Why Movie Production Teams Do Not Learn From Failure

We love those wonderful stories about how people learn from failure. We champion the practices in certain industries (such as healthcare, the military, and commercial aviation) in which organizations improve based on systematic reflection. Yet, in a new study, Suresh Muthulingam and Kumar Rajaram find that Hollywood production teams do not seem to learn from failure effectively.  Perhaps we should not be surprised, as we have all witnessed highly publicized films, with top actors, flop spectacularly at the box office. 

Why is learning from failure difficult in the movie business?  The UCLA Anderson Review summarizes these scholars' findings: 

So why does failure appear to stick rather than teach? The researchers point to three structural barriers. First, fluid teams disband before the financial verdict arrives, so there is no collective moment of reckoning. Second, individuals tend to blame losses on external factors or other team members rather than examining their own contributions. Third, movie production lacks the kind of systematic post-failure review that exists in aviation or medicine.

The implications stretch beyond Hollywood. Any industry that relies on project-based teams assembled for a single engagement — teams that are dissolved afterward — may face similar dynamics. The research suggests that managers assembling such teams should pay close attention to the collective financial track record of members, particularly those in coordinating roles like producers who bring the group together.

These three points are right on point and consistent with my work and the research of other scholars about learning from failure.  First, stable teams have an opportunity to iterate, to reflect and learn.  Harvard's Richard Hackman once demonstrated the importance of stability, and the perils of instability, in his research on airplane cockpit crews.   Second, the fundamental attribution error is very real.  People tend to blame the person when others fail, but they blame external circumstances when failing themselves.  Finally, you learn effectively if you have a systematic process for evaluating, reflecting, and putting new techniques into practice.  The After Action Review used by the U.S. military is one such successful systematic practice, now employed by many companies, such as Royal Dutch Shell, as well as by many healthcare organizations.   

Why Might a Leader Fail in One Situation, But Succeed in Another?

Several months ago, I wrote about how many professional sports coaches do not win a championship in their first gig as a head coach.  Instead, they win in their second tenure, or even later.  I suggested that we don't see many CEOs in business get a second chance if they fail during their first tenure as a chief executive.  Today, however, I read about one leader who is thriving during her second opportunity to serve as a CEO.  Fortune's Phil Wahba wrote about Michelle Gass.  She served as CEO of Kohl's, which struggled during her time there.  Now, she's serving as chief executive at Levi's, and the company has been growing profitably with strong shareholder returns so far during her tenure.  

Why might Gass be succeeding after stumbling at Kohl's? Wahba offers two key reasons. First, he writes that the Levi's role "plays to all the strengths she's developed over her long career." In short, we have a better match between Gass' skillset and the demands of the job at Levi's than at Kohl's. Gass' background at Starbucks gave her a set of brand management skills that match well with the Levi's brand positioning work that needed to be done. Second, some chief executives may be more suited to growth scenarios than turnaround situations. The skillsets required in each situation are quite different. I certainly agree with both points, and I would add that the Kohl's situation was a tough one for any leader. Brick-and-mortar retailers of that type simply face a tough road with any leader at the helm; the economic and strategic headwinds are strong. I would also add that some leaders may learn from experience very effectively. Gass may have reflected on her first tenure and made key changes that helped her thrive in her second role.

Wahba makes one other key point though. He writes, "some might be in the right place at the right time and get too much credit for success, or, conversely, get blamed for being unable to fix an unfixable company." I think he hits the nail on the head. We often have a severe case of attribution error when it comes to chief executives. We typically give them too much credit when their companies succeed, and too much blame when their companies fail. The same goes for head coaches in sports. We need to consider all the factors that contribute to the performance of a company: the management team surrounding the CEO, the efficacy of corporate governance, the attractiveness of the industry structure, the macroeconomic conditions, and frankly, the good or bad fortune they may encounter during their tenure (to name just a few key factors).

Beware When Leaders Blame the External Environment

Source:  pexels 

My favorite comments from corporate quarterly earnings reports tend to be those that blame the weather for poor same store-sales growth, when no natural disaster or major weather event has occurred.  They simply blame the unusually rainy month of May or the above-average snowfalls in the month of February for lackluster sales.  Hmm..... what's really going on?    Analysts and investors must accept these explanations with great caution.

Remember that human beings tend to exhibit what psychologists call the fundamental attribution error.  When others fail, we look inside of them for their faults or their inadequacies that may have caused that failure.  When we fail, we look outside of ourselves, blaming external conditions or unforeseen situational circumstances.   Corporate leaders do the same, of course.  It's easy to find fault with external conditions, rather than looking in the mirror.

How does one distinguish between invalid attributions or honest assessments of external factors that may have inhibited performance?   One easy way is to look at competitors.  Are they suffering the same fate?  The analysis applies to many metrics, not just sales.  If a few rivals are doing exceedingly well in the same competitive environment, then one has to ask why executives are so readily blaming external circumstances for the poor performance.