Maintaining your Core Product (for an orchestra, this includes music and those who make it)

One of the themes we’ve heard repeatedly from the MOA management has been the need to adopt a clear, rational business model—that the floofy art vision that has existed simply can’t pay the bills. I agree that it would be helpful to bring more business savvy into the organization, but I’ve cautioned repeatedly about bringing in inappropriate business models or being so devoted to the siren song of “business” that the organization forgets that it is, after all, a non-profit arts organization.

For example, several board members have bemoaned the fact that 40% of their operating costs go towards paying the musicians. Yes, a tried and true business technique for lowering costs has been to cut payroll; if this is your frame of reference, it is perfectly logical to reduce the musicians’ pay as a way of reducing overall organizational costs.

But I would argue that this is an inappropriate business comparison—the musicians are not simply personnel, they are also the product. Reducing their numbers or replacing veteran players with younger, cheaper models will have a direct, and measurable effect on the product and, from my perspective, set off a chain reaction that will greatly harm the organization.

As a helpful analogy, let’s discuss this in terms that might be more readily understandable—using a restaurant.  (Yes, it should be obvious I love a good analogy.  My baseball analogy is at  https://maskoftheflowerprince.wordpress.com/2013/06/01/if-an-orchestra-was-like-a-baseball-team-repost/ )

Chicago is home to many distinguished eateries, but one of the most spectacular is Rick Bayless’s Topolobampo. Bayless has created a culinary empire by serving glorious, authentic Mexican food with astonishing care and attention to detail. Topolobampo is the crown jewel in this empire, a restaurant that raises Mexican cuisine to a rare art form.  I doubt the president of Mexico’s personal chef could do any better. Guests eating at Topolobampo expect the best, and expect the prices to match. While you certainly don’t have to break the bank to eat there, you certainly can—when you factor appetizers, entrée and dessert, along with an astonishing bottle of amarone that magically brings all the assorted flavors together, a party of two can easily rack up a very large bill. (For good or for bad, I know this from personal experience.)

But all restaurants live on painfully thin profit margins. What if Bayless decided to improve his bottom line by adopting a business model closer to that of, say, Chipotle? He could, for example, choose to move away from fresh, seasonal ingredients and buy bulk products that are canned or frozen. He could create an assembly line that would cook all the food in large batches ahead of time, and simply assemble and warm each plate when orders came in. He could get rid of the sommelier and the hand-selected wines that pair with the specific ingredients and go instead with a corporate partner that would supply bulk wines cheaply. Bayless could further reduce staff by eliminating servers altogether and adopt a “facilitated buffet” service.  He could also have patrons bus their own dishes to eliminate busboys, too. Add in a corporate sponsorship with Coke, and his new, cost-effective restaurant is ready to open, and he and his business manager could dream of all the wonderful profits they would make.

The thing is, the changes he made would have fundamentally changed the product, and while the old expensive elements would have gone away, so would all the things that brought in a profit. In this new restaurant, I would never, ever, pay $200 for my food. That price is predicated on me having a culinary experience, not just grabbing a bit to eat. I don’t care that the glass of “I-Can’t-Believe-it’s-Chablis” is more profitable for the new restaurant to serve—if it makes my food taste like metal, I won’t want to drink it. I won’t care what kind of discount the restaurant got on its beef if my dish has the consistency of rawhide.

Let me be perfectly clear that I like Chipotle just fine as a restaurant and I don’t want to disparage it or accuse it of unsavory business practices; I won’t, however, go there for a special occasion, buy a Chipotle cook book, sign up for their e-newsletter, or spend more than $10 for my food. I would, however, do all those things for Topolobampo.

Same with the Orchestra. Cheaper musicians and pops concerts might look more profitable on paper, but I certainly won’t spend $80 a ticket to hear them. I won’t buy their recordings since I can find better ones performed by better ensembles. If I’m not inspired, I probably won’t contribute more than a small, token amount, and I certainly won’t give to a capital campaign. And since there are so many artistic and musical ensembles to support in the Twin Cities, this new “profitable” orchestra will most likely drop off my radar altogether.

I’m not going to a concert to help your bottom line… I’m going for an experience.  If I can’t get this experience with the Orchestra, I’ll go somewhere else where I can.  How much time and effort would the organization need to spend, then, in trying to break through my indifference to get me to support it again? The Orchestra might have a profitable year, but at the expense of long-term prospects and support.

Wiser souls than I have said it clearly—no business thrives by diluting and diminishing their core product. And since the musicians are your core product, I would advise changing your frame of reference to reflect that.

 Xochipilli

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