Demand_Creating What People Love Before They Know They Want It

by Adrian Slywotzky

  Confronted with such painful and unyielding constraints, Pixar seemingly had no good options. So they chose to do the impossible: to rebuild Toy Story 2 practically from scratch, and to do it not over two years as normally required but within the existing nine-month deadline.

  Lasseter called an emergency two-day story summit in Sonoma, California. “I realized at that point that Toy Story was us,” he said. “It’s us sitting around that table.” Lee Unkrich, Andrew Stanton, Ash Brannon, and a host of other young Pixar veterans who had worked on the original Toy Story and knew the characters intimately gathered in a room and began tossing around ideas for energizing the narrative of the second film. Concepts they’d had to drop from the first picture due to lack of time were revived, reimagined, and experimentally integrated into the new story. Imaginative twists were invented, with voices around the table rising as people vied to build on one another’s brainstorms.

  The energy of the entire company was suddenly focused around a single goal—to make Toy Story 2 great. But would it work?

  THE ELEVENTH-HOUR DECISION to rework Toy Story 2 from scratch was far from business as usual in Hollywood. But then, Pixar has never been a typical movie studio.

  Founded in 1979 as part of the computer division of Lucasfilm, Pixar struggled to market its core product, the Pixar Image Computer. Threatened with shutdown, it fell back on a secondary competency and began producing computer-animated commercials for client firms like Tropicana, Listerine, and Life Savers. People loved them, and these small-scale successes ultimately led to a $26 million deal with Disney to produce three feature-length computer-animated films, beginning with a movie about kids’ playthings that come to life—Toy Story.

  When Toy Story was released in 1995, it was an immediate hit with both critics and audiences, and it ended up grossing an impressive $362 million worldwide. Pixar followed it with A Bug’s Life in 1998, which also generated tremendous demand. And in the process of making these first two features, creative director Lasseter, Pixar president Ed Catmull, and the rest of the company team began building the business culture and creative system that would make Pixar unique.

  In creative fields like film, it’s easy to fall back on language that is vague and mystical when struggling to define the secrets of success—to use words like genius, inspiration, and magic. There is an element of the ineffable and the indescribable in what Pixar does, and there’s surely no formula that other filmmakers could apply to reliably churn out Pixar-like hits. But there are many specific strategic and managerial characteristics of the Pixar organization that feed its success at creating an entire portfolio of products that have attracted huge audience demand.

  Several of these characteristics are vividly illustrated by what ultimately happened to Pixar’s third feature film, the seemingly ill-fated Toy Story 2.

  Every successful moviemaker recognizes the importance of a great story. But few take the challenge with the seriousness of Pixar. In a speech at the 2009 Cannes Film Festival, John Lasseter spelled out the company’s philosophy. “We will stop production if we have to, to get the story right,” he said. “It takes four years to make a movie at Pixar, and three and a half of those years are spent on story.” In order to rescue Toy Story 2 while working within an impossible deadline, Pixar had to find a way to squeeze thirty months’ worth of story development into a mere nine months. Their solution was to pull talent away from every other activity, sequester them in a room together, and bring the pot to a boil—a bit like applying heat to a chemical mixture in order to accelerate the reaction.

  Over the course of the emergency weekend summit at Sonoma, Pixar’s creative team hammered out the details of a revised story. The new narrative had greater emotional punch, a stronger moral arc, and better character development. To clarify and heighten the personal dilemma faced by protagonist Woody, Oscar-winning composer Randy Newman was enlisted to write a heartrending love song to be sung by the character of Jessie, the yodeling cowgirl. Some basic elements of the original story were retained, but the rewritten tale was far less predictable, more engaging, and more psychologically compelling.

  It’s doubtful the same ultrahigh-speed creativity would be possible on a “normal” project—for example, one where the main characters weren’t already deeply familiar to everyone around the table. It’s impressive that Pixar was able to pull it off. But even more impressive, perhaps, was the company’s commitment to story—even at the price of jettisoning a perfectly adequate narrative, late in the day, in order to replace it with a brilliant one.

  The remaking of Toy Story 2 also illustrates Pixar’s unique style of teamwork. Hollywood can be a hierarchically driven place, where the word of a top executive is all-powerful. But Pixar prides itself on maintaining a spirit of openness, self-criticism, and experimentation, deliberately avoiding the inhibiting rules and rigidly enforced dicta from on high that plague some studios. In John Lasseter’s words, “No note is mandatory,” and “Nothing is standard operating procedure for us.”

  A former Pixar team member describes the company’s reliance on what she calls the “Yes, and” principle. In most organizations, outside-the-box ideas tend to get shot down quickly by people pointing out their weaknesses and explaining why they don’t work. Pixar employees are taught to respond to fresh ideas with a “Yes, and” response:

  Suppose someone says, “We should make a movie about balloons.” Instead of responding with, “No, that would be too hard to animate,” you might say, “Yes, and what if we made them into animal shapes. Then we could tell a story about balloon animals.” The result is a constructive, collaborative approach to idea generation that plays out throughout the company.

  Another Pixar-esque term for the process is “plussing”—constantly adding input from every possible source. “It’s always assumed there’s a way to make it better at every stage,” in the words of director Pete Doctor. “John [Lasseter] is great at saying, ‘Well, what if you did this extra little gesture?’ And suddenly it really sparkles and comes to life.”

  The power of teamwork plays an especially crucial role whenever—as happened with Toy Story 2—a project is in danger of leaving the rails. In a process that has now become routinized, when the director/producer team in charge of a particular project needs or wants assistance and insight, a company “brain trust” convenes, consisting of John Lasseter and Pixar’s eight directors. They’ll study the work in progress and offer ideas aimed at improving the film. But importantly, the brain trust has no overriding authority—the director and producer remain unambiguously in charge of the project. As Ed Catmull explains, this stipulation “liberates the trust members, so they can give their unvarnished expert opinions, and it liberates the director to seek help and fully consider the advice.”

  True to this spirit, the emergency summit that remolded Toy Story 2 drew on the ideas and insights of dozens of Pixar team members. Remember, Lasseter didn’t say, “Toy Story was me.” He said, “Toy Story was us”—and the difference is crucial. “We just got together and started laughing hysterically at all these ideas,” Lasseter continued, “building upon the foundation of the story.”

  When the crew returned to the studio, armed with their transformed story and a renewed sense of purpose, they were energized to perform amazing feats of productivity, starting with rewriting and reboarding the entire picture in a month—an unheard-of feat.

  Toy Story 2 came out on time and proved to be one of the most acclaimed pictures of the year. The pivotal new song, “When She Loved Me,” as performed by pop artist Sarah McLachlan, was nominated for the Oscar for best movie song of the year. The website Rotten Tomatoes, which aggregates and summarizes published reviews from newspaper, magazine, and broadcast critics, reported that Toy Story 2 was reviewed favorably by 147 out of 147 critics—an astonishing 100 percent thumbs-up. Toy Story 2 went on to be not only Pixar’s third straight theatrical hit but the company’s highest-grossing film to that point.

  OPEN-MINDEDNESS, TE
AMWORK, single-minded focus on story—these are just a few of the crucial elements that have enabled Pixar to produce hit movies with greater regularity than virtually any other studio in history.

  Another is Pixar’s unusual emphasis on originality. Pixar deliberately eschews the play-it-safe strategies many studios follow. Instead they push the envelope as strongly as possible. It’s hard to imagine another animation company green-lighting the concept for Pixar’s dark, futuristic, practically dialogue-free eco-drama WALL-E (2008), which Catmull aptly described as “a robot love story set in a post-apocalyptic world full of trash.” Not your typical animated children’s fare—yet WALL-E ended up grossing $534 million, winning the Academy Award for best animated feature (one of twenty-four Oscars won by Pixar to date), and being named number one on Time magazine’s list of best movies of the decade. American audiences struggled with the title of Ratatouille (2007), and industry experts scoffed at the idea of building a cartoon around the character of a curmudgeonly old man, as Pixar did with Up (2009)—yet both films created enormous demand.

  This unwavering insistence on originality is reinforced by the unusual degree of freedom granted to the creative team, which is both a source and a product of the studio’s artistic success. If the Pixar animators experienced two or three costly failures in a row, it’s likely their creative freedom would begin to be challenged by those on the business side. The fact that they keep turning out winners earns them continued license to do their own thing—which in turn results in even more winners.

  In line with this spirit, Pixar prides itself on its research and development department—no other movie studio has one like it. Pixar artists are encouraged to play with ideas they like, the more outlandish the better, and embody their findings in short, low-cost, experimental movies. It’s a unique opportunity for Pixar artists to test concepts and expand their skills without creating undue financial risk for the studio or career risk for themselves. Some of the studio’s hit pictures have originated in shorts produced as R&D projects. And Pixar’s leaders also encourage connections with the smartest minds in academia so the studio will stay abreast of the best new ideas about computer animation and programming.

  The company also prides itself on encouraging long-term partnerships among its talents—another unique element in twenty-first-century Hollywood, where the norm is for collections of artists (actors, screenwriters, directors, producers) to be assembled on an ad hoc basis for individual pictures, then quickly broken up. As members of an enduring team, Pixar employees tend to subjugate their creative egos in favor of a mutual esprit de corps unlike any other in the industry. For example, Andrew Stanton, who played a key role in creating Finding Nemo and who directed WALL-E, willingly resumed his role as an ordinary studio employee after helping to shape those two megahits, exhibiting a modesty that would be rare in any business, much less show business.

  In return for this unusual degree of loyalty, Pixar rewards employees by promoting their long-term career development. For example, every employee, from animators and accountants to security guards, is encouraged to devote up to four hours a week to his or her education. That may include some of the more than 110 courses offered at Pixar University—“the equivalent of an undergraduate education in fine arts and the art of filmmaking,” in the words of its dean, Randy Nelson. “Why teach drawing to accountants?” Nelson rhetorically asks. “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.”

  Even more important, Pixar encourages and rewards artistic contributions from every member of the organization. This philosophy is driven not by some feel-good notion of egalitarianism but by a clear-eyed understanding of the intense demands created by what Ed Catmull calls the “long, arduous process” of creating an exceptional film. He goes on to observe:

  A movie contains literally tens of thousands of ideas. They’re in the form of every sentence; in the performance of each line; in the design of characters, sets, and backgrounds; in the locations of the camera; in the colors, the lighting, the pacing. The director and the other creative leaders of a production do not come up with all the ideas on their own; rather, every single member of the 200- to 250-person production group makes suggestions.

  Catmull is accurately describing the reality of filmmaking, which one critic has described as “the most collaborative major art form since the building of the great cathedrals in the Middle Ages.” In an industry that traditionally lionizes a few individuals anointed as “creative,” such honesty is rare, as is the readiness to respect and honor the contributions made by people at every level of the organization. (Once again, we sense the presence in a great demand-creating organization of social norms, supplementing and enriching the market norms that predominate in most companies, and making a deeper form of partnership among team members possible.)

  Perhaps John Lasseter’s enthusiasm for honoring contributions from every member of the Pixar team is, in part, a reaction to a crushing disappointment early in his own career. A lifelong animation enthusiast, it was a dream come true for Lasseter to join the team at Disney right after college. But as a rookie working under the most distinguished animators in the world, he found he was expected to work hard and say little. When he inadvertently offended his boss in his eagerness to pitch a movie idea based on the newfangled concept of computer animation, he was fired—such a painful episode that he never mentioned it to anyone until years later.

  Ironically, in 2006, Lasseter would be named the new COO of Walt Disney Feature Animation, the very studio that had dismissed him decades earlier—an honor he earned largely because of Pixar’s ability to learn from even the most junior members of its creative team. As Lasseter has said, “Working at Pixar is like being a trapeze artist, where you’re looking across at the other guy to catch you.” That’s elevating teamwork to an almost unprecedented level.

  But perhaps the most central pillar of the Pixar system—and the one that ties together all the specific creative strategies they employ—is to start the movie development process by asking a simple question: What movies would my family and I like to see?

  Anyone with a spark of creativity can provide an insightful and potentially valuable answer to that question—which is why Pixar encourages the flow of ideas from everyone in the company. Asking that question at every opportunity, and following the answers wherever they may lead, is a Hollywood version of the practice all great demand creators share—having the guts to talk with customers and take what they say seriously.

  By practicing these principles, Pixar has architected an extraordinary system for understanding how demand happens, and then making it happen—to the tune of eleven blockbuster hits in a row—movies that have earned both critical acclaim, industry honors (including those astounding twenty-four Oscars and twice as many nominations), and commercial success (see table below).

  PIXAR’S BLOCKBUSTER PORTFOLIO (1995–2010)

  Film Release Domestic Gross (in Millions) Worldwide Gross (in Millions)

  Toy Story 1995 $192 $362

  A Bug’s Life 1998 $163 $363

  Toy Story 2 1999 $246 $485

  Monsters, Inc. 2001 $256 $525

  Finding Nemo 2003 $340 $865

  The Incredibles 2004 $261 $631

  Cars 2006 $244 $462

  Ratatouille 2007 $206 $624

  WALL-E 2008 $224 $521

  Up 2009 $290 $415

  Toy Story 3 2010 $415 $1,063

  Pixar has managed to defy Goldman’s Law largely by finding ways to elicit and activate the personal genius of every one of its employees. “Nobody knows anything”—but when you combine the intellectual and creative resources of hundreds of Hollywood’s most talented minds, the result is a body of insight that is far more robust than what the greatest single genius could produce.

  REPEATED LAUNCH SUCCESS—the kind it takes to build an entire portfolio of successful prod
ucts—is not a function of the economic landscape, or the available technology, or even the types of products a company makes. Success returns to those who build systems to create demand.

  Driven by Goldman’s Law, most organizations launch multiple projects aimed at creating potential future demand, on the same theory that the lottery player buys a handful of tickets rather than a single one. Similar strategies are employed outside of business as well: Foundations and government agencies sponsor numerous pilot projects in fields like medical research and economic development; departments of education support many charter schools testing a variety of teaching methodologies. In each case, they’re hoping for the one blockbuster that will tap a significant level of demand and compensate for numerous failures—a blockbuster whose identity can rarely be predicted in advance.

  Of course, the hundred-bets strategy complicates life for the would-be demand creator. As your perspective broadens from a single project to an entire array of projects, the portfolio often seems like a weed-choked garden in which the most valuable plants are hard to distinguish from the worthless ones. Bottlenecks clog the system, preventing resources from getting to the crucial projects in time.

  Quantity without quality won’t work. To revert to the garden metaphor, the would-be demand creator needs to plant many promising projects, but then weed and winnow them with a sharp eye for quality. Legendary portfolio master Warren Buffett says investors should pretend they have a punch card good for twenty investments—to last their whole life. The point is that when you invest, you must make it count—easy enough to say, but hard to do, and nearly impossible to do consistently. It takes a mind-set, system, and culture that are dedicated to an all-hands-on-deck mentality to maximize the chance of creating a winner, project after project after project.