Make the Playground Work

Lessons in innovation from Pixar Animation Studios

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In the 1990s, when Bill Capodagli and Lynn Jackson were researching what would become their best-selling business book "The Disney Way: Harnessing the Management Secrets of Disney in Your Company," the two co-authors encountered a different sort of Magic Kingdom a few hundred miles north of Disney's headquarters in Burbank.

At the time, Bay Area-based Pixar Animation Studios was, to all appearances, a small, technical contractor to Disney, the storied animation giant. And yet by the early 2000s, on the back of a string of record-breaking smashes, Pixar had arguably surpassed Disney as the world's leading producer of animated movies. Disney eventually acquired its smaller partner-competitor for $7.4 billion in 2006, but Pixar continued to generate hit after hit. Its track record to date, with the recent release of "Toy Story 3," is 11 blockbusters, grossing well over $5 billion at a cost of a little over $1 billion to produce.

Not a bad return on investment.

More than a Playground

Capodagli and Jackson were so fascinated with Pixar's success story — and with the culture that enabled that success — that they have produced a follow-up to "The Disney Way" entitled "Innovate the Pixar Way: Business Lessons from the World's Most Creative Corporate Playground."

The "playground," in Pixar's case, is part physical and part philosophical, explains Capodagli (pronounced Ca-po-die). "Their studio seems more like a playground than it does a professional studio. You may see people riding around on scooters or playing foosball," he says.

But the real secret to the studio's success, the author continues, is not to be found on the soccer field or in the Olympic-size pool on the Pixar campus in Emeryville, Calif. Rather, it's a matter of attitude. "Looking at the world through the eyes of a child is how Pixar continues to catch lightening in a bottle," Capodagli says. "Remember when we were that age? We thought that anything was possible."

In other words, Pixar's wizards don't "think outside the box." They don't even recognize the concept of the box. That allows the studio to continuously innovate both technically and creatively. And that also is a key lesson for companies in other industries looking to copy Pixar's success. "Companies have two choices," Capodagli says. "Either you can look at your product or service as a commodity that any one of your competitors can provide. Or you can look at it as a unique, magical experience that only you can provide."

The Supply Chain Link

How does this apply to supply chain? First, Capodagli suggests that senior management must get over their own preconceptions of Supply Chain's role in the enterprise and encourage it — as well as other functions — to be sources of vital innovation. "Leaders get stuck in the rut of 'I'm the smartest one in the room, and we're going to do it my way,'" Capodagli says. "At Pixar, they say, 'This is the problem that we're trying to solve, but everyone can have input.' It's an often used cliché that 'none of us is as smart as all of us,' but Pixar really believes in that, and everyone feels ownership over the product."

Second, foster an atmosphere that encourages collaboration across functional lines. "At Pixar, they merge their technology and story-telling people together as equals. Creating that level of mutual respect and trust is important whether you making movies or moving freight or making hotdogs," Capodagli notes.

Third, remember that what matters most is what matters to the end customer. "It all revolves around one of [Pixar Chief Creative Officer] John Lassiter's mantras, that quality is the best business plan," Capodagli says, adding, "Walt Disney had the same philosophy: If you make the best product that you can, and you take care of your people, the bottom line will follow."

How are you fostering innovation within your company? Is your corporate campus more playground or battlefield? Drop me a line at [email protected] and share your thoughts. I'll look forward to hearing from you.

— Andrew K. Reese
Editor, Supply & Demand Chain Executive