The Primacy of People

Ed Catmull is the president of Pixar studios. He is someone that should know a thing or two about how organisations succeed in creative industries. With this in mind, I want to share a few things he wrote about for the Harvard Business Review in September 2008.

The business strategy literature today is dominated by the resource based view of the firm. This view is based on the assumption that firms achieve different outcomes because of differences in the underlying resource configuration of the firm. What is the critical and necessary resource for a firm that must produce creative output? Ed Catmull leaves no doubt. It is good people. People with creative talent. Outstanding people.

"It's the primacy of people over ideas: if you give a good idea to a mediocre team, they will screw it up; if you give a mediocre idea to a good team, they will either fix it or throw it away."

However, these resources must be utilized in order to competitive advantage to result. In the management literature, the ability to generate value from resources is called capabilities. Catmull has advice in this area as well. The key capabilities need to be able to manage this creative talent and be able to manage risk.

Catmull has some pointers here for those that must make use of such valuable resources. You have to make it safe to take risks. You must have a culture that values creativity. Not just at the level of the high concept, but in every step in the process.

"A movie contains literally tens of thousands of ideas. They're in the form of every sentence, in the performance of every line, in the design of characters, sets and backgrounds... every single member of the 200-250 person production group makes suggestions."

How do you utilize creative people? The key is to empower them, create the right culture and open up communication. To empower, really means just that. Don't get in the way and give them both leeway and support. Let the best talent available lead and provide the direction. Create a culture where these people are supported. Catmull calls this a peer culture; where people of all levels support each other. Where there is a particularly difficult problem, get the best minds together. Always allow and provide opportunities for peer feedback.

Achieving this is difficult. But the payoff for the organisation is a sustainable system of creative performance.