3 Ways to Build a Culture of Innovation and Creativity at Work

Matthew Luhn

Former Pixar and The Simpsons Story Artist & Animator

December 3, 2019

When people aren’t having fun, they seldom produce good work. That’s how David Ogilvy, the father of advertising, describes the relationship between people and their work. You might say I’m a little biased about this — when I was growing up, my family ran a number of independently owned toy stores throughout the San Francisco Bay Area. I began my career as an animator and story artist for The Simpsons and then moved on to Pixar, where I worked on films including Toy Story, Toy Story 2, Toy Story 3, Monsters Inc., Monsters University, Finding Nemo, UP, Cars, and Ratatouille. As one of the original story creators at Pixar, I participated in building and sustaining the creative culture from our early days as a startup to becoming the most successful filmmaking group in the history of Hollywood.

While many people may think that toy stores and animation studios are the exception when it comes to workplace culture, I believe that because these environments are built to encourage creativity, other companies should learn from what they’ve perfected over the years. I discuss this in my book, The Best Story Wins, and I recently gave a keynote on this topic at Udemy’s People Innovators Summits in San Francisco and London. Read the People Innovators Summit blog highlights here.

Here are my tips to build a culture of creativity and innovation at your organization.

1. Transform the physical environment

The physical workspace has the power to shape people’s attitudes and experiences. Steve Jobs had learned some important lessons during his time at Apple. He noticed that at Apple, people tended to lock themselves behind office doors all day — not a good environment for promoting community, innovation, and happiness. While giving people space and comfort might seem like a good thing, it ultimately led to them becoming more isolated and withdrawn.

When thinking about the workspace at Pixar, Jobs wanted to create a hub where everyone could run into each other, so the bathrooms, cafeteria, and building entrance were all located in one central place. When people left their offices during the workday, they would smile, say hello, and talk about what they were working on. The floor plan encouraged spontaneous creative moments and the cross-pollination of ideas.

And it wasn’t just the overall floor plan — people got creative with their personal spaces, too. People created tiki bars, cereal bars, and all kinds of other artistic installations. This meant people’s offices were conversation starters that expressed their personalities and kept them excited to come to work every day.

Even if you’re not ready to transform your entire office, setting up physical elements like furniture and fixtures also matters. You can start small. A rectangular table can create a pecking order — even subliminally. Round tables create the sense that everyone is on equal footing and all members have an equal say.

2. Eliminate the fear of failure: Failure and creativity go hand in hand

One of the keys to building a culture of creativity and innovation is eliminating the fear of failure. This can be a long and complicated process. Many people operate from a place of fear. They’re afraid to take chances, innovate, or be unique. This goes back to our childhoods when we discovered that doing something inventive or creative led to being picked on or bullied. We’re taught in school that if we don’t do things the “right” way, we’ll get an F. I was lucky that during my childhood, I was encouraged to be a misfit by my father. This led to me choosing environments like CalArts and Pixar where failure and creativity went hand in hand.

Unfortunately, for most people, the fear of failure they develop as children continues into adulthood. Many companies have built a culture ruled by fear where playing it safe replaces the impulse to take creative risks, and everyone is being too careful about what other employees or their bosses will think. 

The most innovative environments are ones where people are encouraged to create, fail, and build new things. Great leaders have all had to fail hundreds of times before they became better leaders. By continuously testing and retesting ideas, they’ve made progress, and they bring that spirit to the companies they lead. Steve Jobs’ failures at earlier startups helped shape his later successes at Pixar and Apple (the second time around). 

When leaders learn from their failures, they encourage others to fail so creativity can blossom. Companies like Google, Apple, and Pixar take chances, and as a result they become beacons for creative people. I look at Netflix today as a great example of this. You can see it in the content they’re developing — it’s original and pushes boundaries. It’s only possible to do this when you give people the freedom to experiment with different ideas.

Team leaders can also create an environment where it feels safe to fail. Rather than pitting team members against each other, they can encourage them to pursue a common goal. In the early days at Pixar, for example, if a story failed, then we weren’t going to have enough money to make the movie. Having a common goal reinforced the idea that we were all friends and shared a sense of camaraderie. It wasn’t a competition, so we were inspired to help each other succeed.

I have worked on numerous films and generated thousands of ideas that never made it to the screen. But these ideas and drawings often ended up inspiring others, linking up to previous ideas, or making a difference in some other way. If I had let these “failures” define me, I wouldn’t have kept going. Luckily, the work environment at Pixar taught me that this is all part of the creative process. When we were working on Toy Story, for example, the character of Woody was originally an unlikable jerk. Nobody who watched the early scenes liked him and The Disney Company decided they weren’t going to fund the movie because Woody was so unlikable. We learned from this failure and made changes so that Woody was more likable right from the start. 

Another element of eliminating the fear of failure is creating clear lines of communication between leadership and employees and encouraging feedback on a regular basis. At Pixar, Steve Jobs and President Ed Catmull would rotate through the whole company, eating lunch with different people each day. During these conversations, they’d encourage people to ask them anything, creating an open environment where people felt empowered to share their ideas.

Feedback was also a regular part of the company culture. When you give feedback, I recommend being honest, but kind. Have a heart. Keep it brief — my rule of thumb is never give notes that are longer than the script you’re reviewing. Make sure that you deliver it in a timely fashion. If you wait too long, people may have already moved on to the next step. At Pixar we always gave our notes or feedback the same day we screened a film. It’s also important to suggest ways to make someone’s ideas better and ask questions to encourage reflection.

3. Encourage innovation

Everybody talks about innovation, but very few people or companies end up truly innovating. To innovate, you must be comfortable with failure time and time again (see the previous section!). Innovating is most often easier for startups because they have nothing to lose — no money, no name, no prestige. Startups are underdogs. They have a big advantage when they fight hard, and they can take the kind of risks that lead to innovation and success.

But this doesn’t mean that only startups can innovate. It just means more established companies will need to work a little harder to encourage innovation. It means you’ll need to focus on creating something new that people will want even before they know what it is. You’ll need to look at the world from a different perspective, discover unexpected obstacles, and solve them in unexpected ways. When you don’t keep surprising people with something new, they start to lose interest and even turn against you. The public may say they want more of the same, but they don’t always know what they want until you give it to them.

Sometimes creating the mindset shift you need for innovation to strike is as simple as getting out of the office and changing your surroundings. At Pixar, we’d go on research trips to learn more about the environment we were trying to create or better understand our characters. 

But if you’re trying to spark innovation and creativity on an ongoing basis, it helps to recognize that people are more than the work they do on a day-to-day basis. Your employees have outside interests and passions, and rather than trying to compartmentalize them, you can encourage them to pursue these interests. For example, at Pixar we had educational stipends that we could use to get outside the walls of the office and pursue something that would refill us creatively, whether it was a painting class or attending an event like Comic-Con.

At the same time, we were encouraged to pursue our personal passions while we were at work, too. If we wanted to make our own film or comic book, we could do so and the company wouldn’t own the rights to it. Pixar encouraged these personal projects because they realized it fed into our creativity and innovation on the job.

You don’t have to overthink it — just look for ways to support your employees as they pursue their interests. At Pixar we’d go out for drinks and draw caricatures for a night. This was a fun way to let off steam and strengthen our friendship with our coworkers, and it ultimately spilled back into our work, too.

It all comes back to the quote I mentioned at the beginning — the work environment has a direct impact on the quality of work that people produce. If you want to encourage creativity and innovation, it’s important to imbue those qualities in your office layout, work practices, and values. And don’t forget to have fun while you’re at it!

About the author:

Matthew Luhn is an accomplished storyteller and instructor with over 20 years’ experience creating stories and characters at Pixar Animation Studios including Toy Story, Toy Story 2, Toy Story 3, Monsters Inc., Monsters University, Finding Nemo, UP, Cars, Ratatouille. As one of the original story creators at Pixar Animation Studios, Matthew participated in building and sustaining the creative culture at Pixar from startup to the most successful filmmaking group in the history of Hollywood.

About Udemy for Business:

Udemy for Business is a learning platform that helps companies stay competitive in today’s rapidly changing workplace by offering fresh, relevant on-demand learning content, curated from the Udemy marketplace. Our mission is to help employees do whatever comes next—whether that’s the next project to do, skill to learn, or role to master. We’d love to partner with you on your employee development needs. Get in touch with us at business@udemy.com

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