Saturday, June 30, 2012

The Assembly Line and Failure

I've recently returned from Theatre Communications Group's Annual Conference, where the theme was "model the movement," focusing on new models and transformative ideas from the field. I was particularly excited to attend this year, as the speakers included Woolly Mammoth Theatre Company's Artistic Director Howard Shalwitz and author/marketer extraordinaire Seth Godin.

Howard kicked off the conference with his speech "Theatrical Innovation: Who's Job Is It?," in which he compared the systems of our regional theaters to that of an assembly line, a theme that would resurface multiple times over the course of the conference. As regional theaters grew and became more complex, often times non-profit managers were encouraged to borrow best practices from corporate entities, designed to improve efficiency, streamline processes and increase return on investment. And it worked...until it didn't. You see, the process of creating art cannot be controlled by an assembly line system. We don't create widgets. And as one artist said to me, "if I was exclusively concerned with return on investment from a monetary perspective, I wouldn't create art, and I certainly wouldn't have had children."

This isn't to say that theaters shouldn't have systems. Systems have helped us reduce waste, maximize time and better utilize our resources. But an over reliance on particularly inflexible systems can also guarantee failure, at least from an artistic perspective. Theater is a particularly risky business, even when producing so called "cash cows," as I have previously written about here. To quote one artistic director, "theaters eat risk for breakfast." But as the economy has contracted, have we become too reliant on our systems? and if Woolly Mammoth is wrestling with this issue, a company that is known to be nimble and innovative, then it must be a significant challenge for others. How often do we as marketing directors get handed a project that we can't wait to work on, knowing that we will need to call upon all of our creativity to develop innovative audience development strategies, only to think - shit, if I give the time and attention this project requires, the next three shows will suffer? Which then results in trying to pound a square peg into the round hole that is our assembly line, which is a disservice to both the artist and the marketer. Great work will push boundaries across all departments within an organization, and senior managers need to create systems and budgets that not only allow space for custom approaches, but that encourage them.

As managers, we like to mitigate risk, thinking that if we could just control our variables just a little more, that we would reach a utopia of risk free theater producing. It's a fool's errand. Since the beginning of the global economic crisis in 2008, the stakes have risen so high that it can feel like we don't have room to fail. But in failure, we find success. It sounds counter intuitive, but making today as failure free as possible will ensure a less successful tomorrow. Even Mr. Godin, a titan in the business world, in his bio proudly proclaims "as an entrepreneur, he has founded dozens of companies, most of which failed." So the question we should all be asking, particularly in the budget process, is - are we building enough room for experimentation and failure?

Recently, I had the opportunity as a consultant to work with a few senior managers who were tasked with reinventing a business model for a program that was part of a much larger institution. Due to funding cuts, the program needed to become revenue neutral over time, and pro formas were developed to guide that process. Along the way, the program hit some unforeseen challenges, but as the pro formas were the only measurement of success, decisions were made that allowed the organization to "stay on target" by hitting financial benchmarks as scheduled at the expense of future operations. When I began my work, I was asked if I thought the program could reach revenue neutral status on the timeline outlined in the pro formas. I said that I believed it was possible, but then followed up by saying the question asked really should be whether the program can remain a going concern after hitting revenue neutral status given the short-sighted decisions that would be necessary to get there. In other words, does it really matter if we got the patient to the hospital in record time if the patient dies in route? How many decisions do we make each year that only considers the financial position of the company during the fiscal year in question? and would we make different decisions if we considered the pros and cons over multiple years? The financial strain on many arts organizations is tremendous, but if we continue to sprint to obtain single year targets while we ignore the conditions that wait for us at the finish line, over time we can snatch defeat from the jaws of victory. Unless an organization is under dire financial constraints, and death is literally knocking at the door, all major decisions must be viewed in a multi-year context.

Studies have shown that people are motivated more by avoiding failure than by achieving success. As this article states, some professional athletes like winning, but they really hate to lose. This would explain why limiting risk is so appealing, even if it jeopardizes our ability to succeed. But I would argue that mindset breeds mediocrity, and that artists and arts administrators are different. We know that our best work comes from taking risks, and this is something we need to remember as we head back into work tomorrow.

1 comment:

Melanie said...

It's so refreshing to know that I'm not the only one thiking this way. I'm new to the non-profit arena and have be tasked with building strategic partnerships within the organization that I work. There are BIG goals on the table, but what I find to be a short sighted vision for how to get there. When aiming big and laying foundation for future success, there has to be balance between achieving short-term financial goals and investing in programs and relationships that will benefit the future. Performing arts organzations especially are on edge in doing so due to the nature of our 'product'. When the focus is on the bottom line all the time, it's hard to focus time and money on a project or program that may not provide direct revenue. Certainly avoiding risk saves money, but without keeping in mind a comprehensive vision in making decisions, we limit our ability to continue to lay down foundations upon which new support can be built. Adjusting to changing economic climates is second-nature for any educated business person. A smart business person ajusts successfully, but considers the long-term reprocussions of every decision. What saves you a penny today might cost you a dollar tomorrow. It's a shame how even those at the top fail to see the picture in it's entirety. Focusing on numbers alone to guage the success of an organization provides instant gratification but it doesn't do anything to build a support system for the future.