4 Keys for a Successful Arts Organization

As I’ve been commenting on the recent plague of labor disputes that have engulfed the classical music world (most recently the Atlanta Symphony Orchestra, but also the Metropolitan Opera and Minnesota Orchestra), I’ve made references to artistic strategic plans and artistic bottom lines. Some criticized the very idea of these concepts, remarking that they are superfluous—suggesting, apparently, that an arts organization should just get on with the business of “doing” art without wasting too much time thinking about it.

I disagree. In today’s competitive environment, an arts organization that wants to survive has to do more than just going around “arting.”

I would argue that a successful arts organization needs to tend four key areas if it is to thrive: artistic development, financial development, audience development, and administrative development. Moreover, these four areas need to be developed in tandem with each other—they fit together like interlocking puzzle pieces. If one is underdeveloped, the structure as a whole won’t work.

Let me explain.

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1. Artistic Development. For an arts organization, this should be the fundamental area of concern: at what artistic and programmatic endeavors must we excel, in order to succeed? At a fundamental level, this is what arts organizations do. Because it is so central to the organization, it should be systematically looked at, considered, evaluated and re-evaluated. What activities do we do, and why? A strong arts organization will nurture the artistic passion of its artists, creating work that challenges them, poses questions of them, makes demands of them, and lets them grow as artists.

And the organization should find its comparative advantage (or if you will, competitive advantage) so that it can stand out from its peers. What is the organization’s unique strength, the one area that it will excel in? What can it provide artistically that other peer groups cannot? That unique advantage should be identified, and then relentlessly pursued.

Related to this, an organization should know its basic artistic limitations. It cannot do all things, or be all things to all people… so there have to be artistic choices. It should look at its activities with a clear eye, and not be afraid to edit what it does, so that it can create more focused artistry. And it should never let ancillary artistic activities interfere with its primary artistic product. For example, an orchestra can, in theory, perform just about every kind of music from every genre. But it shouldn’t. It should internally agree that it is to focus on symphonic, orchestral-based art music. That does not mean that it cannot ever perform pops concerts, movie concerts, opera or any other sub-groups of music… but it cannot let these activities overwhelm its primary artistic product of classical art music. In doing so, it will lose its comparative advantage, and be competing against peer organizations that specialize in those kinds of projects. And it will be competing at a disadvantage.

To support this, there needs to be an artistic strategic plan that helps the organization ensure that every artistic activity supports the shared artistic vision. There are hundreds of possible works that a group could perform, but the trick is to find those that fit into the overall artistic vision. Similarly, there are hundreds of potential guest artists/soloists/conductors a group could work with, but the trick is to find people that make sense for the art the organization is creating. In both these cases, the reason doesn’t have to be grandiose or complicated—there just needs to be a reason.

One other important thing: the arts group should evaluate how effectively it’s presenting its art. This is an area where many people roll their eyes and insist this is nearly impossible. I agree it is hard to measure artistic success, but it must be done—you pay attention to the things you measure. Plus, more and more funders are demanding some sort of evaluation that shows the effectiveness of the programs they support. A group should give thought to how it could be evaluated in a way that makes sense for itself. For some, it might be by improved scores on audience surveys, or through better media reviews. Others might be able to convene a peer-review panel of other trusted artists who provide external feedback. There are many options, and the field of evaluation is a growing one.

At the end of the day, every arts organization should have a clear vision about the kind of art it engages in. There should be a focused plan for what the art is and how it is created, and there should be strong evaluative tools in place to see if the artistic vision has been achieved.

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2. Financial Development. At the same time, there is another critical question an organization must ask itself: what resources must it marshal and steward effectively to insure the artistic vision is fulfilled? This is obviously a question many bedevils many arts groups—some of whom never successfully address it.

There are some key things to remember. First, if an arts group is a non-profit organization (unlike, say, a commercial theater) the financial resources are harnessed to support the art. This may seem obvious, but it’s worth calling out. The goal is not about maximizing profits, or paying dividends to shareholders; rather, it is about finding the right mix of financial resources to make the art possible.

But just as the finances support the art, the art has to support the finances—the organization cannot spend outside its resources. There has to be a realistic plan that links the art with the financial support necessary to make it happen.

Traditionally there are three sources of financial support: earned income (primarily ticket sales), contributed income (from individuals corporations, foundations or the government), and investment income (as in an endowment). Each organization will have its own unique blend of these three sources—there is no “correct” formula. The Sanford Social Innovation Review lists several financial models that an organization can follow… each with its own benefits and limitations.

Because there is no one size fits all answer to building financial support, an organization must choose which approach best suits its needs. Does it have the capacity to manage an endowment? Can it survive solely on earned income? Is its base of individual donors sufficient? And there are other questions that speak to institutional priorities, too. Is the goal to achieve steady growth? A better ratio of donations to ticket sales? Maximizing corporate support? Each aspect will have benefits and drawbacks, and the wise group will carefully evaluate the real-world implications of its choices, rather than blindly say “increase ticket sales!”

Ultimately, a group needs to create a strategic plan that helps focus the organization. Like a strategic artistic plan, such a financial plan lays out priorities and helps an organization make decisions among competing options. Such a plan keeps an organization from running in too many directions or chasing money

And again, there needs to be some sort of evaluation so the organization can chart its progress, and see if course corrections need to be made. This is far better than waiting until the end of a fiscal year and realizing you are broke.

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3. Audience Development. Every arts group needs an audience. Audience development asks the question of how relevant an arts group is… how is it meeting the needs of its customers and the community?

All arts groups are concerned about growing their audience, as these people are the principle source of earned income and contributions. But too often, they don’t do so in a strategic way. There are three strategies for audience development: broadening, deepening, or diversifying.

Broadening means attracting more audience members like those cur­rently attending (and usually, are already inclined to attend).  It is essentially an effort to cast the nets as widely as possible to get more people in the seats.  The whole focus is to continually and rapidly find new patrons, and tends to be somewhat of an indiscriminate strategy.  Mailing a flyer to all addresses in the city of Minneapolis, for example. Because the emphasis is on attracting new people, and not necessarily on keeping them, this strategy can have a relatively high rate of attrition as some people will casually give you a try and move on.  The hope is that with enough people coming through your doors, some are bound to stay around.

To deepen your audience base, however, you have to get fewer numbers of people who already support you somehow to engage with you at a higher level.  In short, you try to turn your existing friends into your best friends.   You may ask them to go from casual ticket buyers to season subscribers, or move them from casual contributors to major donors.  This strategy relies heavily on targeting people, segmenting them into discrete populations and applying very specific strategies to get them to take specific actions that move them in a specific direction.   In many ways, the ways you work to deepen your audience are directly at odds with the strategies needed to broaden it.

Diversifying an audience means you are implementing strategies to specifically attract people who do not normally attend your performances… say, bringing in more youth aged 18 to 30.  It requires a comprehensive view of your audience base as it is now, as well as a clear idea of who you want to attract, for what reason.  You need an understanding of what barriers this new population faces, plus a clear sense of what methods would convince these folks to attend—in short you need a very, very specific pool of research and a clear strategy before you even begin.

These three approaches don’t overlap. And not only are the strategies different for each, but the revenue generated will be different, too.  There isn’t a single correct answer, but an organization has to decide what it wants to do, develop a plan around that goal, and execute it.

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4. Human Resource Development. And finally, an arts organization has to have the capacity to fulfill all the above plans. The primary question here is how can the workers across the organization perform their duties, learn, improve, communicate, and collaborate?

It is not enough to say people should do their jobs… do they have the resources to do them effectively? Do they have the required expertise, or do they require additional training? How do they interact with each other, and can these interactions be more positive? More efficient? How is institutional memory maintained—are there succession plans for artists who move away from the organization, staff members who resign, or board members who rotate off the board?

Speaking of board members, what is their role? How active are they in actual running of the organization? Do they take a completely laissez-faire approach and only show up at the annual meeting? If so, is there a better way to engage them? Are they micro-managing the staff, and if so can they be pulled back? How can the board structure be managed to maximize board leader’s expertise, connections, and knowledge without burning them out?

This is a broader point… there needs to be constant attention to whether anyone is getting bored or burned out. These are festering problems that will slowly infect other aspects of the organization or its critical operations.

Human resource development is an area where many arts organizations fall flat; far too often an organization will bite off more than it can institutionally chew.

For example, this is one of the problems of demanding that arts organizations increase earned revenue… simply by adding more performances. While this sounds nice in theory, if there isn’t sufficient staffing to run the box office, to manage the increased number of contracts, complete basic maintenance on the facility, the product as a whole will suffer.

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Each of these four areas is critically important for an arts organization, but to achieve greatness an organization has to manage each of these four in connection with the others.

The successful arts organization does these things simultaneously.

For example, it is great to have a strong artistic strategic plan, but such a plan has to take into account the expected audience and be in line with the expected budget. Plus, the plan has to be based on the real-world capacity of the staff, volunteers and board members.

One of the problems with all the recent orchestra/opera labor disputes has been a fixation on a financial plan as the end-all, be-all of the organization. While the financial strategic plan is critical, it cannot exist in isolation. If the board and staff members simply don’t have the ability to raise the expected funds, it will fall flat. If there is no engagement of the community, it will be increasingly difficult to sell tickets or secure donations. And if the art is an afterthought… well, why bother with any of it?

And one final key point. The way to keep all four areas in synch with each other is constant, transparent communication. All stakeholders need to communicate openly and honestly, with full acknowledgement of each others role and importance for the organization. When communication breaks down, the organization starts to break down.

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I do not at all subscribe to the idea that classical music, opera, or arts in general are “dying.” Many organizations have successfully survived the Great Recession, and many are having banner years in terms of donations, ticket sales, and innovative artistry.

But I absolutely believe that arts organizations face challenges—big ones.

My hope is that by adopting a more rounded, holistic approach to the way they do business, arts groups can better understand their mission, marshal their resources, and continue to deliver powerful artistic experiences.