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.   

Careful about Romanticizing Failure

Source: Vistage

Have we come to romanticize failure at times in business and in the society at large?  Perhaps we have.  Is that detrimental to us at times?  New research suggests that we should be careful about romanticizing failure.  Lauren Eskreis-Winkler, Kaitlin Woolley, Eda Erensoy, and Minhee Kim have published a paper titled "The Exaggerated Benefits of Failure" in the Journal of Experimental Psychology: General.   They conducted a series of studies that demonstrate that we often overestimate the likelihood that people will rebound from failure and achieve success.  They write,

Across 11 studies, people in the lab and professionals in the field overestimated the rate at which health failures, professional failures, educational failures, and failures in a real-time task were followed by success. People thought that tens of thousands of professionals who fail standardized tests would go on to pass (who do not), that tens of thousands of people with addiction would get sober (who do not), and that tens of thousands of heart failure patients would improve their health (in fact, they do not).

The scholars argue that people consistently tend to overestimate how much we will learn from our failures.  In reality, we often are not effective at reflecting upon our failures, identifying the root causes of poor performance, and implementing corrective courses of action.  

I would argue that we need to stop repeating overused and inaccurate cliches about failure.  One that often bothers me: We learn more from failure than from success.  Actually, research suggests that we learn most effectively when we can compare and contrast failure and successful outcomes.  Reflecting on both success and failure leads to more improvement than only conducting lessons learned exercises after we fail.   

For those interested in practical guidance for how failure can lead to learning, I highly recommend Amy Edmondson's book, The Right Kind of Wrong: The Science of Failing Well.  Edmondson does not romanticize failure. Instead, she offers a clear-eyed view of different types of failure, some that are more preventable than others, and some which can lead to a great deal of learning if we approach them the right way.  

Why Too Many Goals Can Be Counterproductive

Increasingly, organizations face pressure to achieve a range of goals, extending well beyond profitability and shareholder value maximization.  Many people note the benefits of this broader perspective.   Interestingly, though, Dartmouth Professor Pino Audia's work highlights one potential negative effect of defining too many goals as an organization.  Here's an excerpt from Kirk Kardashian's feature on the Dartmouth Tuck School of Business website regarding Audia's research:

Conventional wisdom says setting goals is a good practice, because it helps people and organizations accomplish their priorities. But it’s not that simple.  “Ironically,” says Pino Audia, Professor of Management and Organizations at Tuck, “having too many goals can make corporations less accountable.”   Audia has come to this perspective after 15 years of researching when organizations learn from failure, including writing a new book on the topic: Organizational Learning from Performance Feedback: A Behavioral Perspective on Multiple Goals (Cambridge University Press, 2021). One of his main contributions to the field of organizational behavior is his discovery that people show a tendency to form self-enhancing assessments of their performance. This tendency thrives in situations where performance metrics are ambiguous, giving people the latitude to see their own performance in a good light, even if others might assess it more harshly. “The proliferation of corporate goals creates greater ambiguity,” Audia explains, “and that creates greater latitude for self-enhancing assessments of performance.”

What does Audia mean by self-enhancement?  He argues that many business leaders don't learn effectively from failure because they find ways to convince themselves that they did not fail.  They try desperately to maintain their positive self-image in the face of disappointing results.  The establishment of a diverse range of objectives facilitates this self-delusion!  If many goals have been defined, they might point to the strong performance on a few of those goals, while trying to ignore or downplay poor performance on a range of other objectives.  Kardashian writes that, "a key feature of self-enhancing decision makers is that they are cognitively agile in the sense that they change the parameters used to assess performance to reach more favorable assessments."   Sadly, this "cognitive agility" means that leaders and organizations don't learn from failure as effectively as they should.  

Do Entrepreneurs Do Better In Their Second Attempt at a New Venture?

Francine Lafontaine and Kathryn Shaw have conducted an interesting new study regarding entrepreneurship.   They chose to study whether entrepreneurs who failed in their first new venture did better the second time around.   The scholars examined retail entrepreneurs in Texas from 1990 to 2011.  Here is a summary of their findings, from an article by Allison Schrager in Business Week:

Over the 21-year-period, 2.4 million retail businesses opened and 2.2 million closed. Three out of every four were founded by first-time business owners.  Lafontaine and Shaw found that the Texas retailers were less successful than the national average for small businesses: One in four closed after a year; half after two. What happened next was telling. Of the first-time entrepreneurs whose businesses closed quickly, the overwhelming majority—71 percent—didn’t bother to try again. But the tenacious 29 percent who did were more likely to be successful the second, third, and even tenth time around. Somewhat paradoxically, their success rate increased with their number of past failures.

Interestingly, the article points out that these findings stand in stark contrast to the findings of a study conducted in the UK by Deniz Ucbasaran, Paul Westhead, and Mike Wright.   They found that serial entrepreneurs have a hard time learning from failure, though they note that people working on several ventures at the same time appear to be more successful .  Here is their explanation:

Psychological research suggests that strong emotions often prompt people to blame others or external events rather than themselves so that they can maintain some semblance of self-esteem and a sense of control. This “attributional bias” appears to make serial entrepreneurs less capable of learning from failure than portfolio entrepreneurs, whose attachment is spread among multiple initiatives.

What do we make of these contrasting findings?  I'm not sure, though I would note that the new study on Texas entrepreneurs has a much larger sample size, and it does not rely on self-reported data from surveys.  The new study also controls for industry and type of entrepreneurs (mostly mom and pop retail stores).   Does the type of venture matter?   Perhaps that may be the reason, but more research will be needed in this area.