The Root Cause of Industry Roadkill

Roadkill is the term we use to describe the many failed entertainment projects that litter the industry's history. The majority of roadkill has occurred since the boom of indoor FECs and other types of indoor community-based entertainment projects that started in the early 1990s. Tombstones are engraved with such names as Discovery Zone, X-Site, Mountasia, as well as many lesser known individually owned centers. In fact, Discovery Zone was rescued from the intensive care ward of its first bankruptcy, sort of like the dead rising from the grave on Halloween, only to finally die a little over a year later in a second bankruptcy.

About a half-dozen times a year, our company is hired by owners of ailing centers to analyze why their businesses are performing so poorly and to recommend a turn-around strategy. In some situations, we are able to develop a plan to correct the underlying causes and improve the center's performance, but rarely to the investors' and owner's original expectations. In other situations, the prognosis is terminal, as the problems are incurable because of poor location, insufficient market size, or a simple issue like inadequate parking. Unfortunately, in many cases, the owners don't call us in until after they've depleted their working capital -- when they no longer have the monies needed to correct the problems.

Each ailing center has had its own unique problems. However, we have identified the one common root cause that has resulted in the failures -- a problem universal not only to the failure of leisure projects but to numerous other businesses, as well. Surprisingly, the wisdom to avert disaster with an entertainment center has been around for at least 26 centuries:

Real knowledge is to know the extent of one's ignorance.

Believe it or not, researchers at Cornell University and the University of Illinois, Champaign-Urbana, have been working to substantiate the validity of this age-old saying. In a research paper published in the June 2003 issue of the journal, Current Directions in Psychological Science, researchers restate Confucius' wisdom this way: "People tend to be blissfully unaware of their incompetence. This lack of awareness arises because poor performers are doubly cursed: Their lack of skill deprives them not only of the ability to produce correct responses, but also the expertise necessary to surmise that they are not producing them... People are unaware of their incompetence, innocent of their ignorance."

The research showed that the poorest performers at a task, those subjects with the least knowledge, overestimated their performance or skill the most, whereas the best performers, the most knowledgeable, actually slightly underestimated their performance. The research supported the same findings in three other research projects conducted during the past several years.

The researchers explain that people fail to recognize their own incompetence because that incompetence carries with it a double curse. The skills needed to produce correct responses or judgments are virtually identical to those needed to evaluate the accuracy of one's responses. For example, the skills needed to develop the layout for a center are the exact same skills necessary to recognize whether the layout is correct. Thus, if people lack the skills to produce correct answers, they are also cursed with the inability to know when their answers, or anyone else's, are right or wrong. They cannot recognize their responses as mistakes, or other people's responses as superior to their own. In short, the researchers say incompetence means that people not only reach erroneous conclusions or decisions, but they also don't have the ability of evaluate their decisions as correct or incorrect. Incompetent individuals do not have the skills necessary to achieve insight into their own plight. Put simply, people incompetent in any area of knowledge are likewise ignorant of their incompetence. Ignorance might be bliss, but when it comes to developing and managing businesses, bliss will most likely turn to financial grief.

Yes, the root cause in the majority of instances of roadkill is blissful ignorance. This is supported by the anecdotal evidence that the vast majority of failed or struggling centers we have examined were developed by novices to the industry who failed to seek expert advice from seasoned industry experts. These entrepreneurs didn't know what they didn't know. So they proceeded down the development road relying on their own judgments, believing full well they were making good decisions.

This research is reassuring to us, as it explains a phenomenon we have often attributed as entrepreneurial arrogance. We now understand what we thought was arrogance is only the result of the human frailty of not being able to recognize one's own ineptitude.

One area where we have repeatedly seen this blissful ignorance demonstrated is in developing the mix for a center. The vast majority of entertainment facility developers, at least in the past, have been middle-aged men. They typically act as if they have divine intuition on what will work in the marketplace and subsequently develop a mix that appeals to them based on gut instinct. This phenomenon is sometimes referred to as the bias of personal perspective. That would work fine if the market they were trying to reach was middle-aged men instead of families, which obviously includes moms and children. So the developers' personal bias tells them to do one thing, when the marketplace really wants something else. It's sort of like trying to mix oil with water. We have often had to remind clients they are not the customer.

We see this androcentric (male-centered or biased) characteristic not only with the mix of many centers, but in the design. Like they say, men are from Mars and women are from Venus. The appearance of Mars is completely different from the appearance of Venus, yet men -- owners and architects -- continually design Martian environments for Venusians and their children (for more about androcentric design, read our article Beyond Androcentrism).

Considering this decision-making weakness of the human condition, can industry roadkill be prevented? Probably never entirely, neither in the entertainment industry nor in other business enterprises. Blind ambition will continue to be a large part of the entrepreneurial process. We can hope, though, that in the future more entrepreneurs will turn to industry experts for assistance to save themselves from their lack of expertise. At a minimum, prospective FEC developers should attend introductory seminars such as Foundations Entertainment University.

Our company is only one of many consultants and designer/producers in the location-based entertainment industry. We are often asked what our fees are, only to hear the response, ''It's not in our budget,'' or ''I can't afford it.'' We will conclude this article with a simple response to those statements: You get what you pay for. That may appear self-serving, but it's really directed at trying to prevent industry roadkill. These failures end up hurting everyone in the industry by making it increasingly difficult to access capital for projects. Those who say they can't afford it are often the ones who can't afford not to work with a consultant -- to save themselves from the blissful ignorance of not recognizing how much they need help.