“TO INFINITY and beyond!” Buzz Lightyear's memorable if nonsensical phrase has been echoing around playgrounds ever since Pixar introduced the space ranger to the world in “Toy Story” in 1995. It will echo with renewed vigour this week when Pixar releases the third instalment. There is every reason to expect that three will be as successful as one and two—and Pixar will continue to mint money for its parent company, Walt Disney.

Pixar has succeeded as well as anyone in mastering the art of creativity. The company has produced one animated hit after another—including “Finding Nemo”, “Cars” and, a particular favourite of this columnist for its enthusiasm for unbridled individualism, “The Incredibles”. Rather than being crushed by Disney, as many feared, Pixar has reinvigorated its parent company.

But hit machines can run out of steam. Pixar's founding fathers cannot go on for ever. Ed Catmull, the firm's president, is 65, and John Lasseter, its chief creative officer, is 53, which makes him ancient by Hollywood standards. Creativity is hard enough to sustain for individuals, let alone organisations. Business history is littered with the corpses of corporate Icaruses that rose heavenwards on the wings of creativity only to plunge to the ground. That is a worry not just for Pixar but for the whole Disney empire: Mr Catmull doubles as head of Disney Animation Studios and Mr Lasseter is chief creative officer for both businesses.

How likely is it that Pixar will be able to escape that fate? The company has one important thing on its side: planning. Messrs Catmull and Lassetter spent many of their formative years watching Icaruses fall to earth from their base near Silicon Valley. Even Apple almost expired before begging Steve Jobs to return to the company. The pair consequently did everything that they could to build a machine that could outlast them—and continue churning out animated characters for decades to come.

Pixar's approach to creativity is striking for two reasons. The first is that the company puts people before projects. Most Hollywood studios start by hunting down promising ideas and then hire creative teams to turn them into films. The projects dictate whom they hire. Pixar starts by bringing in creative people and then encourages them to generate ideas. One of its most successful recruits has been Brad Bird, who has presided over two Oscar-winning feature films, “The Incredibles” (in which he also provided a character's voice) and “Ratatouille”.

The second is that the company devotes a lot of effort to getting people to work together. In most companies, people collaborate on specific projects, but pay little attention to what's going on elsewhere in the business. Pixar, however, tries to foster a sense of collective responsibility among its 1,200 staff. Employees show unfinished work to one another in daily meetings, so get used to giving and receiving constructive criticism. And a small “brain trust” of top executives reviews films in the works.

Pixar got the inspiration for this system from a surprising place—Toyota and its method of “lean production”. For decades Toyota has solicited constant feedback from workers on its production lines to prevent flaws. Pixar wants to do the same with producing cartoon characters. This system of constant feedback is designed to bring problems to the surface before they mutate into crises, and to provide creative teams with a source of inspiration. Directors are not obliged to act on the feedback they receive from others, but when they do the results can be impressive. Peer review certainly lifted “Up”, a magical Pixar movie that became the studio's highest-grossing picture at the box office after “Finding Nemo”. It helped produce the quirky storyline of an old man and a boy who fly to South America in a house supported by a bunch of balloons.

Pixar also obliges its teams to conduct formal post mortems once their films are complete. In lesser hands this might degenerate into a predictable Hollywood frenzy of backslapping and air-kissing. But Pixar demands that each review identify at least five things that did not go well in the film, as well as five that did.

And the winner is…

None of this can guarantee Pixar's long-term success. Creative organisations depend to a striking extent on the X-factor provided by charismatic leaders such as Messrs Catmull and Lasseter. Creativity depends on serendipity as much as planning: Pixar itself started life making computer parts and only dabbled in animation as a sideline. Success is a great killer of innovation: there is an ever greater danger that, as Pixar's list of blockbusters lengthens, its “creatives” will take ever fewer risks and its managers will become ever more complacent (as happened, by the way, at Toyota). Too much planning can alienate the prickly eccentrics who sometimes drive the creative process. It is worth remembering that Disney went into a long decline because its emphasis on doing things the Disney way alienated many creative people. But on the other hand not even the most robust production systems can eliminate risk: the second “Toy Story” film had to go through a set of wrenching revisions at high speed after it went too far off the rails, in spite of the studio's early-warning systems.

Managing creativity involves a series of difficult balancing acts: giving people the freedom to come up with new ideas but making sure that they operate within an overall structure, creating a powerful corporate culture but making sure that it is not too stifling. Few organisations can get this balancing act right in the long term—particularly as the formula can change over time.

But Pixar's attempt to solve this problem is nevertheless impressive. The company's enthusiasm for thinking ahead is admirable. Even more admirable is its willingness to look to a car company for inspiration. For a culture as inward-looking as Hollywood's, that is a remarkable piece of creative thinking.

This article was corrected online on June 19th: we had referred to “Saving Nemo” when we had of course meant “Finding Nemo”.





Economist.com/blogs/schumpeter