9 ms·

How Pixar Bosses Saved Their Employees from Layoffs

202 points by rpledge 16y ago

hkarthik 16y ago
Great story. But look how times have changed. I can't imagine many company leaders today choosing to stand their ground and put their own heads on the chopping block. I'm not sure when it happened, but this kind of servant leadership doesn't seem to exist today. Anyone have recent examples of stories like this?
- scott_s 16y ago
  Times have not changed. This level of commitment of managers to their employees is rare now, and always has been.
  - dustingetz 16y ago
    i try not to be a cynic, but if they had even an inkling of their potential, their commitment was economically rational.
    - sliverstorm 16y ago
      How many people move to take a bullet because it is the economically rational thing to do? Even body guards don't generally elect to take a bullet unless they really like the person they are protecting.
    - scott_s 16y ago
      Potential is not a guarantee. Even if you see potential in someone, there is still a risk in investing in that potential - not all potential is realized. Even if we assume the managers' motives were purely economical, it's still rare. Consider that they took a risk - their own jobs - based on their own belief that their team could deliver.
- GrooveStomp 16y ago
  What has changed is the size of the industry. There are so many animation studios these days that the chances of landing in a studio with leaders like Ed Catmull and Alvy Ray Smith are far, far smaller than they were back then.
- deleted 16y ago
  [deleted]
julian37 16y ago
According to this article, Pixar doesn't treat its employees as nicely these days: http://www.huffingtonpost.com/lee-stranahan/lucasfilm-and-pixar-consp_b_801432.html http://www.huffingtonpost.com/lee-stranahan/lucasfilm-and-pi...
- far33d 16y ago
  Actually, Pixar is probably one of the best places on the planet to work. The no-cold-call policy did not mean that employees were off limits completely. We hired lots of people from ILM, Lucasfilm, Dreamworks, etc, but they came to us. The "evil" of this particular case is pretty overstated. I was there at the time, and basically understood it was happening, and it didn't bother me in the slightest. All those other VFX houses treated their employees like cattle.
  - deleted 16y ago
    [deleted]
  - jonhendry 16y ago
    I can kinda see a practical rationale to a no-cold-call policy: It's pretty well-known when a movie is in production, so one company could throw a monkey wrench into a competitor's film by poaching a key person at a bad time just by throwing a bunch of money. I suppose that's mostly the case anywhere, but film releases are, I think, on somewhat tight schedules to hit release windows. Cause a three month delay in the release of a Pixar movie and you might remove a potentially huge summer competitor from the field. As long as unhappy employees are able to look elsewhere on their own initiative, it doesn't seem that bad.
haasted 16y ago
Remarkably similar to the story of how the jews of Zakynthos were saved during WWII. http://www.ushmm.org/museum/exhibit/online/greece/nonflash/eng/zakyntho.htm http://www.ushmm.org/museum/exhibit/online/greece/nonflash/e...
vl 16y ago
I'm worried about future of Pixar, they always valued original and insightful stories. All of their early and recent productions were delightful to watch. Understandably, this approach left not so many space for sequels. They recently committed to making of Monsters 2 and Cars 2. Story outline for Cars 2 is just terrible. It seems that financial concerns under Disney leadership are prevailing and bits of integrity are slipping away.
- jedsmith 16y ago
  The first time I saw it, I thought the Cars 2 trailer was fake.
- topherjaynes 16y ago
  The Story outline for cars might seem "terrible," but think about every Pixar movie's outline before you actually saw it? A movie about Toys? A Movie entirely about Rats--whose going to watch that? A Robot who doesn't talk, for how long? And yet, each and everyone of those movies were astounding, at least in my opinion, but critics and box office receipts prove my point too. Yes, sequels have a tendency to be purely money ploys, but luckily Pixar's sequels almost exceed the originals (Toy Story 2 and 3). I'd give the future films a chance before you even see a trailer for them.
  - jedsmith 16y ago
    > before you even see a trailer for them. http://www.youtube.com/watch?v=oFTfAdauCOo http://www.youtube.com/watch?v=oFTfAdauCOo
    - axod 16y ago
      Thanks. Looks good to me, but I like kids movies.
  - JabavuAdams 16y ago
    For me, aside from some interesting landscape rendering, Cars isn't in the same league as the other Pixar films. It felt like a pure kids movie + merchandising extravaganza. > and box office receipts prove my point too This isn't saying much. The cost-structure of CGI and effects-heavy films is such that you have to essentially make something that will appeal to kids and/or teens, otherwise you're hosed financially. I can think of many great stories that I'd love to see on screen that wouldn't really appeal to kids + teens, and therefore wouldn't be feasible with the current cost-structure.
sdh 16y ago
don't worry! disney execs will finally figure out a way to get those layoffs to happen.
jedsmith 16y ago
I watched "ILM - Creating the Impossible" on Encore on Demand the other night, and it was well worth the watch. There is quite a bit devoted to the relationship between ILM and Pixar, and a number of historical anecdotes like this article that are very interesting. If you haven't seen it, check it out before they drop it. Of course, The Pixar Story is worth watching as well (same people, I think).
- ruff 16y ago
  The Pixar Story has some issues with it--largely cuts out Alvy Ray Smith and gives a lot more credit to Steve Jobs than deserved. I'd recommend reading The Pixar Touch for a balanced portrayal of the company. For what it's worth, I got to know Alvy by running into him at various Seattle breakfast spots over the years (he's in Berkeley now). If you ever get to hear him speak, be sure to go up and talk with him. He's nothing but a welcoming, smart, and humble guy.
lukefabish 16y ago
It's great to see that level of commitment to a team, but it was also a smart move - those guys knew that the intellectual capital sitting in those employees heads was one of Pixar's biggest assets. Get rid of them so they can go work for a competitor? Nuts.
- wtracy 16y ago
  Which then makes me wonder: If they had gotten laid off, how many of those employees would have followed them to the next job? If your employees are valuable enough, and loyal enough, you might actually win either way in that situation.
Splines 16y ago
If you haven't yet, go and watch the Pixar Shorts Films Collection[1]. It includes a fairly long extra with interviews with early Pixar employees, and the challenges they faced with the limited technology at the time. [1] http://www.amazon.com/Pixar-Short-Films-Collection-1/dp/B000V1Y44G http://www.amazon.com/Pixar-Short-Films-Collection-1/dp/B000...
radioactive21 16y ago
Great story. Of course if you over analysis it's nothing great, under neath it could simply be that the executives know that the layoffs was just a start. First round of layoffs leads to low morale, which leads to a decline in quality which eventually leads to them being removed. A lot of leaderships like coaches are usually on short lifespans. The executives knew that by forcing the company to think about losing two top execs it was serious and maybe reconsider. In this case it was a good gamble. Their intentions is what makes the story great, though. Honestly I would have given a list of people to layoff, but that's why I am not a great leader or a leader of anything for that matter, of any sorts LOL
deepGem 16y ago
Had read about this in HBR long back, Thanks for the refresher. The entire Pixar story is very very inspiring.
Stormbringer 16y ago
It's funny how the mind plays tricks on us. I had thought that Steve Jobs had made much more off the sale than that - when I looked at their numbers 7.4 billion return on 5 million invested over 20 years? Pffft. Then I ran the numbers... ... it translates to a 44% compounding annual increase over 20 years ... Oh that I should do so well for anyone that would invest in me!!
- MWarneford 16y ago
  There's a beautiful coffee table book "The Pixar Story" that talks about the cash Jobs put into Pixar. The book claims Jobs purchased Pixar for $5M and immediately invested another $5M. When he purchased the company he was also running NeXT. Pixar, like NeXT, was a computer company selling computer hardware. Both companies we're struggling and taking up a lot of Job's cash. The story goes that Pixar started to produce more 3D animated shorts, these impressed Katzenberg at Disney who agreed to part fund Toy Story. Only to even get to that point, 6 years after Jobs purchased the company, he'd had to invest a total of $60M into Pixar. He was investing close to $1M a month. Between Pixar and NeXT jobs was nearly broke. Although I suspect his "nearly broke" is a much bigger bank account thank my "nearly broke". Not sure how true the story is. But that's how "The Pixar Story" tells it.
  - yardie 16y ago
    I watched the Pixar Story DVD and when they mentioned that Jobs was writing a million dollar personal check every month to keep the company afloat my opinion on his running the company changed instantly. Most opinions of his role as CEO are really dismissive of him and give all the credit to Lasseter (who does deserve a lot of credit). But Lasseter, beyond working in the company, has no real skin in the game. He doesn't have to justify to himself that this investment may not work out, and continue giving it money...for 10 years. And if Pixar failed its not his bank account that would look like a crater. So when someone opines that Steve didn't really influence Pixar, I casually mention that $100 million over 10 years gets you a lot of influence. And then ask them to read the pixar story.
MarkMc 16y ago
In 2008, Pixar's creative director John Lasseter explained the secret of their success: "The people who work here are doing what they've wanted to do their whole lives." [1] This is great advice that can be applied to any type of work, particularly entrepreneurial start-up activity. If you're in it just for the money and don't enjoy what you do, chances are your little start-up venture will not succeed. It also didn't hurt that Ed and Alvy could stand up to their bosses. In my experience, one feature that separates good manages from bad is the willingness to shield their team from the crap thrown by upper management. [1] http://www.time.com/time/magazine/article/0,9171,1813964,00.html http://www.time.com/time/magazine/article/0,9171,1813964,00....
javanix 16y ago
If anyone is interested, The Pixar Touch by David Price is a pretty fantastic look at the early history (both from a business standpoint and from a technological standpoint) of the company. http://www.amazon.com/Pixar-Touch-Vintage-David-Price/dp/0307278298/ref=sr_1_2?s=books&ie=UTF8&qid=1294850011&sr=1-2 http://www.amazon.com/Pixar-Touch-Vintage-David-Price/dp/030...

202 points by rpledge 16y ago

Great story. But look how times have changed. I can't imagine many company leaders today choosing to stand their ground and put their own heads on the chopping block. I'm not sure when it happened, but this kind of servant leadership doesn't seem to exist today. Anyone have recent examples of stories like this?

scott_s 16y ago
Times have not changed. This level of commitment of managers to their employees is rare now, and always has been.
- dustingetz 16y ago
  i try not to be a cynic, but if they had even an inkling of their potential, their commitment was economically rational.
  - sliverstorm 16y ago
    How many people move to take a bullet because it is the economically rational thing to do? Even body guards don't generally elect to take a bullet unless they really like the person they are protecting.
  - scott_s 16y ago
    Potential is not a guarantee. Even if you see potential in someone, there is still a risk in investing in that potential - not all potential is realized. Even if we assume the managers' motives were purely economical, it's still rare. Consider that they took a risk - their own jobs - based on their own belief that their team could deliver.
GrooveStomp 16y ago
What has changed is the size of the industry. There are so many animation studios these days that the chances of landing in a studio with leaders like Ed Catmull and Alvy Ray Smith are far, far smaller than they were back then.
deleted 16y ago
[deleted]

julian37 16y ago

According to this article, Pixar doesn't treat its employees as nicely these days: http://www.huffingtonpost.com/lee-stranahan/lucasfilm-and-pixar-consp_b_801432.html http://www.huffingtonpost.com/lee-stranahan/lucasfilm-and-pi...

far33d 16y ago
Actually, Pixar is probably one of the best places on the planet to work. The no-cold-call policy did not mean that employees were off limits completely. We hired lots of people from ILM, Lucasfilm, Dreamworks, etc, but they came to us. The "evil" of this particular case is pretty overstated. I was there at the time, and basically understood it was happening, and it didn't bother me in the slightest. All those other VFX houses treated their employees like cattle.
- deleted 16y ago
  [deleted]
- jonhendry 16y ago
  I can kinda see a practical rationale to a no-cold-call policy: It's pretty well-known when a movie is in production, so one company could throw a monkey wrench into a competitor's film by poaching a key person at a bad time just by throwing a bunch of money. I suppose that's mostly the case anywhere, but film releases are, I think, on somewhat tight schedules to hit release windows. Cause a three month delay in the release of a Pixar movie and you might remove a potentially huge summer competitor from the field. As long as unhappy employees are able to look elsewhere on their own initiative, it doesn't seem that bad.

haasted 16y ago

Remarkably similar to the story of how the jews of Zakynthos were saved during WWII. http://www.ushmm.org/museum/exhibit/online/greece/nonflash/eng/zakyntho.htm http://www.ushmm.org/museum/exhibit/online/greece/nonflash/e...

vl 16y ago

I'm worried about future of Pixar, they always valued original and insightful stories. All of their early and recent productions were delightful to watch. Understandably, this approach left not so many space for sequels. They recently committed to making of Monsters 2 and Cars 2. Story outline for Cars 2 is just terrible. It seems that financial concerns under Disney leadership are prevailing and bits of integrity are slipping away.

jedsmith 16y ago
The first time I saw it, I thought the Cars 2 trailer was fake.
topherjaynes 16y ago
The Story outline for cars might seem "terrible," but think about every Pixar movie's outline before you actually saw it? A movie about Toys? A Movie entirely about Rats--whose going to watch that? A Robot who doesn't talk, for how long? And yet, each and everyone of those movies were astounding, at least in my opinion, but critics and box office receipts prove my point too. Yes, sequels have a tendency to be purely money ploys, but luckily Pixar's sequels almost exceed the originals (Toy Story 2 and 3). I'd give the future films a chance before you even see a trailer for them.
- jedsmith 16y ago
  > before you even see a trailer for them. http://www.youtube.com/watch?v=oFTfAdauCOo http://www.youtube.com/watch?v=oFTfAdauCOo
  - axod 16y ago
    Thanks. Looks good to me, but I like kids movies.
- JabavuAdams 16y ago
  For me, aside from some interesting landscape rendering, Cars isn't in the same league as the other Pixar films. It felt like a pure kids movie + merchandising extravaganza. > and box office receipts prove my point too This isn't saying much. The cost-structure of CGI and effects-heavy films is such that you have to essentially make something that will appeal to kids and/or teens, otherwise you're hosed financially. I can think of many great stories that I'd love to see on screen that wouldn't really appeal to kids + teens, and therefore wouldn't be feasible with the current cost-structure.

sdh 16y ago

don't worry! disney execs will finally figure out a way to get those layoffs to happen.

jedsmith 16y ago

I watched "ILM - Creating the Impossible" on Encore on Demand the other night, and it was well worth the watch. There is quite a bit devoted to the relationship between ILM and Pixar, and a number of historical anecdotes like this article that are very interesting. If you haven't seen it, check it out before they drop it. Of course, The Pixar Story is worth watching as well (same people, I think).

ruff 16y ago
The Pixar Story has some issues with it--largely cuts out Alvy Ray Smith and gives a lot more credit to Steve Jobs than deserved. I'd recommend reading The Pixar Touch for a balanced portrayal of the company. For what it's worth, I got to know Alvy by running into him at various Seattle breakfast spots over the years (he's in Berkeley now). If you ever get to hear him speak, be sure to go up and talk with him. He's nothing but a welcoming, smart, and humble guy.

lukefabish 16y ago

It's great to see that level of commitment to a team, but it was also a smart move - those guys knew that the intellectual capital sitting in those employees heads was one of Pixar's biggest assets. Get rid of them so they can go work for a competitor? Nuts.

wtracy 16y ago
Which then makes me wonder: If they had gotten laid off, how many of those employees would have followed them to the next job? If your employees are valuable enough, and loyal enough, you might actually win either way in that situation.

Splines 16y ago

If you haven't yet, go and watch the Pixar Shorts Films Collection[1]. It includes a fairly long extra with interviews with early Pixar employees, and the challenges they faced with the limited technology at the time. [1] http://www.amazon.com/Pixar-Short-Films-Collection-1/dp/B000V1Y44G http://www.amazon.com/Pixar-Short-Films-Collection-1/dp/B000...

radioactive21 16y ago

Great story. Of course if you over analysis it's nothing great, under neath it could simply be that the executives know that the layoffs was just a start. First round of layoffs leads to low morale, which leads to a decline in quality which eventually leads to them being removed. A lot of leaderships like coaches are usually on short lifespans. The executives knew that by forcing the company to think about losing two top execs it was serious and maybe reconsider. In this case it was a good gamble. Their intentions is what makes the story great, though. Honestly I would have given a list of people to layoff, but that's why I am not a great leader or a leader of anything for that matter, of any sorts LOL

deepGem 16y ago

Had read about this in HBR long back, Thanks for the refresher. The entire Pixar story is very very inspiring.

Stormbringer 16y ago

It's funny how the mind plays tricks on us. I had thought that Steve Jobs had made much more off the sale than that - when I looked at their numbers 7.4 billion return on 5 million invested over 20 years? Pffft. Then I ran the numbers... ... it translates to a 44% compounding annual increase over 20 years ... Oh that I should do so well for anyone that would invest in me!!

MWarneford 16y ago
There's a beautiful coffee table book "The Pixar Story" that talks about the cash Jobs put into Pixar. The book claims Jobs purchased Pixar for $5M and immediately invested another $5M. When he purchased the company he was also running NeXT. Pixar, like NeXT, was a computer company selling computer hardware. Both companies we're struggling and taking up a lot of Job's cash. The story goes that Pixar started to produce more 3D animated shorts, these impressed Katzenberg at Disney who agreed to part fund Toy Story. Only to even get to that point, 6 years after Jobs purchased the company, he'd had to invest a total of $60M into Pixar. He was investing close to $1M a month. Between Pixar and NeXT jobs was nearly broke. Although I suspect his "nearly broke" is a much bigger bank account thank my "nearly broke". Not sure how true the story is. But that's how "The Pixar Story" tells it.
- yardie 16y ago
  I watched the Pixar Story DVD and when they mentioned that Jobs was writing a million dollar personal check every month to keep the company afloat my opinion on his running the company changed instantly. Most opinions of his role as CEO are really dismissive of him and give all the credit to Lasseter (who does deserve a lot of credit). But Lasseter, beyond working in the company, has no real skin in the game. He doesn't have to justify to himself that this investment may not work out, and continue giving it money...for 10 years. And if Pixar failed its not his bank account that would look like a crater. So when someone opines that Steve didn't really influence Pixar, I casually mention that $100 million over 10 years gets you a lot of influence. And then ask them to read the pixar story.

MarkMc 16y ago

In 2008, Pixar's creative director John Lasseter explained the secret of their success: "The people who work here are doing what they've wanted to do their whole lives." [1] This is great advice that can be applied to any type of work, particularly entrepreneurial start-up activity. If you're in it just for the money and don't enjoy what you do, chances are your little start-up venture will not succeed. It also didn't hurt that Ed and Alvy could stand up to their bosses. In my experience, one feature that separates good manages from bad is the willingness to shield their team from the crap thrown by upper management. [1] http://www.time.com/time/magazine/article/0,9171,1813964,00.html http://www.time.com/time/magazine/article/0,9171,1813964,00....

javanix 16y ago

If anyone is interested, The Pixar Touch by David Price is a pretty fantastic look at the early history (both from a business standpoint and from a technological standpoint) of the company. http://www.amazon.com/Pixar-Touch-Vintage-David-Price/dp/0307278298/ref=sr_1_2?s=books&ie=UTF8&qid=1294850011&sr=1-2 http://www.amazon.com/Pixar-Touch-Vintage-David-Price/dp/030...