The Culture Code: The Secrets of Highly Successful Groups

by Daniel Coyle

  Creative leadership appears to be mysterious, because we tend to regard creativity as a gift, as a quasi-magical ability to see things that do not yet exist and to invent them. Accordingly, we tend to think of creative leaders as artists, able to tap into wellsprings of inspiration and genius that are inaccessible to the rest of us. And to be sure, some leaders fit this description.

  The funny thing is, when I visited leaders of successful creative cultures, I didn’t meet many artists. Instead, I met a different type, a type who spoke quietly and tended to spend a lot of time observing, who had an introverted vibe and liked to talk about systems. I started to think of this type of person as a Creative Engineer.

  Ed Catmull is such a leader. A soft-spoken seventy-two-year-old with a bristly beard and quick, watchful eyes, he is president and cofounder of Pixar, one of the most successful creative cultures of all time. Every other studio in the world hopes to create a hit once in a while. Pixar can be thought of as a machine that creates hits every single time. Since 1995, it has made seventeen feature films, which have earned an average of more than half a billion dollars, won thirteen Academy Awards, and generated some of the most beloved cultural touchstones of our age. A decade ago Catmull took a side job of co-leading Walt Disney Animation Studios and helped it generate a string of blockbusters including Frozen, Big Hero 6, and Zootopia.

  I meet Catmull at Pixar’s headquarters in Emeryville, California, inside the studio’s sleek Brooklyn building. Brooklyn, built in 2010, is a sunlit box of glass and reclaimed wood, brimming with Pixarian touches like a speakeasy, a fireplace, a full-service café, and a roof deck. It is easily one of the most stunning office buildings I’ve ever seen. (As one early visitor put it, “Thanks for ruining the rest of my life.”) As Catmull and I walk through shafts of sunlight, I make a passing remark about the building’s beauty.

  He stops and turns to face me. His voice is quiet and authoritative, the voice of a doctor making a diagnosis: “In fact, this building was a mistake.”

  I lean in, unsure I’ve heard correctly.

  “The reason it’s a mistake,” Catmull continues evenly, “is that it doesn’t create the kinds of interactions we need to create. We should have made the hallways wider. We should have made the café bigger, to draw more people. We should have put the offices around the edges to create more shared space in the center. So it wasn’t like there was one mistake. There were really a lot of mistakes, along of course with the bigger mistake that we didn’t see most of the mistakes until it was too late.”

  This is an unusual thing for a president of a company to say. If you compliment most leaders on their beautiful multimillion-dollar building, they say thank you, and they mean it. Most leaders will not admit mistakes of this magnitude because they feel the admission would produce a dangerous whiff of incompetence. But not Catmull. He loves these moments; in a way, he lives for them. There is no blame or judgment in his gaze, only a quiet satisfaction born of clarity. We made some mistakes with this building, and now we know that, and we are slightly better because we know that.

  If you set out to design a life that represented the perfect merger of art and science, you might design one that looks like Catmull’s. The child of educators, he spent his early years idolizing Einstein and Disney, studying drawing and physics, and dreaming of making feature-length animated movies. After college, he landed a job with George Lucas, which led to a partnership with Steve Jobs and the creation of Pixar, a small studio with ambitions of fusing computers and filmmaking.

  For several years, Pixar struggled. Then in 1995 came the breakthrough, the $360 million success of Toy Story. That’s when Catmull began to get a nagging feeling that something was out of balance. He knew that other companies had been in this precise situation—on top of the world, flush with cash, lauded for their creativity and innovation. And most of them had stumbled, lost their way, and collapsed. The question was why? And how could Pixar avoid that fate? Catmull talked about that moment in a podcast.

  “So the question was, okay, how do you make it so that it’s sustainable? Because the people I knew of who were in these [failed] companies—and I had a lot of friends in Silicon Valley—were smart, and they were creative, and they were hardworking. So whatever problem was actually leading them astray was really hard to see, and the implication was, whatever that force was, it would also apply to us at Pixar. So this became the interesting question. These forces are at work—can we find them before they do us in? So at the end of the year I realized that this is actually the next goal. It’s not a film. It’s how we can have an environment where we can find and address these problems.”

  We leave the Brooklyn building and walk across campus to the Steve Jobs building, which possesses many of the features Brooklyn lacks: a massive and welcoming central atrium, wide hallways for congregation, and a hivelike buzz. Near the stairs on the second floor stand two offices that embody the two pillars of Pixar’s creative approach. The office on the left belongs to John Lasseter, Pixar’s creative compass, master storyteller, and muse. His office is almost invisible beneath a Day-Glo moraine of toys: action figures, dolls, both old and new, dozens of versions of Mickey Mouse, Woody, and Buzz Lightyear. On the right is Catmull’s office, looking as if it were lifted intact from a German aerospace firm: cool, efficient rectangles rendered in black, white, and gray.

  Catmull sits down and starts explaining, in his calm doctorly voice, how Pixar’s creativity happens. “All the movies are bad at first,” he says. “Some are beyond bad. Frozen and Big Hero 6, for instance, were unmitigated disasters. The stories were flat, the characters weren’t there. They sucked. I’m not saying that in a modest way. I was in the meetings. I saw the early versions, and they were bad. Really bad.”

  This pattern is not unusual at Pixar. In the original Toy Story, Woody started out as bossy and unlikable (“a sarcastic jerk,” Catmull says). The early versions of Up were so bad that the entire story was changed. “Literally the only thing that stayed the same was the word up,” he says.

  When most people tell stories about their successful creative endeavors, those stories often go like this: The project started out as a complete disaster, but then at the last moment, somehow we managed to rescue it. This arc is attractive because it dramatizes the improbability of the rescue and thus places the teller in a flattering light. But Catmull is doing something profoundly different. He sees the disaster and the rescue not as improbable companions but as causally related. The fact that these projects start out as painful, frustrating disasters is not an accident but a necessity. This is because all creative projects are cognitive puzzles involving thousands of choices and thousands of potential ideas, and you almost never get the right answer right away. Building purpose in a creative group is not about generating a brilliant moment of breakthrough but rather about building systems that can churn through lots of ideas in order to help unearth the right choices.

  This is why Catmull has learned to focus less on the ideas than on people—specifically, on providing teams with tools and support to locate paths, make hard choices, and navigate the arduous process together. “There’s a tendency in our business, as in all businesses, to value the idea as opposed to the person or a team of people,” he says. “But that’s not accurate. Give a good idea to a mediocre team, and they’ll find a way to screw it up. Give a mediocre idea to a good team, and they’ll find a way to make it better. The goal needs to be to get the team right, get them moving in the right direction, and get them to see where they are making mistakes and where they are succeeding.”

  I ask Catmull how he knows when a team is succeeding.

  “Mostly you can feel it in the room,” he says. “When a team isn’t working, you see defensive body language, or you see people close down. Or there’s just silence. The ideas stop coming, or they can’t see the problems. We used to use Steve [Jobs] as a kind of a two-by-four to whack people in the head so they could see the problems in the movie—Steve was good at that.
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  “But it becomes harder and harder as time goes on, because as directors get more experience, they sometimes have a harder time hearing other points of view that might help them. There are so many parts you have to get right, and it’s so easy to get lost in this swirling mass. Your first conclusions are always wrong, and so are your second and your third. So you have to create mechanisms where teams of people can keep working together to see what’s really happening and then work together to solve the problems.”

  Pixar realizes these mechanisms in a set of regular organizational habits. In the Dailies, held in the morning, all of Pixar’s people gather to view and comment on the previous day’s footage. (Animation is a spectacularly slow process; each day produces only a few seconds of film.) In field trips, teams immerse themselves in the environments of their movies (scuba-diving trips for the Finding Nemo team; archery lessons for the Brave team; cooking lessons for the Ratatouille team). In BrainTrust meetings (discussed in Chapter 7) a team of Pixar’s top storytellers provides regular, vigorously candid, and painful feedback on films in development. At Pixar University, an assortment of classes acts as a kind of mixer, allowing people from different areas of the company to learn side by side. (The classes teach everything from fencing to painting to tai chi.) And in the postmortems, off-site retreats that Catmull organizes after a film is completed, the team members capture and share the biggest takeaways from the process.

  Each gathering brings team members together in a safe, flat, high-candor environment and lets them point out problems and generate ideas that move the team, stepwise, toward a better solution. (Not surprisingly, Catmull is a passionate admirer of the Japanese concept of kaizen, or continual improvement.) Most of these meetings access the brainpower of the entire group while maintaining the creative team’s ownership over the project.*

  Accordingly, Catmull has almost no direct involvement with creative decisions. This is because he realizes that (1) the teams are in a better position to solve problems, and (2) a suggestion from a powerful person tends to be followed. One of his frequently used phrases is “Now it’s up to you.” This is also why he tends to let a troubled project roll on “a bit too long,” as he puts it, before pulling the plug and/or restarting it with a different team. “If you do a restart before everyone is completely ready, you risk upsetting things,” he says. “You have to wait until it’s clear to everyone that it needs to be restarted.”

  Catmull is congenitally wary of mottoes and catchphrases, as he believes they can easily distort reality. Nonetheless a handful of “Ed-isms” are heard in Pixar’s corridors. Here are a few:

  Hire people smarter than you.

  Fail early, fail often.

  Listen to everyone’s ideas.

  Face toward the problems.

  B-level work is bad for your soul.

  It’s more important to invest in good people than in good ideas.

  You’ll notice that, in contrast to Danny Meyer’s vivid, specific language, these are defiantly un-catchy, almost zen-like in their plainness and universality. This reflects the fundamental difference between leading for proficiency and leading for creativity: Meyer needs people to know and feel exactly what to do, while Catmull needs people to discover that for themselves.

  Catmull spends his days roving around Pixar and Disney, watching. He helps onboard new employees and observes BrainTrust meetings, hawkeyeing the interactions for signs of incipient trouble or success. He cultivates back-channel conversations to find out what’s going on behind the scenes. He worries when he sees awkward silences or people avoiding each other; he celebrates when a group takes initiative without asking permission (such as when a group of animators organized an impromptu Boy Scout–themed sleepover on Pixar’s lawn). He defends teams when they make mistakes (and they can make some extremely expensive mistakes).

  If Danny Meyer is a lighthouse, beaming signals of purpose, then Catmull is more like the engineer of a ship. Catmull doesn’t steer the ship—he roves around belowdecks, checking the hull for leaks, changing out a piston, adding a little oil here and there. “For me, managing is a creative act,” he says. “It’s problem solving, and I love doing that.”

  —

  If you were to create a field experiment to test Catmull’s leadership methods, it might consist of the following steps: (1) locate a struggling movie studio; (2) place Catmull in charge and, without changing any personnel, allow him to reengineer the group’s culture. Then you would wait to see what happened.

  That, in fact, is precisely what happened in 2006. The struggling studio happened to be Walt Disney Animation. After a run of success in the 1990s, Disney had entered a decade-long creative wasteland, producing a series of films that were consistently flat and dull and, not coincidentally, unprofitable. (This string included The Lost Empire, Brother Bear, Treasure Planet, and Home on the Range, which featured a burping cow voiced by Roseanne Barr.) So Disney CEO Bob Iger attempted the corporate equivalent of a heart transplant, purchasing Pixar and putting Catmull and Lasseter in charge of reviving the most storied brand in animation—and maybe in all of entertainment.

  Most observers didn’t expect the combination to work out. For starters, there was the size differential. Pixar was relatively small, while Disney was gargantuan, and it was hard to imagine that Catmull and Lasseter could control it. “Like Nemo swallowing the whale” was the way Fortune magazine put it. Another factor was the geographic challenge: Pixar was in Emeryville, near Oakland, while Disney was 350 miles away in Burbank. Entertainment-industry history showed that these kinds of acquisitions were risky and often harmful to both parties.

  After the sale went through, Catmull and Lasseter traveled to Burbank and made a speech to Disney employees. Lasseter was inspiring, talking about legacy and rejuvenation. Catmull, typically, said about two sentences. “We’re not going to turn Disney into a clone of Pixar. What we’re going to do is build a studio on your talent and passion.”

  They got to work, starting with physical structure. At the time of the acquisition, Disney employees were scattered across four floors of a giant building, siloed in groups that reflected their expertise (animation, layout, design) rather than their collaborative function. Catmull headed up a rebuild that smooshed all the creative and technical people together around a central gathering place called the Caffeine Patch. He then put his and Lasseter’s offices (they committed to spending two days a week at Disney) near the center.

  Next Catmull focused on creative structure. Disney had been using the conventional film development model, which worked as follows: (1) studio executives create development teams, which are charged with generating stories; (2) studio executives evaluate those ideas, decide which would be developed, and assign directors to each one; (3) directors make the movies, and executives evaluate early versions, offer notes, and occasionally create competitions called “bake-offs” to decide which film is ready for release.

  Catmull flipped that system on its head, removing creative power from the executives and placing it in the hands of the directors. In the new structure, the directors were responsible for coming up with their own ideas and pitching them, rather than being assigned them by studio executives. The job of the executives was not to be all-deciding bosses but rather to support the directors and their teams as they undertook the painful journey from idea to workable concept to finished film. Early in the transition, Catmull invited Disney directors and executives to Pixar to observe a BrainTrust meeting. They watched the team work together to pick a movie apart and do the hard work of rebuilding it.

  The change in the energy at Disney was immediate. Disney directors called it a breath of fresh air and likened it to the fall of the Berlin Wall. It was a moment of hope, reinforced by the fact that the Disney team’s subsequent movie improvement meetings (they dubbed them the Story Trust) were judged to be the best and most useful anyone there had experienced.

  Catmull, however, wasn’t as quick to celebrate, knowing that real change wasn
’t going to happen overnight. “It takes time,” he says. “You have to go through some failures and some screw-ups, and survive them, and support each other through them. And then after that happens, you really begin to trust one another.”

  Which is what happened. The first few films after the acquisition were immediately better, scoring improved reviews as well as box office success. Then in 2010, Disney’s teams began clicking at a Pixarian level, with Tangled ($591 million in worldwide box office), Wreck-It Ralph ($471 million), Frozen ($1.2 billion), Big Hero 6 ($657 million), and Zootopia ($931 million). Catmull notes that the transformation happened with virtually no turnover. “The people who made these films are the same people who were there when they were failing,” he says. “We put in some new systems, they learned new ways of interacting, and they changed their behavior, and now they are a completely different group of people when they work together.”

  We put in some new systems, and they learned new ways of interacting. It’s strange to think that a wave of creativity and innovation can be unleashed by something as mundane as changing systems and learning new ways of interacting. But it’s true, because building creative purpose isn’t really about creativity. It’s about building ownership, providing support, and aligning group energy toward the arduous, error-filled, ultimately fulfilling journey of making something new.

  * * *

  * You see this pattern with many highly creative groups, such as Lockheed’s famous Skunk Works (which designed the U-2, the Blackbird, the Nighthawk, and several other legendary planes in record time), Xerox’s PARC (which invented the computer interface that Steve Jobs “borrowed” for Apple), Google X, Procter & Gamble’s Clay Street, and Mattel’s Project Platypus, all of which are essentially the same place: physically distant from the parent group, nonhierarchical, and given maximum autonomy.