What Business Can Learn From Hollywood

70TH ANNUAL GOLDEN GLOBE AWARDS

As Golden Globe winners bask in their victories and Oscar nominees gear up for their moment in the spotlight next month, The Financialist asked how the most creative minds in Hollywood keep coming up with inventive ideas — and what businesses of all kinds may be able to learn from their strategies.

 

Innovation-obsessed companies looking for the next big idea may want to take a page out of Hollywood’s playbook.

 

For many businesses, innovation remains little more than a buzzword that has come to define the race to stay ahead of their competitors in a tough economy. But in the $87 billion Hollywood film industry, innovation and creativity are more than just concepts – they actually drive the bottom line.

 

Hollywood companies such as Pixar Animation Studios and RealD Inc., which has revolutionized 3-D projection systems in recent years, foster creativity among employees as part of their business models.

 

The Financialist spoke to Scott Kirsner, an innovation expert and author of “Inventing The Movies: Hollywood’s Epic Battle Between Innovation And The Status Quo,” and Larry Gerbrandt, an independent entertainment analyst in Los Angeles, to understand how Hollywood’s most successful innovation practices can help companies put some bite behind the buzzword.

 

If someone has a good idea, get out of his way.

 

One of the biggest mistakes large companies make, says Kirsner, is creating obstacles for their most innovative employees, something Hollywood studios – where even the most prominent screenwriters and producers work independently as freelancers – know to avoid.

 

“There’s less bureaucracy, so there are fewer people that can stand in the way of a good idea,” says Kirsner. “It’s harder to retain creative people when you’re at 30,000 employees, so you at least work to create an environment where people aren’t stomping on new ideas.”

 

Let outsiders pitch ideas.

 

Kirsner says Hollywood, from the pitch process to the open casting season for actors, is set up to allow the best new ideas to rise to the top, even if they come from newcomers or people outside the industry.

 

“Hollywood studios are very permeable to creative people flowing in and out,” says Kirsner. “If a project gets greenlit, it’s just, ‘Let’s do it.’ How many people are really coming into the average (large) company pitching ideas?”

 

Partner up to take big risks

 

Like corporations, Hollywood can be risk averse, making it difficult to create a culture of innovation, Gerbrandt says. To overcome that, studios have come up with a creative solution: spread the risk by partnering up with other production houses. This strategy is behind one of the industry’s largest blockbusters: James Cameron’s “Titanic.”

 

“If a studio thinks a project is too risky it will often partner with others,” Gerbrandt says. “Titanic was co-produced by Fox and Paramount. They were scared the movie was going to be a failure, so they managed the risk.”

 

Gerbrandt says large corporations should take note. “You don’t see GM and Ford getting together saying, ‘Let’s try to create a new fuel cell.”

 

Small teams can bring big innovations

 

Many of Hollywood’s most successful projects originate from partnerships and small teams that like to work together time and time again. Such winning partnerships include Seth Rogen and Evan Goldberg (“Knocked Up”, “Superbad”) or Ben Affleck and Matt Damon (“Good Will Hunting”).

 

“Fast-moving, creative people want to be in places with other fast-moving creative people,” says Kirsner. “If you want to solve some problem or develop some product, having a team that can function like a special ops group, one that can work without roadblocks, is the way to go.”

 

Demand accountability on every project

 

Hollywood functions on a project-by-project basis, and job performance is evaluated at the box office with a level of transparency Gerbrandt says managers elsewhere might find unnerving.

 

“Actors, directors, the guys who do the lighting, almost everybody is a freelancer,” Gerbrandt told The Financialist. “It encourages creativity, because you’re only as good as your last job. There aren’t too many industries quite like that.”

 

Photo Courtesy of the Golden Globe Awards,  © HFPA

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