Business Models

Does Your Real Estate Serve Your Current Strategy?

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Bloomberg recently had a piece about how the Girls Scouts of Colorado recently opened a space in Denver known as DreamLab, envisioned to be a third space for girls.

As spaces for young people to hang out grow scarcer, and the mental health of young women, especially, reaches unprecedented lows, the Girl Scouts is investing in properties girls can make their own.

“We really want the Girl Scout DreamLab to be their third place,” after home and school, said Anne Smith, senior vice president of property strategy for Girl Scouts of the USA

Two other DreamLab spaces are under construction in NJ and LA and more may be on the way based on how Covid has apparently impacted Girl Scout operations and use of physical spaces.

“Troops found that the traditional public spaces they’d relied on to host meetings, like church basements and libraries, were getting harder to access. Girl Scout staff were embracing remote work like the rest of the workforce, leaving offices empty. Some Girl Scout councils started selling properties, as membership dues dropped.

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Data showed that the best-utilized spaces were those within a 20 to 30 minute drive from the majority of their membership, for example. “There were a lot of different data points that show that our current model wasn’t meeting the needs of our girls,” said Smith.

The Denver DreamLab occupies about 4,000 square feet of leased space in a new property chosen for its prime location: It’s within 15 miles of nearly 30% of Girl Scouts of Colorado members as of 2020, and by 2026 it’s projected to be within 15 miles of more than 150,000 girls between the ages of 5 and 17.

I wondered if this might serve as an example or inspiration for arts organizations in some way. I don’t know exactly how at this point.  Back in January 2022, the Long Wharf Theater announced that after nearly 60 years operating in permanent spaces around New Haven, CT they were going to pursue being an itinerant company so that they could provide services closer to the communities they hoped to serve.  So there is something of a precedent for arts organizations disinvesting themselves of their spaces.

While there are performance, rehearsal and offices spaces that have been offered to arts organizations similar to how it seems DreamLab is being offered to Girl Scout groups, I don’t know that many arts organizations who have utilized these resources have done so with the intentional goal of being itinerant so much as adapting to the opportunities being made available.

It may not seem like a big distinction on paper, but you could say the same about Vine, Instagram, and Tiktok. While Vine seemed to be everywhere for awhile, it fell out of favor relatively quickly while other similar apps thrived.

 

Taking A Look At A Good Old Fashion Case Study

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The blog for Master of Management in International Arts Management had a case study post by Donna S. Finley and Vijay Sathe examining how the Calgary Philharmonic Orchestra (CPO) and Alberta Ballet (AB) had revamped their business model in an attempt to stabilize their finances.

Feels like it has been awhile since I covered a good old fashioned case study.

One of the first things that Finley and Sathe discuss is that both organizations recognized they were already essentially serving the bulk of their core markets and that growth would only come from identifying new market segments:

At CPO, audience research led to the identification of two new audience segments: those attracted by the flexibility of single-ticket sales, and those seeking to enjoy classical music in non-traditional environments in a variety of venues within and outside of the city.

At AB, research revealed numerous new audience segments that all indicated a strong desire for before- and after-performance receptions, dining opportunities, special events for youth to meet dancers and purchase products and memorabilia, and alternative, more personal and customized venue experiences.

While these are programming and ticketing choices that have been identified as areas of opportunity for a large number of arts and cultural organizations, there was an additional area of growth Finley and Sathe mentioned that left me wanting to know more:

At CPO, new and unusual settings were found and facilitated both the renewal of traditional repertoire and the introduction of new works. New business focused on joint community programming initiatives, whereby revenues and expenses could be split between CPO and a community group such as the Rotary Club or the South Asian Association. The Orchestra found an immediate new revenue opportunity within services it had historically undervalued.

I was curious to know how this manifested. It sounds like Rotary or South Asian Association were co-sponsoring or partnering with CPO on producing new and traditional works in novel locations, but I wanted to know more about how the programming was executed, what attendance was like, if there was revenue sharing between CPO and the community organizations. Basically, all the stuff an arts administration and policy nerd gets excited by.

Another major point touched upon in the case study was both organization’s attempts to stabilize the cycle of engaging in capitalization campaigns, spending the money, then engaging in another campaign, all in the face of decreasing donations and funding. Especially while faced with the impacts of Covid. One of the things they did was outsource administrative functions to third party services providers with far more expertise which apparently saw a great deal of cost savings. When I first read the post, I thought perhaps both organizations had consolidated their back office functions in partnership with each other, but that doesn’t seem to be the case.

Unfortunately, they also realized savings by cutting artists contract weeks:

“…reducing musician weeks from 46 to 40 per year and dancer weeks from 42 to 36 per year; and, at CPO, reducing staff salaries by 20% while simultaneously introducing an incentive pay component with upside potential based on the entrepreneurial success in tapping new markets.”

The description of the entrepreneurial programs of both organizations were pretty general. (Granted, the title of the article does include “abridged.”) Apparently, for CPO the success of those efforts “more than made up for the 20% decrease in their base salary as part of the cost-cutting measures.”

What caught my eye was an apparent admission that for both organizations:

“… The artistic side, comprising the Artistic Director and their respective teams of artists, made its plans and decisions in isolation – disconnected from all or most aspects of the business operations.”

As a solution, both organizations are working toward streamlining their planning and reporting structures

Less Attendees=Increased Satisfaction

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Last week when I was writing about the ticketing trends being forecast for the coming year, I accidentally omitted an additional point from the article I found pretty interesting.  Apparently, during the pandemic, many attractions like  zoos, aquariums, museums and theme parks found that customer satisfaction increased when capacity restrictions were in place.

“Guests readily adapted to new procedures, which does not surprise us because it is consistent with what we have seen in our practice for many years,” Digonex’s Loewen says. “[Operators] also realized some of the business benefits. For example, when you limit the number of folks that can get into the attraction at a certain point of time, they saw all their guest satisfaction scores go up, and many of them saw all of their other per-cap revenues grow significantly. When it is less crowded, when people are having a better time, when they are feeling better about their visit, they tend to spend more on food and beverage and at the gift shop and on ride tickets.”

There have already been signs of these trends. Disney has apparently indicated they won’t go back to pre-pandemic attendance numbers. Similarly, the Louvre Museum is reducing admissions from 45,000/day to 30,000/day ““in order to facilitate a comfortable visit and ensure optimal working conditions for museum staff…”

Some US National Parks are requiring timed entry reservations from April 1-October 31.

So there is a good possibility other entities may start to use restricted admission as a customer satisfaction strategy in coming years. For some there may be a benefit to positioning their organization as an alternative activity for those who can’t gain admission to such places.

Creativity For Solving Problems, Not Monetizing

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Diane Ragsdale recently made a post about the design and intent of the Masters of Arts in Creative Leadership program she is leading at Minneapolis College of Art and Design (MCAD).

In answering the question about why one would study leadership at an art and design college, she writes:

Creativity is consistently ranked as one of the most important skills for navigating the complexities of the 21st century….Creativity was equated in business schools with the scaling of innovations towards the ultimate goal of stimulating economic growth. I didn’t want to hook beauty onto that value chain. I would sometimes quip: This beauty course is not aimed at putting beauty in service of business. My aim is the opposite. I want leaders to put business in service of beauty.

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The creation in creative leadership as we are interpreting it at MCAD is based in a foundational premise that there are ways of being, doing, and knowing that are inherent to artmaking and design that are both undervalued by society-at-large and incredibly valuable at a moment in which we are looking at the “end of the world as we have known it” and the need to make a new one

I have often written in opposition to the prescriptive approach to the arts as a way to solve problems, similar to how Ragsdale alludes to the interest of businesses to monetize creativity for the future. Essentially viewing it as a tool to be used and thus if it doesn’t yield expected results within an expected time frame, the problem must be you are using the wrong type of creativity for the job.

As most in creative fields know, it is something you practice over a long period of time rather than learn in a seminar and then go home trying to apply. No one thinks you can become highly effective at an athletic pursuit without a lot of practice, analysis of performance and negotiating bottlenecks. People focusing on employing creativity need to go through a similar process, including possibly getting past a mental wall no less imposing than one a marathon runner may need to push past.

In my post yesterday about improv helping people tolerate uncertainty and reduce social anxiety, I took pains to call attention to the fact the people conducting the study intentionally engaged professional theatre artists to teach improv to students. This is not to say that therapists and counselors can’t effectively teach students to use improv. As the study authors allude to, there is a difference between the approach of someone teaching you improv to fix something about you and the approach of people who practice and teach improv in order to get better at improv.

Yes, the theatre artists likely knew they were there to help prove improv can help people better cope with uncertainty and anxiety, but the whole study gets contaminated if the scientists are frequently talking to them about expected outcomes. So it is likely the theatre artists were jazzed to be getting paid to teach and share about improv for 10 weeks and the prospect that it might provide a model for improving the mental well-being of kids made the experience all the more satisfying.