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The first and biggest challenge that Iger had to face before that idea could ever become a reality was the disdainful attitude towards Disney of Pixar’s controlling shareholder, Steve Jobs.

Pixar and Disney were already doing business together for some time with Disney co-funding, co-owning, marketing and distributing many of Pixar’s films. However, their partnership came to an abrupt halt due to numerous disputes in 2004. Steve Jobs concluded that Disney had become too process-oriented with excessive bureaucratic procedures and a lack of collaborative spirit.

Since all of the talent and leading creative minds in animation technology and storytelling were concentrated in Pixar, Jobs had all the leverage in negotiations.

Pixar’s invaluable assets and Bob Iger’s irresistible trait

Unexpectedly though, when Jobs forced Iger to share his “crazy idea” over the phone on a warm October evening, Iger’s sweaty proposition was met with recipience. When discussions on the matter started, Jobs brought forth his main concern and biggest fear: Disney would obliterate Pixar’s culture. He believed the creativity and innovation that Pixar had demonstrated over the years was attributed to its collaborative culture more than anything or anyone else.

Inside Pixar technology was inspiring new storytelling techniques and art was pushing the boundaries of technological possibilities. Those were cultural aspects unique to Pixar and, in Jobs’ mind, what enabled the company to technologically and artistically pioneer in the animation industry

Thus, his primary goal during the negotiations was shielding Pixar’s culture from what he viewed as a destructive and sterile culture in Disney. Pixar was bringing such originality that each movie always seemed like a huge risk in terms of storytelling. Imagine pitching their movies, for example, a clownfish loses its father, and the father teams up with another fish that has memory problems to find his son. Not so inspiring.

In essence, nobody knew or could guarantee whether the next Pixar movie would be a massive success or a total flop. An aspect that made the investment extremely risky. Disney was conservative, and Jobs feared that Disney would prevent such risks and thus kill the innovative ideas that would come out of the Pixar movie.

On the other hand, Disney was in desperate need of new ideas, people brave enough to take risks, and the technology to bring those ideas to life. Iger needed to revitalize Disney Animation and the best people who could do that were Pixar’s visionary leaders John Lasseter and Ed Catmull.

It was Bob Iger’s uncommon career experiences that made the difference. Twice during his career, the company he was working for was acquired by another. First, it was ABC from Capital Cities, and the second was Capital Cities/ABC from Disney. This firsthand knowledge on the impact on the culture of a company that acquisitions bring and the candor that Steve Jobs and Bob Iger’s relationship was developed on allowed the latter to persuade the former that Pixar’s acquisition by Disney would leave its culture intact. And so it did.

On January 24, 2006, The Walt Disney Company bought Pixar Animation Studios for $7.4 billion and allowed the studio to create great films while its leaders refreshed Disney from the inside. Since then, Pixar has earned more than $11 billion at the global box office and even more through Disney’s other assets such as theme parks and physical products.

Key Takeaway: Crazy ideas need respect and candor to become reality

Pixar’s acquisition story reveals that every new and radical idea needs more than just determination and hard work to be realized. Bob Iger had clear strategic priorities when he became CEO, but also had the prudence to respect the unique cultural qualities of Pixar.

He was able to recognize that the value of Pixar was in its people and their ways of collaborating. The sincerity and openness that both Jobs and Iger demonstrated laid the grounds for fertile conversations which resulted in the merging of two companies and the birth of a new one that leveraged each other’s strong assets while mitigating their greatest vulnerabilities.