Why is it important to strategically manage arts organisations?
Resources are becoming increasingly scarce. Funding for arts organisations is declining. Political perceptions of the value of the arts appears at an all time low. In the age of the pandemic there remains a high likelihood of restrictions upon activities, and perhaps most importantly, audiences have choices about where to spend their money – or even whether to spend it at all.
The environment within which arts organisations operate is volatile and unlikely to stabilise in the foreseeable future. In a volatile environment the risks are higher and greater emphasis is placed upon effective governance. Strategic management is a tool for ensuring ongoing viability and sustainability within a changing environment.
Managing an arts organisation in a strategic manner is a process. Throughout this process the board, senior management and even key stakeholders might engage in strategic thinking, strategic analysis, strategic planning, implementation and monitoring of the strategic plan, and finally: strategic reflections. (Varbanova, L. 2012)
A key barrier to strategic planning can be resistance from the artistic stakeholders within an arts organisation. It doesn’t need to be this way. First, and foremost, as illustrated in The Cycle the arts program is front and center; there shouldn’t be any conflict between the two. A great artistic program benefits from effective organisational management; without great art there wouldn’t be any need for managers of arts organisations.
Adopting a strategic approach to management of an arts organisation introduces change to an organisation. This adds to the potential for conflict. At the heart of an arts organisation are two people, the CEO/Executive Director and the Artistic Director. Together they are jointly responsible for the operation and artistic programs. Together they should lead the strategic management process.
Many tend to view a strategic plan as being strategic management. Such a perspective is unfortunate, as it leads to an assumption that responsibility for strategic management rests with the Board. Granted the Board is a key stakeholder in the strategic management process, a strategic plan on the other hand is simply a written record of all the thinking that goes into the process. As pointed out earlier in this post, strategic management is a combination of thinking, planning, implementing and reflecting. This process ultimately involves all the board and all the management team.
An effective strategic management process will engage all stakeholders, bring together a diverse range of perspectives, recognise opportunities and limitations and set out a common vision and direction that guides the activities of every person within your organisation.
The challenge for arts organisations is to align corporate governance, organisational management and artistic direction in a manner that meets the needs of all stakeholders.
Making great art can be risky. Sometimes an innovative concept fails to attract an audience, resulting in costs exceeding revenues. This is the stuff of nightmares for board members who have a legal obligation to ensure arts organisations operate in a viable manner. In any circumstances, arts organisations operate on slim financial margins. This adds to the risk.
Israeli research, comprising interviews with CEO’s of arts organisations identified a Three-to-Tango management model, comprising three basic functions they considered essential in addressing any conflict between business and art. The research identified these three roles as The Dreamer held by the artistic director, The Doer held by the CEO and the Ambassador held by the board chairperson. When these roles are aligned, the Chair supports the CEO by facilitating a tango between the three leadership roles.
In summary, when we strategically manage arts organisations we open up a wide ranging conversation, involving a diverse range of stakeholders, who seek to set out a common direction for the future, after discussing elements of risk and opportunity. This is achieved without any negative impact upon the artistic program, while raising awareness and creating understanding between the different groups. In turn, this leads to improved decision making.
John Coxon is founder of art4u.australia, a consulting agency helping arts organisations to remain viable through application of The Cycle, a proven model for arts organisations. For advice and guidance on strategic management of your organisation shout out to John.