The Avatar Effect: How Less Novelty Drives More Success

In a world captivated by transformative innovations such as generative AI and other groundbreaking tools, businesses and leaders often prioritize novelty to gain a competitive edge and remain at the forefront of their industries. The commercial success of products like AI-powered chatbots and image generators demonstrates the allure of innovation. Yet research reveals a key challenge: novelty inherently engenders uncertainty, making innovation a risky endeavor.

How, then, can organizations successfully innovate? Research from Lillien M. Ellis, assistant professor at University of Virginia Darden School of Business, offers a compelling answer: not all aspects of a product need to be novel — and, in some cases, they shouldn’t be.

Drawing on James Cameron’s “Avatar,” the highest-grossing film of all time, Ellis and co-author Joshua H. Katz illustrate how reducing novelty in some aspects of a work can allow for increased creativity elsewhere.

“We argue that James Cameron did not make a mistake when he based the Avatar story on previous works but rather strategically used novelty reduction to increase the final product’s success,” they write in Academy of Management Review. “Novelty reduction can play a critical role in the creative process.”

Two Strategic Approaches

The research identifies two distinct approaches to managing novelty, both of which can be seen in the creation of “Avatar.”

1. Permanent Novelty Reduction (PNR) is where creators decrease novelty in key aspects of their final product to make it more amenable to consumers or gatekeepers.

Cameron's use of familiar storylines exemplifies PNR. Drawing from successful films such as “Dances with Wolves,” “The Last Samurai,” and “Pocahontas,” he created a recognizable narrative framework. He also made the Na'vi humanoid enough to make their interactions with humans believable. These choices demonstrate how lower novelty in key aspects can contribute to a product's success.

2. Temporary Novelty Reduction (TNR) involves strategically decreasing novelty in the short term to overcome resistance to novelty. This often leads to a more creative product in the long term.

“Avatar” pioneered numerous technological innovations, from motion-capture techniques to 3D cameras. However, Cameron strategically reduced novelty during development by waiting for technology to mature, partnering with existing camera manufacturers and simplifying set designs. This temporary reduction of novelty ultimately enabled greater creativity in the final product.

The Power of Familiar Elements

The researchers note that even organizations claiming to value innovation often reject truly novel ideas. “Studies have demonstrated that while decision-makers might claim to prize novelty, they frequently reject creative ideas,” they write. “Organizational gatekeepers tend to favor familiar ideas over novel ones, even when their organization has already devoted significant resources to discovering creative solutions.”

The research reveals why using familiar elements can be crucial for success. As Ellis and Katz explain, “Neuroscientists have demonstrated that in consuming art, the pleasure one experiences stems partly from an individual's ability to predict how the song, movie, or novel will end.” This insight helps explain why “over half of the 100 highest-grossing movies in the past 20 years were based on previously published works.”

They also point out that this lesson can be applied more broadly. For example, new electric vehicles use a nearly identical driving system to gasoline-powered cars — the same arrangement of a steering wheel and pedals — even though an entirely new control system would be possible. “By intentionally keeping consumer experience closer to previous versions of the technology, carmakers appeal to consumer biases for familiarity and increase their chance of commercial success,” say Ellis and Katz.

Three Take-Aways for Creative Success

1. Strategic Timing. Cameron demonstrated patience by waiting for technology to match his vision. He moved forward only after seeing successful examples of photo-realistic computer-generated characters in films such as “The Lord of the Rings,” “King Kong,” and “Pirates of the Caribbean.” This strategic waiting allowed him to build on established technological foundations.
2. Design Simplification. Instead of creating entirely new creatures, Cameron's team drew inspiration from existing sources. The Ikran, for example, combined elements from Art Nouveau aesthetics, animal movement patterns and marine life structures. This approach simplified the design process while still creating unique results.
3. Balance of Innovation. The research shows that reducing novelty in some areas doesn't diminish overall creativity. Instead, it can enhance team performance and lead to greater innovation in the final product. This balanced approach allows teams to focus their creative energy where it matters most.

Practical Applications for Today’s Leaders

In terms of innovation strategy, leaders should resist the urge to innovate everything simultaneously. Success comes from carefully balancing novel elements with familiar ones, using existing frameworks as foundations for new ideas.

Effective team communication requires translating complex concepts into simple, relatable explanations. Leaders should build on established references that team members understand, creating common ground between departments, from technical to creative to marketing.

For product development, teams should carefully consider which familiar elements to retain for user comfort while focusing innovation where it matters most. Successful existing elements can serve as building blocks for new developments.

Risk management in innovation requires reducing resistance by incorporating familiar elements that make new concepts more accessible to stakeholders. The key is finding the right balance between creativity and market acceptance.

The Path Forward: Balancing Innovation and Familiarity

The “Avatar” effect provides a new framework for how we think about creativity and innovation. As Ellis and Katz conclude, reducing novelty “should not be considered antithetical to creativity but rather a central part of the creative process.”

For business leaders, this means recognizing that successful innovation often requires finding the right balance between novel and familiar elements. Whether developing new products, managing creative teams or driving organizational change, reducing strategic novelty can help bridge the gap between breakthrough innovation and market acceptance.

Assistant Professor Lillien M. Ellis is co-author of “Dances with Avatar: How Creators Can Reduce the Novelty of Their Work to Achieve More Creative Success” with Joshua H. Katz of the Universidad Carlos III de Madrid, published in Academy of Management Review.