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Modeling Consumer Behavior

April 9, 2007

by:

Joe Patti

Over at Adaptistration, its Take A Friend to the Orchestra Month (TAFTO). I am not writing this year, but I am participating in a sense. The orchestra will be performing in the theatre I run.

Drew prefaced today’s entry with a promise that it would wow readers with the concepts it was presenting. I have to say it certainly did for me. Bill Harris of Facilitated Systems creates a computer model to test if Drew’s TAFTO program is beneficial for orchestras in comparison with paid advertising.

Now since he is dealing with statistics and computer programs, it isn’t the easiest of reads. On my first read through I absorbed enough to realize it was providing enough valuable insights to read through again a couple hours later. If I understand correctly, one can copy the program he has written and use it in the simulator he suggests to produce results specific to ones organization.

I was intrigued by all this so I followed a link back to Bill’s blog and came across an entry on the Knight Foundation’s Magic of Music Final Report. Not two weeks ago I had cited a portion of the finding of this report to a group and now I see Mr. Harris telling people to be careful about the conclusions they drew from it.

He quote from page 32 of the report-

In trying to profile the factors that might predict a ticket buyer, one statistic stood out: 74 percent of them had played an instrument or sung in a chorus at some time in their lives.

What he says this appears to be saying is,”the probability of someone having played an instrument or sung in a group, given that they were a ticket purchaser, was 0.74.”

But what he says you really want to know is the probability that someone will buy a ticket “given that they played an instrument or sang in a group.” That may be what you assumed the report was saying because you hope that people who play instruments and sing (or perform in a play, paint, etc) will patronize your organization.

My assumption about the findings in the Knight report was that people who had music in their background might be inclined to attend later in life, but I didn’t see a cause and effect relationship. It merely seemed that people with a musical background shared were an affinity group within symphony attendees.

However, under the suspicion that inclination to attend wasn’t any different than cause and effect assumption, I posted a comment to Harris’ latest blog entry asking if I was making an erroneous assumption.

We shall see what he says. In the meantime, the lesson here is to read those statistics with a careful, critical eye.

Arts in an Age of Technology

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Will I Still Love Me Tomorrow?

April 4, 2007

by:

Joe Patti

One of the exercises Peter Drucker suggests in the “Managing Oneself” article I cited yesterday is feedback analysis suggesting that:

“Whenever you make a key decision or take a key action, write down what you expect will happen. Nine or 12 months later, compare the actual results with your expectations.”

If you are thinking of making this a practice, you might check out FutureMe.org. It is a website that allows you to send email messages to your future self anywhere between 3 days and 50 years. You could use the service to aid in feedback analysis, self-reflection or just entertain your future self.

There was a piece on NPR this weekend about the FutureMe website where the founder read off some of the public letters submitted to the site. (You can flag your letters as private or public when you submit them.) Some of them were funny and others, the the story of a man who uses the service to cope with his progressing Alzheimer’s, were quite touching.

Terms and Ideas

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Leader, Manage Thy Self

April 3, 2007

by:

Joe Patti

Are you a listener or a reader? If you don’t have any idea what I am talking about, you may want to take a look at Peter Drucker’s “Managing Oneself,” an article that has been reprinted in the Harvard Business Review a number of times. I first got my hands on it at the Arts Presenters Emerging Leadership Institute in January and have read it about three or four times since then. (It is only 11 pages long.)

As one might imagine from the title, the main thrust of the article deals with self-examination as a way of self-improvement. What he suggests isn’t a “12 Easy Steps to a Better You” program. If anything, he believes trying to adopt another’s practices is likely to make you miserable. He also observes that people often think they know what their strengths and weaknesses are but are usually wrong. (So if you are miserable in your current position, read it!)

In addition to knowing ones strengths and weakness, he feels it is important for people to know how they perform. That is where the whole reader or listener question comes in along with learning how one learns, what environments one thrives most in and what ones values are. Then, given your knowledge about how you best operate in relation to these factors, what is it you can contribute? Drucker gives a number of interesting examples of how men like Patton, JFK, Eisenhower and Churchill were hampered by situations which emphasized their weaker areas.

Once you have obtained this self-knowledge, Drucker urges you to recognize that everyone around you is an individual operating in varying degrees to the same criteria, have different ways of achieving success and therefore need different things from you to realize that success.

“Whenever someone goes to his or her associates and says, “This is what I am good at. This is how I work. These are my values. This is the contribution I plan to concentrate on and the results I should be expected to deliver,” the response is always, “This is most helpful. But why didn’t you tell me earlier?”

And one gets the same reaction – without exception, in my experience-if one continues by asking, “And what do I need to know about your strengths, how you perform, your values, and your proposed contribution?” In fact, knowledge workers should request this of everyone with whom they work, whether as subordinate, superior, colleague, or team member. And again, whenever this is done, the reaction is always, “Thanks for asking me. But why didn’t you ask me earlier?” Organizations are no longer built on force but on trust. The existence of trust between people does not necessarily mean that they like one another. It means that they understand one another.”

Yes, I know there is a certain irony in expecting people who don’t learn best by reading to gain maximum benefit of Drucker’s message through reading.

Management Philosophy

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Resource Guide for Non-Profits

April 2, 2007

by:

Joe Patti

By way for an Arts Presenters newsletter I was directed to a worthwhile resource for non-profits of all kinds put out by Mellon Financial Corp, Discover Total Resources: A Guide for Nonprofits. (Downloadable PDF, by the way.)

Though billed as “a descriptive checklist to be used as a guide, or self-audit, by boards, staff and volunteers to assess the degree to which they are tapping a full range of community resources: people, money, goods and services,” the document is much more than a mere checklist. It provides great ideas and some of the best fundamental guidance about how to run a non-profit I have seen in or out of textbooks.

It does indeed provide a self-discovery audit for your organization, but some of the real value as one might imagine comes in the Money chapter. No coincidence, I am sure, that it is the longest chapter. Though honestly, read them all.

I single out the Money chapter because it is the area of greatest concern for non-profits and it is dense with good guidance about topics like internal financial controls and being wary about earning income outside the purview of your non-profit status. Some of the grant and fundraising notes are familiar, but the summary of options is good.

One option I had never heard of before is a Program Related Investment.

“Stated simply, a PRI is an equity investment, loan or loan guarantee made by a foundation to serve a charitable purpose. It is sometimes called a social investment. Unlike grants, PRIs must be repaid, sometimes with the addition of a low interest rate.”

They seem to be used for social service programs which may be why I hadn’t come across them before. Doesn’t seem to be any reason I can see for them not to be use in the arts. Though their use may be more complicated than the summary can do justice to.

While reading I had a “duh, why didn’t I think of that” moment when it came to the idea of consortia and other cooperative efforts between organizations. One of the suggestions they make is that groups can leverage their pooled resources to obtain higher quality products and services than they could alone. Among the examples they give are purchasing supplies in bulk and perhaps sharing legal and accounting services.

I often talk about how block booking efforts are going to become a financial necessity in the near future for arts organizations, but I lacked the wit at the time to make the logical extension of that idea to other operational areas. Some of the examples the document gives about cooperative efforts might be worth reading to spark ideas and surmount blind spots like mine in ones thinking.

Terms and Ideas

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