Sunday, March 27, 2022

The Path to Hit-Making: How Early Music Variety Helps Music Artists

The creative arts are full of one-hit wonders who produce exactly one famous hit and are never heard from again. Most famously this happens in music, but it is also true for authors, visual artists, and performing artists. Is it possible to predict which creative artists can have multiple hits? The usual answer is, “Of course not!” But if it were possible, such knowledge would be useful outside the arts as well. Organizations of all types often need to develop novel and creative products, and even those products that involve engineering or science ultimately start with creativity.

Actually, we are making some progress in understanding how multiple hits are created. Research by Justin M. Berg published in Administrative Science Quarterly looked at musical artists and discovered that a key factor in becoming a multi-hit artist is the music made before the first hit. This sounds strange but is easy to explain. Before the first hit, artists are generally ignored and can freely choose what to create, and they may end up making choices that differ a great deal from each other. After the first hit, they are under the magnifying glass of the world (and themselves) and typically try to stay in tune with what their audience wants without changing too much from their past production. Problem is, what their audience wants keeps changing.

This is where the production before fame becomes important. Some musicians make very novel music, some musicians make a great variety of music, and some musicians make music that lacks novelty and variation but hits exactly what the audience wants at the moment. Who can repeat the hits? When the question is phrased this way, it seems clear that variation is a good thing because it lets the musician adapt to new trends without changing too much from past work. That’s exactly what the research found. But interestingly, novelty before becoming popular also let the musician produce multiple hits. Maybe that’s because it creates a sense of freedom and an audience expectation of some surprises?

But wait, before we worry about how a musician can get multiple hits, maybe we should think about how to get the first hit. So here is some bad news: Novelty is great for multiple hits but bad for getting the first one. Fortunately, the same is not true for variation, which helps the chances both for a first hit and for multiple hits. Of course, if you are an artist, you know that variety is a very hard thing to achieve, maybe even harder than novelty. In fact, the main driver of variety seems to be repeated failure when doing the same thing over and over again, illustrating that it is not just hard to accomplish but also hard to attempt. Cost and benefit…

What do these findings on musicians tell organizational decision makers? More than you might assume. First, we know that creativity has similar effects on innovative work across a wide range of products, so we can actually learn about product design from successful musicians. Second, these findings directly tell us what resumes should look like when hiring someone to do development work – look for variety! It is valuable and costless, because job applicants will come with a great variety of variety levels.

Finally, and this part could be costly, the findings also tell us what type of workflow a development team should have. Unlike musicians and other creative artists, who are forced by their audiences to stay relatively close to their past production, development teams will maintain a variety of projects if they are told to do so. And we know that variety increases the likelihood of success.

Berg, Justin M. 2022. One-Hit Wonders versus Hit Makers: Sustaining Success in Creative Industries. Administrative Science Quarterly, forthcoming.



Sunday, March 20, 2022

Firms Following the Law: Legal Inequality Promotes Actual Inequality

Do firms follow the letter of the law? They are supposed to, and they usually do. Do firms follow the spirit of the law? Sometimes, and especially when their executives agree with it. These are general and obvious statements, but it was only recently that we learnt how far firms will go in following the spirit of the law. Suppose that a US firm is in a state that just passed a law banning the affirmative action practices that help minorities get hired and promoted in most of the nation. Will the firm continue to hire and promote as before, or will it make changes?

The question is important for many careers. Black and Hispanic employees are only half as likely to become managers as White employees. Affirmative action policies were put in place to even these odds, and affirmative action bans are promoted by politicians who want to counter the movement towards fair employment practices. In nine states, such bans were passed. But did the bans have any effects? Research by Letian Zhang published in Administrative Science Quarterly answers this question.

The key feature of affirmative action bans is that they don’t ban firms from doing affirmative action – they only ban the public sector from doing so. But they can still serve as normative cover for firms and executives who are against affirmative action and similar equal employment opportunity practices, and so inspire them to weaken or even roll back any affirmative action practices they are doing. Did this happen?

Yes, definitely. The proportion of Black managers in a firm is a sensitive indicator of equal opportunity practices, and it showed clear differences between firms that were in a state banning affirmative action and firms in a state that did not ban it. For comparable establishments, the proportion of Black managers dropped by 0.63 percentage point, with most of this drop experienced by Black women. When interpreting this number, keep in mind that the proportion of Black or African American people in the US is 12.4 percent, so a drop of 0.63 percentage point is roughly a 20-percent drop relative to the population.

This difference was not the same across firms, however, because the political views of the Chief Executive Officers made a difference. Most of the drop in the proportion of Black managers was a result of firms with conservative CEOs, which saw a drop of 0.93 percentage points in the proportion of Black managers, compared to firms in states without affirmative action bans. Again, compare with the drop in all firms combined (0.63) and the total proportion (12.4), and the difference is clear.

So, the law is not just a law but also a signal. But signals are not for everyone; they are followed by those who are most alert to them and friendliest to their message. That, of course, is the whole point of passing a law that only some of the many organizations in a state need to follow. Signals are symbols, and symbols matter.

Zhang, Letian. 2022. Regulatory Spillover and Workplace Racial Inequality. Administrative Science Quarterly, forthcoming.