In October 2005, Steve Jobs surprises Catmull and Lasseter by proposing that Pixar be sold to Disney. (Just 18 months earlier, Pixar and Disney had publicly fallen out due to Disney CEO Michael Eisner, who had created the faltering Circle 7 to make Pixar sequels without Pixar’s input.) Now, with Eisner replaced by Bob Iger, who candidly acknowledged Disney Animation’s current crisis, Steve argued that a merger would give Pixar more stability and a trusted distribution partner. He asked Catmull and Lasseter to meet Iger. 

After meeting Iger, both Catmull and Lasseter were reassured that Iger would keep Pixar’s best interests in mind. Iger noted that during a trip to Hong Kong Disneyland, he had realized that all of Disney’s recent classic characters had come from Pixar. He asked incisive questions about what makes Pixar work. In mid-November 2005, Jobs, Catmull and Lasseter proceeded with the merger but remained mindful that they must not demoralize Disney Animation’s people. With Iger’s support, Catmull and Lasseter drafted a “Five Year Social Compact” (276) to protect Pixar’s culture. They declined to sign employment contracts, insisting that such contracts erode the trust between employees and management.

In January 2006, Disney acquired Pixar for $7.4 billion. Catmull became president and Lasseter became the chief creative officer of both studios; they immediately shut down Circle 7. At Pixar, Iger promised to safeguard the company’s culture. The next day in Burbank, Catmull emphasized that Disney Animation should not become a Pixar clone.

Catmull quickly noticed that Disney Animation had created a fear-based environment that was reinforced by the building’s layout and an isolating executive suite. He and Lasseter remodeled the space to signal transparency, then established a Disney version of the Braintrust and elevated effective internal leaders. They also ended the use of traditional studio notes and kept a strict separation between the two studios’ resources. A resistant top executive departed, while Andrew Millstein, formerly of Circle 7, emerged as a thoughtful leader and later became general manager. 

The principle of separating the studios’ resources empowered each one to step up and solve its own production problems single-handedly; Pixar dealt with a costly re-rig that delayed Ratatouille, while Disney Animation reworked a developing film called American Dog, retitling it Bolt. Later, the technique of hand-drawn animation returned to Disney with The Princess and the Frog, which featured Disney’s first Black princess. Against marketing advice, the word “princess” stayed in the title, a choice that Catmull later laments, as this title created the false impression that the film was intended only for young girls. Disney’s reworking of the Rapunzel fairy tale, Tangled, enjoyed greater success in 2010; in a Pixar-style gesture, leadership personally delivered bonuses and letters to the crew.

In a 2023 postscript, Catmull notes that Disney Animation lacked director-level individuals with a strong sense of story structure. After writer Dan Gerson flagged the fact that Pixar’s writers were absent from routine check-ins, Catmull brought them in and updated their contracts so that writers could consult across projects. Cross-studio advising strengthened both studios, with Pixar’s Andrew Stanton supporting Zootopia and various Disney directors weighing in on Inside Out. Catmull notes that even this book underwent a peer-review process, as Gerson, Robert Baird, and Nathan Greno helped him to hone Creativity, Inc. itself. Catmull also describes a number of joint advances and technical collaboration between the two studios.

In January 2013, about 35 Pixar leaders met for a two-day offsite at Cavallo Point. Head of production Tom Porter presented cost data, but the discussion uncovered graver issues with Pixar culture. The group noted that production costs must drop by about 10% and observed that outside economic pressure was rising. They also discussed the erosion of the founding principle that ideas can come from anyone.

Guido Quaroni proposed asking all employees for ideas. Lasseter decided to close the studio for a day so that employees could focus solely on solutions. The group named the plan Notes Day and set a date: March 11, 2013.

Preliminary data gathered from all of Pixar’s employees yielded 4,000 suggestion emails and 1,000 distinct ideas. The team distilled these into a list of 120 topics that covered everything from workflow and tools to training and culture. The most requested goal was to determine whether a film could be made in no more than 12,000 person-weeks. 

On Notes Day, Lasseter opened with a candid, vulnerable speech, sharing his disquiet over the tough personal feedback he received. He urged everyone to remain candid, especially toward management. For a full day, employees attended multiple sessions according to their interests, generating high energy and frank discussion.

In the following weeks, various advocates pitched the resulting ideas to management. Four ideas to improve Pixar culture were implemented immediately, an additional five were approved, and about a dozen are ongoing at the time of the book’s writing. Catmull credits the success of Notes Day to the company’s clear, measurable goal, the commitment of senior leadership, and the employees’ willingness to execute new goals themselves. Most importantly, Notes Day restored Pixar’s cultural safety, making candor possible again.