Northumbria University Newcastle Business School An Analysis of Pixar’s Organisational Culture Name: Anoynomous HR0372 – Culture and Organisations Bachelor of Arts (Hons) in Business Management January 2011 Word Count: 3668 TABLE OF CONTENTS Page No 1 writing community service essay . INTRODUCTION3 2. IDENTIFICATION OF CENTRAL ISSUE4 3. OUTLINE OF THEORETICAL FRAMEWORK5 4. ANALYSIS 4. 1ARTIFACTS6 4. 2ESPOUSED VALUES AND BELIEFS7 4. 3BASIC UNDERLYING ASSUMPTIONS10 . CONCLUSION12 6. RECOMMENDATIONS13 7. REFERENCES14 1. INTRODUCTION Pixar Animation Studios as we know today, was started as in 1984 when John Lasseter, chief creative officer of both Pixar Animation Studios and Walt Disney Animation Studios and also concurrently, principal creative advisor for Walt Disney Imagineering at present date, left his animation job at Disney to join the computer graphics division of Lucasfilm Ltd.
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Two years later in 1986, this division was bought over by Steve Jobs, who established it as an independent company and renamed it “Pixar”. Pixar’s first short film, Red’s Dream had its world premiere at Siggraph in 1987 while its first commercial, Wake Up was produced in 1989 for Tropicana. In 1991, Pixar and Disney teams up in an effort to produce and distribute up to three full length animated films, which saw the release of Toy Story in 1995. This was also the year Pixar went public.
Having enjoyed notable success, Pixar and Disney entered into a new agreement in 1997 to produce five movies jointly, and released several movies, namely A Bug’s Life, Toy Story 2, Monsters, Inc, Finding Nemo, The Incredibles, which all enjoyed tremendous success and also taking home several awards at the same time. Pixar was purchased by Disney for US $7. 4 billion in May, 2006. But instead of introducing Disney’s culture into Pixar, chief executive of Disney, Robert Iger continued to let Pixar produce movies their own way and even agreed to protect Pixar’s creative culture (The Telegraph, 2009).
In fact, Robert Iger even requested for help from the top management of Pixar to help revive Disney (Catmull, 2008, p. 66). 2. IDENTIFICATION OF CENTRAL ISSUE The main issue that will be discussed in the analysis will be the human resource management of Pixar. When Pixar was acquired by Disney in 2006, not only did Disney not introduce their culture into Pixar, Disney even agreed to preserve the Pixar’s culture. This action by Disney proves that there must be something attractive about Pixar’s culture that makes them wants to protect and preserve it.
It may be also due to Pixar’s culture being more outstanding and superior than that of Disney. The fact that Disney’s chief executive Robert Iger requested help from Pixar’s management to revive Disney supports this. The analysis will take a deeper look and understanding of Pixar’s human resource management and the way that they operate that makes Pixar’s culture so attractive. 3. OUTLINE OF THEORETICAL FRAMEWORK For the analysis of Pixar’s organizational culture, we will be using the three levels of organizational culture as defined by Edgar Schein (2010).
Culture, as formally defined by Schein (2010, p. 18) is “a pattern of shared basic assumptions learned by a group as it solved its problems of external adaptation and internal integration, which has worked well enough to be considered valid and, therefore, to be taught to new members as the correct way to perceive, think, and feel in relation to those problems”. The three levels of culture are namely artifacts, espoused beliefs and values, and basic underlying assumptions. Artifacts are described by Schein (2010, p. 3) as the surface level of culture, as they can include the things that a person see, hear and feel when they join a new group and are experiencing their culture for the first time. Artifacts are visible and feelable structures and processes, and can also be an observed behavior. However, one drawback is that they can be difficult to understand and decipher (Schein, 2010, p. 24). Thus, the true culture of the organization cannot be understood by solely looking at the artifacts. To understand more, it is necessary to look at the next level.
Espoused beliefs and values are goals, values, aspirations and ideologies shared by everyone in an organization. Normally, these values are laid down by the leaders or founders of the organization (Schein, 2010, p. 25). However, espoused beliefs and values can sometimes be mutually contradictory (Schein, 2010, p. 27). Thus, the organization’s culture is only understood just on the surface level. Basic underlying assumptions, which are unconscious and taken-for-granted beliefs and values provides for a deeper understanding of an organization’s culture.
Schein concluded that the essence of a culture lies in the pattern of basic underlying assumptions (Schein, 2010, p. 32). If the basic underlying assumptions are not deciphered, it will be hard to understand the artifacts and espoused beliefs and values correctly. As Schein (2010, p. 32) himself had concluded, any group’s culture can be studied at the three levels. The three levels of culture allows for an analysis of Pixar’s organizational cultural from an observational level.
Information can be readily drawn from business reviews, news articles on Pixar, interviews with Pixar’s employees and Pixar’s website, thus making Edgar Schein’s three levels of culture an ideal model for analysis of Pixar’s culture. 4. ANALYSIS 4. 1Artifacts Pixar’s headquarters is located at Emeryville, San Francisco. The giant entrance hall, known as the Village Square runs the entire length of the building (The Telegraph, 2009). This is a place where employees are encouraged to meet for some refreshments and even play some games if they want to.
Pixar’s works are also displayed around the building too. Life size models of their movie characters can be found along corridors and landings, while artwork from their movies act as decorations of their walls. By looking at these, one can easily portrait Pixar as a relaxed, fun and creative environment to work at. This is true not only in common areas of the building, but also in personal working space as well. At Pixar, individual offices are decorated with different themes.
The animation department probably had the most fabulously decorated office that one can imagine (Capodagli and Jackson, 2010, p. 91), with a tiki hut, a pagoda bunk bed and a parachute covering a line of cubicles, while another department built a 60s style love nest completed with its own disco lightings (Schlender, 2001). However, Pixar’s building design is not limited to just creating a fun and creative atmosphere. Steve Jobs, previous chief executive of Pixar had a vision to design a building where the employees could meet and interact with each other naturally (Capodagli and Jackson, 2010, p. 8). It was nearly impossible not to run into employees from other departments during a working day as the important facilities such as the mailboxes, meeting rooms, cafeteria and toilets were all located in the center atrium. In fact, all of the eight toilets in the building can only be found there (The Telegraph, 2009). It is arguable that a small downside to this could be for those employees who need their own personal space, but this also allows for casual chats between employees.
It allows them to have a less intense interaction and talk about anything or even their work, and a good and creative idea must just pop out of it, as Steve Jobs realized (Capodagli and Jackson, 2010, p. 88). So in Pixar, having a “relaxing” moment of the day plays an important part not only in relieving stress from their employees work, but also getting better productivity at work. Located within their headquarters, Pixar’s very own Pixar University was established to provide employees with in house courses that would aid them in their daily work.
As quoted by Bill Polson, technical director of Pixar, employees can look to get out of their routine work and get to be the director of their own creative idea (Hempel, 2003). Another primary purpose is to build morale, spirit and communication among employees. Throughout the duration of the course, employees are able to learn, have fun and enjoy together and thus, it can be said that it is a form of teambuilding too. For a certain course, the attendees may not all be from a same department, therefore this helps in easing the communication process between departments as well. . 2Espoused Beliefs and Values At Pixar, learning and upgrading is one of the important values and is supported by the earlier mentioned artifact, Pixar University. As quoted by Randy S. Nelson, former dean of Pixar University, “We have something going on almost every day and most evenings. We offer the equivalent of a Bachelor of Arts in Fine Arts through our course. ” (Hempel, 2003). Employees are even allowed to miss work in order to attend courses at Pixar University. This goes to show how important learning is as a value to the Pixar management.
With a range of more than 110 courses available ranging from a complete film making curriculum to painting, drawing, sculpting and even belly dancing, pilates and yoga (Taylor and Laberre, 2006; Schlender, 2004; Catmull, 2008, p. 71). Employees are encouraged to devote up to four hours every week towards continuing their education. One fact that can be taken away from here is that Pixar’s believes in investing in their people. By spending time towards their personal development, it will equip their staff with more knowledge and ultimately, bringing the productivity of the organization to a higher level.
Besides constant learning, the fact that Pixar holds all their employees in high value can be also be derived from the fact that even non work related courses are being offered to them. Pixar believes that every film that they produce should be of the same high quality. This is evident in the making of Toy Story 2. The production team of Toy Story 2 at that time was a relatively new creative team who had never had a chance to head a movie production before due to the fact that the main creative leaders who made Toy Story were being tied down by the production of A Bug’s Life.
Toy Story 2 was originally intended to be released on home video only. However, Pixar’s leaders realize that having two different standards of quality (Catmull, 2008, p. 67) within the same studio should not be the direction that Pixar was to be headed. Hence production was started all over again and Toy Story 2 went on to be a critical successful for Pixar, grossing over US$485 million worldwide. But success came at the expense of tremendous personal sacrifices from the production team.
Inhumane working hours were put in which resulted in stress injuries for many of them. With this, a clear statement was made that producing mediocre films was simply unacceptable. As Catmull (2008, p. 68) said, “As a result of Toy Story 2, it became deeply ingrained in our culture that everything we touch needs to be excellent”. All these evidenced the level of commitment that Pixar places towards the quality of their films. To quote Alvy Ray Smith, co-founder of Pixar, “Pixar is a place where working together works.
Artists and geeks team up and collaborate” (Capodagli and Jackson, 2010, p. 131). This reflects the presence and importance of teamwork as one of Pixar’s values. With arts and technology being the two most important disciplines of the company, Alvy Ray Smith further mentioned that the artistically creative people and the technically creative people are helpless without one another. As Catmull also recognized, in order for Pixar to be successful, the barrier between the arts and technology disciplines must be removed.
Not limited to the two disciplines of arts and technology, trying to fuse together any two disciplines may be seen as a challenging task, as each discipline will have its own culture and language. Even the physical distances between their offices may play a part in preventing smooth collaboration (Catmull, 2008, p. 70). However at Pixar, this does not seem to be the case as the arts and technology people have developed a good working relationship. At Pixar, “Technology inspires art, and art challenges technology”, as mentioned by John Lasseter in Catmull’s (2008, p. 1) article. This saying is treated more than just mere words and constantly reinforced, and is considered by John Lasseter as a wonderful yin-yang relationship at the foundation of Pixar (Schlender, 2004). The “dailies” and “creative brain trust” are another two examples which further highlights the importance of teamwork. The “dailies”, are daily reviews in which work in progress are shown to the entire animation team, after which everyone is encouraged to give their thoughts and feedback. The “dailies” are stated by Catmull (2008, p. 0) as “a practice of working together as peers which is core to the Pixar culture”. This is not surprising given the benefits that the daily reviews can yield. As the entire team is present at the review, important points from the director can be communicated to all members at the same time and more importantly, the team can learn and inspire one another and in the long run, more creative ideas can be generated as well. Even when creative idea runs out or production encounters some problems, the team can look to enlist the help of the “creative brain trust” (Catmull, 2008, p. 9), which is made up of John Lasseter himself together with eight other directors (Andrew Stanton, Brad Bird, Pete Docter, Bob Peterson, Brenda Chapman, Lee Unkrich, Gary Rydstrom, and Brad Lewis). Here, the work in progress is presented to the brain trust and together with the production team, they engage in a session to brainstorm for ideas and ways to make the movie better. After the end of the two hours session, the decision on what to do moving forward is left to the director and his team as the brain trust only provides advice.
As the brain trust does not have any decision making authority, directors who encounter production problems can go to the brain trust with the mindset that it is solely for the seeking of their expert opinion, and not having to worry about the production going in another direction as the decision is still theirs at the end of the day. With the directors feeling comfortable to consult the brain trust, working efficiency is increased, teamwork is promoted and the end result is the number of hit movies that Pixar has produced to date. Lastly, “people” appears to be one of the values in Pixar as well.
In his article, Catmull (2008) has repeatedly mentioned that good people are more important than good ideas, stating that “If you give a good idea to a mediocre team, they’ll screw it up. But if you give a mediocre idea to a great team, they’ll make it work”. The welfare of their staff is just as important to Pixar as well. Animators needs to get their managers’ approval before they are allowed to work more than fifty hours a week, and a masseuse and doctor drops by their headquarters every week (Burrows, 2003). Employees are even encouraged to get a neck massage at their desks (The Telegraph, 2009).
All in all, employees at Pixar seem to appreciate very much what is being done for them. They are impressed by how much Pixar cares about them and find the environment very rewarding and enjoyable to work in (Pixar Animation Studios, 2011), to the extent that they cannot think of another better working place. Pixar does not tie down their employees with contracts which is the norm in other companies. Randy S. Nelson referred to contracts as something which allows companies to be irresponsible, and freeing them of the need to keep their staff happy and fulfilled (Taylor and LaBarre, 2006).
Normally, contracts would be something that a company refers to as protecting the interests of both employer and the employee. With the omission of contract in Pixar, it reflects the level of trust they have in their employees, and also their commitment towards them. Happy employees can also create loyalty, a sense of belonging and longer tenure with the company. It is only beneficial towards the company if they can instill a sense of loyalty within their staffs. First, they get a group of people who are familiar with their work and processes in the company as they have been around for a period of time.
Second and more importantly, good and capable staff are retained and continue to value add to the company. With all the evidence, it can be concluded that employees at Pixar are treated with the utmost importance. 4. 3Basic Underlying Assumptions Pixar’s operating principles were: One, everyone must have the freedom to communicate with anyone. Two, it must be safe for everyone to offer ideas. Three, we must stay close to innovations happening in the academic community (Catmull, 2008, p. 71). The design of Pixar’s building was in a way that it would free up the communication barrier between departments.
So all that is left is that employees need to know that it is alright for them to approach other departments for problems solving, even without their superiors knowing about it. This mode of operation saves time as people can work with each other directly without having to go through the tedious process of informing and getting approval from superiors, which is present in many other big organizations. Being able to generate creative ideas is critical given the nature of the industry that Pixar is in. Creative ideas play a huge role in film making, and Catmull (2008, p. 6) sees creativity as an important factor that needs to be present at every level of the artistic and technical part of the organization. Ideas generating are not just limited to the directors and executives of the company. Every staff can contribute by offering ideas regardless of their rank in the company. Every single idea has the potential to be a great idea. With this assumption, the staff feels comfortable to contribute their own ideas and thoughts. Staff on the receiving end will also learn to value the feedback given to them as they get used to showcasing their work.
Technical artists are encouraged to publish their research and participate in industry conferences. Ideas may be revealed, but it keeps Pixar connected to the academic community and helps to attract talented to join Pixar. This supports the belief that the company values people more than ideas. Lastly, another of Pixar’s basic assumption seems to be “have fun as you work”. To get some momentary relief from work, employees are allowed play video games, swim or play sports (The Telegraph, 2009), all during working hours. Animators whiz around the building on cooters (Schlender, 2001). John Lasseter’s believes that his casual and easy going style (The Telegraph, 2009) when combined with daily work routine, is a catalyst for being successful. And through the earlier mentioned design of the individual office spaces suggests that at Pixar one needs to work hard, but it is also crucial that you have fun, and as you enjoy yourself, enjoy your work as well. 5. CONCLUSION The success of Pixar can be attributed very much to president Ed Catmull and chief creative officer John Lasseter.
As the co-founders of the company, they laid down the culture and structure of the company which paved the way for Pixar to shine on the global stage. With Ed Catmull being a technical expert, while John Lasseter was a creative genius, they had also led by example in forging the yin-yang relationship between technology and arts mentioned earlier and driving the importance of teamwork across. From an observer’s point of view, Pixar seems to be the perfect company for anyone to work in. As a company which has grown tremendously from its humble roots, one can argue that Pixar will continue to grow and enjoy critical success in the future.
However, with growth comes threat as well. Pixar has enjoyed great success largely due to the part that their employees being able to operate effectively as a team. This becomes largely challenging if Pixar continues to grow. When an organization becomes too big, it may be hard for them to function effectively together. Also, Ed Catmull and John Lasseter had been at the helm of Pixar from the very beginning. When the time comes for them to leave the company, there is a danger that the Pixar culture could be gone together with them. 6. RECOMMENDATIONS
From the above analysis, we can find much evidence of Pixar planning for their future by injecting new blood and constantly promoting constant learning for existing staff. However, not much can be found on the planning of leadership. The threat of Catmull and Lasseter leaving one day is real. Catmull (2008, p. 72) has also identified that the ultimate test of whether himself and Lasseter have achieve their goals is by Pixar enjoying the same success when they are both gone from the company. To preserve the Pixar culture, career development programs can be rolled out, not just to the management level, but all hierarchies within Pixar.
Firstly, top level staff like directors could be developed to one day take over the role of either Catmull or Lasseter. An internal candidate is more suitable as this person would have already been exposed to the Pixar culture, and is also very familiar with the way things are being done. With a development program, the chance of Pixar retaining its culture and in turn, retaining their position in the market is much higher. Development programs for other hierarchies are as equally as it allows staff to plan for their future which in turn, is equivalent to planning for the company’s future.
Trying to keep a small company culture is also important as teamwork is the main ingredient for their success (Borrows, 2003). But with over 900 employees as at 2009 (The Telegraph, 2009), it will be hard to do so. Other than attending courses at Pixar University, departmental or cross departmental teambuilding sessions can also be held periodically to strengthen the already strong relationship between employees. To conclude, Pixar needs to preserve their culture and maintain their mode of operation to continue enjoying success in the future.
As Pixar has not experienced a failed production to date, not being complacent is one of the key things that Pixar should observe. To quote Catmull (2008, p. 72), “We do not want people to assume that because we are successful, everything we do is right”. 7. REFERENCES Burrows, P. (2003) ‘Pixar’s Unsung Hero’, Business Week, 3839, pp. 68 – 69, Business Source Premier, [Online], Available at: http://web. ebscohost. com (Accessed: 28 December 2010) Capodagli, B. and Jackson, L. (2010) Innovate the Pixar way. New York: McGraw-Hill Catmull, E. 2008) ‘How Pixar Fosters Collective Creativity’, Harvard Business Review, 86 (9), pp. 64-72, Business Source Premier, [Online], Available at: http://web. ebscohost. com (Accessed: 27 December 2010) Hempel, S. (2003) Pixar University: Think out of the Mouse. Available at: http://articles. sfgate. com/2003-06-04/bay-area/17493262_1_pixar-s-emeryville-technical-director-bill-polson-pixar-president-edwin-catmull (Accessed: 30 December 2010) Pixar Animation Studios (2011), Pixar Company Info, Available at: http://www. pixar. com/companyinfo/history/index. html (Accessed: 3 January