This article will be analyzing Steve Jobs and his control over the media organization known as Pixar from 1986 to 2006. The two integrated theories used by Steve Jobs were transactional leadership and transformational leadership. By blending these two theories I've noticed that Steve Jobs managed to create his own brand of Charismatic leadership. Steve Jobs, in a sense, looks at these theories as two stages of one movement.
Who is Steve Jobs?
In 1986 Steve Jobs bought a Graphics Group from Lucasfilm's computer graphics division. Even though he bought it for 10 million dollars, this was considered an inexpensive purchase. George Lucas was in the process of some financial difficulties. He was going through a divorce and at this time in California the spouse receives half of everything. George Lucas did not want to lose financial control over his Star Wars enterprises so he made plans to give his ex-wife a monetary settlement.
Lucas thought that selling his computer graphics company was the fastest way he could generate more revenue. He expected to get 100 million for the company. Steve Jobs managed to get the company for only 10 million. Jobs relocated the company to Emeryville, California and named it Pixar. This purchase was one of several strategic moves Steve Jobs made from 1986 to 2006. While making these decisions, Steve Jobs was incorporating transactional and transformational leadership.
Transactional to Transformational
Debra Nelson, in her book Organizational Behavior discusses how Jobs started off working for Atari and then eventually created his own company called Apple Computers. Jobs was a visionary and his software design brought immediate financial success to his employers in the present but Jobs was looking ahead to the future. Wayne Gretzky was often asked about his success in hockey. Gretzky would always say that he doesn't focus on where the puck is; he focuses on where the puck is going. This is a saying that Steve Jobs quoted often. He was always trying to "see where the puck was going" in respect to computer technology.
This did not sit well with many of his employers. The CEO of Apple essentially "ousted" Steven Jobs for his visionary talk. It was at this point that Jobs formed another company called NeXT computers. Steve Jobs also purchased what is now Pixar. These actions on his part demonstrate, "the kind of rhetorical work a leader in transformational mode needs to do when confronted with a staff (Apple Computers) firmly embedded within a transactional mode. It offers further insight into the rhetorical features that make Steve Jobs' discourse so persuasive" (Nelson 248). Steve Jobs convinced many people to follow him as he planned to build computer technology of the future.
Steven had essentially worked in transactional mode when building the Apple Computers company but he desired to extend the transactional mode to a transformational mode. Unfortunately Apple Computers CEO was comfortable with a transactional mode and did not want things to change.
A leader like Steven Jobs can be a transformational leader and a transactional leader. It is harder for a transactional leader to switch to looking into a transformational future but it's easy for a leader who is primarily transformational, like Steven Jobs, to vacillate between the two modes of present and potential future. "Exceptional transactional leadership cannot substitute for transformational leadership" (Nelson 402). "Steve Jobs has an uncanny ability to create a vision and convince others to become a part of it. Some scholars see transformational leadership and charismatic leadership as very similar" (Nelson 402).
Charismatic Leadership in Pixar
When combining transactional and transformational leadership a leader can become a strong charismatic leader of an organization. Steve Jobs' CEO leadership over Pixar from 1986 to 2006 was a perfect example of charismatic leadership born out of these other two approaches. Charismatic Leadership is hard to define because many scholars disagree on the criteria for someone to have charisma. Most everyone agrees that charismatic leaders possess gifts and talents that are used to effectively persuade people to believe in their ideas.
I would consider transactional leadership and transformational leadership as very valuable talents that could be used to effectively persuade a group of people. Jay Conger in his book Charismatic Leadership in Organizations connects these three forms of leadership into one approach. "Many researchers postulated that charisma is a popular attribute of leaders who serve in the change agent or transformational roles. Others believe that charismatic leadership was the most exemplary form that transformational leaders could assume" (Conger 11).
Under the leadership of CEO, co-founder and chairman Steven Jobs, "the Pixar animation studios combined creative and technical artistry to create original films in the medium of computer animation" (Nelson 176). Toy Story was a revolutionary 3-Dimensional, all-digital movie. Toy Story was the first of its kind. Steve Jobs worked with technology guru Ed Catmull and the "multi-talented John Lasseter in an effort to develop software systems to produce animated, three dimensional movies using computer graphics" (Mogel 189).
From 1986-1991 they developed three core software systems: Marionette, Ringmaster and Renderman. These were used to make animated shorts and because Pixar was so cutting edge, they were able to license these programs out to other people. Ed Catmull talks about developing cutting edge animation in an interview. When asked how Pixar could keep such an innovative edge he mentioned a lot of things. One important factor is having a group of honest people working with you. There are no class systems either; they all look at each other as peers.
He also stresses the importance of a good communication structure. "I think we have one of the finest buildings for working and communicating that I've ever seen, which incidentally is a tribute to Steve Jobs, who drove the design of it" (Catmull 1). Jobs draws people in, causing them to feel the "energy of the building" as Catmull puts it. "And when you feel the energy of the building, it helps the group come together and stay together and produce the magical things (Catmull 1).
Steve Jobs drove this design for nearly ten years. In the book The Second Coming of Steve Jobs, author Alan Deutschman chronicles how Steve Jobs maintained an energy among his followers at Pixar for a long time before there was any serious pay off. At the end of 1986, Pixar had no foreseeable future, but the very creative Lasseter was working on some new and innovated ideas. Lasseter had created several short films and one short film in particular attempted to demonstrate and validate the Pixar Image Computer. The name of one of these films was Luxo Jr; the film dealt with a pair of anthropomorphic Luxo brand lamps. The larger was an infuriated parent watching the smaller lamp play with a toy ball that eventually popped.
Luxo Jr was exceptionally popular. It impressed computer scientists and the film industry. The short was nominated for Best Short Animated Film at the 1986 Academy Awards. Pixar now had influence in the film industry and hoped to use it to its advantage. After this Academy Award nomination, Pixar was emboldened to release its second product called RenderMan. Jobs hoped that products like RenderMan and Ringmaster would ignite a consumer uprising. He hoped to encourage amateur people to create computer animation on their home computer, the same way the Macintosh allowed untaught people to create professional-appearing documents like newsletters and flyers.
Unfortunately for Jobs and the Pixar Company, these products did not garner a lot of interest. Pixar sold slightly more than 100,000 RenderMan licenses. RenderMan received wide publicity and respect when James Cameron became a loyal user with his films, The Abyss and Terminator 2. Revenues from RenderMan and the Pixar Image Computer were not enough to bring Pixar out a financial slump. Another idea to boost profits was to begin producing commercials and eventually a television show. Their most popular ads were for Life Savers candy and Listerine.
Pixar had many financial hardships. They saw hope when Lasseter's third short film, Tin Toy, was released and received an Oscar for Best Short Animated Film. Tin Toy was centered on a group of toys in an infant's room and was much more sophisticated than earlier productions. This success took place around the same time as James Cameron's release of The Abyss, which featured a RenderMan rendered character. Tin Toy was the precursor to Toy Story.
Disney's animation world was having amazing success in the late 80s. The Little Mermaid was a huge financial triumph for them. Fortunately for Pixar, Lasseter maintained contact with Disney, and pitched the idea of a Christmas television special. Katzenberg, the head of Disney film, enjoyed all of Lasseter's shorts and offered Pixar a three film deal. Lasseter began working on extending Tin Toy to a feature film now known as Toy Story.
When Steve Jobs heard this news from Lasseter, he rearranged the entire Pixar Company. He shut down almost every sales office. After Steve Jobs reorganized the company, the only work for the sales staff was to continue to sale the RenderMan product to other software makers. The creative division of the company, headed by Lasseter, was tripled. Jobs put all his energy into producing the film Toy Story. This was a risky investment on Steven Jobs' part. If this film failed, the Pixar Company would not survive.
On opening weekend, Toy Story earned $39.1 million, enough to regain the production costs. By the end of its theatrical release, the film netted over $200 million in box office receipts, an inconceivable amount for an animated feature. Pixar became a household name, proving that Jobs' vision was not an insane idea. Toy Story proved to be cutting edge filmmaking that led to several profitable CGI films.
Under Job's leadership, the Pixar company produced Toy Story (1995), A Bug's Life (1998), Toy Story 2 (1999), Monsters, Inc. (2001), Finding Nemo (2003), The Incredibles (2004), and Cars (2006). When the contract with Disney came closer to its end, Jobs made plans to seek a new contract with a new distributer. With the obvious success of computer animated films, he could easily find another distributer or distribute them himself. The Disney chief executive, Michael Eisner tried to prevent Jobs from leaving but Eisner failed.
This failure, among other things, cost Eisner his position. Bob Iger replaced Eisner at Disney; then, Iger managed to work a deal with Jobs. In this deal, Disney would purchase Pixar in an all-stock transaction worth 7.4 billion dollars. This deal made Jobs one of the most powerful leaders of the century. Jobs became more powerful, as a shareholder to Disney, than Roy E. Disney himself. After this deal was made, Jobs owned 7% of the companies stock and joined the company's board of directors. Now Jobs not only oversees Pixar but Disney. He is one of only six men that sit on this committee. Because of the success of Pixar animation, the Disney committee often looks to Jobs for sage technological advice.
Conclusion
When the CEO of Apple computers rejected Steve Jobs' new innovative ideas, Steve Jobs could have folded. He could have acquiesced to the way things were. Steve Jobs could have decided to retire in his thirties but he did not. He had a desire to see computer technology do something it has never done before. After leaving Apple Computers Steve Jobs did four key things. He:
- Sold all his shares in Apple Computers
- Managed to buy a 100 million dollar computer graphics company for 10 million
- Turned Pixar into a production company for computer animated feature films
- Sold Pixar to Disney which resulted in him having more shares of Disney than Roy E. Disney himself
Now, the people at Apple Computers have welcomed Steve Jobs back with open arms. Some, like Alan Deutschman, are even calling it "the second coming of Steve Jobs." These four key choices that Jobs made with the Pixar Company, demonstrate both transactional and transformational thinking; causing Jobs to be one of the most Charismatic leaders of our day.
written by
Chester Elijah Branch
WORK CITED
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Deutschman, Alan. The Second Coming of Steve Jobs. New York: Broadway Books, 2000.
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