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Columbia Business Monthly

What “The Last Jedi” Teaches Us About Organizational Change

Feb 08, 2018 09:40AM ● By Emily Stevenson
By Dr. Robert E. Ployhart
Professor of Business Administration, Darla Moore School of Business

Unless you’ve been living under a rock, you’ve heard the debate about audience reaction to Star Wars: The Last Jedi. (Note: there are no movie spoilers in this article.) It is obvious that Star Wars fans are loyal and analytical, which explains why The Last Jedi has created such a controversy. The Last Jedi has received almost universally favorable reviews from movie critics, and by most accounts, is second only to The Empire Strikes Back in terms of critical review. However, The Last Jedi is unique in that it sits at nearly 50 percent audience approval. Perhaps it is simply a reflection of our highly divided country, but most fans either loved or hated The Last Jedi.

As a lifelong fan of Star Wars (I was there when A New Hope came out in 1977), and a professor of management, I find this situation both enlightening and illustrative of all organizational change efforts. Change is uncomfortable, and organizational change is extremely difficult. Many change efforts either fail entirely or fail to meet expectations. An organization’s leadership is usually blamed for the failure—due to a perceived lack of vision, poor judgment, or inability to build commitment to the change effort.

The question of whether the change was being made for the right reasons is often not part of the post-change conversation. Psychologists call this “hindsight bias,” which means that we judge prior decisions based on what we know today. Therefore, when a change effort fails, hindsight bias leads most observers to blame the organizational leaders. They made bad decisions, exercised poor judgment, failed to understand market conditions, whatever—the point is that it was a dumb idea to change and the leadership must be incompetent not to have recognized that it was a bad idea.

It’s no coincidence that major change efforts usually begin when a firm brings on a new leadership team. For example, former GE CEO Jeff Immelt changed the vision of the company away from Jack Welch’s emphasis on expansive growth, to a more sustainable, focused strategy. Many remember Ron Johnson changing direction for J.C. Penney after boldly creating and implementing the very successful Apple Store vision. In both of these examples, history has judged the change efforts to have either failed or (at best) have produced mixed results—but at the time both efforts were seen as bold visions for a new future.
A similar story is now playing out with The Last Jedi. The Last Jedi is directed by Rian Johnson, a newbie to the Star Wars franchise. Johnson is faced with a difficult task—the original actors and actresses are aging, as is the original fan base. The fan experience is also becoming a bit predictable; there are only so many variations to the basic Skywalker/force/dark side-light side story. And the younger generations, who are the financial future of Disney and the Star Wars franchise, have grown up with cartoons that have a different set of characters. These younger fans are also more diverse on almost every dimension.

So Johnson does what probably needs to be done—he changes the story pretty dramatically. He expands future opportunities by breaking with past traditions. He does it for the right reasons. And the reaction is predictably mixed—some like it, some hate it. But the difference between The Last Jedi and industry change efforts is that there is pretty much universal agreement by experts that this was the right change to make. Perhaps most importantly, the experts are still saying The Last Jedi is an excellent movie and a much-needed change, even though audience reaction remains mixed. That is, the experts are not falling victim to hindsight bias.

Whether Johnson’s dramatic change to the Star Wars storyline is good financially remains to be seen. I will not be surprised if this change shakes up the Star Wars fan base; some formerly loyal fans may disappear. But I also bet the change broadens the fan base. Time will tell.

What I can tell you for certain is that I felt fairly stunned after seeing The Last Jedi for the first time. In a way I felt let down—this was not The Star Wars I’ve known for most of my life. The story is different, the characters are different, and the ending is different. But I know enough about organizational change to give it a chance. I saw it a second time, and came to appreciate that this film is a true beauty. It is a divisive movie because it boldly breaks with tradition. There are many parts of the movie I do not like, but the important thing is that I can see the vision for why the change is necessary. I can’t wait to see the next one: Dec. 20, 2019, already on the calendar.