Category Archives: economy

Taking steps to understand digital potential in the performing arts

CaptureAt the CAPACOA conference in Halifax this past January, attendee feedback suggested that I made a compelling case for Breaking the Fifth Wall: Digitizing the Performing Arts. Indeed, attendees were buzzing with the challenges and opportunities presented. Others who have watched the presentation online have asked me how they can get involved. You can watch my talk here on video. In it, I weave together a case for sector-leadership and sector-ownership in developing a future digital platform. I am most excited about digitization beyond the 2-D screens we have today. In particular, I believe a future-oriented perspective requires us to contemplate live-streaming/streaming 3-D renderings; holographic and or virtual reality convergence in technologies. Things most of us have never seen but enabling technology solutions are advancing rapidly.digitalPost

In this talk I offered a brief context of digital transformation in the last 20 years, an overview of experiments in digital performing arts presentation from around the world, a perspective on what it take to transform the challenging economic model that persists in live performing arts for the presenting field in particular, and a call to action.

At the upcoming CAPACOA national conference in Ottawa from November 25 to 28 I hope to turn that buzz into tangible action: Together with CAPACOA, we invite you talk about the next steps we as a sector want to take to drive this discussion forward and explore opportunities of digital distribution at scale in Canada and beyond. Can we establish a working group to spearhead conversations and build sector leadership on this central issue? Who wants to be and needs to get involved?

I am looking forward to facilitating this conversation on November 26  at 8 am.

Is it Sustainable? Volunteers in arts and culture

An off-the-cuff remark during the recent SPARC Network Summit, was captured by Chad Ingram of the Minden Times:

“The idea that we’re all volunteer-run [in rural communities] . . . is that sustainable?” [Inga] Petri asked, pointing out that the arts is one of very few industries where people are expected to donate much of their time. “We would never imagine mining to work that way. We would never imagine forestry to work that way.” [Or fisheries for that matter: all industries that are also often located in rural or remote locations in the country.]

So why do we not need to have volunteers running mining companies, like they run community-based arts presenting organizations in many regions of Canada? Why do forestry companies not call for volunteers to support their operations or sales teams, as many arts organizations do? Why such a dearth of volunteers in integral oversight roles in fisheries or construction industries?

Don’t worry. I get it. The performing arts is a sector where labour productivity can’t so easily be increased (that Beethoven symphony requires the same number of musicians today as it did when it premiered), unlike what has been achieved in those other industries through automation and machinery with ever greater capacity requiring ever fewer people. Yet, at the same time labour costs in the arts have to keep pace with inflation and cost of living for artists and administrators (well, that isn’t always the case, but still costs have risen while productivity has not). One response to what has been called Baumol’s Cost Disease means that it is hard to imagine the arts and culture sector existing to the degree it does in Canada without massive volunteer involvement.

Volunteerism – doing useful things in an organized way without pay to make others’ and our own lives better – is a great attribute of being part of a vibrant community.  Yet, especially in smaller communities in Canada, worries about attracting, training and retaining  volunteers are common. People burn out from the demands of volunteering in the arts,  volunteering at the local hospital and any number of charitable and not-for-profit organizations.

We collected pertinent information underscoring the importance of volunteering – and inferred the great importance it signifies in terms of the arts for Canadians – in the Value of Presenting study (links to PDF):

“(…) Canadians who volunteer in the arts and culture sector gave on average more time (127 hours per year) than those in any other sector in 2010. This represents an increase of 21% since 2007, the largest increase of any sector examined at a time when 6 out of 12 sectors registered a decline. (…) When considered in terms of total hours, the amount of volunteer time equates to about 100 million hours. That is equivalent to more than 50,000 full-time jobs.

(…) in the Survey of Performing Arts Presenters … [more than] half of survey participants report more volunteers than staff. The average ratio of volunteers is 17 for each paid staff member. (…)

The profound reliance on volunteers is even more evident among presenters of entire programming seasons in small communities under 5,000 people. They are less likely to have any staff and instead tend to be entirely volunteer run. These rural organizations rely on a day-to-day volunteer complement of an average of 36, with half reporting the use of 12 or fewer volunteers and half reporting more than 12. This increases to an average of 167 during the height of their operations.

I wonder whether this reliance on volunteers is sustainable. And whether it is sufficient to off-set the cost disease that has been diagnosed. And whether it is makes sense and is fair that so many functions (we can look at them as potential full-time jobs) are filled by unpaid labour?

To be clear, arts organizations have also undertaken other strategies to alleviate the inevitable pressures, including:

  • Higher ticket prices
  • Advocacy for greater public support
  • Increase in private, corporate donations
  • Renegotiating union contracts to reign in costs

While they do not address the underlying structure of the sector, each of these strategies has bought time for many organizations, even if not all in Canada, by generating needed income.

So, where do we go from here?

Well, one place I will go is to the CAPACOA conference in Halifax, where I will discuss Digitizing the Performing Arts and explore whether that could be “the holy grail” to shifting the performing arts presenting sector’s structure toward a new model that suffers less from this dynamic.

What’s the matter with numbers?

With thanks to CAPACOA for commissioning my response to the Culture Shock debate entitled  “Hard Facts VS. Proverbial Truths: The Impact of Arts & Culture on Canadian Citizens & Communities” held on November 20, 2014 at the Community Knowledge Exchange Summit.  Moderated by Canada Council for the Arts CEO Simon Brault you can watch the archived livestream here

Billed as #CultureShock, Alain Dubuc, a journalist and economist, and Shawn van Sluys, who heads up a philanthropic foundation that works to make the arts more central to our lives, debated whether “For arts and culture to be fully valued by society, their impact must be demonstrated with hard facts” or whether proverbial truth are sufficient.

The case for telling the stories of transformation and understanding through art was made eloquently. Yet, I was more struck by the economist’s assertion that hard facts are “the best way” rather than “the only way” to ensure we fully value arts and culture.

This debate brought to my mind Daniel Kahneman’s observation in Thinking, Fast and Slow  that humans  have a propensity to believe that “what you see is all there is.”  He cautions us that we can easily miss important parts of a situation because there may be more going on than meets the eye.

And that reminded me of the old adage that what we count is what matters.  By inference that suggests that we actually count what truly matters, and that those things left uncounted do not matter.  In the arts much of what gets counted are ticket sales or attendance as a percentage of capacity. Until recently, little attention has been paid to collecting the stories, let alone data points, of impact and benefits of the arts. In my view, just because some things are (relatively) easy to measure, like attendance or GDP or employment figures, that does not mean that they tell the whole story – or the most important parts of the story. Conversely, just because some things are harder to measure that doesn’t necessarily make them any less important or, for that matter, immeasurable.

Indeed, I think we gain the deepest insights through a purposeful combination of numbers and stories. For numbers are not meaningful by themselves. Numbers require context and an understanding of the intrinsic dynamics at play. In my work as a researcher and strategist, my task is not merely to produce tables and analysis, but to interpret findings and create meaning. It is this highly creative process of meaning creation and collaboration with all the decision-makers that can lead to new insight. And in creating meaning we bring the numbers to life through examples: the stories.

Some in the arts do not wish to speak the language of numbers which they equate with the language of business. From my experience working with corporations I know that yes, numbers are important, but many invest heavily in innovation and creativity in order to solve significant problems and improve quality of life through new products and services. The divide is not so great. Rather, we may well be just lacking translators or mediators; people who are proficient in both languages and who can help us understand each other better.

Watch the debate. 

Economics of fear reloaded

Back in early 2009 I was struck by the incessant credit crisis coverage that had been going on since Lehman’s Brothers collapse in 2007, and before then if you had been paying attention to the sub-prime mortgage asset-backed securities issue. I thought it had to have impact on how people would behave in terms of consumption choices.

Economics of Fear and Sustainable buying practices

Now it’s late 2011, and we have just come through 5+ years of unending credit crisis, recessions and now debt crisis news coverage.

The coverage of “the markets” – those mysterious beyond-human-beings-making-decisions markets – is like a game show or maybe an endless cricket game, just a lot faster:  like hockey where the spectator never quite “sees” the puck but can infer it from the players motions.

The headlines are unhelpful at best to illuminate the issues – headlines are there to “sell papers”, or in online vernacular “secure eyeballs.” (It’s good to remember the motivations each industry has in its activities.)

Yesterday’s news of German Bond Auction not selling out is a prime example of disinformation moving faster than light (Neutrino pun intended): How many in the public who consume headlines know what a bond auction is, how it works and who the usual buyers are? If you read beyond the headlines you might learn a few other facts:

They come from the bottom of a Wall Street Journal article headlined: “German Bond Sale Spurs Worries”

  • “Germany had never tried to sell a 10-year bond that paid only 2% interest, and the historically low yields appeared to depress appetite among the traditional circle of buyers.”
  • “Germany sold 3.644 billion Euros at 1.98% average interest.”
  • “Germany traditionally auctions bonds, rather than operating a syndicate of primary dealers to place them with investors. The Finanzagentur, the government’s issuing agent, then gradually feeds the bonds it doesn’t sell into the secondary market. This system means that there is no pressure on banks to bid for the bonds or risk their relationship with the sovereign. Moreover, banks across the Continent are trying to reduce their holdings of sovereign bonds, or at least not take on extra exposure, Mr. Krautzberger said.”
  • Take a moment to check out the interactive feature in the article that shows how German bond yields have declined recently …

No doubt it sounds like the Finanzagentur miscalculated and underestimated the political sentiments and headlines that could follow if they did not sell out and the concerns they might raise.

Bringing it home I have two questions for you: How much are the headlines affecting news-spectators decision making about their own debt, credit, income, savings and spending? And what is your organization’s strategy to adapt as consumer behaviours keep shifting ever more online/mobile which has shifted traditional power away from brands and toward consumers and the platforms they use?

In the face of uncertainty what’s your strategy?

The economic, financial, political and social pressures playing out the world over (Arab Spring, summer and fall, EU sovereign debt, US Congress debt failure) do not mean we all disappear from the face of the earth any time soon.

These massive disruptions simply have become normal.

You do not need to act globally to feel the effects of uncertainty on your business. This is the time for organizations and individuals to re-evaluate their specific situations and build new contingencies, develop new strategies, uncover opportunities for value innovation. Your capacity to analyze, understand and adapt will shape your outcomes.

This is the time for the kind of iterative 360 degree research and strategy process I use in my practice, and others use in theirs. It is by examining internal and external factors and helping people evaluate various dimensions rigorously that together we can shape a powerful direction forward. More than hope it provides pathways for decisive action, grounded in fact and using built-in measures to recognize when course corrections may be necessary.

A few questions

Are your customers particularly stressed due to the financial market turmoil? Which customer segments are more affected and how?

If you are in the B2B sector, are you aware of your business customers current concerns and how you can enhance their opportunities?

As a for-profit or not-for-profit corporation how are you taking account of changes in your environment, in your customer base, among stakeholders? Have you re-examined the assumptions in your 1-, 3- or 5-year business plans, yet?

Are you part of an industry / a sector that has been struggling already to maintain a resilient customer base? Have you accounted for and created strategic responses to the alternatives challenging your products or services in the market today? Have you examined how your products and services are essential – or hard to replace – to your customers?

How are you perceived in your community? How have you been managing your brand in order to create value and trust? How are you evaluating your impact on your community?

How have you responded to the massive changes in consumer behaviour due to the internet and now mobile technology? How have you leveraged the new opportunities that come with online and mobile communications and what are the next opportunities?

These are a few of the questions worth considering. It’s in part the impetus for the series of thought pieces I have been sharing on value innovation in the performing arts, a sector I care deeply about. The process is the same no matter the sector.

Anti-marketing? Real estate issues in Bolivia

To North-American eyes this was a thoroughly surprising message:

“Esta casa NO está en vente” (This house is not for sale.)

Anti-marketing? Why write that on a building?

Turns out the anti-message is rooted in changes taking place in Bolivia under the government of Evo Morales, the country’s first indigenous president, even though the majority of Bolivians are indigenous.

Speaking with some of the property-owning locals we learned that it has become increasingly difficult to maintain ownership of anything other than the house they live in. It appears it has become relatively easy for squatters to gain title to unoccupied properties. One person we spoke with, told us they were paying someone to live in a second house they own, in order to protect their ownership. Yes, you read that right. They are paying someone so when they want to use the house in another way in the future they are able to because it is still theirs.

This also explains some of the other unusual notes scrawled in large letters in properties that weren’t in use, such as land without buildings. That message was usually something like “This property belongs to [insert name] and it is not for sale. [phone number]”

This was a good reminder to never assume that our own economic, social or cultural context is some kind of gold standard for how things “should” be and what we expect of others.

A Concept Restaurant

Palermo district in Buenos Aires.

When recessions or economic downturns hit, restaurant owners can turn to creative solutions to survive in such a tough-at-the-best-of-times industry. (You might remember some of this appearing in North America, too.)

I thought this pitch on the sandwich board that otherwise might tell me what the specials of the day are was well done:

“We give you food, drink and good service …  You pay what you want, without pressure and prejudice… enjoy yourself.”

The restaurant looked like a very fine choice for a great dinner out. It also looked like this was no longer a gimmick to keep people coming but an actual business model a la 2011.