Thursday, May 29, 2014

Arts Entrepreneurship Blogathon - Day 5

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

Arts Entrepreneurship Blogathon - Day 5:  If you would like to comment, please go to the site and click on the comment icon at the end of the blog.

Today's Question:
What is the role of collaboration in entrepreneurship ?   What is the relationship of innovation to entrepreneurship?   Of risk taking? Is there a male dominated (or other) bias in entrepreneurship?  Do women and other demographic groups find entrepreneurship more difficult because of that bias?

Russell Willis Taylor:  Chris Mackie, who is a terrific thinker on important issues in our field, told me once that “Collaboration is to the nonprofit field what competition is to the for profit world – it makes it more efficient.”  I repeat this wisdom often and think that collaboration is an important way to garner more resources to create impact, and therefore an essential skill set for entrepreneurs in arts and culture.  There is a broad spectrum of collaborative effort, from short term partnering to full merger, and we should encourage it whenever and wherever we can.

If we accept that entrepreneurs will create new value then innovation is built into what they do.  At NAS we teach ways to implement innovative ideas, to operate within constraints rather than “thinking outside the box” which can be fun and then frustrating when you can’t actually do anything with the bright ideas. 3   Encouraging innovative practice means funding both high risk and episodic failure.

I don’t really have any observations to make on the gender bias question, as the thousands of leaders we work with are fiercely innovative and it doesn’t seem to matter if they are women or men.  I do think that funding people who are going to take risks means moving beyond the usual suspects, and that we as a field could do more to encourage newcomers and people with disruptive ideas.  After all, they are most likely entrepreneurs.

Linda Essig:
Collaboration enhances creativity. There is a body of research in entrepreneurship, creativity studies, and organizational behavior that indicates that heterogeneous groups are more creative than individuals or than homogeneous groups. Creativity is at the root of arts entrepreneurship – the generation of novel ideas and creative work is the first step in the entrepreneurial process.

Innovation is a prerequisite to successful entrepreneurship in the arts.  If Jane Doe opens a dry cleaning shop down the street, she could be considered a business entrepreneur because she starts a business, but the arts are predicated on originality and uniqueness so to be an arts entrepreneur requires both an original creative idea and the ability to innovate – to actualize that idea in a way that has impact.  So innovation is the middle step in the entrepreneurial process:  create  innovate  actuate entrepreneurially.

I tell my students that although entrepreneurial activity involves some risk, entrepreneurs are actually risk minimizers. Entrepreneurship involves recognizing opportunities not for being high risk but for being low risk relative to other possible opportunities, and then having the gumption to undertake the risk that does exist.

Although I think a lot about bias in other areas I study (eg nonprofit boards), I hadn’t consciously considered bias relative to entrepreneurship specifically until you asked this question.  The biases that exist in all areas of the arts no doubt affect arts entrepreneurship – eg., the marginalization of minority voices, a glass ceiling for women, and so on. There is research in the field of entrepreneurship generally that indicates a significant bias toward men in attracting venture capital. Not totally surprising given that the majority if venture capitalists are themselves men.  A 2007 study by Langowitz and Minnitti found that women tend to perceive themselves and the entrepreneurial environment as less favorable than do men.   There’s less capital available to women entrepreneurs and they perceive the environment as less favorable than men do.  Are these conditions a result of bias? As a social scientist, I would say, “bias may contribute to this problem, but correlation does not imply causality” as a woman navigating the world, I say, “yes, there’s bias.”

Anthony Radich:  There is a role for collaboration in the area of arts entrepreneurship. At WESTAF, we work with a staff scattered across the country and around the globe to manage our successful technology programs. The collaboration among staff and the onshore and offshore development teams has required substantial effort to construct but has paid huge dividends. The business-entrepreneurial benefits of these project simply could not exist without a very high level of collaboration.

So collaboration works for us internally; however, I find interorganizational collaborations among arts organizations to be far more challenging. One reason is that, in many cases, likely partners are neither knowledgeable in business entrepreneurial methods nor have an entrepreneurial spirit that can help them link to partners that have such a spirit. In our work, we have found most nonprofit arts organizations to not be ready to partner in most business-related projects.

Another challenge is the “we only need one of them” thinking that exists related to competing services in the nonprofit marketplace. I find that well-meaning foundation executives, corporate leaders, and nonprofit leaders often seek to impose efficiency on a field and snuff out a marketplace for services and programs because they consider support for competing services to be wasteful.  The result is the saddling of the nonprofit arts with mandated “one-only” technologies and services that are expensive and not up to date.

Several years ago, a representative from a major east coast foundation met with me and urged (actually attempted to coerce) WESTAF to throw part of its technology efforts into a single national-level foundation-funded technology initiative.  We didn’t accept his invitation and currently have several thriving technology programs.  Meanwhile, the effort he invited us into is not exactly flourishing--actually it looks pretty dead!

Ruby Lerner:  Collaboration is obligatory—nothing is going to happen in a new undertaking of any kind if you aren’t partnering with others.

We think that risk-taking is part of the definition of entrepreneurship (see Wikipedia!).

While it may be true in the business world, within the cultural arena, I don’t feel a male-dominance. We have so many strong women leaders and organizations / initiatives that were founded by women. Within more traditional institutions, like museums or orchestras, there does seem to be an imbalance in gender parity and demographic diversity, but in the artist-driven sector, gender is less of an issue. However, cultural diversity IS still an issue across the board.

Adam Huttler:  Entrepreneurship can and often does involve collaboration. However, in practice entrepreneurship frequently requires a willingness to burn bridges and breach established protocols. There’s a reason Joseph Schumpeter, the great economist who studied entrepreneurship and innovation, talked about “creative destruction.” Successful entrepreneurs and disruptive innovators almost always trample someone else’s daisies, which means it’s often necessary to go it alone.

Innovation is closely related to entrepreneurship, and the two frequently go hand-in-hand, however they’re not synonymous. The simplest way to distinguish them is to say that innovation is the creation of new opportunities while entrepreneurship is the exploitation of those opportunities.

There is definitely systemic inequality in entrepreneurship. I couldn’t be an entrepreneur if I didn’t believe that I have a right to imprint myself on society. This belief depends on first feeling as though I truly belong in this society, along with a pretty powerful sense of entitlement. Needless to say, this psychology is more common among historically dominant demographic groups. (White male privilege anyone?)

Even more troublesome is the role that networks play in entrepreneurship. It’s almost impossible to create something new and substantial without tapping repeatedly into a network of mentors, advisors, and other resources. To the extent that professional networks correlate to demographics, they work (unconsciously and unintentionally, and therefore insidiously) to maintain the socioeconomic status quo with respect to race, ethnicity, and gender.

Richard Evans:  Economist Robert Reich has called team-building, leadership and management ability essential qualities for the entrepreneur.  The successful companies of the future, he has suggested, will be those that offer a new model for working relationships based on collaboration and mutual value.  Whatever we think of Reich’s view of art museums, I’d agree with the shift in traditional thinking about entrepreneurship that he proposes.  He emphasizes the links between entrepreneurship, team-work, collaboration and mutual value that I explored earlier.  This group of qualities relates closely to the tenets of adaptive leadership, and how I believe they inform not only the new approach of the single entrepreneur, but the move to recognizing entrepreneurship as an aspect of organizational innovation, which I described as a new discipline entering the arts field.

In my first piece, I suggested that most not-for-profit arts organizations could qualify as entrepreneurial in the traditional sense, in that they offer their performances and exhibits with a clear enough sense of the associated costs, but with little certainty of them being fully covered by related sources of income.  They take on and deal with risk, in the classic entrepreneurial fashion.  But nowadays that’s not enough of a description of contemporary entrepreneurship.  In complex contexts, when systems are in flux, and the old rules may no longer apply, entrepreneurial behavior demands more – a capacity to manage risk, but also a deep tolerance for uncertainty.  Risk, after all, can be calibrated from past experience; uncertainty around innovation, which relates to the future impact of new ventures, cannot.  And in the current environment of rapid change, disruptive innovation, and shifts in cultural participation, uncertainty rules.  Entrepreneurial teams address this uncertainty by using short-term feedback loops, rapid and re-iterated prototyping, and an advanced ability to continually question assumptions.

Such teams are also good at moving beyond the first shiny solution that is presented in their innovation work.  When time appears short and concepts have been swirling for a while, it’s always tempting to grab hold, in a prehensile way, of one of the first bright ideas that is put forward as a new solution, especially if it comes from an established leader or a complete novice.  In our experience, that almost always leads to a compromise result, something mildly adaptive but by no means a breakthrough.  More time needs to be spent considering and discarding ideas, until layers are peeled back and genuinely radical approaches can begin to emerge.  The poet Rilke’s two rules for writing poetry are profound advice that applies to these team journeys, I think.  “When you’re writing a poem,” Rilke suggested, “after three stanzas you’ll have written everything you know you have it in you to write.  The first rule is: Don’t stop, for then you will write what you didn’t know you had it in you to write.  And the second rule is: When you get to the end, throw away the first three stanzas.”

This waiting, reflection and preparedness to let go of your favorite idea is not everyone’s concept of a productive process.  Indeed, in terms of traditional male attributes, it can be a real strain to postpone arrival at the solution in this way (male leaders are known to have a strong preference for the Shaper team-role I introduced earlier).  This aspect of contemporary entrepreneurship in teams might be said, therefore, to offer an opening to better appreciation of less macho attitudes.

These dynamics are likely to lead to considerable conflict in an entrepreneurial team, even one that views collaboration as a core value.  We’ve found in our Innovation Labs that productively managing sustained conflict within the team is at the core of adaptive work.  As the adaptive potential of the work increases, and things get real, agreement diminishes quickly, and a lot of heat enters the room as multiple perspectives on the past and the vision for the future are voiced, and conflicting views on how to proceed are urged. This group energy is vital and potentially transformative — ideally, it is managed so as to lead on to a breakthrough approach of high adaptive potential, in favor of which there is sufficient agreement (not unanimity) for prototyping to be sanctioned.

In my experience, however, most trajectories with this promise become derailed by the heat of conflict, as individuals run for the exits.  For arts organizations, managing this trajectory over, say, twelve months is itself an extremely complex affair, as our programs have taught us (the friction tends to reach a critical level after about four months).  Incentivized by governance and funding environments to suppress conflict around assumptions, vision, definitions of success, and organizational strategy, few organizations in the arts field have become adroit at productively sustaining this kind of tension, let alone using it as the key lever for transformative results.

If we can learn this kind of collaboration, if we can build resilient teams with the capability of pushing through the pain barrier to breakthrough results, then the prospect for arts entrepreneurship to earn a new and higher value in organizational life is considerable, and the next ten years should prove immensely instructive.

Andrew Taylor:  As we've all established in our definitional posts, entrepreneurship involves taking action through a collage of resources. Some of those resources are financial. But significant resources also come from the energy, passion, attention, advocacy, connections, and effort of other people. "Collaboration" -- which Michael Schrage aptly defines as "the process of shared creation" -- is one way to connect these resources with the enterprise. Other ways that live lower on the entanglement/engagement spectrum include communication, coordination, and cooperation.

The "innovation" in entrepreneurship, like almost everything else related to the term, comes from action and application. Innovation is more than a great idea or invention, it is the application of that idea or invention to bring real value to real people.

As for bias, there is no inherent bias in the bundle of qualities and actions we call entrepreneurship. But there is certainly bias in the people, groups, and systems that claim the term. Silicon Valley is notoriously biased against women -- as founders, as executives, and as corporate board members. Organized philanthropy has shown a bias in its aggregate giving and its policies of selection and support. Creative industries -- from film to visual to performing arts -- show bias in their selection of artists, executives, and boards, as well. So, it would be no surprise to find many layers of bias embedded in the people and systems that support arts entrepreneurship.

Our opportunity as we focus more energy on arts entrepreneurship is to do so with the same rigor, innovation, feedback, testing, and iteration we expect of our entrepreneurs.

Barry:  Entrepreneurship in the Arts, and all of the sub-issues attendant thereto, will undoubtedly continue to be discussed and debated - particularly as the concept relates to innovation, adaptation, business management, risk taking, survivability and how we, as a field, approach the challenges we face.  I appreciate the thoughts of the panel as a beginning to that ongoing discussion.

Thank you very much to all the panel participants.

Don't Quit