Mutant Business Models Are Coming! (Embrace Them Before They Embrace You)

Apropos to yesterday’s post about non-profit business models is a piece by Saul Kaplan on the Harvard Business Review discussing how every organization that offers some sort of service needs a business model regardless of whether you are a non-profit, NGO, government entity or for profit business.

If you have never thought about your organization’s business model but figure it is about time you did, you may found Kaplan’s comments about the mutability of business models a little disheartening.

“If you ask any ten people in your organization how it creates, delivers, and captures, will the answers even be close?

If not, it’s probably because, in the industrial era when business models seldom changed and everyone played the game by the same set of well-understood industry and sector rules, it wasn’t as important to be explicit about business models. Business models were safely assumed and taken for granted.

That won’t work in the 21st century when all bets are off. Business models don’t last as long as they used to. New players are rapidly emerging, enabled by disruptive technology, refusing to play by industrial era rules. Business model innovators aren’t constrained by existing business models. Business model innovation is becoming the new strategic imperative for all organization leaders.”

He goes on to talk about the need for new, hybrid business models that blur the existing lines. I take some comfort in the fact that business models are currently a hot topic of discussion among various arts administration blogs. It means we are staying current with trends rather than following far behind.

One thing in particular I took away from Kaplan’s post was the importance of keeping involved in the conversation about business models given that existing lines of separation between profit and non profit are likely to become less distinct.

“Perhaps the most important reason for developing common business model language across public, private, non-profit, and for-profit sectors is that transforming our important social systems (including education, health care, energy, and entrepreneurship) will require networked business models that cut across sectors. We need new hybrid models that don’t fit cleanly into today’s convenient sector buckets. We already see for-profit social enterprises, non-profits with for-profit divisions, and for-profit companies with social missions. Traditional sector lines are blurring. We’re going to see every imaginable permutation and will have to get comfortable with more experimentation and ambiguity.”

The Farmer and the Cowman (and Restaurateur) Can Be Friends

Last week we hosted a food sustainability conference sponsored by our culinary program. Sustainability and local food sources is a big deal in Hawaii because between 85%-90% of all our food is imported. If there was a cataclysmic event which prevented food from reaching the ports, there is only about 10 days of food available to feed the population.

I have seen a number of arts bloggers draw a connection between the slow food movement and the arts so I listened closely to what was said hoping to gain a little insight from the practices of other industries.

Since the conference was organized by a culinary program, they approached the subject from the view of how restaurants can source more of their food locally and sustainably. The panels consisted of farmers, ranchers and restaurant owners talking about some of their practices.

Culinary Convening
Farmers, Ranchers and Restaurateurs Convene

There were some inspiring examples of some farmers operating almost completely off the grid with a high degree of recycling. They farm tilapia, circulate the water through lettuce and other plants which help filter the water and send it back through to the fish. Because of a rain catchment system, they haven’t had to draw from the public water supply in many months. Some of the effluvia gets diverted to a nursery which includes fruit trees to provide fertilization. One of the chefs at the gathering said he managed to put a dinner together for a party thrown by the governor where all the ingredients were grown within 100 feet of each other by sourcing them at the farm.

What struck me as applicable to arts and cultural organizations is the stories of some of the mutually beneficial relationships restaurants have created with farmers and ranchers. Chef Roy Yamaguchi of the Roy’s restaurant group convinced a farmer who was just weeks away from closing down his farm to grow a mesclun mix and required all his restaurants to use it. This allowed the farmer to stay in business.

Another chef, Peter Merriman, said that early on he made the conscious choice not to try to guard his food sources. While it undermines his ability to lay exclusive claim to offering high quality ingredients, he recognizes he is helping to keep his suppliers in business by telling people where he gets his ingredients.

Chef Alan Wong, who was in attendance at the convening, has been a long time proponent of using local ingredients. He spoke about how he held a beef tasting at one of his restaurants as part of an effort to convince restaurateurs to support ranchers by buying local beef.

The tasting ended up solving a big problem the ranchers had. The high end restaurants would buy the prime cuts of beef and leave the ranchers with the rest on their hands. A person from a local restaurant chain at the tasting had the presence of mind to ask what was happening with the rest of the cow. Now that chain consumes 250,000 lbs of local beef a year. Because the ranchers can sell the whole cow, the price is lower for everyone and there is incentive to the ranchers expand their operations.

Every arts organization has a different operating environment so I hope people can find something analogous to their own situation in these examples. The most obvious one to me is the oft mentioned fact that the regional theatre movement was intended to employ artists locally and still can if people commit to creating an climate in which this can happen.

One of the ways might be to duplicate Alan Wong’s tasting and actively invite colleagues to see different artists, not with the intent of “selling” them as so many showcase performances do, but with the approach of highlighting and celebrating local resources in an attempt to keep and cultivate them. There is an entirely different ambiance present in the latter scenario versus the former and I suspect one would be far more receptive to the idea of employing someone because of it.

I have to imagine given current trends that there is some mileage to be gotten out of boasting that the casting of a show produced a smaller carbon footprint because no one flew/drove a long distance to New York or Chicago to hire a person and the person didn’t have to travel far to appear locally. Arts organizations can celebrate their fiscal prudence by noting that they don’t have to pay for housing and per diem as they do with “imported” artists because the person already lives nearby. Therefore, much of the ticket revenue is going back into the community as artists buy goods and pay their mortgage and taxes. Perhaps the artists can make a statement about how they appreciate how the deliberate cooperation between a handful of organizations has created an environment that provides enough opportunities to live locally and raise a family rather than hustle for jobs in the big city.

Another idea would be to grow a network in which to share productions. Some theatres already invest in productions together, sharing the development costs and planning to have the show appear in both places. However, some of the members of my consortium produce shows for their own audiences while suggesting the other members might be interested as well. In most cases, each producing organization is partnering with a local performance group to develop the show already and a cost sharing agreement is already in place. Acquiring additional bookings in other parts of the state is just an added benefit for both. Having other venues willing to present the show can also assist with grant writing to support the development of  the production and support touring. I have had two shows I produced go on tour and I have hosted three that originated with consortium partners.

This sort of arrangement is easier when there is a longstanding relationship between organizations in place and they know they can trust that a quality product will be created when they commit themselves  in the conceptual stage. I think that is the sort of relationship that has been developed between the restaurants and the farmers and ranchers. The restaurants know what they are going to get from the suppliers and the suppliers know they have dependable buyers for their products.

One of the other challenges restaurants said they faced with local beef is that grass fed beef tastes different than corn fed beef. A representative from Roy’s Restaurants talked about how she has had to deal with indignant customers who demand to know what the restaurant is trying to pull when they first eat the meat. She spoke about how Roy Yamaguchi decided to not only note that the beef was grass fed in the dish description, but also put a section in the menu that explained about the beef and what it was the restaurant was trying to accomplish.

This immediately sounded like the challenge arts organizations face when trying to introduce audiences to anything outside their experience. The advantage the beef has over the arts is that while both steak and certain segments of the arts have an elitist aura about them, there is a perception that being adventurous with food is a mark of distinction while sampling a new arts experience is either intimidating or the mark of a snob. Do the arts need their own version of Anthony Bourdain to incite exploration?

(By the way, the title of this entry is a nod to the musical Oklahoma!)

Domain Knowledge And Arts Management

I was watching the illustrated lecture seen below on the Drucker Exchange website. William Hopper gives the lecture on domain knowledge which is what a young college graduate would get 50 years ago when he went to work for a large company. Over time, the person would work their way up the ladder of promotion learning the craft of management under the supervision of a more experienced person and you would learn the business of your company.

Hopper says that business schools undermined this system starting in the 70s when they began to spread the idea that getting an MBA would allow you to manage anything. Instead of starting at the bottom, you could go right to the top and need not worry that you didn’t know much about the business of the company because everything operated more or less the same.

It got me wondering if the arts might be heading in the same direction or not with more people getting management degrees and the general itinerant nature of the profession. A good number of the executive leadership of arts organizations are getting ready to retire. Many of them started as artists before moving on to management and then they stayed at their organizations for many years.

There has been discussion about how emerging leaders are having a hard time getting experience because the existing leaders aren’t ready to move on yet. Many of the younger leaders move around a lot trying to find better opportunities. This may be beneficial in giving leaders a wide variety of experiences to draw upon, but doesn’t provide a depth of knowledge about any one organization. Then there is the dearth of good mentors who have the time to act as such for a younger generation.

I was also wondering if aspiring leaders were bringing extensive knowledge of an arts discipline with them these days. Now that there are expanded opportunities to enter cultural management degree programs, these leaders may not have a lot of experience in the means of production for that art. Before I entered my graduate program, I had some acting experience in school and took classes outside of school as well; I worked as an electrician and carpenter in school and for three different summer theatres (plus one where the box office staff was on the electrics crew during strike).

These experiences have ensured that I talk to my tech staff before signing any contract for a performance or rental event.

I am not sure if these sort of activities are part of an arts manager’s career path any more. Be pleased if anyone wants to relate their story.

I do take consolation in the fact that people have to wear so many hats in the arts there is a pretty good chance that even if someone isn’t really familiar with the other aspects of their discipline before they get their degree, they will be fairly well acquainted with the means of production during their first job. Though the lack of resources that create this situation is not really something to celebrate.

I am not entirely sure how to portray this education vs. experience situation. We are in a place where the first generation of people with arts management degrees will be assuming control soon and I think they can probably do so with more confidence than some of their predecessors because they will possess technical knowledge about laws and regulations their predecessors had to learn about as the subject came up.

What they will lack is the experience of working with boards, government entities, unions, foundations and donors over the course of many years in situations where relationships and institutional memory are important. But this is going to be true for any new leader unless they have been promoted to leadership from within, a situation which is becoming ever rarer.

Does Screaming and Demeaning Treatment Make the Show Better?

The big discussion on the LinkedIn Performing Arts Manager forum right now is about the design of a Masters Program in Cultural Leadership. The conversation was slow in starting but sort of took off in the last couple weeks. I mention this just in passing in case anyone else wants to join the discussion and note the source of my post topic.

Anne Marie Quigg recently mentioned in the discussion that she was going to be delivering a conference presentation on her book about bullying in the arts. Bullying is a hot topic in general these days, mostly in schools. But we really don’t discuss it that much in the arts. Or rather, we grouse when we experience it, but we don’t really talk about needing to address it as a matter that undermines the health of the industry, organizations and individuals.

The description of the book notes that really awful people and situations are tolerated because they produce exceptional artistic products and that there is no really concerted effort to change that environment.

“Anne-Marie Quigg researched whether the behaviour represented isolated, rare occurrences in specific creative environments or if it was indicative of a more widespread problem in the arts and cultural sector. She discovered the highest level of bullying recorded in any single employment sector in the UK.

Bullying in the Arts reveals Dr Quigg’s findings, including the personal, organisational, legal and economic consequences of bullying behaviour. Looking at the experiences of countries such as Australia, Canada, France, Sweden, and the United States, this book challenges the notion that the arts are beyond the limitations of the ordinary milieu, exempt from the rules and regulations governing the treatment of employees. “

There have already been mentions in other articles that young leaders reject the premise that one must give their lives to the organization and pay their dues like their predecessors did and prefer a work-life balance. For this reason, many young leaders entering the field don’t aspire to the executive director role.

If this is indeed the trend, (heck, even if it isn’t) it indicates the necessity to address the negative pressures across all areas of the arts and not just administration. It is difficult to believe that only those with ambitions in administration are reticent to embrace the current lifestyle of arts managers and the performers and designers are just fine with the way things are.

Being an artist doesn’t convey a special grace that absolves one of behavior that would get people in most professions fired. Restaurant kitchens are notoriously rough places to work (and they have knives!) and there is a similar debate over the supremacy of the head chef (the way it has always been) vs. the idea that the food doesn’t taste any better for all the screaming.

Given that my experience is mostly in theatrical production and presenting, I am not entirely familiar with the world of dance, opera, classical music and visual art. Are there attempts to address this problem in other areas? What sort of behaviors and practices need to be changed?