But Solo: A Star Wars Story has shown that the historic franchise can produce a flop, and provides several lessons that developers and apartment owners can learn from. Solo: A Star Wars Story has “only” garnered $210 million at the domestic box office. While $210 million seems like a lot of money, it’s a low figure for a Star Wars movie.
Star Wars movies always featured several factors that helped them set box office records: strong marketing campaigns that last six or more months (if not years), a release window with no major box office challenges and great reviews.
In the case of Solo, none of these factors were in place. The marketing, which is one of Disney’s great strengths, was non-existent until only a few months before the movie’s release. The release window was crowded with not only another Disney movie (Marvel’s Avengers), but Deadpool 2 from Fox as well. And reviews-while good-were not nearly as outstanding as other films in the franchise.
What caused this imperfect storm? Unfortunately, a failure by an institution like Star Wars is often the result of taking success for granted, management changes, a lack of understanding of consumers’ changing preferences, and old-fashioned laziness.
Solo also came out less than six months after the latest episodic release for the series, The Last Jedi, leading to some consumer fatigue. Disney and Lucas Films both leaned on past successes, not giving the film the marketing attention it needed, and expecting the Han Solo name to carry the film.
For Solo, management changes came in the form of three separate directors. This caused many expensive and time-consuming reshoots.
Another and probably the most significant reason for the failure was poor marketing. According to motion picture advisory firm, the Cowan Group, Disney needed to do a better job selling new Han Solo, Adlen Ehrenreich.
For example, The Rogue One teaser came out “247 days before the movie’s release, starting an extensive hype campaign for the film. The first 35 seconds of the trailer almost exclusively focuses on Felicity Jones as the protagonist Jyn Erso, selling her as a new franchise hero.
The Solo teaser, however, arrived just 108 days before release, which offered a “far shorter hype window.”
For the Star Wars franchise, one failed movie will not hurt the franchise. Fans are already anticipating the ninth numbered release in the series next year. If your multifamily operation had a similar type of failure, would you be able to recover as successfully?
Do you feel that your operation is too big to fail? Disney felt the same way about the Star Wars franchise. Unlike Disney, you have the chance to think about potential hazards now, and how you can address them.
If a failure happens, do you have a plan in place to learn from it?
Amy Edmondson, in the April 2011 issue of Harvard Business Review, states, “The wisdom of learning from failure is incontrovertible. Yet organizations that do it well are extraordinarily rare. This gap is not due to a lack of commitment to learning.”
Managers in the vast majority of enterprises that she has studied over the past 25 years sincerely wanted to help their organizations learn from failures to improve future performance. However, the common feeling in most organizations is that failure is bad. This leads to the fear of telling the truth and ultraconservative decision making.
Do you have managers and consultants who can see your problems for what they truly are? Do you have a culture of giving honest and timely feedback? Not only that, but are you and they motivated to fix problems before the issues turn into major catastrophes?
Thankfully, Solo has given some great lessons to follow when it comes to real estate investing:
- Previous success does not lead to future success. Conversely, one failure does not mean an organization or property can’t be turned around.
- Don’t take prior successes for granted. Disney mistakenly rested on its laurels. Keep your processes consistent for each property.
- Don’t take your tenants tastes for granted. Relying on the past can lead to a new failure. Make it a habit to research tenant and market trends to ensure you are delivering what the market demands.
- Finally, don’t saturate the market. In Disney’s case, Solo came out too soon after The Last Jedi opened. Instead of being patient and releasing it at the holiday time in 2018, similar to Rogue One, Disney rushed the release and burned consumers out. Be patient.
For investors that are buying older properties or developers regularly creating new communities, these lessons are all vital.
When the magic formula of cost per door to rental rates and occupancy is reached, we have a tendency to try and recreate that magic in the next property. Those will work for a while. But nothing will replace the critical function of market research to ensure each property achieves maximum profitability.
Renovating older properties and developing new ones can both be sound investments, but forgetting any of the lessons above can lead to failure. Each community is different, with a new set of tenants that have varying likes and wants. If you assume all tenants want the same thing, a prior success in one location a few years earlier could lead to failure in another.
An oversaturation of a particular market can also lead to a possible failure. Units may go unoccupied, resulting in a failure that was never expected. However, one failure can still be turned around, as long as a crisis plan is in place and ready to take effect.
Look at your organization today. Are you learning from your mistakes? Does your culture make it safe for candid discussion, do team members push each other to do things right, do you listen to your team and your customers, are you willing to be patient?
If you are in a rut or want to change your culture, contact us. We’ve worked with many companies helping them change and grow. We provide coaching and facilitation to improve performance and accountability while maintaining positive corporate cultures. Here is a link to the Business Transformation Service page on our website for more background.
We’d love to help.