Management Philosophy

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

Do Factors Underlying Desire To Work From Home Herald An Increase In Creativity?

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Back in 2009 I wrote about a TED talk Dan Pink did on motivation. In particular, he discussed how monetary rewards was successful at motivating people in mechanical tasks, but when it came to problem solving and creative solutions, in many cases the greater the reward, the longer it took people to solve a problem.

At the time I wrote:

This may explain why arts people are able to create in the absence of monetary reward.

I wouldn’t let this get around lest people insist that paying you more may rob you of your creativity.

[…]
Pink says the new operating model should be based on:

“Autonomy- Urge to Direct Our Own Lives
Mastery- Desire to get better and better at something that matters, and
Purpose- The Yearning to do what we do in the service of something larger than ourselves.”

It seems like these concepts are beginning to increasingly manifest themselves as people start to consider work from home as an option and seek to embrace greater degrees of autonomy, mastery and purpose in their lives.

Pursuit of Low Overhead Ratio Is Starving Cultural Org Of Success

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For a long time now pursuit of a low overhead ratio has been viewed as a benchmark of good governance in the non-profit sector. There have been arguments against that view, but the perception doggedly persists. Recent research specifically focused on arts and cultural non-profits indicates that these organizations actually need to be spending between 30-35% of their budget on overhead in order to be successful.

I wrote a post for ArtsHacker on the topic recently highlighting this:

As we explained in the academic journal Nonprofit and Voluntary Sector Quarterly, we found that when arts nonprofits devoted 35% of their budget to overhead, they fared best in terms of attendance.

Attendance declined, by contrast, for organizations that spent extremely low and high amounts of their budget on overhead. Groups that spent far too little saw their attendance decline by 9%. Attendance for arts groups that spent way too much on overhead fell by 30%.

While there spending too much is definitely detrimental to attendance, a sizeable portion of non-profit cultural organizations are expending far below what is beneficial.

Hop over to the Arts Hacker post to get more detail about why pursuit of a low overhead ratio sends cultural organizations into a downward spiral as well as why the researchers insist there shouldn’t be a one-size-fits-all rule of thumb about expense ratios.

You Probably Need To Be Spending More On Overhead

Actual Recognition That Return To Office Shouldn’t Be Return To Usual

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Yesterday Daniel Pink made the following Twitter post about OKRs – Objectives & Key Results (because apparently KPIs – Key Performance Indicators, needed to be replaced with another equally meaningless acronym?) and he suggested some NO-KRs which have plagued work culture to jettison.

Pink provided a link to a website summarizing the Charter Workplace Summit. This was the first time I have seen signs corporate employer making constructive attempts to revise the office work environment and move beyond threats or cheap perk ploys to get people to return to the office.

Some of the things that caught my attention:

Workers should be re-onboarded. “We’ve been spending all this energy on onboarding new employees in a unique and special way,” said Daisy Auger-Domínguez, chief people officer at Vice Media Group and author of Inclusion Revolution. “We need to do the same thing for our current employees.” She sees that as a way to remind colleagues why it’s important to come to the office.

Talk about what’s not working. “We owe it to our people to get really specific about where we’re growing, where we’re shrinking, where we think we have the most risk,” said Francine Katsoudas, Cisco’s chief people, policy, and purpose officer. “In doing so, we give our people a lot more power as well.” Providing transparency about a business’s challenges is also a way to enlist colleagues in navigating an economic downturn, said Kieran Luke, chief operating officer at Lunchbox. “We want everyone to see and understand, empathize, and take a sense of ownership.”

Audit your attention. “The scarcest resource that we have is not money and it is not time. It is attention,” said Didier Elzinga, CEO of Culture Amp. Organizations need to assess what they’re asking their leaders, managers, and individual employees to focus attention on amid numerous priorities. “We can actually sit down and look at it and give ourselves almost a budget,” he advised. “How are we going to prioritize the things we need [a company’s staff] to focus on?”

I particularly liked the idea of re-onboarding, especially if people have been working from home for any length of time because the shift back to the office is pretty much going to be akin to starting a new job in a new place mentally, emotionally, physically and relationship wise. In addition, the time and attention paid to new hires makes you feel special. I am sure a lot of us have resented seeing special offers advertised for new subscribers to a service, but no benefit given for 10 years of loyalty. I have recently seen people complain online about being denied the $2/hr bump in salary being advertised for new hires when they obviously had more experience and wouldn’t require a learning curve. It makes people feel their loyalty is taken for granted.

I also liked the concept that these days attention is a scarcer resource than time and money and that there needs to be clear communication across the organization about what priorities should receive the most attention.  We have all seen the posters wearily asking which of the 10 top priorities is actually the super-secret extra top priority the boss want you to focus on first.

What I was really surprised to see included in the list was the recognition that workplaces being a social environment, there is opportunity for tension. There seemed to be an acknowledgement not only that this may present a problem for people returning from a work from home setting, but that perhaps more could have been done to train people for that reality over the last few decades:

Practice real-life scenarios such as uncomfortable conversations. “We often give people an opportunity to expand their role and become managers without actually giving them the experiences that they need to practice the craft,” said Edith Cooper, co-founder of Medley. One way to do that is to create spaces, such as group coaching environments, where they can practice having difficult conversations without being judged or dismissed.

and

Physical offices are a place for conflict. “Conflict, disagreement, the brainstorm, the row, the ‘I’m sorry, we’re not on the same page here’” are important to spend time together with colleagues for, said Julia Hobsbawm, author of The Nowhere Office. In-person work—whether it’s in an office, coffee shop, or other location—is also important for training, mentoring, and social connections between people. “To hang out, to learn, or to argue,” is what in-person work time should be for, concludes Hobsbawm.