I’ve been reading Creativity, Inc., a history of Pixar and autobiography of Ed Catmull, the founder and CEO. Given how captivating Pixar’s seminal movies are, I wasn’t surprised to find the book is engrossing and well written. But I was dazzled by the wealth of management wisdom the book shares. These are my five favorite insights from the book so far.

Insight 1: Humility is one of the best leadership principles.

There is nothing quite like ignorance combined with a driving need to succeed to force rapid learning. I know this from firsthand experience. In 1986, I became the president of a new hardware company whose main business was selling the Pixar Image Computer. The only problem was, I had no idea what I was doing.

Insight 2: Think about hard problems from first principles, rather than taking shortcuts.

When Catmull and his team launched the company, none of them had ever sold high-end hardware before. They had no sense of go-to-market, or how to price the product. So they asked experts and they launched with $122k price point - and the pricing flopped:

The pricing advice I was given—by people who were smart and experienced and well-meaning—was not merely wrong, it kept us from asking the right questions. Instead of talking about whether it’s easier to lower a price than raise it, we should have been addressing more substantive issues such as how to meet the expectations of customers and how to keep investing in software development so that the customers who did buy our product could put it to better use. In retrospect, when I sought the counsel of these more experienced men, I had been seeking simple answers to complex questions—do this, not that—because I was unsure of myself and stressed by the demands of my new job. But simple answers like the “start high” pricing advice—so seductive in its rationality—had distracted me and kept me from asking more fundamental questions.

Insight 3: Building and managing a team isn’t solely recruiting a group of talented people, but melding a team of talented people who collaborate well.

Getting the team right is the necessary precursor to getting the ideas right. It is easy to say you want talented people, and you do, but the way those people interact with one another is the real key. Even the smartest people can form an ineffective team if they are mismatched. That means it is better to focus on how a team is performing, not on the talents of the individuals within it. A good team is made up of people who complement each other. There is an important principle here that may seem obvious, yet—in my experience—is not obvious at all. Getting the right people and the right chemistry is more important than getting the right idea.

Insight 4: Management by influence is much more powerful, enabling and creativity-encouraging than management by edict.

A little bit of background on this quote. Every six months, the team producing a Pixar film meets with the Braintrust, a group of highly regarded people in the company, who review the film and point out the areas where the film struggles. The Braintrust typically just points out problems, but they don’t make recommendations on the solutions, because they want to enable the production team to be as creative as possible.

The Braintrust has no authority. This is crucial: The director does not have to follow any of the specific suggestions given. After a Braintrust meeting, it is up to him or her to figure out how to address the feedback. Braintrust meetings are not top-down, do-this-or-else affairs. By removing from the Braintrust the power to mandate solutions, we affect the dynamics of the group in ways I believe are essential.

Insight 5: Even the most successful companies have material and important management challenges. The key to solving them is a shared mission and intellectual honesty.

What makes Pixar special is that we acknowledge we will always have problems, many of them hidden from our view; that we work hard to uncover these problems, even if doing so means making ourselves uncomfortable; and that, when we come across a problem, we marshal all of our energies to solve it. This, more than any elaborate party or turreted workstation, is why I love coming to work in the morning. It is what motivates me and gives me a definite sense of mission.

Creativity is masterful book combining a history of a great company, interesting anecdotes about Steve Jobs, and some terrific and very candid management insight.