Lion King. He was executive producer of Fantasia/2000, the sequel to the 1940 Disney classic, and the 2004 Oscar-nominated Destino, based on a 1945 collaboration between Walt Disney and Spanish painter Salvador Dali.

In the years after Walt's death in 1966 and his father Roy's death in 1971, Roy E. became disillusioned the Walt Disney Co., which he likened to "a real estate company that happened to be in the movie business." The company had let its feature animation film business, once the cornerstone of the company, go into a freefall. The company, Roy would later say, had lost its "creative drive."

As we write in The Disney Way..."After Roy's (Walt’s brother) death, the financial and creative growth of the company came to a standstill. During the 18 years between Walt's death in 1966 and Michael Eisner's entry as CEO in 1984, a simple question would be asked among the ranks before any decision was made: ‘What would Walt do?’

In 1984, Roy (Walt’s nephew) convinced the board to hire Michael Eisner as CEO and Frank Wells as president and COO. Eisner and Wells were consummate decision makers and quickly began to transform the sleepy little movie studio into a global entertainment enterprise now worth over $50 billion.”

Upon taking over as chief executive, Eisner asked Roy what he wanted to do. Disney responded that he wanted to revive the company's sagging animation division where morale was at an all-time low.

Fortunately, Eisner granted Disney his wish. It was Roy who persuaded Eisner and Wells to invest about $10 million in a digital ink and paint system developed by Pixar. As you can read in Innovate the Pixar Way, the early Disney-Pixar relationship laid the foundation for the soon-to-be-made fortunes of both organizations in the world of computer-generated animation. Although Michael Eisner is credited with much of the Disney turnaround in the 1980s-1990s, Roy was one of the first to realize that Michael Eisner had morphed into what we term a "hero to zero" in The Disney Way. In Chapter 12 of The Disney Way, we describe the events that we believe led to Eisner's demise. For a complete history of the “fight of the century” that prompted Roy to remove himself from the company’s board of directors, you can also read James Stewart’s Disney Wars.

In Pixar’s Blog of August 19, 2008, it is written….
“I need not remind anyone familiar that the latter part of Eisner's employment was marked by extremely bad decisions that deeply threatened the company. The suit-produced movies. The sequels-mill atmosphere. Eisner endangered Disney and its shareholders by letting his great personal dislike (to say the least) of then Pixar CEO Steve Jobs cloud his business sense, putting the relationship with Pixar into serious jeopardy. Had Disney shareholders not revolted, Disney/Pixar would almost definitely have been history, leaving Disney in a very tough situation. Fortunately they did, being led by Roy E. Disney, –who coincidentally now chairs the Disney Legends committee– and, natch, the rest is history.”

Clearly, Roy Disney was passionate about protecting "the happiest place on earth." When Bob Iger stepped in as president in late 2005, he invited Roy to return to the board of directors in an emeritus role and as a consultant.

Chief creative officer for Walt Disney and Pixar Animation Studios, John Lasseter commented, "I really credit Roy Disney completely with the renaissance of Disney animation, beginning with Little Mermaid and all the way through that great amazing series of classic Disney films."

A year ago, we were on the Disney Magic sailing the eastern Caribbean and Roy happened to be onboard promoting his film, Morning Light - the story of a real-life crew training who competed in the 44th Transpacific Yacht Race aboard a TP52 class yacht, Morning Light, owned by Roy. After we watched the film’s debut in ship’s magnificent Walt Disney Theatre, we had a chance to hear Roy speak during the Q & A session and also had the opportunity to meet him afterwards. We found him to be gracious and unassuming… following his own passions, yes, but still remaining a true force in the entertainment empire built by his famous uncle and father. Roy’s passing marks the end of an era. But the values that Walt, brother Roy and nephew Roy so passionately upheld will hopefully guide The Walt Disney Company for years to come.

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