The Ride of a Lifetime

by Robert Iger;

  I didn’t yet fully appreciate just how much Steve liked radical ideas. “Tell me now,” he said.

  While still on the phone, I pulled into my driveway. It was a warm October evening, and I turned the engine off, and the combination of heat and nerves caused me to break out in a sweat. I reminded myself of Willow’s advice—be bold. Steve would likely say no immediately. He might also be offended at what he perceived as the arrogance of the idea. How dare I think Pixar was something Disney could just come along and buy? Even if he told me where I could shove it, though, the call would end, and I’d be left exactly where I already was. I had nothing to lose. “I’ve been thinking about our respective futures,” I said. “What do you think about the idea of Disney buying Pixar?” I waited for him to hang up or to erupt in laughter. The quiet before his response seemed endless.

  Instead, he said, “You know, that’s not the craziest idea in the world.”

  I’d so braced myself for rejection that now, even though I knew rationally that there were a million more hurdles between this moment and ever bringing this idea to fruition, I felt a rush of adrenaline that it was even a possibility. “Okay,” I said. “Great. When can we talk more?”

  * * *

  —

  PEOPLE SOMETIMES SHY AWAY from taking big swings because they assess the odds and build a case against trying something before they even take the first step. One of the things I’ve always instinctively felt—and something that was greatly reinforced working for people like Roone and Michael—is that long shots aren’t usually as long as they seem. Roone and Michael both believed in their own power and in the ability of their organizations to make things happen—that with enough energy and thoughtfulness and commitment, even the boldest ideas could be executed. I tried to adopt that mindset in my ensuing conversations with Steve.

  A couple of weeks after that call in my driveway, he and I met in Apple’s boardroom in Cupertino, California. It was a long room, with a table nearly as long down the middle. One wall was glass, looking out over the entrance to Apple campus, and the other featured a whiteboard, probably twenty-five feet long. Steve said he loved whiteboard exercises, where an entire vision—all the thoughts and designs and calculations—could be drawn out, at the whim of whoever held the felt pen.

  Not unexpectedly, Steve was the holder of the pen, and I sensed he was quite used to assuming that role. He stood with marker in hand and scrawled PROS on one side and CONS on the other. “You start,” he said. “Got any pros?”

  I was too nervous to launch in, so I ceded the first serve to him.

  “Okay,” he said. “Well, I’ve got some cons.” He wrote the first with gusto: “Disney’s culture will destroy Pixar!” I couldn’t blame him for that. His experience with Disney so far hadn’t provided any evidence to the contrary. He went on, writing his cons in full sentences across the board. “Fixing Disney Animation will take too long and will burn John and Ed out in the process.” “There’s too much ill will and the healing will take years.” “Wall Street will hate it.” “Your board will never let you do it.” “Pixar will reject Disney as an owner, as a body rejects a donated organ.” There were many more, but one in all cap letters, “DISTRACTION WILL KILL PIXAR’S CREATIVITY.” I assumed he meant that the whole process of a deal and the assimilation would be too much of a shock to the system they’d created. (A few years later, Steve would propose shutting down Disney Animation completely and just making animated films at Pixar. Even John Lasseter and Ed Catmull hated the idea, and I rejected it.)

  It seemed pointless for me to add to his list, so we moved to the pros. I went first and said, “Disney will be saved by Pixar and we’ll all live happily ever after.”

  Steve smiled but didn’t write it down. “What do you mean?”

  I said, “Turning Animation around will totally change the perception of Disney and shift our fortunes. Plus, John and Ed will have a much larger canvas to paint on.”

  Two hours later, the pros were meager and the cons were abundant, even if a few of them, in my estimation, were quite petty. I felt dispirited, but I should have expected this. “Well,” I said. “It was a nice idea. But I don’t see how we do this.”

  “A few solid pros are more powerful than dozens of cons,” Steve said. “So what should we do next?” Another lesson: Steve was great at weighing all sides of an issue and not allowing negatives to drown out positives, particularly for things he wanted to accomplish. It was a powerful quality of his.

  Steve died six years later. I joined the Apple board not long after his death. Every time I went to a meeting there and looked at that gigantic whiteboard, I saw Steve, intense, energetic, engaged, and far more open to the possibility of making this idea (and I suspected many ideas) work.

  “I need to visit Pixar,” I said. I’d never been there, and toward the end of our contract, things had gotten so bad, there was so little collaboration, that we didn’t even know what they were working on. There was one last film for us to distribute, Cars, but no one at Disney had even seen it. We’d heard they were working on a film about rats in the kitchen of a Paris restaurant, which people at Disney had scoffed at. Communication had completely ceased as each company prepared for the final separation.

  If I was going to make the case for buying them, though, I needed to know a lot more about how they worked. I wanted to meet the key people, learn about their projects, and get a sense of the company’s culture. What did it feel like there? What did they do differently from us that led them to consistently create brilliance?

  Steve immediately agreed to the visit. He explained to John and Ed that we’d talked, and while he’d committed to nothing, and wouldn’t commit to anything without their being on board, he thought it was worth their while to show me around the place. The following week, I showed up at the Pixar campus in Emeryville alone. John’s assistant greeted me in the lobby and led me into their cavernous atrium, which Steve had helped design. Dining areas stretch along both sides, and at the far end was the main entrance to their theater. There were people milling about and convening in small groups in a way that reminded me more of a university student union than a film production company. The place was vibrant with creative energy. Everyone seemed happy to be there.

  If I had to name the ten best days I’ve ever had on the job, that first visit to the Pixar campus would be high on the list. John and Ed welcomed me warmly and explained that I would spend the first half of the day meeting with every director, and they would show me elements of the films they were working on—rough cuts of scenes, storyboards, concept art, original scores, and cast lists. Then I would see their new “technology pipeline” and get a sense of how the tech side and the creative side worked together.

  John was up first. He showed me a virtually finished cut of Cars, and I sat there in the theater mesmerized by the quality of the animation and by how far the technology had advanced since their last release. I remember being awed by the way the light reflected off the metallic paint on the race cars, for instance. These were images I’d never seen in computer-generated animation. Brad Bird then showed me his work in progress, the scorned “rat movie,” Ratatouille. It struck me as one of the most thematically sophisticated and narratively original films Pixar had ever made. Andrew Stanton, fresh off of Finding Nemo, presented a portion of Wall-E, a dystopia about a lonely robot who falls in love with another robot, with a bracing message about the social and environmental perils of consumerism run amok. That was followed by Pete Docter’s pitch for Up, a love story that grapples with grief and mortality and takes place against the stunning visual backdrop of South America. (Pete would direct Inside Out after Up.) And Gary Rydstrom pitched a story about species extinction, told through an adventure involving two blue-footed newts. Pixar later abandoned that project, but I loved the sheer level of imagination and intelligence in Gary’s presentation. Brenda Chapman showed me Brave. Lee Unkrich, who would go o
n to direct Toy Story 3 and Coco, pitched a movie about pets in an apartment building on the Upper West Side of Manhattan. (Ratatouille, Wall-E, Up, Toy Story 3, Brave, Inside Out, and Coco would all go on to win Academy Awards for Best Animated Feature Film.)

  I then spent a few hours with Ed Catmull and the engineers on the tech side, who described in detail the technological platform that served the whole creative enterprise. I saw firsthand what John described when he’d welcomed me into the building that morning. He said the animators and directors were constantly challenging the engineers to give them the tools with which they could fulfill their creative dreams—to make Paris feel like Paris, for instance. And Ed and his team on the engineering side were always building tools on their own, which they then brought to the artists to inspire them to think in ways they hadn’t before. “Look at how we can make snow, or water, or mist!” Ed showed me the most sophisticated animation tools ever invented, technological ingenuity that enabled creativity at its highest form. This yin and yang was the soul of Pixar. Everything flowed from it.

  I got into my car in the Pixar parking lot at the end of the day and immediately began scribbling notes. Then I called Tom Staggs and said I had to come see him as soon as I landed in L.A. I had no idea if the board would go for it, and I knew that Steve could change his mind on a whim. But I felt breathless as I described to Tom the level of talent and creative ambition, the commitment to quality, the storytelling ingenuity, the technology, the leadership structure, and the air of enthusiastic collaboration—even the building, the architecture itself. It was a culture that anyone in a creative business, in any business, would aspire to. And it was so far beyond where we were and beyond anything we might be able to achieve on our own, that I felt we had to do all we could to make this happen.

  When I got back to my office in Burbank, I met immediately with my team. It’s an understatement to say they didn’t share my enthusiasm. I’d been the only one to see firsthand what the essence of Pixar was, and to them the idea was still too impractical. There were too many risks, they said. The cost would be too great. They worried that I was barely into my tenure as CEO and I was already putting my future—not to mention the company’s future—on the line by pursuing this.

  This would be a recurring theme in nearly every discussion I had about Pixar. I was told over and over that it was too risky and ill-advised. Many people thought Steve would be impossible to deal with and would try to run the company. I was also told that a brand-new CEO shouldn’t be trying to make huge acquisitions. I was “crazy,” as one of our investment bankers put it, because the numbers would never work out and this was an impossible “sale” to the street.

  The banker had a point. It’s true that on paper the deal didn’t make obvious sense. But I felt certain that this level of ingenuity was worth more than any of us understood or could calculate at the time. It’s perhaps not the most responsible advice in a book like this to say that leaders should just go out there and trust their gut, because it might be interpreted as endorsing impulsivity over thoughtfulness, gambling rather than careful study. As with everything, the key is awareness, taking it all in and weighing every factor—your own motivations, what the people you trust are saying, what careful study and analysis tell you, and then what analysis can’t tell you. You carefully consider all of these factors, understanding that no two circumstances are alike, and then, if you’re in charge, it still ultimately comes down to instinct. Is this right or isn’t it? Nothing is a sure thing, but you need at the very least to be willing to take big risks. You can’t have big wins without them.

  My instinct about Pixar was powerful. I believed this acquisition could transform us. It could fix Disney Animation; it could add Steve Jobs, arguably the strongest possible voice on issues of technology, to the Disney board; it could bring a culture of excellence and ambition into ours that would reverberate in much-needed ways throughout the company. Ultimately, the board could say no, but I couldn’t let go of this out of fear. I told my team that I respected their opinions, and I knew they were looking out for me, which I appreciated, but I thought we had to do this. At the very least I had to exhaust every possible way of making it happen before I gave in.

  I called Steve the day after my visit to Emeryville. Before I dialed, I told myself that I should try to contain my enthusiasm. I needed to offer praise, because Steve’s pride in Pixar was enormous, but this might be the beginning of a real negotiation, and I didn’t want him to feel that I was so desperate for what they had that he could ask for the moon. The moment I got Steve on the phone, any semblance of a poker face collapsed. I couldn’t pretend I felt anything other than pure enthusiasm. I described the day to him from beginning to end, and hoped that my honesty would ultimately serve me better than any “shrewd” pretense anyway. It could have seemed like a weakness—if you show that you want something so badly you’ll be made to pay—but in this case the genuine enthusiasm worked. I ended by saying, as if it wasn’t already clear, that I really wanted to try to make this happen.

  Steve told me he would seriously consider it only if John and Ed were on board. After we talked, he contacted them to say that he was open to a negotiation, and to promise them that he would never make a deal without their blessing. We planned that I would meet with each of them again, so I could explain in more detail what I was imagining and could field any questions they had. Then they would decide if they were interested in going forward with a negotiation.

  A few days later I flew up to the Bay Area to have dinner with John and his wife, Nancy, at their home in Sonoma. We had a long, pleasant conversation and immediate chemistry. I gave them an overview of my career, the Wide World of Sports days and the experience of being acquired by Capital Cities, the years programming ABC prime time, and finally the Disney takeover and the long road to becoming CEO. John talked about his days working at Disney Animation more than two decades earlier, before the Michael era. (He was let go when the powers that be felt there wasn’t a future in computer animation!)

  “I know what it’s like to be taken over by another company,” I told him. “Even in the best of circumstances, the merger process is delicate. You can’t just force assimilation. And you definitely can’t with a company like yours.” I said that even if it isn’t purposeful, the buyer often destroys the culture of the company it’s buying, and that destroys value.

  A lot of companies acquire others without much sensitivity regarding what they’re really buying. They think they’re getting physical assets or manufacturing assets or intellectual property (in some industries, that’s more true than in others). In most cases, what they’re really acquiring is people. In a creative business, that’s where the value truly lies.

  I took pains to assure John that the only way it made sense for Disney to buy Pixar was if we protected whatever it was that made their culture so unique. Bringing Pixar into our company would be a mammoth transfusion of leadership and talent, and we’d need to do it right. “Pixar needs to be Pixar,” I said. “If we don’t protect the culture you’ve created, we’ll be destroying the thing that makes you valuable.”

  John said he was happy to hear that, and then I dropped my grand plan on him. “I’d want you and Ed to run Disney Animation, too.”

  All these years later, John said he was still smarting at having been fired from Disney, but his respect for the heritage of Disney Animation was powerful. Just as I had an impossible time hiding my enthusiasm from Steve, John had an equally impossible time hiding his at the thought of running Disney Animation. “Well, that would be a dream,” he said.

  A few days later, Ed Catmull flew down to meet with me in Burbank. (We had dinner at a steakhouse near the Disney lot, though neither of us ate meat.) As with John, I took pains to explain to Ed my philosophy about acquisitions—that the culture they’d built was central to the magic they were able to create, and that I had zero interest in forcing them to be anything othe
r than what they already were. I also talked about the other opportunity that was on the table: that I wanted John and him to revitalize Disney Animation.

  If John is all emotion and extroversion, Ed is the photographic negative. He is a quiet, thoughtful, introverted doctor of computer science, who invented much of the technology that made Pixar’s digital animation possible. We were far behind Pixar technologically, but there were other tech resources in other parts of Disney that Ed was interested in getting his hands on. In his understated way, he said, “It would be exciting to see what we could do here.”

  Steve called the next day to say that John and Ed had given him the go-ahead to negotiate with me, and not long after that, I had my second meeting with the Disney board, this time in New York. I told them about the visit to Pixar and the meetings with John and Ed, and that Steve was willing to negotiate. Tom Staggs, who still had some misgivings, gave a presentation on the potential economics of an acquisition, including the question of issuing more shares and the potential dilution of Disney stock, and his best guess as to how the investment community would react, which was mixed to fairly negative at best. The board listened intently, and while they remained largely skeptical by meeting’s end, they gave us permission to negotiate with Steve and come back with something more specific for them to consider.

  Tom and I flew straight from our board meeting to San Jose and met with Steve at Apple’s headquarters the next day. I knew going in that I didn’t want the process to be drawn out. Steve was constitutionally incapable of a long, complicated back-and-forth (the prolonged, acrimonious negotiations with Michael were still fresh in his memory). He was already averse to the way Disney made deals, and I feared that if we got bogged down on any one point, he would sour on the whole thing and walk away.

  So as soon as we sat down, I said, “I’ll be straight with you. This is something I feel we have to do.” Steve agreed that we needed this, but unlike in the past, he didn’t use his leverage to demand a wildly impossible number. Wherever we landed was going to be very good for them, but he knew it needed to be in the realm of possibility for us, too, and I think he appreciated my frankness.