Spencer Harrison, an associate professor at INSEAD, says that managers in any industry can learn from the success of the Marvel movie franchise. While some sequels lack creativity, Marvel manages to make each of its new releases just different enough, so consumers are not just satisfied but also surprised. Research shows that several strategies drive this success; they include bringing in different types of talent while also maintaining a stable core creative team then working together to challenge the superhero action-film formula. And, Harrison argues, leaders in other industries and functions can easily apply them to their own businesses. He is the co-author of the HBR article “ Marvel’s Blockbuster Machine .”

ALISON BEARD: Welcome to the HBR IdeaCast from Harvard Business Review. I’m Alison Beard. It’s summer in the Northern Hemisphere. For some of us that means hitting the beach. For others it means lining up to see the latest blockbuster, one of those big budget movies full of starts and special effects that are guaranteed to blow you away. One studio has both dominated and reinvented this genre over the past decade with characters whose voices you might recognize.

IRON MAN 2: You want my property? You can’t have it. But I did you a big favor. I have successfully privatized world peace.

CAPTAIN MARVEL: You’re a Kree, a race of noble warriors. Heroes – noble warrior heroes.

BLACK PANTHER: The wise build bridges while the foolish build barriers.

AVENGERS: INFINITY WAR: Are you mocking me? Are you mocking me? Stop it, you just did it again. He’s trying to copy me. Enough!

We’re talking about Marvel Studios and it has become a blockbuster machine over the past 11 years. From Iron Man in 2008, to Spider-Man: Far From Home this month, Marvel has released 23 films grossing over 17 billion dollars. More than any other movie franchise in history. They get high ratings from critics too and lots of award nominations.

Our guest today has done some deep research into why Marvel is so good at what it does and what leaders in other industries can learn from them and he’s here today to share what he’s discovered. Spencer Harrison is an associate professor at INSEAD and co-author of the HBR article “Marvel’s Blockbuster Machine’. Spencer, thanks so much for joining us.

SPENCER HARRISON: Thanks for having me.

ALISON BEARD: So, besides the obvious fun factor of this research, why did you want to look at Marvel Studios?

SPENCER HARRISON: The thing that we were most curious about was what happens when we ask people to be creative when they’ve already come up with a prior product. And for us this kind of felt like a question that hadn’t already been answered before. Most of the research that we used to look at when people are being creative or innovative, we kind of throw people in a room and we say, come up with whatever new idea you want.

But when you think about the typical business, they’ve already had some sort of products in their pipeline and the goal now is not to come up with whatever new product you want, but to come up with the product that builds on the success of the previous products, but extends them in some sort of compelling way. And we felt like movie franchises were a really good opportunity for us to understand how these dynamics might play out.

ALISON BEARD: And it’s interesting because franchises are often criticized for lacking creativity. They’re just pulling from the comics and the previous films and stretching out the same ideas and characters. So, why did you think there was more to it in the case of Marvel?

SPENCER HARRISON: Well, exactly right. So, we had read that Ed Catmull, the founder of Pixar had said that sequels are a form of creative bankruptcy.

ALISON BEARD: Which is ironic because Toy Story 4 just came out.

SPENCER HARRISON: Exactly right. But even then, I mean if you look at a lot of the reviews of Toy Story, the question is how successful has Pixar been? Because in the early decade of Pixar, every movie was its own new intellectual property, but in the last 10 years, you’ve seen them really ramp up on sequels.

So, for us that was kind of, the core question is, when can you do this and when can you do it the right way so that it actually feels like you’re extending and renewing the idea, rather than just leveraging the idea for the emotional connection that it already created? And I think there are some moments where people will do these sort of sequels, or they’ll follow up on a new product and there really isn’t much new there.

They’re just trying to squeeze every last bit of value that they can from the original idea. And then there are others where each time the company comes out with a new idea, it feels like something fresh and it kind of renews and reinvigorates the reason why you wanted to buy those products in the first place.

ALISON BEARD: And Marvel falls into that category?

SPENCER HARRISON: I mean, I think Marvel clearly does.

ALISON BEARD: So, what kind of analysis did you and your co-authors do?

SPENCER HARRISON: First we really wanted to understand what was going on inside the studio and because movies are such a public form of creativity, we have a lot of press releases and a lot of interviews, and a lot of media and that allowed us to create an oral history of each one of these movies.

So, we would gather around 10 interviews of each one of the films from the directors and the lead actors and the writers, so that we could understand what had happened in the back story and lead up to making that movie. And then when you put all those together, we had this story of how these movies kind of fit together over time as people are describing the creative process in each one.

And one of the things that struck us is the executive producers and the directors kept using language like, we tried to do something completely new with this move, or this movie is very different than the prior movie, and as scientists that led us to think skeptically, is this really true? Is there any way that we can show objective evidence that they actually have created something new?

So, that led us to a couple additional analyses. One of the things that we did is we looked at who was in each film and both in terms of leading the film and directing the film, and the crew behind it, but also the characters. And so, we could watch how that network of people creating the film evolves and changes over time. We also looked at the emotional experience of the film. So, movies are dramatic medium.

And one of the ways that we sought to analyze that was by doing a computerized text analysis of the scripts. And then finally, movies are also a visual medium and we thought that if there are differences from movie to movie we should be able to see those visually, so we did a fun, computerized visual analysis of the movies as well. And we put all those things together to come to our conclusions.

ALISON BEARD: That sounds like amazing work. So, what were your top line findings on how Marvel succeeds?

SPENCER HARRISON: Well, our top line findings were that they hire directors that come in with what we call “inexperienced experience”. The other thing that we looked at was how they’re able to kind of leverage a stable core of people that stay from movie to movie, but then they allow people to shift around the periphery, and that allows new ideas to flow in and new energy to flow into each one of the productions. And finally, we found that they were willing to keep experimenting with their formula over time, and do things to continually cultivate customer curiosity in what the next new movie might look like.

ALISON BEARD: So, I’d love to delve into each of those ideas starting with experienced inexperience. So, give me some examples of how Marvel brought different types of talent in.

SPENCER HARRISON: Yeah. This was one of the most exciting findings for me. I’ve spent the last 15 years studying how organizations onboard employees and typically, what organizations look for is somebody that has a similar sort of experience to what they’ve had in the past. Somebody that can replicate things that they’ve already done.

And Marvel does something that is very counterintuitive. Instead of hiring people that are going to be really good at directing blockbusters, they look for people that have done a really good job with medium-sized budgets, but developing very strong storylines and characters. So, generally speaking, what they do is they looked to other genres like Shakespeare or horror. You can have spy films, comedy films, buddy cop films and what they do is they say, if I brought this director into the Marvel universe, what could they do with our characters? How could they shake up our stories and kind of reinvigorate them and provide new energy and new life?

One of the examples I think is really fun is what they did with Thor: Ragnarok. So, they hired a director by the name of Taika Waititi. He had a background doing improvisational comedy and very strong character films and he took what had been considered by many Marvel fans as one of the weaker Marvel characters and put together a movie that was just violating all sorts of expectations of what you expected from the Thor movies. It went from being very heavy and somber, kind of taking on these airs of medieval lore and those sorts of things and made it fun and rock and roll, and really hilarious.

And so, that’s one of those moments where you bring in this person and you’re not asking them be like the directors that we’ve had before. Instead you’re saying, be like you. Bring the unique knowledge that you have into this film and then we’ll help you with all the big CGI stuff and the doing of the blockbuster stuff. But what’s most important for us is, you bring in your particular vision and let’s kind of preserve that and keep it for what it is.

ALISON BEARD: So, how might companies in other industries take this idea of hiring for experienced inexperience? How do you find that type of talent if you’re in software, or publishing, or finance?

SPENCER HARRISON: So, I mentioned that one of the things that I’ve studied for a while is onboarding. And if you just think about that verb, “onboarding’. It means you’re bringing somebody onboard, almost as though you’re kind of on a ship and you already have the rolls setup and you know where the ship is going. And they just need to fit in and do their part.

And what I think Marvel is doing is what I would call “in-boarding”. So, they’re saying, hey our process is not about bringing you into the organization and we’re going to tell you how you’re supposed to think and what you’re supposed to do. Instead, we’re going to bring you into the organization and you bring in with you all of the outside learning and experience that you have and you teach us how to do that in a different way.

So, you’re in-boarding that person’s outside experience and fundamentally changing the way the organization thinks about what it is its doing. You’re actually letting the employees create an imprint of the organizations. So, they’re stamping the organization with their outside knowledge.

ALISON BEARD: And is broadening the way you scan for talent another way to get experienced inexperience into your organization?

SPENCER HARRISON: Exactly. So, I think then that is the compliment to it. So, we can think about what is the process we’re using on our side and that provides us a different sort of logic for how we might be thinking about this. And then the other question is, OK, so if we’re willing to do things a different way, what sort of different types of experience should be, would be looking for?

And I think in this case you can see that the directors that they’re hiring at Marvel are movie directors. They’re not project managers from the construction industry, or car designers from the auto industry. So, they’re still people that have industry specific knowledge that fits what they’re trying to do with the project. It’s just that they’ve done different types of projects in the past.

And I think that that’s kind of the way to do it, is to think about what is some knowledge that is complimentary to what we already have, but kind of adjacent and slightly tangential to what we’ve been doing in the past?

So, for example, some consulting companies, rather than hiring people that have an economics degree, they’ll look at people that are chess masters. Because the idea is they might not understand economics, but they definitely understand strategy and they understand how to think several moves ahead of the game. And that is a skillset that equally valuable and it just allows us a different way of seeing what it is we’re doing.

ALISON BEARD: So, Marvel is bringing in all these new directors with very fresh ideas and different perspectives, but then the second thing you mentioned was this stable core. So, who makes up the core that stays the same in these creative teams? And how does Marvel retain them and make them blend with the new people coming in?

SPENCER HARRISON: I think part of what happens is that success and progress is one of the strongest motivations that we have as individuals. So, when we’re a part of something where there is this compelling energy and we feel like we’re constantly being challenged to do new things, but as we do them we can see that they’re being successful, it makes us want to be a part of it. It makes us want to have this sort of gravitational pull to stay with what’s going on.

So, part of what Marvel has done, initially they had a group of executive producers and leaders that kind of formed this team of individuals that would look at each one of the scripts and each one of the movies and make sure it kind of fit a certain set of patterns and what they wanted. And pretty soon they had to get rid of that because they realized that they were creating a universe that was a little bit too complex, and it was creating all sorts of political headaches for them to pass it through this filter.

So, they reduced that and really what you see is Kevin Feige operates as the executive producer in all these movies. You have Stan Lee, is involved and then you have people that kind of move in and out of this core along the way. And so, it’s kind of for some people that are part of this stable core, it’s more like contribute when you have an idea, or when you feel like you have the right energy.

And they allow people to kind of come in and out as it maps onto the story that they’re trying to tell and this sort of energy that they’re trying to get. But I think that what happens is because they have success and because they create such compelling stories, generally speaking people want to stay within the orbit of what’s happening.

ALISON BEARD: So, there is obviously this stable core of actors that started with Robert Downey, Jr., but you’re talking about also the technical experts, the people behind the scenes. The cameramen, the special effects guys, all of that too, right?

SPENCER HARRISON: Exactly. Yeah and we looked at both the actors who are kind of the front of stage people, but also the behind-the-stage people. And there is a stability there, but then there’s also opportunities to shift and if you look at the movies over time, what happens is from one movie to the next, there’s a lot of overlap, but by the time you get to the third then you’ve seen a significant amount of people that have kind of moved on to another sort of project and then new people kind of come in.

ALISON BEARD: So, again, how do you see this applying to teams working in different functions, or sectors? Movies are inherently one project at a time. Can it work in other types of organizations?

SPENCER HARRISON: Well, I think that there are obviously some industries that are more based around project work and that’s an easier transfer of this sort of way of thinking when you know that you’re going to have one project to the next. But even in those industries what often happens is you’re not going to see very much overlap from project to project.

So, I think that what’s nice about what Marvel does, is that they have this balance between there being enough similarity from project to project, but there’s also enough variability and novelty that’s coming in that allows for new ideas to flow into each one of the projects.

I think if you think about kind of a more steady state sort of organization where you might not have as much project work, even then, whenever you’re putting a group together you’re expecting there to be kind of new ideas and diverse inputs from that group. And I think a lot of businesses could spend a little bit more time thinking about what is the composition of this group? How many of these people have worked together before on previously successful projects, so they have some history for how to get something from start to finish? And then how many people can I sprinkle in that are new that will push these people in new ways and allow them to expand their thinking, not just rely on a formula that they might have used in the past?

ALISON BEARD: Right. So, this idea, the third one you mentioned of challenging the formula, that’s a fine line to walk. You want the stable core, you want people coming in bringing fresh ideas, but you have something that’s already working, so you don’t want to push it too far. How do you know how much to challenge the formula?

SPENCER HARRISON: It’s tricky. When we think about creativity and innovation we often talk about this notion of optimal distinctiveness or getting kind of the optimal point between novelty and usefulness. So, you need to have something that’s new enough that it stands out, but it can’t be so new that it violates all my expectations around what that thing is.

And what we found that was happening at Marvel is that the movies were kind of really getting into this sweet spot where they were challenging what was happening before, but also extending what they had done in the past. And at first we weren’t sure that that’s what was going on and so this is where we did the analysis of the scripts and we did an analysis of the visuals of the movie.

So, for us what was really gratifying is that when we plotted the emotional overtone of each script over time, what you actually saw is this almost zigzag pattern where you could see that one script would be kind of heavy and sad, or carry on more somber tones and then the next script would be much more playful and fun, and kind of have more of these positive emotions. And they kept expanding as they went along this zone of what was possible emotionally from a Marvel movie.

So, it wasn’t that every movie was different from the last. Sometimes you would have kind of two in the similar trajectory, but then the next one would kind of go down in a different way. And what that does over time is that it creates a different expectation from the audience. If you’re always selling me the same thing, then when I show up I want exactly what you’ve sold me in the past. Whereas if you’re constantly tweaking things, then what you’re teaching me as a consumer is that I need to be ready to be surprised. I need to be expecting the unexpected. And so, when I show up I’m expecting you to challenge me a little bit. And if you’ve taught your consumer that that’s what the expectation is, then you’re actually creating more degrees of freedom for yourself on what you can create and what becomes acceptable.

ALISON BEARD: So, I’m going to sound like a broken record here again, but I want to talk about how this applies outside of the movie world. I initially thought about Coke. Diet Coke was great. Cherry Coke was great. New Coke, not so much. But they still have to be Coke. So, how do you zigzag when you’re outside this world of films?

SPENCER HARRISON: I think one of the ways that we can zigzag is by really thinking about what is the trajectory of the set of products that we’ve already released, and how far can we move away from that trajectory to create a new experience for customers without being so new that it might be a turn off for people. I think one fun example of that is thinking about what Apple did, especially early in the century. They were generating a lot of innovative products and there was actually so much anticipation built around each new product release because you thought they’re going to release the iPod and now they’re going to release an iPhone, and now they’re going to release an iPad. And each one of those innovations felt fundamentally different and so there was this excitement around each one of those releases and I think in the last decade there’s been less excitement because it feels like they’ve kind of loss that zigzag pattern, and it’s become a little bit more of a flat line.

So, one of the things is just beginning to think about over time, what does our innovation curve look like and how are we pushing against the assumptions that our customers might have around what our products actually look and feel like. So, that we’re continuing to challenge them a little bit, so that they’re more open for new innovations from us

I think if we think more in terms of kind of like, brick and mortar and retail, one of the fun things to think about is in the world of clothing for instance, you can be selling shirts and you might try to differentiate them by having different designs, but more and more as we become more environmentally conscious, we’re also thinking about what are the materials that we’re using to make those shirts out of?

So, for example, a couple of years ago, H&M ran a contest and they had this woman that won the contest had come up with a design for a t-shirt, but it was based on processing cow manure to make the cotton fiber that would go into the t-shirts. So, at that point you’re wearing a completely different sort of article of clothing even thought on the surface it just looks like a typical t-shirt. Now, the question is like, is that too much of a violation or not enough? And it depends on —

ALISON BEARD: For me it might be.

SPENCER HARRISON: — what the organization has done in the past. Yeah, yeah, exactly. I’ve had friends that are like, yeah I’m not going to wear that because it’s going to smell bad. And it doesn’t, but that’s one of those things where if H&M just releases that, that’s probably too much, too far afield too quickly. And so then, if they have that innovation in the bag it’s thinking, what are the two innovations I can do before that to begin to open people up to the possibility that that might be where we want to go.

Sometimes it might be, I’m working on product 2.0 and I can think, well all right, what are the things that I can do to challenge what 1.0 did? And I can also be working on product 2.0 and I might already have the idea for product 4.0. And as a creative person, I’m going to be drawn to want to just do that really outrageous thing, but it helps to say, how can I think about where product 4.0 might be and then work my way back to what’s an acceptable violation, moving from 1.0 to 2.0 and then use that as a staircase to build up to where I’m going to go?

ALISON BEARD: And is that just a gut feel thing, or should you talk to customers?

SPENCER HARRISON: Oh, I definitely think that today it makes sense to be using data to understand where you’re at and what people want, and what people are responding to. And I think that that’s part of the fun of looking at movies is that you can do these sort of analyses of let’s look at the script. Let’s look at the visuals.

But similar sorts of methods are available for a lot of different products. I mean you can even imagine doing the same sort of things with cars and looking at what are the form factors and beginning to plot how different are we from one product to the next? And are we actually creating new experiences for people, or are we just replicating the old experiences?

So, is it look we had a four cylinder engine and now we’re giving you a six cylinder engine, and now, and all we’re doing is just adding a little bit of horsepower. Pretty soon that’s not going to be innovative and people will get bored with that and just expect yes, this next engine’s going to be more powerful, but if I’m including different experiences, like fundamentally different experiences in that package, then I’m opening up that sense of violation and excitement about what’s happening.

ALISON BEARD: OK. So, we’ve talked about a bunch of principles that Marvel employs, is it OK for people who want to learn from these examples to just take a few of those, to cherry pick? Or, do you have to do all of them at once?

SPENCER HARRISON: I think you could start by cherry picking, but I think that you begin to see the real power of them when you think about the synergies. So, it’s not that you can’t try each one of them individually. I mean I think you could create a new product and you could say OK, we’ve got this product designed really good. What’s the one added element that we could put on this to cultivate somebody’s curiosity?

So, you could do these things in sort of an incremental way, but I think the real power comes when you start thinking about how they might work together as an ecosystem. So, if I’m hiring somebody that has fundamentally different type of experience, and I bring them in with a group of people where there’s some stability, but there’s also some newness in the network, and then I allow them to challenge what’s going on and they, if they want to they can plot how what they’ve done is different than what’s happened in the past, but show how it’s not so different that it’s going to turn people off, then I can begin to see how all these things are working together to create this really compelling new way of thinking.

And it’s not just that it allows us to come up with the next new product, but it begins to create just like Marvel did, a sort of universe of products that talk to each other in a fun way and create a storyline for our customers to see how I can grow with you. I can kind of be with you on this journey because you’re creating new things and you’re spurring my intellectual curiosity. And so, I’m constantly wondering what is it you’re going to do next.

ALISON BEARD: Yeah. Is there anything else that you learned about the way Marvel operates? For example, how successful it is globally that you think other leaders could learn from?

SPENCER HARRISON: Well, I think one of the things that by bringing in people that have different sort of experiences and different sort of stories they want to tell, inevitably what you’re doing is you’re speaking to diversity. And we live in a more diverse world and we have more diverse markets. And I think that one of the outgrowths of that then is that Marvel’s able to tell stories that touch on a broader range of the human experience.

Most organizations would want that and they struggle with it and part of the reason why they struggle with it is that the thinking is, how can I stay the same, but still communicate to a group of people that are changing? And Marvel is saying, how can we change to keep up with a world that’s changing as well? So, I think that that’s kind of like a meta theme that you see all of these talk to and it’s easy to say that about movies because movies themselves are stories, but every organization is telling a story. And so, if they’re not able to tell a story that has diversity packed into it, then they’re not going to be able to reach the broad audience that they want to reach.

ALISON BEARD: Great. Thank you so much. It was really terrific talking to you and I do hope that lots of other leaders learn from this really fun example.

SPENCER HARRISON: Thanks for having me.

ALISON BEARD: That was Spencer Harrison. He’s an associate professor INSEAD and co-author of the HBR article, “Marvel’s Blockbuster Machine”. You can find it in our July/August issue or on HBR.org.

This episode was produced by Mary Dooe. We get technical help from Rob Eckhardt. Our audio product manager is Adam Buchholz. Thanks for listening to the HBR IdeaCast. I’m Alison Beard.