business news in context, analysis with attitude

Fascinating piece yesterday in the New York Times about the acquisition of Pixar, the innovative animation studio that created “Toy Story,” “Finding Nemo” and “Cars,” by Walt Disney Co. – a deal that many experts expected to end as a cultural and financial disaster.

The Times writes: “When Disney bought its rival, Pixar, in 2006 for $7.4 billion, many people assumed the deal would play out like most big media takeovers: abysmally. The worries were twofold: that either Disney would trample Pixar’s esprit de corps…or that Pixar animators would act like spoiled brats and rebuke their new owner.”

Two years later, however, not only have most of these fears not been realized, but Disney’s stock has been outperforming most of its competitors’.

The important lesson here – and the one that seems most applicable to other industries, therefore making this story worth noting here on MNB - is that Disney made a conscious decision to respect the culture and individuality of Pixar.

“There is an assumption in the corporate world that you need to integrate swiftly,” Robert Iger, Disney’s CEO, told the Times. “My philosophy is exactly the opposite. You need to be respectful and patient.” Disney decided to let the Pixar people keep their old email addresses (which is a very big deal), maintain their health benefits plan (which was better than Disney’s), and even leave the sign on the front gate as-is. In doing so, Disney not only engendered trust, but loyalty.

“Key to the successful integration, analysts say, has been Mr. Iger’s decision to give incoming talent added duties … In Disney’s case, Pixar was assigned the difficult task of turning around a storied animation department that had fallen into disrepair as it struggled to find its footing in a new world of computer-generated pictures.”

KC's View:
We can all think of cases where an acquisition was made, and the company doing the buying not only didn’t respect the value and culture of the institution it was buying, but drained the acquired company of everything that made it worth buying in the first place.

You make an acquisition, and you aren’t just buying real estate and sales. If you’re doing it right, you’re also adding heart and soul and brains to your own organization…and it seems silly not to take advantage of the addition.