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 / Second Quarter 1997 / Issue 7(originally published by Booz & Company)


How to Manage Creative People: The Case of Industrial Light and Magic

"They gave up, because things are too fluid and dynamic in this industry,'' Mr. Muren said. "It's like a war, it's so dynamic. Short of being anarchy, there's a lot of freedom here. There's not a lot of committees, not a lot of checks and balances in place.

"If there was too much structure," he added, "one of us would say, 'You can't possibly predict all this.' Movies can't be made that way.''

George Lucas has not produced a feature film of his own in many years, but he recently began working with I.L.M. on the first of three movies planned long ago as the prequels to the Star Wars trilogy. Although the stakes are high, this is but another vendor/ client relationship to be managed, another project to fit into I.L.M.'s process.

"In fairness, when George Lucas set up the original I.L.M. to do Star Wars, he made all the decisions,'' Mr. Morris said. "Now George is a client to us like any other, and we put together a project team for the film.

"He doesn't expect to come in and have it be his sandbox," Mr. Morris added. "He expects to be a well-treated client."


Just as Industrial Light and Magic works hard to remain a strategic supplier to the film industry's leading producers and directors, so it carefully manages relationships with its own sources. No vendor is more strategic to I.L.M. than Silicon Graphics Inc., which makes the powerful workstations and servers used to create computer-generated images.

Indeed, the relationship between I.L.M. and S.G.I., which is based in Mountain View, Calif., is a symbiotic one. Silicon Graphics's technology has allowed Industrial Light and Magic to produce memorable special effects, like the liquid metal cyborg in Terminator 2: Judgment Day and the tornadoes in Twister, which could not otherwise have been made. At the same time, I.L.M. has pushed and prodded S.G.I. in ways its traditional customers in aerospace and manufacturing never do.

"We tend to be their lunatic fringe, the place they find out how to do things better,'' said Jim Morris, I.L.M.'s president. In return, Silicon Graphics has developed a system that uniquely suits I.L.M.'s needs, he said. "We have tried other things over the years and have actually migrated to a greater rather than lesser concentration of S.G.I. machines,'' he noted.

Industrial Light and Magic's founding in the mid-70's predates that of Silicon Graphics by about five years, and the special effects in Star Wars, which was released in 1977, were all essentially analog, although a computer was used to control the motion of a camera tracking the physical models. But I.L.M., which was an early customer for S.G.I., in 1982 produced the first completely computer-generated film sequence, for Star Trek II: The Wrath of Khan. The first completely computer-generated character followed in 1985, with the stained glass man in Young Sherlock Holmes.

In recognition of the growing importance of their relationship, I.L.M. and S.G.I. formed the Joint Environment for Digital Imaging, or JEDI, in April 1993. Taking its name from the Jedi knights of Star Wars, JEDI was billed as an alliance to create the largest and most advanced production facility for the use of digital imagery in entertainment. In practice, the alliance is a non-binding, non-exclusive joint development agreement.

"We saw that having a customer/partner like I.L.M. would make a strategic difference to us,'' said Gary L. Lauer, Silicon Graphics's president for world trade. "A lot of what they wanted to do started having a profound influence on our product. They push us harder and push us faster to the outside of the envelope.''

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