• 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.

The curious paradox is that when I accept myself just as I am, then I can change.”

– Carl Rogers

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

– Optimism rules

Successful people are always looking for opportunities to help others. Unsuccessful people are always asking, ‘What’s in it for me?’”

– Brian Tracy

Nothing is a mistake. There’s no win and no fail. There’s only make.”

– Corita Kent

Try not to become a man of success but rather try to become a man of value.”

– Albert Einstein

It is easier to fight for one’s principles than to live up to them.”

– Alfred Adler

Don’t wait for someone else to lead you to your right life; that privilege—and responsibility—is yours alone.”

– Martha Beck

Nothing in the world can take the place of persistence.”

– President Calvin Coolidge

Ripeness is all.”

– William Shakespeare

Do one thing every day that scares you.”

– Eleanor Roosevelt

Opportunity is missed by most people because it is dressed in overalls and looks like work.”

– Thomas Edison

There is little success where there is little laughter.”

– Andrew Carnegie

Whosoever knows how to fight well is not angry. Whosoever knows how to conquer enemies does not fight them.”

– Lao Tzu, Tao Te Ching

Let yourself be silently drawn by the strange pull of what you really love.”

– Jalaluddin Rumi

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

– Buddha

The less effort, the faster and more powerful you will be.”

– Bruce Lee

Luck is what happens when preparation meets opportunity.”

– Seneca

Always be on the lookout for the presence of wonder.”

– E.B. White

The good ideas are all hammered out in agony by individuals, not spewed out by groups.”

– Charles Brower, Advertising Hall of Fame

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

– Erica Jong

A discovery is said to be an accident meeting a prepared mind.”

– Albert Szent-Gyorgyi

There is a crack in everything, that’s how the light gets in.”

– Leonard Cohen

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

– Arundhati Roy

Entrepreneurs need to search purposefully for the sources of innovation that indicate opportunities for success.”

– Peter F. Drucker

If you want to be busy, keep trying to be perfect. If you want to be happy, focus on making a difference.”

– Lisa Earle McLeod

In three words I can sum up everything I’ve learned about life: it goes on.

– Robert Frost

“Here’s to the crazy ones. The misfits. The rebels. The troublemakers. The round pegs in the square holes. The ones who see things differently.”

– Steve Jobs, Apple, Inc.

Life shrinks or expands in proportion to one’s courage.”

– Anais Nin

An entrepreneur tends to bite off a little more than he can chew hoping he’ll quickly learn how to chew it.“


– Roy Ash, co-founder of Litton Industries

‎That which grows fast withers as rapidly; that which grows slowly endures.”

– J.G. Holland, novelist

The true entrepreneur is a doer, not a dreamer.”

– Nolan Bushnell, founder, Chuck E. Cheese's

A man who strikes first admits that his ideas have given out.”

– Chinese Proverb

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

– Oscar Wilde

I may not be able to change what takes place, but I can always choose to change my thinking.”

– Michelle Sedas

Darkness cannot drive out darkness: only light can do that. Hate cannot drive out hate: only love can do that.”

– Martin Luther King Jr.

The journey is the reward.”

– Greg Norman

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

– T.S. Eliot

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

– Victor Kiam

Always look at what you have left. Never look at what you have lost.”

– Robert H. Schuller

Tolerance and patience should not be read as signs of weakness. They are signs of strength.”

– The Dalai Lama

With ordinary talents and extraordinary perseverance, all things are attainable.”

– Sir Thomas Fowell Buxton

Anything not worth doing well is not worth doing.”

– Warren Buffett

Almost anyone can start a community, but it takes real talent and commitment to get people to show up and keep coming back.”

– Andy Sernovitz

It is possible to fail in many ways…while to succeed is possible only in one way.”

– Aristotle

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

– William Blake

You only live once. But if you do it right, once is enough.”

– Mae West

Remove those ‘I want you to like me’ stickers from your forehead
and, instead, place them where they truly will do the most good—on your mirror.”

– Susan Jeffers

Death is to lose the earth you know, for greater knowing; to lose the life you have, for greater life; to leave the friends you loved, for greater loving; to find a land more kind than home, more large than earth.”

– Thomas Wolfe

Nobody talks about entrepreneurship as survival, but that’s exactly what nurtures creative thinking.”

– Anita Roddick, founder, The Body Shop

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

– Noela Evans

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