Thursday, July 25, 2013

The Innovation Mindset in Action: Sir Peter Jackson

by Vijay Govindarajan and Srikanth Srinivas 

Peter Jackson is a game changer who transformed the practice of filmmaking. Like Jerry Buss, who revolutionized basketball, Jackson and other effective innovators share a common set of qualities that we call the innovation mindset: they see and act on opportunities, use "and" thinking and resourcefulness, focus on outcomes, and act to "expand the pie." Regardless of where they start, innovators persist till they successfully change the game.

As an only child, Jackson was often left to entertain himself. His parents bought him an 8-mm movie camera when he was 8 years old. At 16, he left school to work as a full time photo-engraver, saving as much money as he could for film equipment. He began making short films with his friends. These were amateurish horror movies, but they won awards and had a cult following.

Jackson saw a unique opportunity in making hit movies with special effects that would keep people mesmerized in their seats. He got his first break with the Lord of the Rings (LOR) trilogy.

Jackson used "and thinking." He wanted the highest quality movies AND the lowest cost, so he made all three films in the LOR trilogy simultaneously. Hollywood's regular practice is to shoot movies in a trilogy one at a time, minimizing financial risk in case the first one flops. Lessons learned from the first movie can then be applied to the next, and cash flows from early films can be used to fund subsequent ones. Jackson, however, thought that shooting the trilogy in one go would decrease costs and improve quality. If all three films were shot simultaneously, sets would need to be built only once, rather than built up and brought down three times. Shooting the trilogy simultaneously would avoid the costs of actors' potential salary increases over time, especially if the first film proved a hit, and would also prevent characters from aging (or even dying) between one film and the next. New Line Cinema knew this was a gamble but had faith in Peter Jackson's vision and capabilities, trusting that the series would appear seamless if the three films were shot at once.

Jackson managed what may have been risks in others' eyes by being resourceful and focusing on outcomes.

By being resourceful, Jackson managed to keep costs down to $280 million for all three movies. He insisted on shooting the movie and doing all the animation in New Zealand so he could manage both the quality and the cost, despite Hollywood pressure to use animation studios like Pixar. The result was Weta Workshop—a group of organizations, co-founded by Jackson, and dedicated to special effects for movie and television. Jackson also introduced innovative ways to increase LOR viewership. For example, he made a free video for Air New Zealand to make the "seat belt and related" announcements—using LOR characters. Many who saw it got curious and went to see the movies.

His outcomes and accomplishments were extraordinary: The LOR trilogy made for $280 million grossed $6 billion and won 17 Oscars. Weta has grown to be a well-known animation and special effects company with a special twist on horror, employing thousands of people. With Weta, Jackson achieved his vision of dramatically increasing the amount of work done digitally, without affecting quality. As a result, Weta can digitally create environments, characters, creatures, costumes, weapons, props, and vehicles with animation and real life 3D effects.

In honor of his significant accomplishments and contributions to his country, Jackson was made a Knight Companion of the New Zealand Order of Merit in 2010.

Jackson expanded the pie and completely transformed the movie industry in New Zealand, so much so that Wellington has become Wellywood and filmmakers like James Cameron have purchased New Zealand property. Jackson also expanded the pie by extending LOR's success to others' projects. Ian Brodie, an extra in the films, wanted to write a book about the locations where LOR was shot. Jackson shared all the location details with Brodie and the resulting book, The Lord of the Rings Locations Guidebook, was a runaway bestseller. Jackson allowed Jens Hansen, the local jeweler who made the ring for the movie, to reproduce it. The book and the jewelry expand the audience for the movie, and vice versa.

Sir Peter Jackson is a game changer. He has transformed much more than the movie industry in New Zealand—he has also transformed filmmaking globally. 

Vijay Govindarajan and Srikanth Srinivas

Vijay Govindarajan and Srikanth Srinivas

Vijay Govindarajan is the Earl C. Daum 1924 Professor of International Business at the Tuck School of Business at Dartmouth. He is coauthor of Reverse Innovation (HBR Press, 2012). Srikanth Srinivas is an innovation catalyst and the author of Shocking Velocity.

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