The power paradox

The power paradox

Just because you have the power, does not mean you should use it. And even when you don’t have the power, sometimes you must act as though you do  

ADAM LEIPZIG

As a CEO, how should you exercise your power? Should you govern by consensus? Make people tremble in fear? Be tough but fair?

We confront the same questions every day in Hollywood when we’re working on movies, because each movie is its own start-up entrepreneurial venture—we craft the business plan (the script), hire a bunch of people, and then make the product (the movie). Along the way, those of us who finance films and run studios need to decide what kind of leaders we are and what kind of power we will wield.

This issue comes into play at every step in the process, and nowhere more so than at the end, when we have to decide how the movie will be finished. We call that “final cut.” The “final cut” is the final version of a film, the moment where we stop tinkering with it and say it’s done. It’s also a moment where emotions can run high, because most of the time the director does not have “final cut”—that power is reserved for the motion picture studio or financial investors. While I know this seems strange to people in many other parts of the world, the United States has no tradition of droit morale or “moral rights” given to creators of intellectual property. If someone else is paying the bills, everything, even a movie, is a “work for hire,” which means the filmmaker, in the last days of a movie, holds precious little power.

On one film I supervised, our studio found the ending unsatisfying. We had an instinct, borne of our experience, that if the ending were better—in fact, if the last two scenes were reversed—audiences would leave the movie much more up-beat, which would translate into better word-of-mouth and more ticket sales in the future. The director didn’t want to make the change. She liked the ending the way it was, but she agreed to a test, so one Sunday afternoon we went to a cinema and screened two versions of the movie in adjacent rooms for test audiences. The versions were the same except that two scenes at the end were in a different order. After the screening, a research company did an audience survey, and it turned out we were right: the version with our ending had a higher approval rating.

You’d think that would be the end of the story. We, the studio, had “final cut,” and the director didn’t. But, even with the audience results in hand, she didn’t want to budge. She made an artistic plea, stating that the film was simply a better film with her ending, and that we should support quality and artistic integrity.

That evening, we executives at the studio caucused among ourselves. We reached a surprising decision—we agreed to let her keep her ending. We had done our job, and showed her that a different, more commercial ending was possible. She had done her job, and fought back to preserve her vision. Why did we make the decision as we did? Because, at the end of the day, we recognised that our role was to be financiers, not movie-directors, and even though we had the power to change the movie, it would overstep our role and imperil our relationship with this director and other directors we may work with in the future.

The outcome of that film was an even further surprise, because its box office turned out to be double our expectations. The director had been right all along; the audience appreciated her mark of quality.

Then I worked on another film with the opposite result. This time, we had engaged an extremely powerful director, one of the few who commanded the power of “final cut” himself. When we screened the film for a test audience, it tested poorly. The fixes were obvious to all of us, including the director. But he knew the film’s star would not want to go along, and this director told us, in confidence, that the only way to get the changes made would be if we played a charade, so he could claim we were forcing him. Here, too, we played our role, and he played his. The film got changed and became a moderate success.

What’s the lesson of these two stories, and what does it tell you about the kind of CEO you should be? Think of it as the Power Paradox. Just because you have the power, does not mean you should use it. And even when you don’t have the power, sometimes you must act as though you do.


Adam Leipzig is the CEO of Entertainment Media Partners, an international firm that advises its clients how to get exceptional financial and creative returns and maximise the value and visibility of entertainment content. Adam has produced, supervised and distributed more than 25 movies, which have earned more than US $2 billion in revenue on US $300 million in production investment. He is the publisher of Cultural Weekly, and former president of National Geographic Films and senior executive at Walt Disney Studios.