Managing Communications Firms in the New Unpredictable Environments: Watch the Movies

This paper looks at a puzzle facing many industries: How can they survive and thrive in rapidly changing and unpredictable environments? The ideas in the paper are intended to be useful to many industries and firms. The movie industry is used as an example to test the applicability of some new work being done on resilience in unpredictable systems. Previous work has already shown that the U.S. movie industry (often referred to as Hollywood) is one of the least predictable industries in the world (in terms of which movies will be big hits) and it suffers some giant failures every year. Yet it is also one of the most successful and stable industries in the world, accounting for a very large share of U.S. exports every year. What works for the movie moguls may work for other organizations that find themselves in unpredictable environments. Movie revenues follow a power law distribution in each year. The reasons for this and the implications for strategy in similar environments are examined, including the implications of treating communications firms as complex adaptive systems. Rules of thumb are distilled that may be helpful for other industries and firms. These rules appear to be consistent with several widely accepted management theories, making it appear more likely that the rules from other systems will be relevant in developing resilience in business systems.