Joe Patti

I have been writing Butts in the Seats (BitS) on topics of arts and cultural administration since 2004 (yikes!). Given the ever evolving concerns facing the sector, I have yet to exhaust the available subject matter. In addition to BitS, I am a founding contributor to the ArtsHacker (artshacker.com) website where I focus on topics related to boards, law, governance, policy and practice. I am also an evangelist for the effort to Build Public Will For Arts and Culture being helmed by Arts Midwest and the Metropolitan Group. (http://www.creatingconnection.org/about/) My most recent role was as Executive Director of the Grand Opera House in Macon, GA. Among the things I am most proud are having produced an opera in the Hawaiian language and a dance drama about Hawaii's snow goddess Poli'ahu while working as a Theater Manager in Hawaii. Though there are many more highlights than there is space here to list.

CONNECT WITH JOE

[novashare_follow button_size="medium" button_shape="square" networks="twitter=https://twitter.com/buttsintheseats,linkedin=https://www.linkedin.com/in/joe-patti-14aa666/,subscribe=https://insidethearts.com/buttsintheseats/subscribe/"]

Marketing by Drucker

by

To continue the discussion about Peter Drucker’s thoughts on Non-profit management that I started yesterday, I thought I would look at his view of marketing.

There are a number of interviews included in Managing the Nonprofit Organization where Drucker asks different people their views on a set topic. One of the interviews associated with marketing features Philip Kotler who teaches at Northwestern University. One of the things he says is that many people confuse marketing with hard selling and advertising.

He says “The most important tasks in marketing have to do with studying the market, segmenting it, targeting the groups you want to serve, positioning yourself in the market and creating a service that meets the needs out there. Advertising and selling are afterthoughts.” The difference is a function of how you start out. Do you look at who you want to serve or do you start with a product and then look for markets to push it into. The former is marketing, the latter is selling.

I will be the first to admit, I am guilty of selling under the guise of marketing. Part of this is due to pressure from above to fill seats and lacking the time, staff and environment to be asking if my actions properly served a market. Actually, pretty much all of it is due to those influences. I learned what marketing was supposed to be in school, much as Kotler defines. When I got out in the real world, I was never in a position to work under the proper definition.

Still, it is easy to market incorrectly even if you are acting in accordance with the definition. You may be clear about the needs you want to serve, “but don’t understand the needs from the perspective of the customers. They [organizations] make assumptions based on their own interpretation of the needs out there.”

I have been seeing this idea cropping up a lot recently in the articles I am reading. Arts organizations have been accused of not being cognizant of the changing needs and expectations of its audience. One of the things Mr. Kotler says is marketing can “help us understand why customers chose to be with us in the first place and why they’re not choosing to be with us any more.”

A couple ideas I came away from the reading with was that arts organizations could do a better job marketing by assessing their strengths. Even if there are a couple other theatres, orchestras, ballet companies, etc in the area, they can certain examine the market, see what there might be a demand for and fulfill it. This can range from things arts organizations already do like positioning themselves to the Shakespeare or modern dance niche or offering classes to adults and children and providing outreach programs free of charge to underserved schools.

It can also be new programs that recognize the different needs of all the segments you wish to serve. Instead of only having one format for an audience education program, you might pitch different ones for different segments. Older audiences might like a formal lecture/talk back after a Thursday performance that started at 7pm. Younger audiences might prefer a coffee house format discussion after a Saturday night performance that started at 8pm. Churches have different ministries under one roof to suit different segments of their congregations. This is a structure that arts organizations can adapt to their needs.

The methods that Drucker and Kotler discuss for making sure your organization is market rather than selling driven are fairly obvious but perhaps difficult to implement because it can require fighting institutional inertia. The first is to do market research to understand the market and its needs, the second is to develop segmentation and be aware of the different groups you want to serve, the third is to develop policies and programs that are structured to the meet needs of the groups. Everyone in the organization has to be invested in these programs over the long haul because the desired result won’t be attained immediately.

More Drucker to come.

Nonprofit Drucker

by

As I noted in an earlier entry, Peter Drucker, one of the most highly regarded management and leadership authorities in the world has written a book on managing the non-profit organization. I am about half-way through Managing the Nonprofit Organization: Principles and Practices. Though it might be better to discuss the book as a whole when I finished it, I thought it wise to attack a portion of it at a time lest I create an entry so long no one would have the time to read it. Also, I placed so many Post-It notes to mark passages in the book, it begins to appear a hedgehog.

Rather than try to summarize the whole book, I am mainly going to note some interesting concepts he speaks of that I hadn’t thought of, or at least, had not thought of to the extent his writing inspired.

The first was his idea that the product of a non-profit is a changed human being. In this he refers to the change a hospital, scouting organization or church might produce as well as exposure to the arts. This is an interesting idea because as much as mission statements declare their purpose is to effect this change, the focus of most arts organizations tends to be on presenting/producing shows.

He notes that since non-profits don’t have a conventional bottom line to achieve, they need guidance in management and leadership all the more “lest they be overwhelmed by it.” The problem, he says, is that most management texts and resources don’t address the particular needs and challenges of the non-profit and thus the impetus for writing this book.

One of the negative effects of not having a bottom line is that non-profits tend to view everything they do as “righteous and moral” and are reluctant to scrap efforts in one area to redirect organizational resources elsewhere. Drucker feels “they need the discipline of organized abandonment even more than a business does” in part because of the dearth of resources they possess.

The process of change and innovation necessitates looking outside of the organization. He notes that consulting “current reporting systems doesn’t reveal opportunities; they report problems. They report the past. Most answer questions we have already asked.” He says the biggest impediment to successfully innovating is trying to hedge your bets too much so that you are safe if your plans don’t work out. All that does is anchor you too much to the past and prevents you from creating the proper degree of change to provide success in the future.

Drucker has some thoughts about choosing leaders for change. He says that too often “selection committees are overly concerned with how poor the candidate is. Most of the questions I get are not: What is he or she good at, but we think this person is not too good at dealing with….The first thing to look for is strength–…and what they have done with it.”

The second thing he says is that selection committees have to look at what the one immediate challenge is and select a person whose strengthes matches that need. Then he says he would look for character or integrity because a leader needs to be a model for others in the organization. He says that the ultimate question to ask is would you want one of your children to work under the candidate. Would you want one of your children to look like that person one day.

He talks about the fact that a non-profit leader doesn’t have a single dominant constituency to serve like business has the shareholder and government has the voter. He actually defines the ones a non-profit serves as those whose “No” can adversely effect your organization. For an arts organization it can be the audience and volunteers and funders and students, etc. He points out that there has to be separate marketing and handling plans for each group as well as perhaps for segments of each group. They may all be coming to view the same product but what motivates their arrival differs.

He says the best time to innovate is when things are going so well, you don’t want to try to fix anything for fear you will break something and plunge to ruin. However, as everyone knows, the worst time to try to institute effective change is when the institution is fighting for its life. No one will be thinking about the best course for the next 10 years if they are worried they won’t be getting a pay check next week.

It isn’t always a matter of completely changing course, but heading in the same direction more efficiently. If you have achieved your objectives, figure out how to improve on them. Ask “Can’t we do better?” Build upon your strengths. Look at how expectations are changing and decide how your strengths fit into that world.

He also points out, somewhat amusingly, that “It’s an old rule that everything that’s new has a different market from the one the innovator actually expected.” He points out a number of examples where people intended a product or program for one group but ended up being wildly successful with a segment they didn’t intend to reach. Automobile manufacturers have a terrible time with this today when they roll out a vehicle with the intent of attracting young people only to have the parents buy it in droves instantly branding the car as unhip.

Although the book was written in 1990, many of Drucker’s messages have resonance in literature and articles I have cited in the last few weeks and months. He says that organizations need to take customers seriously. “Not saying, We know what’s good for them. But, What are their values? How do we reach them?” He cautions against an organization becoming to entrenched in fund raising and defining its value in terms of economics lest they “subordinate that mission to fund raising.”

There is quite a bit of truth in this. As he says, non-profits don’t have a bottom line. Because of this, lately they have been making appeals for money based on the benefit to others’ bottom lines. It never really occurred to me so clearly as now that in doing so, non-profits risk pushing their identity and mission aside and making themselves servants to corporate and community well being. They position themselves as the new 401k and health benefits package that will attract employees. Rather than being about beauty and reflecting the human condition, they claim to be contributing to improving economic and social conditions. Fear then the day when the arts are held responsible for keeping it so. In utilizing the rationale that like sewer lines, their existence contributes to rising property values, arts organizations are in danger of being viewed as such.

Look for more Drucker insights in future entries

Various Notes

by

I was listening to Fresh Air on NPR yesterday where Bill Moyers was being interviewed. There were a couple comments he made that struck a cord with me. Moyers was a primer mover in the formation of what eventually became the Public Broadcasting System. In discussing public television, he said “the most important thing that we can do is to continue to treat Americans as citizens, not just consumers. If you look out and all you see is an audience of consumers, you want to sell them something. If you look out and see an audience of citizens, you want to share something with them.”

This seems important to remember in these times when cultural organizations are trying to discover ways to serve their audiences better. As much as we adopt the methods and techniques of the for profit in order to address the changing expectations of the population, it will become important to remember that there are a few characteristics that separate the non-profit world from the for, and that is the intent with which we approach audiences.

Moyers also discussed the rise of blogging and likens it to the early days of the US as a nation when the low cost of printing presses provided “ink stained wretches” like Tom Paine with the ability to disseminate their views of the world. He notes the material they printed was very partisan and lacked the objectivity that journalists at least claim to aspire to today. Blogging today, he says, is the closest society has approached to the democratic expression of the nation’s youth.

Speaking of blogging and democratic expression, (since I speak of it so often)I was pleased to see the Artful Manager mention a theatre in Seattle which has provided audiences with the opportunity to blog about the shows they have seen. The first comment apparently came within 40 minutes of the show’s end. Since then there have been some additional entries.

The only disappointing element of the project is that comments are apparently approved of by a gatekeeper on staff. The comments are written by a number of people, but they are listed as being posted by a single person. In fact, in order to comment, you have to email your thoughts to a person whereas with my blog, you can comment on what I have to say immediately.

True, I can eventually delete what you have to say, but I have to find the comment first. This being my 52nd or so entry, that will become more difficult as time goes on. There is also the chance someone will read a critical comment before I remove it and catch me when I delete it. As I have stated before, if an organization is going to invite candor, they have to remove any appearance that they censor it out.

Don’t Take Them For Granted

by

A lesson from the big boys in the for-profit world. My sister works in the new business department of Deutsch Inc. (as seen on The Apprentice) In the last couple months they have lost two accounts because new people took over management positions and simply decided to move their business to agencies with which they had preexisting relationships. There was no attempt to meet with the folks at Deutsch to discuss anything, just a call saying the business was being moved elsewhere.

It wasn’t a matter of poor results either. The first company, DirectTV had actually seen the largest increase in business ever since those godawful ads with celebrities reading half-literate testamonial letters began airing. Yesterday, Snapple became the second company to dump the agency and Deutsch did everything for them including designing the bottles and labels and writing those fun facts that appear under the cap. (I actually contributed a couple!) Deutsch would like to replace them with another beverage account but it is tough finding one that Pepsi or Coke doesn’t own.

A less or two here for non-profits. The first is obviously not to take your customer’s loyalty for granted. This is not to say Deutsch did. By all accounts they served their customers well. However, as you can see, some times it doesn’t matter how good a job you do and how much value you offer a customer. It just takes one opinion leader to turn a large segment of your customer base in another direction. Obviously, this can make your job easier in some respects if you can identify the opinion leader and harnass his/her influence for your own ends. But you can also encounter an easy come, easy go situation too.

Another lesson that isn’t necessarily illustrated by the Deutsch example but bears discussion is not to take your audience for granted in general. One of the things that constantly annoys me, and I am sure I am not alone, is seeing lucrative offers for subscribing to a service or magazine. Unfortunately, I can’t take advantage of these offers because I have been a loyal customer for a decade. I really resent the fact that companies will do all sorts of wonderful things to entice me to be a customer but they don’t do anything to reward my loyalty much less entice me to remain a customer. Even worse, when I originally signed up, they weren’t offering any incentives so I missed out entirely.

The only time I get offered special deals, it is to buy something I don’t need from a partner. This makes me strongly suspect they are getting a cut of whatever I buy due to their referral. Do companies really think they are rewarding me by giving me a deal on something I may or may not want when they know for certain I value what they offer?

It is so much more expensive to get new customers than it is to retain current ones, it is worth at least recognizing a person’s loyalty. Given the power and ease of use databases provide, it would be so easy for arts organizations to reward loyalty. If person buys X number of single tickets in a year, they get flagged for a free ticket or a discount. They have been buying tickets regularly for 10 years? Their tickets are mailed in a thank you card with a gift certificate for dinner.

Certainly, you may do all this work and they may still be seduced away by an impulse to do something different. An arts administrator’s job is to make it easy to at least partially ignore those seductions.