Strategic Planning in the Arts

A Practical Guide

Michael M. Kaiser

• Publisher: Brandeis University Press
• Year: 2018
• ISBN:
  9781512603217
• Topic: Commerce
• Subtopic: Commerce Général

Planning today is more important than ever. Both acquisition and allocation of resources are increasingly difficult for arts organizations as a result of emerging technologies, reduced arts education, aging donors, and the advent of new forms of entertainment. It is essential for arts organizations to take a coherent approach to these issues to remain vibrant over time. In fact, most arts organizations do periodically attempt some kind of planning exercise. But a review of hundreds of such plans suggests that most contain merely a wish list, rather than concrete plans for the future: "We will increase ticket sales!" is a common "strategy" expressed in too many arts plans. In the absence of details about how ticket sales will be increased, it's an empty promise. In Strategic Planning in the Arts, Michael M. Kaiser, the former head of the Kennedy Center in Washington, DC, and an arts management guru, has produced a clear, concise guide for staff or board members of not-for-profit arts organizations who are responsible for developing, evaluating, or implementing plans. Relying on real-world cases and examples, Kaiser shows how to conceive, assess, and act on every part of the strategic plan, from the mission statement to the financial statement; from managing the board to marketing. Praise for Michael Kaiser: "A rich yet tidy cornucopia of solutions for the challenges facing the American arts scene."—Washington Post

PART 1 Setting Up

1

A FRAMEWORK FOR STRATEGY DEVELOPMENT

Building on the Mission

Strategizing is a creative process that cannot be performed simply by filling out forms. However, putting people in a room and asking them to think creatively about the future can yield very little and can waste a great deal of time. These sessions frequently devote too much time to the interests of a vocal minority, usually omitting discussions on many substantial issues and always prohibiting the development of a coherent, integrated plan.

Any planning process is made more efficient when it employs a structure, or framework, as a guide. This chapter introduces a framework that underlies one effective approach to planning. This approach is a generic one that has been used successfully by both for-profit corporations and not-for-profit organizations. Just as this framework provides a guide for the planning process, it will also provide an outline for this book. In the following chapters, each element of the framework will be tailored specifically to the needs of arts organizations.

THE MISSION STATEMENT

The foundation of this framework, and the starting point of all strategic planning, is the mission statement. The mission statement describes the central goals of the organization and the scope of its operations. The goal of a corporation in the for-profit sector is easy to describe: maximize stock price by making as much money as possible for as long as possible. While the mission statements for profit-oriented companies may include some discussion of the product line, customer base, or geographical scope, the central focus must be on profit. (Unfortunately, many for-profit organizations think of their missions as marketing statements, emphasizing specific products or services, or service to the customer, rather than profit. This can lead to a great deal of confusion when a corporation acts on behalf of its shareholders in a way that costs customers.)

For arts organizations, and all not-for-profit organizations, the mission statement is more difficult to define. We know the company is not in business to make a profit, but why does it exist? To offer world-class performances or exhibitions? To educate? To train young artists? To serve a specific region? To encourage the creation of new works of art? To preserve and present older masterworks? When one removes the overwhelming profit motive, the mission becomes more difficult and, therefore, more important to formulate. For although the specific wording of the mission statement is not of key importance (too many people spend too much time worrying about the semantics of the statement), the implications of the organization’s mission are staggering. They guide the entire planning process and, more important, should influence all programmatic and administrative decisions.

Those organizations without explicit missions have a difficult time managing themselves. Individual members of the staff or board may make decisions that they feel are best for the company but that counteract the actions of their peers; consistent progress in a missionless organization, therefore, is a result of luck.

If a mission statement is to be an effective management tool, every person who influences the behavior of the organization must understand its implications. For example, a symphony board that accepts world-class quality as an element of its mission must be willing to commit to raising the funds needed to achieve this huge ambition. Similarly, a regional theater company that aims to produce experimental works must be prepared to mount more targeted marketing and fund-raising efforts than a counterpart producing light comedies and musicals.

While the mission clearly directs the remainder of the planning process, the final wording of the mission statement need not be drafted before planning commences. The planning process is an enlightening, iterative procedure that allows the participants to “fine tune” the mission statement as they reveal the full implication of each parameter of that statement. However, while the final wording of the mission does not have to be determined in advance, a broad outline of the company’s goals must be developed before any effective strategizing can commence. For without a goal, a strategy is meaningless.

ENVIRONMENTAL ANALYSIS

While a strategy without a goal is meaningless, a goal without a strategy is a wish. For this reason, developing a mission statement is not enough: expressing one’s goals does not guarantee attaining them. Yet many organizations’ plans are little more than a mission statement followed by several affirmations that the mission will be accomplished. (“The company will build its audience by improving its marketing program.”) Clearly this is not sufficient.

The first step in determining how the organization will achieve its mission is to review the environment in which the company operates. No arts organization operates in a vacuum, despite the level of isolation its board and staff might feel. The success of an organization depends, in great measure, on the way it evaluates the environment in which it operates and its ability to respond appropriately. There are three parts to an environmental analysis.

The first is an evaluation of the arts ecology for the nation as a whole. What trends are going to affect the ability of an organization to achieve its mission? Are technological changes affecting arts participation? Is demographic change affecting whom we must address with our programming? A strong strategic plan must acknowledge explicitly the trends that are influencing the arts ecology.

The second aspect of environmental analysis is an exploration of the “industry” in which the company operates—the museum industry, the theater industry, and so forth. While many arts professionals may be uncomfortable with the word “industry,” it is appropriate. Each art form offers products and services and has customers, competitors for resources, and suppliers—the participants that define an industry. This evaluation includes a review of peer organizations, those organizations that face similar opportunities and constraints and whose actions may affect one’s own organization. For-profit companies study their competitors in order to predict how they will compete in the future. In the not-for-profit sector, competition is less direct. While the regional nature of the arts means that few arts organizations outside of major cities compete with other similar organizations for audience dollars or local contributions, they do compete with touring companies and for artists, gifts from national corporations and foundations, and grants from the National Endowment for the Arts, the National Endowment for the Humanities, and other government agencies. Increasingly, as arts organizations distribute their work online, competition between peer companies, even many thousands of miles apart, has intensified.

Of course, some cities do support multiple opera companies, symphonies, art museums, and so forth; in these culturally dense cities, direct competition is a more important factor. For this reason the third aspect of an environmental analysis is a study of the arts ecology of the city or region in which the organization operates. How many organizations are competing for earned and contributed dollars? How large is the base of corporate, foundation, and individual donors? What demographic, sociological, and economic factors influence the health of the arts institutions?

In sum, environmental analysis suggests the constraints and opportunities presented to the organization and indicates the factors required for success. In addition, this analysis will suggest how the environment is likely to change in the future. Understanding the evolution of the arts ecology in advance is a key to effective strategic planning because it gives the company time to decide on appropriate responses to expected environmental change.

INTERNAL ANALYSIS

Once an analysis of the environment has been developed, it is possible to evaluate the way one’s own organization “fits” into the industry. This internal analysis is an integral part of the strategy development process. It suggests what the organization is doing well and what it is not doing well and how these strengths and weaknesses align with the success factors determined in the environmental analysis.

This internal audit is an essential element for creating a strong set of strategies. Yet internal analysis is difficult to perform because it demands objectivity in exploring areas of weakness and self-confidence in describing one’s own strengths. By matching these internal characteristics with the industry success factors, one can identify those areas the organization must address in its strategic plan—both the strengths it can exploit and the weaknesses it must overcome.

STRATEGY DEVELOPMENT

An organization’s strategies are a description of the way the organization expects to address the success factors revealed in the environmental analysis in light of the organizational strengths and weaknesses uncovered in the internal analysis. If the organization possesses one of the key success factors, how will it protect and exploit it? If the organization is deficient in another success factor, how will it overcome this weakness? The specific operating strategies that must be developed will depend on the nature of the organization, as illustrated by the following list of headings in the strategy sections for two organizations in differing industries:

DANCE COMPANY	MUSEUM
Artistic/repertory	Exhibitions
Production	Collection development/loans
Touring	Publications
Education programs	Education programs
School	Conservation
Development	Development
Marketing	Marketing
Finance	Finance
Administration	Administration
Personnel	Personnel
Volunteers	Volunteers
Facilities	Facilities
Technology	Technology
Governance/board	Governance/board

Virtually every organization, regardless of art form, will develop strategies for the same administrative functions; it is the programmatic functions that differ.

IMPLEMENTATION PLAN

Once the major strategies of the organization have been developed, one can produce an implementation plan. The implementation plan is a detailed work plan that assigns every strategy to someone and sets a time frame for its completion. This implementation plan gives board and senior staff a tool for ensuring that the plan is implemented. Without an implementation plan, most strategic plans end up sitting on a shelf, costing more than they deliver.

FINANCIAL PLAN

A final step in the planning framework is to translate the strategies into measurable financial results. While the ultimate goal of the organization is to achieve its mission, not to achieve a surplus, it is impossible to pursue a mission consist...