Tuesday, May 27, 2014

Arts Entrepreneurship Blogathon - Day 3

Good morning.
"And the beat goes on……………."

Arts Entrepreneurship Blogathon - Day 3:  If you would like to comment, please go to the site blog.westaf.org and click on the comment icon at the end of the blog.

Today's Question: 
What are the major challenges to, and opportunities for, advancing Entrepreneurship in the arts?  What are the differences for artists v. Arts administrators?  How do we foster and promote organizational entrepreneurship?

Andrew Taylor:   Paul DiMaggio once characterized American cultural policy as favoring stability,  ''encouraging small organizations to become larger and large organizations to seek immortality.'' Over the past fifty years, that strategy has fostered extraordinary growth in cultural activity and opportunity across the United States (and around the world). But it has also institutionalized a set of biases.

Most of the systems we've constructed to feed that system also favor stability and growth. Funders prefer nonprofits with multiple years of activity before they'll consider a significant grant. The 501c3 status requirement of most nonprofit granting agencies -- public and private -- also suggests that only established entities are allowed to play. Educational efforts for managers and artists tend to prepare students to work in established organizations and artistic disciplines.

That stability bias leaves the new, the innovative, the temporary, the impulsive, the cross-boundary, the small endeavor in the arts at a disadvantage -- not only for independent artists and small organizations, but for the "intrapreneurship" and innovation within established organizations.

If major funders want to encourage entrepreneurship in all its forms, they'll need to unbundle their bias in giving and measuring what they give. They'll need to allow more hybrid, for-profit, or fiscally sponsored initiatives. They'll need to let go of reliable impact as an outcome goal, and embrace a portfolio approach to their giving and impact strategies.

And we'll all have to let go of our own bias surrounding 'big' and 'permanent' as requirements for greatness in the arts. Artists and audiences are already doing this, despite our current policies and practices. So, if we can't learn our way out of it, we'll grow our way out as a next generation takes our jobs and forgets our ways.

Linda Essig:  One challenge is that many artists see the very word “entrepreneurship” or the very concept of the art market as antithetical to artmaking.  Albert Camus, in his 1957 speech at Uppsala University said, “Art for art’s sake, the entertainment of a solitary artist, is indeed the artificial art of a factitious and self-absorbed society. The logical result of such a theory is the art of little cliques or the purely formal art fed on affectations and abstractions and ending in the destruction of all reality. In this way a few works charm a few individuals while many coarse inventions ·corrupt many others. Finally art takes shape outside of society and cuts itself off from its living roots.”  I see arts entrepreneurship as a way of connecting art and society.  Some artists, as noted in an earlier post, see it as a neoliberal attack on the arts. We live in the economic world we live in, and if artists can understand entrepreneurship as a means to feed their artistic practice, then they can use the capital system to subvert the capital system, if that is their goal.

There is a distinct difference between arts entrepreneurships and arts “management,” in that entrepreneurship means innovating new ideas while management can be understood to mean maintaining a status quo. But, there isn’t really a fixed status quo, because the technological, economic, social, and aesthetic environment for the arts is constantly changing, and changing rapidly. Arts administrators can (and should) be proactive in the way their organizations respond to the constantly changing environment and, more than just responding to change, can make that change themselves to move the arts forward.
Another challenge, and one we need to be very cautious to avoid, is factionalism within the field of arts entrepreneurship itself.  Entrepreneurship and management are converging for the reasons just mentioned, they cannot be viewed as dichotomous; individual entrepreneurship and new venture creation should likewise not be viewed as opposites; the study of entrepreneurship within arts disciplines should not be viewed as contrary to the study of arts entrepreneurship across disciplines; entrepreneurship in the for-profit sector should not be viewed as a completely separate discipline from entrepreneurship in the nonprofit sector; and finally – and most importantly – those who teach, study, and practice arts entrepreneurship in universities should not separate themselves from those who teach, study, and practice arts entrepreneurship in the public, nonprofit, and private sectors.  It’s a big tent – there’s room for everybody.

To promote or foster organizational entrepreneurship (and by this I assume you mean entrepreneurial action in and by organizations or “intrapreneurship”), organizations need to be open to voices from all levels of the organization and recognize opportunity wherever (or from whomever) it might arise. 

Ruby Lerner:  We believe that artists are de-facto entrepreneurs, so we don’t see a difference between them and other entrepreneurs. But what we find in the arts is that there’s not a lot of infrastructure or coordinated efforts to help sustain them. Venture capitalists will engage with a business for up to seven years. This rarely happens in our field, but it’s the model Creative Capital has adopted. We support artists systematically and make a long-term investment to help them build sustainable careers. And we earmark a small pool of the funding we provide for “special opportunities,” so that our artists can take advantage of opportunities as they come up.

On the organizational front, it’s harder for organizations to take risks because they tend to have greater overhead costs and somewhat less flexibility. It’s one of the reasons that I think organizations need special pools of money dedicated to seizing opportunities, just like the “special opportunities” funds we set aside for our awardees. In a way, it’s like building in “risk capital” so that the org can take risks and explore new ideas while knowing that the organization is still secure.

Richard Evans:  I see a number of challenges to advancing a contemporary form of entrepreneurship in the arts.  But also that this is a time of opportunity for entrepreneurial approaches.  Embracing these opportunities means shifting from a focus only on individuals as sole entrepreneurs, to better recognizing adaptive organizations as an engine of entrepreneurship.

As a professional sector, the arts tends to maintain an insistent focus on heroic leaders, when today’s wicked problems demand adaptive techniques that no single individual, no matter how brilliant, can utilize alone.  From an era that prized heroic individualism and organizational differentiation, I think we must bring urgency in moving toward shared solutions and waves of collective action.

This move is inhibited by a widespread confusion between organizational innovation and creativity.  Creativity is a quality of individuals (some people are naturally talented at coming up with original ideas).  Creative thinkers are vital to innovation (and we have plenty of them), but they aren’t sufficient.  To innovate means to develop creative ideas into feasible strategies that organizations can actually implement.  This is a group activity, requiring people to work together in new ways toward breakthrough strategies.  So innovation seems to me a definable organizational discipline, a set of skills, processes, and tools that every organization can learn.  When the Kellogg Foundation recently studied organizational innovation in the not-for-profit sector, the authors concluded that “every nonprofit should make innovation part of its core competencies.”  They called the report Intentional Innovation.

When we think about entrepreneurship in the arts, we tend to focus on the launch of new programs and products, rather than on the process of discovery, design and prototyping.  The overemphasis on product over process drives other misunderstandings.  Funders urge organizations to add a new program, reinforcing an unsustainable mentality of continued expansion and diffusion of energy when a stronger focus on building resilience is what is really needed.

If entrepreneurship and innovation are tethered to organizational growth, and if growth remains the primary measure of organizational success, then entrepreneurship in organizational settings is condemned to be a destabilizing force in the worst sense of the word.  Rather, the disruptiveness that can attend innovation should be directed to making hard choices — choices about what we now leave behind (as no longer useful to us), as much as about how we reconfigure our existing work.  Letting go is at the core of innovation.

My rule of thumb – that organizations should work toward devoting 20% of their annual resources to the various stages of innovation – requires that we regularly and aggressively make space for new ventures by stopping doing things that aren’t achieving our desired impacts, or that absorb energies better released for re-imagining.  Becoming more provisional as an organization is, in my experience, a sophisticated capacity.

A related obstacle to entrepreneurial approaches gaining due weight in the field is the lack of innovation capital available to organizations – resources held on the balance sheet for strategic investment in new ventures if and when prototyping suggests an opportunity to scale up and mainstream the initiative.  Few cultural organizations have in the past been able to build capital funds of this type on their own.  The norms of capitalization in the field, with an overwhelming emphasis on illiquid assets such as endowments and buildings, and a value system grounded in an unfulfilled search for permanence and stability, have militated against strengthening this aspect of the financial profile.
Lacking these funds, most innovations are condemned to remain what I call “dworphan”: both dwarfish in scale and orphaned from the organizational mainstream, relegated to the margins rather than intentionally growing to become part of core operations (that new music series of two small concerts; the single improv session in a local bar).  This is one reason entrepreneurship is blunted, and adaptive change in the field is so slow.  A policy realignment is badly needed, supporting new values of organizational flexibility and adaptability.

Yet there are also big opportunities for entrepreneurship in the arts these days.  Complexity is a particularly good environment for the entrepreneurial.  When, as artists and organizational leaders, we try to address complex challenges (the familiar example is parenting), cause and effect circle each other, they are no longer in any kind of linear relationship — yesterday’s solution doesn’t work today, and often we’re not sure what the problem even is ….  In contexts where unpredictability rules, established systems are in flux, and new patterns are struggling to form, the most useful response is to create the conditions for next practices to emerge.  This means probing, questioning, and experimenting to find the way forward.  As David Snowden of Cognitive Edge has written: “Because you cannot analyze the problem space fully in advance, you have to be prepared to adjust systems interactively until you find what works.”  This is work that an entrepreneurial team can excel at.  Where teams with little entrepreneurial capacity (all Implementers and Completer-Finishers) will worry about perfecting five-year plans and logic models, the entrepreneurial team will understand the need for a “good-enough vision,” and get on with some radical experiments to test possibilities, learn hard from them, rinse and repeat.  This is the kind of team for funders to put their money on.

But that will only happen if we collectively re-imagine our use of the word “failure,” an even more toxic word in the arts than “merger”…..  Of course, if we reflect on our experience as artists, we know that failure is endemic to the creative process, that trying stuff out in a spirit of serious play, and not getting it right, is the only way we learn how to do things that have never been done before.  Yet this important understanding of productive failure has not translated to our organizations and funders.  We need boards, staff and investors to support “learning journeys” and to demand that we ask difficult, probing questions at every stage, with candor and determination to change our approach, potentially, at every turn.  In this way (and many others), our organizations have to become more, not less, like artists.
This is very important, because organizational innovation is the means by which organizations undertake essential adaptive work, and can bring artists as entrepreneurs into the work as never before.  Innovation is a newly emerging, organization-wide discipline, the most far-reaching new set of capacities arts organizations can learn, and, I believe, the most powerful new discipline to enter our field since the advent of strategic planning in the 1970s.

To overcome obstacles and advance arts entrepreneurship, I think we need to ask: What would it mean for us to encourage and support innovation across our organizational processes?  How might we bring innovative approaches to our strategic thinking?  What criteria do we apply in deciding to stop doing something in our organization?  Do we have an organized process for doing this?  What structures can we put in place to ensure it happens regularly?

Anthony Radich:  One significant obstacle to launching and advancing entrepreneurship in the arts is the continuing profound denial on the part of many arts administrators that much of the audience for certain art forms has moved on. Often, entrepreneurial efforts get a bad name because they are launched to “save” what cannot be saved. Applying good resources and staff to such lost causes rather than applying them elsewhere is a huge waste. Business entrepreneurs seek optimal circumstances in which to create success. They do not usually seek out sick entities to revive.

Another challenge is that the arts field is frequently a poor market into which to launch products incubated by arts entrepreneurs. Because the nonprofit arts world has been largely shielded from the marketplace, it has been slow to engage with entrepreneurially developed innovative arts-service products. Many traditional arts administrators are either threatened by them or naively believe that they can produce the same product and similarly benefit financially from it, even though these organizations seldom have the assets in place that would allow them to launch such efforts. 

Adam Huttler:  As I explained on day 1 (note: if you are on the site, scroll down to the Day 1 entry for Adam's previous post.  If you are reading in your email box, click on the Day 1 email)  I’m seeing a lot more activity in this space by artists than by organizations. Artists are nimbler by nature, and they don’t need organizations as much as they once did to reach an audience.

The first step to fostering organizational entrepreneurship may be to teach arts administrators to understand the business they’re in and the value they add. Arts administrators must recognize that organizations have no fundamental right to exist, and are only useful and justified to the extent that they assist in the creation or distribution of the work of artists. Armed with that sobering perspective, an arts administrator can take a clear-eyed look at the challenges faced by artists and audiences and figure out how to provide real value to one or both of those customer groups. An organization that does that successfully will have no trouble building a sustainable business as well.

Russell Willis Taylor:  The major challenges to fostering a greater number of entrepreneurs are capital and genuine feedback loops.  With regard to capital, a subject that GIA has recently re-animated with some important national discussions, unplanned growth for a poorly capitalized organization can kill it, and the natural optimistic opportunism of leaders in our field can lead to acute over-extension, thereby weakening organizations and burning out leaders.  Capital isn’t just money, it’s also human capital and we need to nurture and develop that talent, not exhaust it.  I think we need more capital that funds the ideas and strategies of the leaders rather than using organizations to fund the strategies of the donor or funder if we want to encourage entrepreneurs.  This doesn’t mean we shouldn’t have meaningful metrics for performance – they are essential and in my experience entrepreneurs demand them to improve their own performance. 

Feedback loops are an important part of any field that takes risks – we need them to strengthen the individual and collective efforts.  Feedback loops tell us what is working and what isn’t working so that we can eliminate or redesign failed efforts.  Our field would benefit from more candid and public feedback loops – is there any other field that only has success stories?  We need failures to evolve and improve, and we need to know about the failures of others to benefit from them.

Thank you panel.

Don't Quit