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Info You Can Use: So You Think You Want To Merge

November 16, 2011

by:

Joe Patti

It seems discussion of non-profit mergers is becoming more prevalent of late. I recently became aware of a research document created by Wilder Research and MAP for Non Profits looking at what factors contribute to or inhibit the successful merger of non profits in the pre-merger, merger and post-merger phases.

There were actually some parts of the document, What do we know about nonprofit mergers? Findings from a literature review, focus group, and key informant interviews, that were very familiar. So much so I thought perhaps I had already written a blog post on it already. It doesn’t seem that is the case. However, since their report includes a literature review in addition to surveying they conducted themselves, it is likely I read some of this before.

They raise some good questions and provide some interesting advice on many aspects of a merger on issues like the name of the new organization, getting a third party involved to shepherd the process, doing due diligence on each other, issues about conflicting organizational cultures, creating a clear time line for the process.

One suggestion they had was to involve your top five funders in the process in order to gain their investment. That may be very sound advice as at least one case they mentioned found that most funders treated the merged organization with its newly expanded capacity as if it were one of the constituent entities effectively cutting their support in half.

Many organizations chose to merge as a result of some sort of crisis, either the loss of leadership, financial problems, change in the operating environment, etc. According to the research, one of the worst times/reasons to merge is if one organization is at the brink of financial ruin. Other than the fact that the new organization will inherit the problems of the troubled organization and that it is not prudent to negotiate anything from a position of weakness, research shows that even mergers between relatively sound organizations don’t necessarily result in a financially stronger combined organization.

The following are areas that they identify as needing to be addressed during the merger phase. There is a similar list for the pre- and post- phases.

2A. Key stakeholder involvement
2A1. Executive staff champion
2A2. Board commitment to the merger process
2A3. Client, consumer, and funder involvement in planning

2B. Role of staff in merger process
2B1. Staff involvement in planning
2B2. Communications with staff throughout process
2B3. Staff’s perception of the effect of the merger

2C. Integrating formal and informal structures
2C1. Attention to cultural integration
2C2. Attention to board and mission integration

2D. Providing due diligence to the process
2D1. Clear decision making process
2D2. Clear and realistic time frame

They provided the following factors which contribute to a merger’s failure:

-Lack of capacity, sophistication, or skill in the board or executive leadership
-Leadership’s inability to communicate well or to effectively influence others
-A weak or declining balance sheet or imminent financial collapse of one organization
-Programs or services that are not particularly unique or of distinctive value to the community
-Organization’s fear of losing autonomy or change
-Differences in governance, culture, or mission
-Board and staff opposition to the idea of merger
Engagement purely for survival, not from strength
-People involved do not see the real work involved in a merger
-Loss of key leader during the process

Boards, Business Models, Info You Can Use, Legal Topics, Management Philosophy

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Advocation For Arts Careers To High Schoolers

November 15, 2011

by:

Joe Patti

I was speaking about arts careers at a high school career day today. The high school had been really good about sending out information packets with suggested topics to cover with the students (what skills do you need, what type of education is required, what classes should you be taking right now).

I have done a few of these in the last couple years but it was only after today’s session that I started to think about what arts people should be doing when they get the opportunity to speak to students about arts careers. There are guides written about presenting testimony to government entities and speaking to businesses about the benefits of the arts. There is a lot written on getting the arts back in schools, but not a lot has been created on the subject of advocating arts careers, or even just for taking arts classes after graduation, to middle and high school students.

This might present a significant challenge given that the students may not have had many arts experiences or at least recognize it as such. Unlike adults who might view the arts as having value in the context of the economic health of an area even if they do not often attend themselves, students may not have developed many impressions at all.

One of the reasons I started thinking about this is that I shifted my approach somewhat mid-stream today. While I think the result was better than what I had planned, I think there is still plenty of room for improvement. Maybe those of you focused more on arts education have worked all this out already and can provide some guidance.

I worked up a powerpoint presentation with images of what we do at the theatre now, including the ways our students are making their own opportunities. I also had job descriptions from various positions in performing and visual arts – production managers, art handlers, outreach assistants, etc to show students that there were opportunities beyond just performing.

The first session went pretty well from my point of view at the time and I got through the slides. The second session took a little longer to go through the slides. By the third session I had basically abandoned the slides and only showed 2 or 3 for the remaining two sessions of the day.

Essentially I went from talking to them to having a conversation with them about what they were doing now arts wise, what they wanted to do with their careers, why they didn’t want to pursue their artistic interests as a career and for those who did want to pursue it, what factors were standing in their way. I made this shift partially out of a realization that I wasn’t practicing what I am trying to preach about engaging audiences and partially because the questions they were asking pointed toward concerns in these areas.

In the process, I came to realize that a lot of the claims about the skills and abilities of the Millennial generation are a little inflated by the media. These kids are pretty much like I was in high school, a little unsure of themselves and appreciative of the wisdom of others (and just as practiced at exhibiting disinterest). Yes, they will probably grow up and outstrip the accomplishments of those who preceded them, but we old farts still have something of value to offer at present.

We had discussions about parents not being supportive of aspirations and wanting their kids to be lawyers. I talked about developing portfolios of your work and creating speculative pieces to showcase talent since they won’t necessarily have pieces they have created for a job. We talked about creating your brand both online and with face to face networking and housing your portfolio of work online for people to reference. (Which surprisingly didn’t seem to have occurred to many of them.)

I also gave them some tips about how to create opportunities for themselves to exhibit their talent. How to approach people with resources they may need, what those people may expect from them and how and work out mutually beneficial arrangements.

What was interesting to me was that in this age of television shows like American Idol which make it seem like success is achievable in terms of weeks rather than years, there were really very few students who were absolutely sure that they would make it. While there were a few people who said that they wouldn’t pursue their artistic interests as a career due to impracticality or low income potential, most simply lacked confidence in their own abilities.

My underlying message to everyone was to stay in school (naturally) and the benefits of different disciplines for their careers – liberal arts and social sciences so you can understand what motivates people; science to gain the skills to examine situations objectively as well as understand the properties of materials one might work with as an artist; business and law/contracts to understand how to protect your interests.

Ultimately, of course, I kept pressing the idea that you had to nurture your artistic passion and creativity in whatever you pursued. Fortunately, the teacher had a guitar in the classroom which helped to reinforce that concept.

So what else can you say to students preparing to go to college who may not have ever really experienced or thought about the value/place of arts and creativity in their lives to awaken their minds to the possibilities?

Advocacy, Art(ist) Education

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Audience Engagement-Careful What You Wish For

November 14, 2011

by:

Joe Patti

One of the biggest topics of discussion these days is about engaging audiences. Often during these discussions, people talk about the way things used to be when audiences weren’t expected to sit passively in a dark theatre with the suggestion that maybe things need to move back in that direction.

I came across a link to a very interesting book on the subject, The Making of American Audiences by Richard Butsch. Last week, someone linked to the chapter on the decline of audience sovereignty (I apologize for not noting who.) What parts are online made for a very interesting read.

I backed up to the earlier chapters about the rowdy working class “b’hoys” who were very engaged, moreso than we might like. They would get up on stage with the actors at times and chase each other around. They would make actors repeat sections of the performance that they liked, often dozens of times, before they allowed the show to continue. If they didn’t like something the actor or manager did, they would call them out on stage for an explanation and apology. Edmund Kean refused to perform in Boston when audiences were small. When he returned four years later, people remembered the slight and audiences in New York rioted both inside and outside the theatre. He was met with the same reception in Boston a month later.

Imagine audiences that were so invested in theatre that people in one city were offended on behalf of another four years later.

The relationship between audience and performers wasn’t always so destructive. Some greenhorns, “green’uns”, believed so strongly in the reality of the performance they might climb on stage and offer money to characters suffering destitution. The b’hoys would attend performances regularly and were knowledgeable about the different works and familiar with the actors of the companies. While they might challenge an actor’s interpretation of Shakespeare when it differed from their own, they would also provide prompting when a line was forgotten out of a desire to see that the show went off well for the newer attendees. There could be a strong sense of ownership and rapport with the actors who appreciated the interactions.

However, in time, the actors became adept at managing the interactions with the audience, taking some of their control away. The b’hoys in turn became so invested in their favorite actors, they began to demand respectful treatment from the audience on their behalf, thereby ceding some of their ability to make demands on the performance.

Despite whatever control the working classes were exerting over their fellows, it was still too vulgar for the wealthier gentry classes. They began to move to theaters frequented by better classes of people and then abandoned theatre entirely in favor of opera. Respectable people did not go to the theatre.

According to Butsch, the focus was about opera as a place where respectable people gathered moving away from attending a performance because of a star. The orthodoxy of class was enforced by the dress code. Working class folks could go to some of the better theatres, but the requirement of kid gloves, good clothes and a clean shave helped to exclude them. “The introduction of reserved seating also made the exclusion of undesirables more manageable.”

Later chapters chart the shift of arts attendance away from being a male pursuit to one associated with the female gender.

It was very interesting to read about how our current attendance environment gradually developed. There was certainly a separation of the wealthy elites and the working class. However, even the working class had its own insider groups who were in the know and enforced certain expectations of behavior and knowledge upon those who were new to their community.

Really, this is a function of human nature and not specific to the arts. Not long ago IT departments were the source of frequent jokes because of their stereotypical disdain for those who hadn’t used computers enough to know how to troubleshoot simple problems. Now that people have more technology experience and there isn’t a need to enter arcane commands at a DOS prompt, that stereotype isn’t as prevalent. I think that is the state people in the arts are aspiring to when they talk about engaging audiences–getting them involved and familiar enough with an arts experience to dispel some of the negative stereotypes.

My “careful what you wish for” title to this entry doesn’t really anticipate a return to those wild and wooly times when performers had to dodge projectiles. It may only just feel like you are inviting that sort of chaos as you approach the process of audience engagement. It may result in the 21st century equivalent of calling the manager or actor on stage to explain themselves. This currently happens with celebrities’ personal lives where they are expected to respond to allegations about what they were doing at certain times and places. It doesn’t happen as much with their professional choices because the general public doesn’t feel empowered enough to be invested in caring.

But what if they were taught that it was an area in which their involvement was valued…

Arts in an Age of Technology, Audience Relations, State of the Arts

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70-10 Split Of Board Learning

November 9, 2011

by:

Joe Patti

I have been on a few board-staff retreats and have always been a little skeptical about whether any significant change will come from them. Admittedly, in some cases some small changes have followed the retreats which grew into larger initiatives. Big changes in governance were a little harder to achieve.

Debra Beck at the Laramie Board Learning Project provides some commentary on board learning that made sense to me. Board Retreats aren’t necessarily bad practice, but rather, as they say, needs to be part of your balanced ~~breakfast~~ erm, approach to board learning.

The faulty assumption is that boards can only learn if (a) they are called together for a formal training event and (b) that experience is led by an all-knowing instructor who will pour all of the “right” answers into their heads. When that is accomplished, poof. Our boards will miraculously get their act together, achieve some governance perfection, and stop holding us back.

It may sound good in theory, but there’s just one problem: not only is it not how most adults actually learn, it’s not even the way they learn best…
[…]

In an earlier “overheard” favorite links post, I referenced the 70:20:10 framework of learning, which draws on research about the role of informal adult learning. In a nutshell, the 70:20:10 model says that:

70 percent of what adults learn comes through experience and real-life situations, e.g., through project-based work, collaborating with others, trying new things, practicing more advanced skills, etc.

20 percent of what we learn comes through others, e.g., mentoring, debriefing, networking, discussion, and team tasks.

10 percent comes from formal learning events, e.g., workshops/training, e-learning, and games-based learning.

It probably won’t be too surprising to learn that Beck says boards only get better at governing when that 70% block is used to practice governance and directly observing the work of the organization.

The 20% learning from others doesn’t really involve consultants at board retreats. Rather, it involves having a mentor on the board or an opportunity to observe and discuss the processes the board uses to make decisions, including questions whether a diversity of viewpoints is represented.

It is the 10% portion that includes learning from expert sources including seminars/webinars, workshops, conferences, and of course, formal training for new board members about their responsibilities.

Debra Beck probably gets the percentages right. The hardest task to accomplish in obtaining a better board is getting all the members to work effectively and be engaged in the business of the organization. People may groan about board retreats, but it can be easier to get a fair number of people to attend than to commit to implementing changes due to the perception (and hope) that things can be substantially fixed in the course of a few hours time rather than require the investment of many hours over the course of months and years .

Boards

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