The Role of Success and Failure in Fluid Teams: Evidence from the Motion Picture Industry

Many business settings involve fluid teams, where team members come together to work on a project, after which the team is disbanded. It is well-known that coordination can be challenging and affect the performance outcomes of fluid teams. The literature has studied how several facets of experience can facilitate learning and improve outcomes for fluid teams. However, the role of experience with success and failure and its effect on improving outcomes for fluid teams has remained unexplored. In this study, we use data from the motion picture industry to examine how the experience with success and failure resident within key members of a movie production team affects profitability. Our analysis of the data for 2,091 movies released in the United States between 1999 and 2018 reveals that a movie’s profitability depends on the production team’s history with success and failure. Additionally, we find that teams with a history of success result in movies with higher profits, whereas teams with a history of failure result in movies with lower profits. We also find that increased relative dispersion in the team’s experience does not affect the movie’s profitability. Further analysis of the composition of movie teams indicates that financial performance can be significantly impacted when movie teams are predominantly composed of members with a history of success or failure. We contribute by illustrating a new measure of team experience relevant for fluid teams and by providing insights on how to compose teams based on members’ experience with success and failure. This paper was accepted by Elena Katok, operations management. Supplemental Material: The online appendix and data files are available at https://doi.org/10.1287/mnsc.2023.03756 .