• May 2016

The Business of Hollywood

Hurray for Hollywood! After all, who doesn’t love movies, celebrities, and the bright lights of that big city? But what’s it really like to do business in Tinseltown?

On a recent business trip to Los Angeles, I had the opportunity to take a look at the City of Angels from a business angle. In this issue of Be Inkandescent magazine, we dedicate our 18 columns to learning more about what makes LA tick — and how you might be able to play more like a movie star or a mogul at your small business.

To get us started, we turn to Prof. Adam Gordon, PhD, who teaches at Cardiff University and writes regularly on business topics for Forbes.com. Scroll down for his insightful article, “Celebrities as Entrepreneurs.” And don’t miss Gordon’s Tips for Entrepreneurs, in which he takes us to Oxford University to learn how educators are helping business leaders better forecast and manage the future.

To whet your appetite, here’s a taste of what else is in this month’s issue:

  • Child actor Jeff Cohen — best known as Chunk in “The Goonies” — grew up to be an attorney who penned The Dealmaker’s Ten Commandments. Be sure to check out this title from the guy who did the infamous “truffle shuffle.”
  • Actor and director Paul Barry — known for his work on “Love Is a Four-Letter Word,” “Small Claims,” and “Introducing the Dwights” — shares his thoughts on how actors tap into their intuition, and how you can, too, in this month’s IntuitionRules.com column.
  • Paul Newman’s daughter Clea is carrying on her father’s legacy as you’ll see in our podcast interview about her nonprofit, SeriousFun.

We leave you with this parting thought from Paul Newman: “I was terrorized by the emotional requirements of being an actor. Acting is like letting your pants down; you’re exposed. I’d like to be remembered as a guy who tried — tried to be part of his times, tried to help people communicate with one another, tried to find some decency in his own life, tried to extend himself as a human being. Someone who isn’t complacent, who doesn’t cop out.”

Here’s to seeing your name in lights! — Hope Katz Gibbs, publisher, Be Inkandescent • founder, Inkandescent Public Relations

Celebrities as Entrepreneurs

By Adam Gordon, PhD Executive Education Director Cardiff University

Harvard Business School (HBS) Professor Anita Elberse has a decade of research charting the great rise in power enjoyed by top-tier celebrities in the entertainment industry, both in commanding ever-higher pay and as moguls in their own right, able to dictate the terms of engagement and define new business models for themselves.

If stars are becoming power brokers of their industries, it makes sense to get them into the mix of a business school course that looks at strategies for success in the entertainment industry.

Last year when HBS Executive Education ran its four-day Business of Entertainment, Media and Sports (BEMS) course, basketball star Dwyane Wade was a student delegate, alongside other stars who have sought anonymity. In 2014, linebacker Brandon Marshall and supermodel Karlie Kloss were in the class. When I interviewed Elberse for Forbes.com, she said: “If you compare the world of entertainment now with the world of entertainment 25 years ago, you see that some individual stars can get things done now and can wield an influence now that they couldn’t in the past.”

Superstars are getting smarter about how much new-found power they have.

Wanting to know how to best use that power is what brings people like Wade into the HBS classroom. “They want to know how they can best monetize their brand enterprise and leverage their influence.”

Says Elberse: “If you want to understand the world of entertainment, you cannot just have people from the big (conventional entertainment industry) companies in a room, and have them try to figure out what’s the future. You have to also incorporate the perspective of people like Wade or Kloss, and get an understanding of what it is they want to achieve and how they want to achieve it. Because increasingly they are shaping this space. That’s why we are keen to have these people in the room.”

This is an arrangement that is obviously also valuable to the standard agents, managers, and entertainment executives the course attracts, who get to hear the perspectives of talent from the very source. Executive Education always justifies its value in part by who else is in the room — the cross fertilization, networking value proposition. Other than sourcing the perspectives of star talent, BEMS carefully assembles a classroom of executives across the worlds of film, television, music, book publishing, sports, and allied sectors.

Following the famous HBS “case method,” where learning is achieved by close study of past real-world situations (a pedagogic style B-schools learned from law schools), the BEMS program uses case studies of stars who have flexed their power — for example the HBS Beyoncé Case, which looks at the company Sunday’s Super Bowl halftime show the star built around her brand, which sits outside the traditional record-label structure.

The program also pivots on Elberse’s other main research theme: the rise of blockbuster economics in the entertainment industry.

“Increasingly companies, and even individuals, have to make bigger bets in order to stand out in this space. So this is where you get film studios making ‘tentpole films’ or record labels spending an insane amount of money to try to market someone’s album,” says Elberse.

“That creates a new competitive environment in which there is increasingly a difference between companies that have scale and can do those things and companies that cannot — which are increasingly locked out of that space. “Increasingly these markets are winner-take-all, where a few people at the top get all the rewards and are increasingly powerful.”

In her book, “Blockbusters,” Elberse tells the story of Alan Horn. In 1999, new in his role as president and chief operating officer of Warner Bros., he singled out five event films among his annual output of more than 20, and steered a disproportionately large portion of production and marketing budget to them. Making big-budget movies and lavishly marketing them was not new; what was novel when Horn did it was building an entire strategy on selective disproportionate budget allocation. The recent wall-to-wall tsunami of media during the launch week of Star Wars 7 is the poster event for this approach.

“Blockbusters” contrasts this strategy, which was wildly successful for Warner Bros., with that of Jeff Zucker, CEO of NBC Television Group and NBC Universal in 2007, who pursued the opposite strategy: placing a larger number of smaller bets and guarding against deep investment on any single project. “During Zucker’s tenure, NBC fell from its perch as the highest-rated television network to fourth place, behind its three broadcast rivals — ABC, CBS, and FOX — a demise once unthinkable.”

Blockbuster strategies almost always go hand-in-hand with eye-popping investments in top creative talent, which is how these two themes of the BEMS course come together. According to “Blockbusters”: “The focus on star talent now extends into virtually all sectors of the entertainment industry. A Spanish businessman single-handedly raised the bar for investments in A-list talent in the world of soccer. Bringing a show-business mentality to his renowned soccer club, Real Madrid’s president, Florentino Pérez, started pursuing what he called his ‘galácticos’ strategy, a reference to the star power of the players he sought to recruit.” (Galácticos is the Spanish word for “galactics” or “superstars.”)

The celebrity pay scales and tsunami marketing budget required of a galácticos strategy puts huge pressure on the business models of studios, record labels, and sports teams, and it flies in the face of conventional business logic, which is to spread rather than concentrate risk, and limit investment to a level that won’t break the bank.

Yet not doing galácticos appears an even surer route to failure, not only inside but also outside entertainment. One need only think of the many that have fallen or can’t now get into the industries where Uber, Twitter, Airbnb, and Facebook are winner-take-all.

Not one to undersell itself, Harvard’s marketing for the BEMS course tells paying executives they will learn to “assess different strategies, including when to bet on a blockbuster versus a number of smaller ‘plays’”; “discover when it pays to bet on A-list talent”; and “evaluate the effectiveness of strategies that play to the value of star talent.”

Meanwhile, crossing both themes of star empowerment and blockbuster economics is the not-insignificant matter of digital technology evolution.

The entertainment industry is ground zero for digital disruption because so much of the product can move in digital form, and because social media allows stars and fans to disintermediate the corporate broker. The program has case studies on Facebook and BuzzFeed, among various players that are changing the way either stars or producers can market and distribute content.

The big question currently facing entertainment companies is how digital technology will affect their bets on blockbusters and superstars.

Does it increase or decrease the power of talent? Does it make the blockbuster strategy obsolete, or more necessary?

Elberse explains: “Some industry insiders have suggested that digital technology will spell the end of blockbusters — and, with that, the effectiveness of blockbuster strategies. … But a closer look reveals that the reality isn’t quite so simple. In fact, in today’s markets where, thanks to the Internet, buyers have easy access to millions and millions of titles, the principles of the blockbuster strategy may be more applicable than ever before.”

Her conclusion: “There are fundamental laws of consumer behavior that explain the strategy’s enduring appeal — the kinds of laws everyone with an interest in the entertainment industry should be aware of, in other words. The blockbuster strategy’s continuing importance to the success of entertainment companies is made abundantly clear in the enormous amounts of data that online channels generate.”

Click here to read Adam Gordon’s Tips for Entrepreneurs.

Note: This article was first published Forbes.com on Feb 9, 2016.

Working With Leaders in the Executive Classroom: Oxford Helps Entrepreneurs Manage Future Uncertainty

By Adam Gordon, PhD
Executive Education Director, Facilitator, and Faculty
Cardiff University

Turbulent-Uncertain-Novel-Ambiguous (TUNA) is the acronym an Oxford University Executive Education program uses instead of the more familiar VUCA — Volatile- Uncertain-Complex-Ambiguous. Either way, we understand the problem: The external environment changes rapidly and unpredictably, making leaders look silly. What worked yesterday won’t work tomorrow.

As TUNA pressures warp previously steady-state industries, executives respond by trying to predict the future, grappling with early-warning signals or trying to identify market or technology trends.

The five-day Oxford Scenarios Programme (OSP) offers a different path.

“At Oxford we try really hard to try to get through the ‘futurology’ that’s out there, and (instead) power people who have resources and agency to do things better,” says Dr. Angela Wilkinson, who teaches the program along with Saïd School Prof. Rafael Ramirez.

Scenario Planning is a method of direction-finding and strategy formation that defines itself by non-prediction. Scenarios are integrated narratives of how the future may unfold, with always two or more in a set. This avoids the brittleness of a singularly predicted future — which the unpredictable world will surely make nonsense of.

The OSP accepts about 40 delegates and — fairly unusually for executive education — also hosts two or three organizations as real-world “proto-clients,” providing live client situations for the delegates to work on.

In the next program, the proto-clients are: a university (not Oxford) trying to manage faculty field research in the new era of geopolitical risk; an FMCG (fast-moving consumer goods) ice-cream company concerned that Millennials aren’t buying its products; and a scholarly professional body struggling with how digitalization is eroding its centralized authority and journal-based business model.

“These live cases give the program a ‘clinical-research feel,’” says Wilkinson. “We used to use some form of a generalized case, like Harvard Business School cases. But that doesn’t prepare the delegates for what they are going to encounter in their organizations.

“Live clients reflect the ambiguity of the scenario planning reality they will find themselves in, how messy and difficult it is.”

The clients present their business situation late on Monday, and are then interviewed over dinner by the assigned delegate teams. Midweek there is a check-in teleconference lasting one to two hours, during which the teams test their evolving framework. A half-day on Friday is given to client presentation and discussion of the implications.

For executives who don’t have a spare week and £6,000 (about $8,400) to spend at Oxford’s Egrove Park executive education facility in England, Ramirez and Wilkinson have just published a book, Strategic Reframing: The Oxford Scenario Planning Approach, which they wrote to broaden access to the philosophy and methods of the Oxford Scenario Planning Approach (OSPA).

“Reframing” in the title refers to leaders’ mental frames — sometimes called mental models, or paradigms — that scenario planning targets. A key problem, arguably the key problem in successfully managing a TUNA world is “frame rigidity,” when a leader’s mental model is not wide enough or flexible enough to perceive (or to take seriously) all the alternative, plausible outcomes that matter.

Scenario planning invites multiple framings of an uncertain situation, making leaders more aware and conscious of the legacy frame they have unconsciously been using to make sense of the world.

According to “Strategic Reframing”: “By rehearsing actions with these alternative frames, new and better options for action can be identified and contribute to a re-perception of the present situation.”

Wilkinson is an alumna of a renown planning office at Royal Dutch Shell and currently head of strategic foresight at the OECD in Paris, where she describes her focus as “leading a project to upgrade it (strategic foresight).

“The OECD, like most organizations, is strongly oriented to ‘evidence-based policy.’ If you can’t quantify it, it can’t go in the conversation,” she says.

“But if you just stick to the numbers, you can end up ‘not learning’ because you just stick with the stuff you can measure as opposed to the stuff that’s important — which requires you to exercise judgment.

“Quantitative, evidence-based policy served us well in he last maybe 10 or 20 years before the financial crisis, when everybody thought everything was very steady-state.

“You can manage by numbers but you can’t lead by them. Quality of judgment, of intervention, needs a more systemic understanding of why things happen, and are connected to each other.”

“The numbers matter, but so do the narratives,” says Wilkinson.

Transitional Space

In the “Strategic Reframing” Forward, Kees van der Heijden, another Shell planning office alumnus who has greatly advanced scenarios thinking, says that “a management system driven by macro-predictions and forecasts has proven too narrow to deal with turbulence.

“We need to redesign the strategic management system to restore the balance between the complexity of the system managed and that of the management system.”

Restoring this balance is what scenario planning offers.

“We ground it in Winnicott’s concept of transitional space,” says Wilkinson, referring to the psychologist D. W. Winnicott, famous for the concepts of a “transitional object” and “transitional space” — being the object or area by which the self navigates and learns its relationship with the outside world.

“We take this into the classroom, and we get them to understand that the scenario planning process is ‘a transitional space.’”

When a firm navigates its relationship with the outside world, particularly an apparently hostile or at least disagreeable TUNA world, the pathologies of the organization emerge. “They fall into fragmentation — lack of a common agenda or, alternatively, complete groupthink and complete blind spots,” says Wilkinson.

The question is how do you create a healthy (what van der Heijden calls) “strategic conversation” that allows leaders and experts to consider ideas that are not familiar to them, and to disagree with each other safely.

“Contestation” of Future

Says Wilkinson: “The scenario process in Shell originated from trying to stop people pushing forward pet projects and enable a ‘contestation’ of future that allowed better decisions, including investment decisions, to be made in the present.”

While Shell was and remains the poster company for scenario planning, its methodology, or at least what is understood and represented as its methodology by knock-off scenario consultants, has also been responsible for the banalities of utopias or dystopias or techno-Armageddon future narratives that are unhelpful to the real process of decision-making for leaders facing everyday uncertainty.

“The (bulk of the scenarios) literature talks about methodology and theory as process: There are the steps — ‘the 3-step process’ or ‘the 6-step process’ you go through. It is a selling logic! There is so much ‘production’ of scenarios, so little effective use of them,” says Wilkinson.

Raising the quality of scenario planning is very much part of the OSP’s agenda. The program was started in the early 2000s by Ramirez, joined soon after by Wilkinson, and has been continually refined as the field itself has come to understand the many pitfalls that scenario projects have fallen into.

“We looked at lots of training programs on scenarios. You follow these-and-these steps and end up with 2×2 matrix and you think you’ve done well. But 99 percent of those fail. So we asked ourselves: What do they need to know in order not to fail at that point?

“At the OSP, you learn from all the mistakes the field has made over the last 60 years.”

As part of this, Wilkinson explains how the OSP executive education week has been redesigned to focus delegates not on method — is there a right or a wrong way to do it — but on “‘where does it fit in with the purpose of the organization, its vision, mission, or strategy?’”

This requires taking OSP student delegates well past creating analytical content for scenarios, towards a deeper understanding of how the scenario process needs to dovetail with organizational purpose and the leadership agenda.

Institutional context is woven into good practice. “Good for us means they are useful and usable, as opposed to analytically credible, but nobody has the slightest interest in them,” says Wilkinson.

Tram-Lined

“When the delegates first come in (to the OSP), the question you have to work really hard at is ‘the forecasting question,’ because they are so tram-lined into forecasting that they can’t break out of that mode.

Working for different clients “helps delegates understand where they have choices around what they are doing and how they are doing it.”

“They are not learning not to produce a set of scenarios, but to design a scenario-based intervention in their organizations,” says Wilkinson.

This is why embedding learning with the real problems of real-world clients is intrinsic to the OSP teaching process. Delegates learn about the political setting as well as the social process of the client, because what works for one won’t necessarily work for the other.

Over the course of the client service process, the student delegate groups go through the full learning-to-build scenarios cycle twice — they get two bites at both scenario-building and client-engagement.

This is to reinforce learning, as one may expect, but an iterative, revisiting, relearning process is what defines the Oxford scenarios method, and what it is fundamentally teaching practitioners to do when making client-worthy scenarios, wherever and whenever they do it.

According to “Strategic Reframing”: “Scenario planning as we see it in the OSPA is ideally not a linear ‘project’ with a beginning, middle, and end, nor (ideally) a one-off intervention, but is instead an iterative process that enables and sustains organizational learning.

“The delegates have a go at delivering an intervention with their client, and they learn from that intervention a lot about what their client actually needs, and then they redesign their scenario intervention.

“That iteration of loops, building and using then rebuilding and reusing, is what makes the difference,” says Wilkinson.

To iterate, prototype, fail-fast, and rework is an approach to that many fields, including strategy and scenario planning, have learned from design thinking.

The iterate-learn-rework model also helps would-be scenario practitioners understand that learning — about their client and its internal and external contexts, and the future it is facing — is at the heart of scenario-based management of a TUNA world.

The preferred term for a scenario practitioner in “Strategic Reframing” is not “scenario planner” or “scenario facilitator,” but “scenario learner.”

Note: This article was first published on Forbes.com on April 6, 2016.

Acknowledging the good that you already have in your life is the foundation for all abundance.”

– Eckhart Tolle

Always bear in mind that your own resolution to succeed is more important than any one thing.”

– Abraham Lincoln

Part of your destiny is to live in the zone of maximum satisfaction.”

– Martha Beck

Education is not the filling of a pail, but the lighting of a fire.”

– William Butler Yeats

Sometimes the dreams that come true are the dreams you never even knew you had.”

– Alice Sebold, The Lovely Bones

When you are asked if you can do a job, tell ‘em, ‘Certainly I can!’ Then get busy and find out how to do it.”

– Theodore Roosevelt

When I dare to be powerful—to use my strength in the service of my vision, then it becomes less and less important whether I am afraid.”

– Audre Lorde

We are not meant to resolve all contradictions, but to live with them and rise above them.”

– William Blake

Think of yourself as on the threshold of unparalleled success. A whole, clear, glorious life lies before you. Achieve! Achieve!”

– Andrew Carnegie

The only dream worth having is to live while you’re alive and die only when you’re dead.”

– Arundhati Roy

We need to learn to set our course by the stars, not by the lights of every passing ship.”

– General Omar Bradley

As each woman realizes her power, she transforms the world.”

– Patrice Wynne, WomanSpirit Sourcebook

It is only when the mind is free from the old that it meets everything anew, and in that there is joy.”

– J. Kristnhamurti, The First and Last Freedom

Find somebody to be successful for. Raise their hopes. Think of their needs.”

– Barack Obama

The great use of life is to spend it on something that will outlast it.”

– William James

Simplicity is the ultimate sophistication.”

– Leonardo da Vinci

Of course there is no formula for success except perhaps an unconditional acceptance of life and what it brings.”

– Arthur Rubinstein

Hope sees the invisible, feels the intangible, and achieves the impossible.”

– Helen Keller

Many people prefer to play it safe when it comes to business matters. Are you willing to take risks in the pursuit of entrepreneurial success?”

– Steven Schussler

I always maintained that the greatest obstacle in life isn’t danger, it’s boredom. The battle against it is responsible for most of the events in the world — good or ill.”

– Dr. Evelyn Vogel, Dexter

You often meet your fate on the road you take to avoid it.”

– Goldie Hawn

The man who acquires the ability to take full possession of his own mind may take possession of anything else to which he is justly entitled.”

– Andrew Carnegie

I’ve come to confirm that one’s title, even that of president, says little about how well one’s life has been led. No matter how much you’ve done, or how successful you’ve been, there’s always more to do, to learn, and to achieve.”

– Barack Obama

A diamond is a lump of coal that stuck with it.”

– Norwegian proverb

A lot of people have ideas, but few decide to do something about them now. Not next week. But today.”

– Nolan Bushnell, founder, Atari

The gem cannot be polished without friction; nor man perfected without trials.”

– Chinese proverb

Entrepreneurs willingly assume responsibility for the success or failure of a venture and are answerable for all its facets.”

– Victor Kiam

If you would create something,
 you must be something.”

– Johann Wolfgang von Goethe

Happy are those who dream dreams and are ready to pay the price to make them come true.”

– Leo Jozef Suenens

Luck is what happens when preparation meets opportunity.”

– Seneca

Remember that it’s okay to ask for help when you’re stumped, because sometimes you really can’t be expected to handle everything alone.”

– Martha Beck

No longer talk at all about the kind of man a good man ought to be, but be such.”

– Marcus Aurelius Antoninus

Destiny is not a thing to be waited for, it is a thing to be achieved.”

– William Jennings Bryan

Don’t judge each day by the harvest you reap, but by the seeds you plant.”

– Robert Louis Stevenson

Be bold and mighty forces will come to your aid.”

– Basil King

You take your life in your own hands, and what happens?
 A terrible thing: no one to blame.”

– Erica Jong

Pain is inevitable. Suffering is optional.”

– Dalai Lama

Entrepreneurs are willing to roll the dice with their money or reputation on the line in support of an idea or enterprise.”

– Victor Kiam

I don’t do very well without fear. There needs to be a part of me saying, ‘That’s going to fail,’ so I can prove myself wrong.”

– Harry Potter's Daniel Radcliffe

Only those who will risk going too far can possibly find out how far one can go.”

– T.S. Eliot

The mind is everything. What you think, you become.”

– Buddha

In the middle of difficulty lies opportunity.”

– Albert Einstein

To find what you seek in the road of life, leave no stone unturned.”

– Edward Bulwer Lytton

If my mind can conceive it, and my heart can believe it, I know I can achieve it.”

– Jesse Jackson

You have enemies? Good. That means you’ve stood up for something, sometime in your life.”

– Winston Churchill

Tell me, what is it you plan to do with your one wild and precious life?”

– Mary Oliver

Challenge is a dragon with a gift in its mouth. Tame the dragon and the gift is yours.”

– Noela Evans

Who cares if my glass is half empty or half full; I still have something to drink.”

– Optimism rules

We need to learn to set our course by the stars, not by the lights of every passing ship.”

– General Omar Bradley

Education is an admirable thing to have, but it is well to remember that nothing worth knowing can be taught.”

– Oscar Wilde

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