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Disney was, for years, every bit as big as our imaginations. Theme parks, yes, animation, yes, but each took us, through our imaginations, someplace else. Somehow, their ability to continue to do that--to stimulate our imaginations--has bogged down. That wonderful, successful model that worked and only got better through the Nineties isn't feeding the mind in the year 2006. I'm banking on Pixar's ability to revive the Disney experience and to make it dance again. Seventy years later and it's time for Fantasia Redux. Watch those elephants dance!

Posted by Ed Di Gangi at January 25, 2006 12:27 PM

Don't skip the Shrink Tom, we have to wait a very long time for education to catch up with what is really valuable. Unless it can be 'measured' or 'assessed' the education system over here is not interested. What is the result? We have loads of kids who are taught how to pass tests and guess what? - Surprise, surprise they become very good at passing tests. Wonderful (not) :-(

Posted by Trevor Gay at January 25, 2006 12:47 PM

I don't buy this argument. Ford reduces by 30K on top of what they reduced last time around; GM already announced they will reduce by 25k ~ 30K; DCX by 6K; Delphi by a load; Visteon another load--by the time it's all done a city the size of Des Moines will be out of work--no health insurance either. You can bet those folks won't be running to the video store to rent the DVD of the latest Disney/Pixar release, let alone plopping down $7.50 to see it in a theatre. It's all connected whether you think so or not. In fact, if it weren't for manufacturing you wouldn't be able to drive to the video store, rent the video, download it onto your hard drive, or anything at all. Manufacturing is vital to the entire economy, whether it is soft or hard, new or old. Marketers, sellers, and (alas) even designers never seem to realize this. No way should Ford be bailed out of their self-inflicted woes, but Disney / Pixar more important in the grand scheme of things? I don't think so.

(What does the price comparison have to do with anything? Sure, Pepto is much more expensive, but I don't have to use a gallon of it every time I drive 30 miles. And, did you ever notice Evian spelled backwards is Naive? Coincidence?)

Posted by Mike at January 25, 2006 1:13 PM

I've worked for Disney in the past but currently live in Detroit, my family works for Ford and my business is directly impacted by all of these cuts (Ford, GM, their suppliers, et. al.) but that being said Tom is right about Disney and it does directly apply to Ford.

Ford (and the American auto market in general) is hurting because they're trying to fix their problems by doing everything EXCEPT building a better, cooler more reliable, more affordable automobile. They can cut forever but until they stop getting killed by Honda and Toyota in the showrooms none of it matters.

Bill Ford himself said in the press conference the other day that part of their problem has been that they've been building cars based on their capacity and not on market demand. They've had too much of a build it and they will buy it mentality. Essentially they've sat in their big glass house in Dearborn, Michigan trying to tell the US market what to buy - but giving us little reason to buy it.

Disney under Eisner was for a time simply magical. However, as was bound to happen eventually the Disney Kool-Aid started tasting so good and everyone got so comfortable patting themselves on the back that they too decided that THEY could tell the market what to see, buy and do. THEY were the 500lb gorilla and what they said was reality. Disney thought they could go it alone and didn't need Pixar - after all who was Pixar compared to the House of Mouse - after flopping horribly on the go it alone we dictate you capitulate approach they've turned the corner a bit.

Now both companies future success is not be found in the cost of what they're making - but the quality of what they're making. If Disney/Ford keep on trying to slap their name on inferior cheap products counting on their "brand" to make the sale (instead of their design, quality and product imagination) they're both in trouble.

Both companies were born out of creativity, imagination and a coolness that was so overwhelming that the customers flocked to share in the brands. The brands then got so big they thought their pull was inevitable - product was irrelevant. Both were wrong. Now long term survival for both is dependent on mustering enough creativity and imagination to refire the coolness factor that will bring their customer base back.

Despite all of the gloom and doom (especially in Detroit this week as folks are being escorted out of their offices by HR & security)long term I don't think we have to worry about either business folding. If there's one thing we've all learned it's that previously great but now empty brands rarely die they just get bought up by bigger companies who think the power of the brand of the declining company can be revived and regrown with "proper management".

Posted by Steve at January 25, 2006 2:16 PM

With all due respect to Mike it's not an issue of whether manufacturing is important or not. I can still drive to the video store in a foreign car to rent a movie filmed in Eastern Europe on a DVD mass produced in China to play it on a DVD player made in China (whose tech support and help line is provided by a company in India) while sitting in a chair made in Sweden and eating organic popcorn grown in South America. We do need manufacturing, we just don't need AMERICAN MANUFACTURING.

The cuts at Ford are not because of a lack of respect for manufacturing. Manufacturing is vital to the economy. We're not buying fewer cars - we're buying fewer Ford/GM cars and not because we don't like the UAW or the marketers or the sellers or even the designers it's because we don't like the product.

So in the end IT IS all about the design and the bang that design gives you for your buck (or yen or euro). The whole "Buy American" movement isn't going to save us this time (if it even did last time) if we want to compete we have to compete based on quality and creativity not loyalty.

Make a better, more desirable product and make it more affordable (not cheaper) - it's Business 101.

Posted by Steve at January 25, 2006 2:47 PM

Tom, great post ...but how many US companies deliver to your last line? At Davos this morning Stephen Roach of Morgan Stanley kicked off with a gloomy world forecast - that the world is too dependent on American consumers. US consumers may be willing to pay a preimum for well designed products (though not the ones who shop at Wal-Mart or fly Southwest), the rest of the world is far more "value oriented". The American corporation has to become far leaner and then expect a small premium for design or product innovation advantages. Otherwise we are just , repeatedly, letting copy cat products from around the world under cut us.

BTW - you talk about Evian...ink in HP's cartridges for home printers costs more per ounce than Chanel No.5 or Dom Perignon. Guess how many Chinese and other knock-offs are being launched at that juicy target?

Posted by Vinnie Mirchandani at January 25, 2006 3:09 PM

Tom,
Wharton School had a great take on the Pixar and Disney marriage and the implications of this deal for the whole media and entertainment industry.
http://knowledge.wharton.upenn.edu/index.cfm?fa=viewArticle&id=1379
Hope you find this podcast thought provoking.
Dmitri

Posted by Dmitri at January 25, 2006 3:33 PM

I read this BusinessWeek article on the expected deal about a week ago.

http://www.businessweek.com/bwdaily/dnflash/jan2006/nf20060117_1937_db035.htm

Considering what Disney used to be, this was a sad, but true quote:
"Others say the culture at Pixar, where folks work miles from Hollywood, could be harmed by melding its more freewheeling style with the more corporate life at Disney."

I think that says a lot.

Mike, I hear what you're saying but I think you're taking Tom's statements at surface value. It's not the importance of movie-making VS. the importance of manufacturing. It is the elevation of innovation, quality, big ideas, a new economy, and a new way of doing business (and it's more than just a cliché).

Ford and GM have been stuck in archaic methodology, misguided ambitions, and a focus on efficiencies instead of effectiveness.

Here's the good news: GE has proven that you can turn it around. It can be done. I'm sure that they have some incredible individuals who have the ability to help remake this company, if given the opportunity (there's the key).

Here's the real question: Have they awakened the true spirit of what made them great?

The Pixar/Disney deal has the possibility to do that. The cutting of jobs by Ford? It'll take more than efficiencies.

Posted by DUST!N at January 25, 2006 4:43 PM

Good to see you back, Tom.

"Now if only we could get the schools, including B-schools, to move beyond the industrial, rote-learning age ... and embrace the age of intangibles-creativity-innovation I really would feel better—I might even skip my appointment with my shrink this afternoon."

Absolutely right: I think a lot of people get bogged down in criticism of business schools because they don't have any idea of HOW to change the education structure and better the pedagogical management process (such as with MBA'S), and I must sy, this is the first time I have ever seen a solution offered up.

I really, really, really think you're onto something here that you haven't drawn out because it was part of a wider organisational (cultural) contexy, but this post is perhaps the first to give any indication of where management education should go ...

... Mintzberg and friends from HBS again were all to keen to jump the gun and say "MBA'S don't work in training managers" but never offered up any real solutions.

You once said, "There are no answers." I agree, though ironically, I think you might really have stumbled upon an answer here to a very wide-reaching problem. Arguably I think this is where European business schools might be able to offer up a competitive advantage as Europe has always been, and still is largely, the creative epicentre of the global stage.

Posted by Daniel M. Harrison at January 25, 2006 8:31 PM

Tom- I agree that the Disney/Pixar marriage is definitely a sexier combination. However, I believe Bill Ford is righting his ship with a focus on innovation... New designs, green technology, hybrid engines, etc. are all opportunities for innovation in the auto industry. I believe Bill Ford made it clear that the efficiency changes are necessary, but innovation is the foundation... See our post which trims Bill's call-to-action into the innovation nuggets ... Innovation-Driven Vision: Ford Motor Company ...
As always, thanks for your great insights ... FM

Posted by Innovation-Driven Vision: Ford Motor Company ... at January 25, 2006 9:32 PM

"Now if only we could get the schools, including B-schools, to move beyond the industrial, rote-learning age ... and embrace the age of intangibles-creativity-innovation I really would feel better—I might even skip my appointment with my shrink this afternoon."

Amen!

And the best part is that, in past posts, you've pointed to schools that are already doing it right. On that note, I finally bought Dennis Littky's book and all I can say is "Wow"! Super-Wow! Damn incredible. After the first chapter I was so energized I couldnt sit down... had to keep reading as I paced around the room.

Ive immediately started to put his ideas in use in my classroom, which will either create great excitement,.... or get me fired again :)

viagra online australia cheap Keep pushing for creativity & innovation in education!

Posted by AJ Hoge at January 25, 2006 9:57 PM

"Now if only we could get the schools, including B-schools, to move beyond the industrial, rote-learning age ... and embrace the age of intangibles-creativity-innovation I really would feel better—I might even skip my appointment with my shrink this afternoon."

Amen!

And the best part is that, in past posts, you've pointed to schools that are already doing it right. On that note, I finally bought Dennis Littky's book and all I can say is "Wow"! Super-Wow! Damn incredible. After the first chapter I was so energized I couldnt sit down... had to keep reading as I paced around the room.

Ive immediately started to put his ideas in use in my classroom, which will either create great excitement,.... or get me fired again :)

Keep pushing for creativity & innovation in education!

Posted by AJ Hoge at January 25, 2006 9:59 PM

Yeah, I like this deal alot a plugged here http://web-tones.typepad.com/home/2006/01/pixar_rules.html, should be interesting...

But, uh, please keep the appointment with the shrink and hopefully it will NOT make you any less crazy, because "business crazy" is what you do better than anyone on the planet, lose that and your toast!

Posted by Carlos Leyva at January 25, 2006 10:57 PM

Tom, sorry to extract such a small point from your missive, but you hit the nail on the head when you said:

"Now if only we could get the schools, including B-schools, to move beyond the industrial, rote-learning age ... and embrace the age of intangibles-creativity-innovation I really would feel better—I might even skip my appointment with my shrink this afternoon."

The one thing that concerned us about relocating from Ireland back to the US was the education system. It is still trying to churn out assembly line workers (I'm talking more about elementary and high school more than university). Desperately needs to evolve!!

One of the major factors in our decision to move to Bellingham WA was that there is a Waldorf (Steiner) school there. They take a different approach to learning, and we're looking forward to it - anthropomorphism or not.

Posted by Tom O'Leary at January 26, 2006 5:22 AM

Interesting how people confuse disagreement with misunderstanding. I understood Tom's post perfectly well. I just don't agree with the basic premise, and my last point is that people who live their lives in the world of commerce that takes place either before or after the manufacturing "step" almost always discount manufacturing as something that just sort of happens. And no, I'm not such an innocent that I think the problems with American manufacturing are the fault of anyone other than the management of the specific companies in trouble. There are currently thousands of highly-skilled and motivated professionals who are working like crazed monkeys to save American manufacturing--NOT through gov't trade policies or hand-outs, and certainly not through jingoism (Buy American). Instead, they work within the sector to breed radical change in the way manufacturing is done. They overhaul entire supply chains, slash waste, improve costs, increase quality, form bonds between customers and suppliers, and a host of other initiatives that--if taken seriously and applied religiously--have a serious shot at saving American manufacturing, which does matter to a lot of Americans.

Posted by Mike at January 26, 2006 7:27 AM

I understand Mike's sentiments about manufacturing and Steve's insight re. Disney/Ford. Manufacturing isn't dead..Toyota replacing manufacturing jobs in the US almost at a one to one rate with each GM cut. I suggest US manufacturing management may be on life support. Tom, I know you love GE, but you need to spend a little time in the manufacturing plants that build the jet engines, even the lighting plants. I have, and I cringe. We seem to think that in American manufacturing concerns, saying so makes it so. I do not see the will to make the tough cultural changes necessary. Of course Ford wants to be more innovative! But it won't happen with the same old design team built based on a culture of seniority and entitlement. Bill Ford, I admire you...but you ought to think seriously about outsourcing your design efforts. (heh, you have done it with engines for a long time..) I applaud the efforts you have made to put women in responsible positions in design, but how about putting some 20 somethings in charge of the 50 somethings to light a spark. Change is spreading a lot of pain around Ford, but maybe not enough yet. Do you really believe the same executive team can lead this change?? I don't.

Posted by mike neiss at January 26, 2006 8:03 AM

The apple doesn't fall far from the tree? Mike Neiss's remarks about Ford being resistant to change are dead-on, but this is the way Ford has been run since the days when Henry ran the store. Look at how he resisted changing the Model T, even long after no one wanted to buy them. Or, how about how Henry always stuck by his old cronies even when they were killing the company? It appears the current generation has the same problems with radical innovative change as Henry did. The company almost died several times under Henry's watch, and it could turn out to be even more severe this time than Bill Jr. will admit. Things aren't any better at GM, either. Remember how Bob Lutz was supposed to be some sort of design genius? Once Lutz came on board the company was supposed to be in the capable hands of a "car guy" once more. Where are the wonderful new company-saving designs from GM? All I read about is "wait until our designs hit the show rooms next year..."

Posted by Mike at January 26, 2006 8:17 AM

Here's my source for the comment about Des Moines.
http://forums.industryweek.com/forums/showthread.php?p=45#post45

Posted by Mike at January 26, 2006 8:23 AM

"Lets get small" - remember that by Steve Martin?

Bring back Steve Martin man for that "get small thing".

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To amplify Tom O's point on education above - boy that really is the deal - maybe the corporate world can lead the way because the Democrat dominated union education in the USA means poor teachers and classes are around forever - and USA universities have become so liberally dishonest - almost tragic.

Got turned on to calculus early on - what a ride - learn metrics / math / design - makes life easy.

Posted by Sean at January 26, 2006 9:13 AM

Sean, check out Cathy's first Post today, on Bo Burlingham's new, cool book.

Posted by tom peters at January 26, 2006 10:11 AM

Tom raises an important point of Innovation, Design, Creativity education! Of course, Apple Has it. Motorola has it when it comes to coming out with blockbuster phones like the Razr. However, we should not become complacent! Just saw a segment on CNN on how Design, Innovation and Creativity have been the focus of South Korea as a nation for the past decade or so. Samsung and Hyundai are just as capable of competing in these areas as any U.S company. In fact even Japanese companies like Toyota are facing stiff competition from carmakers like Hyundai and Kia with ever improving quality and better warranties on their cars!

In addition to Innovation, Design Coolness and Creativity, something else intangible that contributed to the success of products like iPod is its "usability". Compared to every other mp3 player, iPods are immensely simpler and easier to use.

If companies can figure out how to make product simpler and easier to use, even with lesser features, they will become immense hits!

Posted by Nari Kannan at January 26, 2006 11:36 AM

Pixar - Disney, Worlds collide and only one culture will survive... My guess is the Mouse will win!

Posted by K. White at January 26, 2006 11:43 AM

I've had some experience with corporate ventures of mixed-sized enterprises and it seems it always comes down to one thing. The partner with the most red tape and approval stages in any venture wins. Eventually the creative voice quits trying to argue the story.

When I was working at putting such ventures together, I looked first for a similarity in corporate size, culture, and philosophy to ensure the venture had a chance of working. But then, they were small ventures. Not Disney-size games of Monopoly.

Posted by Liz Strauss at January 27, 2006 9:55 AM

"The partner with the most red tape and approval stages in any venture wins. Eventually the creative voice quits trying to argue the story."--Nicely said, Liz. Among many other things, you just explained 100% of the reason why I left McKinsey in 1981, 10 months before the publication of In Search of Excellence. (The good news for me: McKinsey had no faith in the book, and I bought out all my rights for $50,000.)

Posted by tom peters at January 27, 2006 12:31 PM

"Sean, check out Cathy's first Post today, on Bo Burlingham's new, cool book."

Check out Mike and I's debate going on in the comments section on the same theme.

Posted by Daniel M. Harrison at January 28, 2006 8:13 AM

I'm reading this thread while listening to Richard Florida (author of "The Flight of the Creative Class") deliver a TV lecture on the Creative Economy. A few quotes: “We’re living through a shift from the Industrial Age to the Creative Age and the shift is just as profound as the shift from the Agricultural Age to the Industrial Age.” “EVERYTHING depends on the development of the human creative capability.” “[Our most important job is to] expand the membership of the Creative Economy.” He goes on to make the point that urban centers — about two dozen world-wide — are the primary containers for the development of this economy.

Posted by John O'Leary at January 29, 2006 9:07 PM