Harvard Business Review

Five Ways Pixar Makes Better Decisions


Posted on Harvard Business Review: July 15, 2010 9:53 AM

I'm writing a new book with Larry Prusak and Brook Manville. If we had to name it today, we'd call it Judgment Days: How Great Organizations Make Great Decisions. It's about how organizations—rather than individuals—build their capacity for good judgment and decision making. We're going to try to show how individual decisions, made on particular "judgment days," were shaped and succeeded by activities to improve organizational judgment. We hope to describe a variety of organizations—from companies to schools to hospitals to foundations—that make consistently great decisions over time. In order to surface some of the ideas and get feedback from readers, I'm going to start blogging about the book and plan to get Larry and Brook involved in that activity.

We think that organizations with good judgment have a number of typical attributes. One is that they involve a number of different people in making important decisions. Their senior executives keep in mind that they don't have a monopoly on knowledge and judgment and therefore involve multiple people in decision processes.

Let me give you an example. Pixar (btw, I really enjoyed Toy Story 3) has a phenomenal track record for making great animated movies. (Ed Catmull, the studio's president and co-founder, recently wrote an article for HBR called, "How Pixar Fosters Collective Creativity.") We don't have access—at least yet—to details of the particular decisions made at Pixar, though some must have been difficult: for instance, the decision to make the movie Up about a 78-year old man who loses his wife and rides his balloon-floated house to South America.

How did Pixar make that and other good decisions? There seem to be several factors going on:

Its managers give its directors a lot of autonomy. The studio prides itself on being "director led" and gives them a high degree of autonomy. "Managers like to be in control," but Pixar fights it, according to an interview with Catmull at an event The Economist put on in March.

Even though directors have autonomy, they get feedback from others. "Dailies," or movies in progress, are shown for feedback to the entire animation crew. In The Economist interview, Catmull also describes a more extensive periodic peer review process:

We have a structure so they get their feedback from their peers. … Every two or three months they present the film to the other filmmakers…and they will go through, and they will tear the film apart. Directors aren't forced to respond to the feedback, but they generally do—and the films are generally better for it.

Pixar uses a process for "postmortems" on the major aspects of movies after they're completed. Ed Catmull described it as "like taking cod liver oil," but the company insists on it anyway. During the postmortems, the team involved in the film is asked to come up with five things they'd do again and five things they wouldn't do again. Postmortems not only surface the information but also help to prevent the problems from festering among team members. Catmull comments that because people are starting to game that postmortem process, Pixar is thinking of alternative approaches.

Pixar admits mistakes in other ways. Sometimes, when a movie project isn't going well, Pixar will "restart" it. Toy Story 2, for example, wasn't going well and had to be restarted. Catmull points to that restart as a catalyst for the articulation of several key values at the company.

Pixar has an extensive education program at Pixar University, with more than 110 different courses. That's got to improve organizational judgment. And even there, employees are encouraged to make and admit mistakes. Randy Nelson, the director of Pixar University, says, in the book Mavericks at Work: "It's the heart of our model…giving people opportunities to fail together and to recover from mistakes together."

Clearly, Pixar tries to improve creative decisions through multiple means. Individuals still have an important role, but their individual judgment is enhanced by organizational judgment.

What do you think of the Pixar story? Do you have any examples of good organizational judgment around particular decisions? And would you read a book about the topic?

Tom Davenport's latest book is Analytics at Work: Smarter Decisions, Better Results.

Copyright © 2012 Harvard Business School Publishing. All rights reserved. Harvard Business Publishing is an affiliate of Harvard Business School.

Tom Davenport writes the Harvard Business Review blog: The Next Big Thing.

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