In the late 1980s, a huge telephone company hired a top-of-the-line consultancy to make a forecast.
Mobile phone usage was growing quickly, and the phone company needed to know how to plan for this new transformative technology. So they paid a world famous consultancy what is known professionally as a "boatload of cash" to answer this question: how many mobile phones will be in use in the United States by the year 2000?
So the consultants put on their serious faces and fired up the mainframe computers and crunched demographic and economic and technological data and rates of "build-out" and "carrier upgrades" and a lot of other words I don't understand, and came up with an answer, which they printed out and attached to their bill.
There will be, they said confidently, in the report that they sent to the phone company along with their (I'm sure huge) invoice, by the year 2000 in America, as many as one million mobile handsets in use.
So the telephone company began busily planning for a market which in 10 years' time would see one million mobile handsets scattered about the continent of North America. For the record, by the year 2000, there were 109 million handsets in use. So the enormously expensive, arrogant, pompous, and ridiculously well-dressed consultants were off, a bit. By a factor of 100.
But it's easy to blame the consultants and to mock them for their mistake. Consultancies in general are irritating collections of know-it-alls and expense-account spenders. Walk through any airport in the world, and you're confronted with advertisements offering "strategic vision" and "competitive advantages" if you hire this or that consultancy. But the truth is, the only thing anyone really wants to know is, what's going to happen tomorrow? And nobody knows what's going to happen tomorrow. Most people don't even know what's happening today, and the future has a habit of coming all at once, and in unpredictable ways.
Nobody likes to hear that, though. We all prefer to believe in the myth of the expert, who will tell you in soothing tones that his firm has a special way to figure things out, a clever algorithm, a set of methods designed to predict the future and mitigate risk.
Lately, though, the experts have taken it on the chin. What, for instance, is the recent financial collapse but a spectacular example of what I call "the stupidity of the smart"? Who was more impressive in marshalling complicated maths formulas and equations than the "quant" guys working the derivatives and collateralised debt obligations desks at investment banks worldwide? Impressive until, as you might recall, they suddenly weren't.
It took a constellation of smart engineers to produce the recent oil spill in the Gulf of Mexico, and a stadium-sized collection of clever bankers to produce the credit crises in the US and Europe. Stand outside any casino in Las Vegas, and someone will come along with a fat stack of cash, brimming with confidence, who will explain that it's going to be different with them, see? They have a system! They've worked out exactly how to bankrupt the casinos, to beat them at their own game.
An hour or so later, straggling out of the casino, shirt untucked and pale, they look a bit like the mortgage trading department at Lehman Brothers a few minutes after the firm officially went belly up: stunned, furious and of course utterly broke. When smart people act stupid, they rarely do it with style. And they almost never own up to it. Instead, we're treated to whinging, shrieks of blame-shifting, demands for a bail out and finger-pointing.
In Hollywood, we face this kind of thing all the time. Out here, the stupidity of the smart is a way of life. We're used to the Monday morning surprise, when a movie that cost almost $200 million opens to a tepid, indifferent box office response. We're accustomed to brilliant, talented people making enormous stink bombs – expensive feature films that repel audiences or high-priced television series that garner tiny ratings. It's to be expected in a business where uncertainty rules and the customer is always changing his mind. When smart people act stupid in Hollywood, they behave like adults: they shut themselves away for a few months, lay low, collect their thoughts, and begin to work on the comeback.
In this way, the entertainment industry is actually much more rational and business-like than any other industry I know. On the other hand, when you make a spectacularly wrong prediction in Hollywood, like the consultancy that miscalculated the number of mobile phones, you still expect to get paid. In this way, the entertainment industry is exactly like every other industry too.
Rob Long is a writer and producer in Hollywood