The Failed Management Practices of Paramount and Why Disney, Universal, and Warner Bros. Succeed

The Business, this week, released their podcast focusing on the issue of pay-to-play auditions as well as taking some time for the Oscars. But what is even more interesting from a business perspective, is not the pay-to-play audition practice (illegal) or the endless machination that has become the Academy Awards, but their brief discussion on Brad Grey, as head of Viacom. Kim Masters makes the point:

“What we’re looking at is sort of a cultural thing…to many people nowadays these jobs of running studios are not about having a tremendous vision that you really want to bring and green lighting these movies, it’s about managing up.”

Matt Belloni of The Hollywood Reporter chimes in:

“If you look at the way Paramount was managed they weren’t  releasing a lot of films which can juice the numbers for a year…they weren’t creating these franchises that can move on to the next level. If you’re just doing another Star Trek, you’re not making enough movies to have that hit that generates a franchise; and they didn’t have the investment from the parent company to really invest in the top tier talent that can do that stuff. I think it’s an example of how you’re seeing the movie business bifurcate into this have and have-not system.”

Masters and Belloni make an excellent point. The reason why Paramount is falling behind in terms of the other major studios, and why Grey ultimately left the company, is because of poor management technique and the inability to make a franchise. The issue involves much of what Guy Kawasaki (The Art of the Start), Eric Reis (The Lean Start-Up) and most entrepreneurs caution in the corporate world. Management techniques are often very by-the-book and focus more on getting results fast and profit margins than on efficiency  and doing things right. They also do not address corporate synergy and fail to adhere to their mission and vision statements, which should be like their Bible in terms of operations. Poor management techniques are what drove companies like Big Idea Entertainment (the makers of the popular children’s show VeggieTales) into bankruptcy in 2006. While more information is needed in regards to the future of Paramount and the direction they follow, it would be wise for the new managers to focus on the lessons of Reis and Kawasaki- take things slow, develop corporate synergy, focus on efficiency instead of mass production, listen to your audience, and step back from previous projects to find the flaws and improve on them. That is the some of the steps of the learning process and explains the success of Disney, Warner Bros., and Universal; not because they made better films( which they did) but because they were able, and willing, to go back to square one and learn.


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