This report is going to assess the company Pixar from an innovation perspective. This report will focus on the good and bad points of the company to give an insight into its attitude towards innovation.

A number of different methods were used to gather the information in this report, such as websites, interviews, articles and books.

Steve Jobs (Apple CEO) purchased the computer graphics section of Lucasfilm Ltd in 1986 and called this new company Pixar. Pixar started as a very small company with only 44 employees. Pixar started making short animations films which were at the forefront of CGI technology. Pixar also created a number of adverts for companies such as Listerine in their early years. The first feature length movie Pixar created was Toy Story and it was the first fully computer generated animated film ever, Toy Story grossed $362 million worldwide.

Pixar did not just create animations, they also developed a lot of the technology which allowed them to create their films. Work teams and some individuals won numerous awards from organisations like The Scientific and Engineering Academy Awards in fields such as Digital scanning and Direct input devices.

One huge advantage Pixar has over other animation companies is their unique understanding of innovation in company structure and employee relations, this report will aim to discuss this in further detail.

Section 2 – Employee relations

Pixar is a very organic company which disagrees with the structure of mechanistic organisations. A mechanistic organisation has a very hierarchical structure and the companies future is dictated by those in senior roles.

Section 2.1 – Brad Bird

Steve Jobs hired Brad Bird into the company after its first three successful films, Jobs was worried that they had ran out of creativity and he did not want the company to go stale. Brad Bird understood that there was room for improvement in the companies creative process. Bird understood that every employees input is valid and has its use. He knew that communication is vital in the innovation process so everyone can help each other to create the best work possible. The main problem with this is that It is difficult to get employees to speak their minds as they are often afraid of criticism from their peers, and they have good reason to fear this as they are working with some of the best animators in the world. Birds solution to this problem was to get the employees in groups to look at the work each member had done that day. Bird wanted to encourage people to speak their minds, he talked about the strong and weak points of each persons work and praised people for challenging his criticisms. At first this did not work very well, before Bird was introduced to the company the animators were afraid to criticise any work as previous managers did not take kindly to criticism, however constructive it was. It took nearly two months for any of the employees to actively participate in these group discussions, however one employee finally did and the rest of the employees saw that Bird praised this employee for doing so as he knew it was the best way to get everyone comfortable with this process.

Section 2.2 – Open Philosophy

Pixar has a very open philosophy towards its business. Pixar encourage employees across it’s company to interact with each other. They want employees of all levels to talk about their ideas and problems so the company can benefit through this interaction. Even the lowest level employees have the option to speak to the highest level employees as Pixar has an open door policy in its offices. This idea originated from the quotation below.

“Interaction = innovation”

Steve Jobs

Pixar also has a open approach when it comes to their technology and advancements. Pixar encourages employees to publish their work in academic journals as they don’t believe in hiding success. At first this may seem like a bad idea from a business perspective as they will be helping rival companies to better their productions. When you look at it more closely it starts to make a lot of sense. Pixar does this because it attracts talent to the company, talented individuals become aware of the new advances being made at Pixar and are often very keen to be hired by them so they can be at the forefront of this technology. Pixar is very interested in bringing new employees into the company as they challenge the status quo and often lead to new and exciting ideas.

Section 2.3 – Pixar University

Pixar wants its employees to branch out and learn new things. Pixar University was created to allow its employees to do so. Every single employee is given up to four hours a week to take courses. Some of these courses are on related subjects such as animation and some are completely unrelated such as yoga. These courses bring employees from different corners of the company together and it helps them all learn new skills or it can simply help them relax. This scheme seems to have paid off as some employees have realised they have a certain talent in a new field and they switch to a different department where their skills are put to better use. Employees are allowed to reject work and meetings if they coincide with these courses, this shows how strongly Pixar feels about learning in their company.

Section 2.4 – Perfection holds back innovation

Brad Bird brought a number of new things to Pixar and one of them has changed the company dramatically in the way it produces it’s films.

Bird believes that perfection is something that holds back innovation. This is something that shocked employees when he joined the company, the below quotation shows exactly what he means.

“Look, I don’t have to do the water through a computer simulation program… I’m perfectly content to film a splash in a swimming pool and just composite the water in.”

Brad Bird (2008)

This was a new innovative approach to how the animators worked. Before this, animators had always painstakingly created every part of an animation and never used shortcuts to create the same effect. Bird understood that some pieces of work needed to be perfect but for some pieces it was unnecessary as the same result could be achieved by different means. It was this kind of innovative thinking that helps the company produce at a faster and cheaper rate.

Section 2.5 – Concluding employee relations

This section of the report has talked about how Pixar treats its employees and how it stimulates them to become better at their work. It’s difficult to criticise Pixar from this perspective as they have an extremely good understanding of what employees want and how to develop their creative skills. It is evident that their approach to employee relations is working as they continue to create new and exciting films which could only be produced by employees who enjoy their work.

Section 3 – Environmental innovations

Pixar has an unorthodox approach to the environment that their employees work in. The offices in which Pixar employees work are specifically designed to maximise creativity and interaction.

Section 3.1 – Cubicles

The animators are allowed to completely customise their working cubicles. In a business as creative as Pixar you can’t sit the employees in blank cubicles.

(http://www.home-designing.com)

Most of the employees like to give their cubicles a homely feel by bringing personal items and making the atmosphere as friendly as possible. This sort of environment is best for a creative business like Pixar.

Section 3.2 – Pixar HQ

The building in which Pixar is based also has a slightly different design to conventional working spaces. Steve Jobs who as we mentioned earlier believes that interaction = innovation designed the office with this in mind. The main building has a large atrium situated in the centre of the office which people at first thought was unnecessary, but Jobs designed this atrium to contain the cafeteria, mailboxes and toilets. At first this seemed like a strange idea as everybody had to move from their individual areas to go to the bathroom or to collect mail. The reason for this was that people are essentially forced to see each other on a daily basis which leads to interaction which in turn leads to innovation.

Section 3.3 – Social environment

The environment Pixar creates isn’t just physical. There is also an important role in the social environment of the company. During an interview Brad Bird was asked…

“We’ve been talking a lot about how you promote innovation. What undermines it?”

(The Quarterly 2008)

His response was the following…

“Passive-aggressive people-people who don’t show their colours in the group but then get behind the scenes and peck away-are poisonous. I can usually spot those people fairly soon and I weed them out.”

(Brad Bird 2008)

Brad Bird made it his goal to get rid off people who hindered the innovation process as to him they were a cancer eating away at the creativity of the company.

Section 3.4 – Concluding environmental innovations

The way Pixar designed its working space does seem very suited to the type of business that they are, a creative industry should have a creative environment. The idea of situating all the things people need on a daily basis in the atrium is essentially a good one, however it may not be to every employees liking as it may grow tiresome for people who have to take a long trip to just go to the bathroom. The social environment created by Pixar is very good as it is designed to embrace creative and happy people and it is also designed to eliminate people who bring innovative processes down.

Section 4 – Films

Section 4.1 – Films and reviews

To date Pixar has produced 11 feature films which are listed below as well as ratings received by the popular movie critic website rottentomatoes.com.

Toy story (1995) – Rating – 100%

A Bug’s Life (1998) – Rating – 91%

Toy Story 2 (1999) – Rating – 100%

Monsters, Inc (2001) – Rating – 95%

Finding Nemo (2003) – Rating – 98%

The Incredibles (2004) – Rating – 97%

Cars (2006) – Rating – 74%

Ratatouille (2007) – Rating – 96%

WALL-E (2008) – Rating – 96%

Up (2009) – Rating – 98%

Toy Story 3 (2010) – Rating – 99%

The above ratings show that Pixar have a tremendously good track record when it comes to producing films. You can also see that the latest films were produced much quicker. Since 2006 Pixar have been producing a film every year, this could be down to some of the innovative ideas from Brad Bird which were discussed earlier.

Section 4.2 – Cars

In the rating system one film stands out from the crowd, and that films is Cars.

(http://reponses.qctop.com)

Every film Pixar has done has been rated over 90% except for Cars which received a much lower rating of 74%. There must be a reason for this dramatic drop in rating, and that reason is that Cars displayed a lack of innovation, the visual elements of the film were very good however the story lacked the “Pixar magic” a lot of critics refer too. The story was unoriginal and it was clear that something was missing when they were working on this film.

While this film was being produced Pixar could have used an innovation method such as SWOT analysis to assess their strong and weak points.

Below is an example of what they could have done to assess Cars.

Strengths

Good Animators

Effective Marketing

Strong Brand

Productive work environment

Weaknesses

Bad basis for a film, Car racing is hard for a lot of people to relate too

Unimaginative storyline compared to previous films

Opportunities

Further strengthen market position

Huge profit potential

Merchandise

Threats

Rival companies

Growing dislike for cars as an environmental hazard.

Above is a basic example of how SWOT analysis could have been used to ensure that Cars was received as well as all the other films they have produced. It would have been difficicult for this to have been performed by Pixar themselves as it is often hard to criticise your own work especially if it took 2 years to produce so an external person could have done the evaluation.

Section 4.3 – Attitudes towards money

Some methods of analysis would not have worked in a company like Pixar such as The Boston Matrix which focuses on market growth and revenue. One of the key values that Pixar holds is that making profit can not be your focus in producing a good film.

“I don’t make movies to make money-I make money to make movies.”

(Walt Disney)

Above is Walt Disney’s philosophy on making movies, Pixar as a creative organisation tries to adhere to this as they believe it will lead to greater success in the long term.

Pixar has clearly learnt what they did wrong in Cars as the four movies they have produced since have all received above 96% which is an extremely high score. It is unclear what Pixar did, but it has worked. They may have used a method like SWOT analysis or maybe they hired new employees with a fresh perspective.

Section 5 – Conclusion

Overall Pixar are a very good company to assess from an innovation perspective. Rival companies such as Dreamworks create similar films but often these films are overshadowed by the work of Pixar and this is down to the way that Pixar as a company works. Few companies are as organic as Pixar in their organisational structure and a lot of larger companies tend to have a mechanistic approach towards film making. You only have to look at the success that Pixar has had to realise how difficult it is to be critical of Pixar as a company. They are the worlds leading animation company who only have one film which let them down, and even that film was still extremely popular.

Pixar are an extremely innovative company which is shown through their work and the dedication that the employees have towards their films. Pixar have had an incredibly good track record with their films and we can only wait to discover the new ways they will continue to spur creativity in their organisation.

Section 6 – References

Pixar’s company history – http://www.pixar.com/companyinfo/history/1986.html

Interview with Brad Bird – http://gigaom.com/2008/04/17/pixars-brad-bird-on-fostering-innovation/

Details of Pixar films and ratings – http://en.wikipedia.org/wiki/List_of_Pixar_films

Images references

Title page – http://userlogos.org/files/logos/AlexT/PixarLogoLight.png

Work cubicles – http://www.home-designing.com/wp-content/uploads/2008/10/pixar-494×539.jpg

Cars – http://reponses.qctop.com/upload/FlashMcqueen-21976.jpg

Section 7 – Bibliography

Books

Capodagli, B. Jackson, L. (2009) Innovate The Pixar Way McGraw Hill

Interviews

Interview with Ed Catmull

http://blogs.hbr.org/hbr/hbreditors/2009/02/creating_a_safe_haven_for_crea.html

Websites

http://corporatelearning.hbsp.org/corporate/assets/content/Pixararticle.pdf

https://www.mckinseyquarterly.com/Innovation_lessons_from_Pixar_An_interview_with_Oscar-winning_director_Brad_Bird_2127#

Pixar’s Brad Bird on Fostering Innovation

http://benfry.com/writing/archives/179

http://consultaglobal.wordpress.com/2008/09/22/pixars-innovation-recipe/

http://www.irishideas.org/GreatJournal7.pdf

http://www.getdriven.com/2008/01/pixar-university/