Two forces are rapidly converging and cannot be ignored

  • 34% of Americans studied have ‘not too much’ or ‘no confidence’ at all in nonprofits. Only 16% expressed a ‘great deal’ of confidence.
  • The percentage of people who feel charities do a ‘very good’ job in helping others has fallen from 34% in 2003 to 25% in 2008.
  • 70% say charities waste a ‘great deal’ of money. Only 11% feel they spend money ‘wisely’.

While this news is alarming, the fact that when asked the same questions about the nonprofits in their own town or community, the responses, while a bit better, are not statistically so, and would fall within the margin of error (3%).

These critical and depressing findings can be found in the April 2009 Brookings Institution report: “How Americans View Charities, A Report on Charitable Confidence“, by senior fellow Paul Light.

Couple this with the following from Strategy and Business, published this month by Booz, Allen Hamilton.

The shifts in global output are striking. The International Monetary Fund projects the world economy will have shrunk by 1.1 % in 2009, with mature economies, including the United States, Germany, and Japan, contracting by 3.4% and emerging economies growing by 1.7%. In 2010, overall global growth is expected to hit 3.1%, but China is forecast to grow by 9% and India by 6.4%. Meanwhile growth in the United States is projected to be 1.5%…

So, if China and the U.S. started even at the end of 2008, the result by the end of 2010 is China’s economy has grown by 10.7% and the U.S. economy has shrunk by 1.9%, a differential of 12.6%. Nonprofits are not immune to cascading effects of this global reality.

The article goes on to say that US companies, if they are going to remain competitive must commit to three things: innovation, strategic approaches and operating models aligned with new realities, and cost containment. The consequences for American business of not responding are self evident.

So, when I couple the negative view of nonprofits in general with the downward pressures on America’s wealth building engine, it’s no surprise that for the first time, I am hearing business people (who are in a fight just to survive), local civic and political leaders (with less and less to work with), and heretofore generous individual donors (whose wealth has shrunk markedly) expressing little patience with nonprofits who do little to innovate, maintain their historic business model, and run up ever-increasing deficits instead of containing costs.

Our field must respond. Why? Because if diminished confidence and a shortage of available resources weren’t enough, shifting consumer economics are driving new behaviors (saving vs. spending, deciding what’s necessary vs. what would be nice to have, becoming more price conscious); demographic shifts are influencing preferences (preferring experiences to presentations, wanting to engage instead of simply attend). While all this is happening outside our organizations, inside our organizations, long periods of denial and excess optimism have conspired to create high levels of stress, and in some cases, outright paralysis across the institution. This stress and paralysis is stifling artistic vitality. Time and energy—human capital—gets spent putting out fires, fighting over limited resources, and deciding who to blame.

Well, the good, and the bad news is that no one is to blame, and that we are all to blame, in assuming for far too long that everything could remain the same, while the world shape shifted on us.

Getting started requires courage. First we must stop the hemorrhaging—confront the brutal truths— and decide what’s most important—what’s mission critical; because without cash and without clarity of purpose, there is no future. Once this hard step is taken, innovation is required—challenging openly and honestly the assumptions that got us here, and finding fresh ways to achieve something worthwhile.

Finally, in achieving these two outcomes, we must build an effective and collaborative culture around the unique value that each stakeholder—artist, trustee, manager—brings to the table. By embracing these three responsibilities—priority setting, innovation, and engagement—we can reclaim our vitality—organization by organization, and in so doing, remain a force in assuring our nation’s rightful place as a major contributor to a better world.

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The Changing Practice of Leadership

“It’s no longer the time of the heroic leader – the leader who walks in and takes up all the space in the room. The job of today’s leader is to create space for other people –a space in which people can generate new and different ideas; a space where seemingly disparate departments and people in the organization come together and have a meaningful conversation; a space in which people can be more effective, more agile, and more prepared to respond to complex challenges.”

The Changing Nature of Leadership, a CCL White Paper

In 2007, the Center for Creative Leadership (CCL) conducted a survey of mid and upper level managers across numerous industries, both for profit and nonprofit. 84% of respondents stated that the definition of effective leadership has changed in the past five years. 60% of respondents (that’s three in five!) stated that leaders now face challenges that go beyond their individual capabilities to solve. These findings are hugely important in that leaders can no longer simply ramp up, get stronger, or improve on their own strengths in order to face down the challenges that confront their arts organization. Often, it’s beyond their ability to simply define the challenge—as in itself, it’s no longer simple, but quite complex.

In this same research we learn—once again that, “…prolonged organizational success…tends to breed resistance to change.”

So, let’s get this straight. Highly committed and highly capable leaders are responsible for the extraordinary success in building our national arts ecology, anchored by hundreds of recognizable organizations that have grown continually over the past decades. Yet those same organizations now face challenges that a single leader can no longer figure out and solve. That’s quite a dilemma, and one that demands shifts in our assumptions about  organizations and what they require of their leaders.

According to CCL, in 2002, the three highest rated leadership skills were (in descending order): being individually resourceful, being composed, and being decisive.  In 2007, the same survey indicates that those competencies had fallen closer to the bottom of the list (of eight choices) and were replaced by (again, in descending order): building and mending relationships, change management, and participation management—meaning the  integrating of others into the decision making and strategy development process.

With this data in hand, it’s time to change radically our view of what leaders do and to work collaboratively with them in developing the new competencies required for their  success. We owe them nothing less.

What Brain Science is Rapidly Teaching Us about Leadership

I am incredibly taken by what brain science is discovering about how and why people behave the way they do at their workplace—and the implications this has for how leaders need to profoundly alter their own behavior in response to the findings.

David Rock and Jeffrey Schwartz first stirred my thinking in late 2006 with their article, The Neuroscience of Leadership published in May by Strategy and Business. While they shared some intriguing findings, the take-aways for me are:

  • Change is pain. Organizational change is unexpectedly difficult because it provokes sensations of physiological discomfort.
  • Behaviorism doesn’t work. Change efforts based on incentive and threat (the carrot and the stick) rarely succeed in the long run.
  • Humanism is overrated. In practice, the conventional empathic approach of connection and persuasion doesn’t sufficiently engage people.

My thinking up to this point was that if you adequately incentivize the change effort, you pay close attention to the needs of the individual—show empathy, and were effective in your communications skills—good at persuading, and then you could successfully move things forward. Yet these findings based on solid research and rendered in terms that the non-scientist can understand and should not be ignored. Rock is a coach, researcher, author, and developer of the coaching curriculum at NYU; and Schwartz is a UCLA-based psychiatrist and author

Last week on my way to lead a session on Internal Stakeholder Engagement at the National Guild for Community Schools of the Arts, I was reading Rocks’ most recent piece, Managing with the Brain in Mind. In this article,  he moves beyond the brain science findings and offers up a five-component strategy for addressing what people need most when asked to commit to the organization’s future and to the change it demands. He has adopted the acronym SCARF to identify the five fundamental individual needs when such commitment is required:

Status: Understanding the role of status as a core concern can help leaders avoid organizational practices that stir counterproductive threat responses among employees. For example, performance reviews often provoke a threat response; people being reviewed feel that the exercise itself encroaches on their status. This makes 360-degree reviews, unless extremely participative and well-designed, ineffective at generating positive behavioral change. Another common status threat is the custom of offering feedback, a standard practice for both managers and coaches. The mere phrase “Can I give you some advice?” puts people on the defensive because they perceive the person offering advice as claiming superiority. It is the cortisol equivalent of hearing footsteps in the dark.

Certainty: Leaders and managers must thus work to create a perception of certainty to build confident and dedicated teams. Sharing business plans, rationales for change, and accurate maps of an organization’s structure promotes this perception. Giving specifics about organizational restructuring helps people feel more confident about a plan, and articulating how decisions are made increases trust. Transparent practices are the foundation on which the perception of certainty rests.

Autonomy: Leaders who want to support their people’s need for autonomy must give them latitude to make choices, especially when they are part of a team or working with a supervisor. Presenting people with options, or allowing them to organize their own work and set their own hours, provokes a much less stressed response than forcing them to follow rigid instructions and schedules. In 1977, a well-known study of nursing homes by Judith Rodin and Ellen Langer found that residents who were given more control over decision making lived longer and healthier lives than residents in a control group who had everything selected for them. The choices themselves were insignificant; it was the perception of autonomy that mattered.

Relatedness: Leaders who understand this phenomenon (the need to feel connected—a part of) will find many ways to apply it in business. For example, teams of diverse people cannot be thrown together. They must be deliberately put together in a way that minimizes the potential for threat responses. Trust cannot be assumed or mandated, nor can empathy or even goodwill be compelled. These qualities develop only when people’s brains start to recognize former strangers as friends. This requires time and repeated social interaction.

Fairness: In organizations, the perception of unfairness creates an environment in which trust and collaboration cannot flourish. Leaders who play favorites or who appear to reserve privileges for people who are like them arouse a threat response in employees who are outside their circle. The old boys’ network provides an egregious example; those who are not a part of it always perceive their organizations as fundamentally unfair, no matter how many mentoring programs are put in place.

Much about SCARF may seem quite obvious. Yet I urge to read these two articles—in their entirety. Then share your comments. There is now some scientific validation for what we have assumed was helpful (fairness, autonomy, etc.) yet there is so much more that challenges our notions and deeply held working assumptions—especially about the importance of the social nature of our organizations, and how responsive those of us in leadership positions must be

Leaders and Legacy

The New York Times Sunday magazine article, Can Modern Dance Be Preserved, by Arthur Lubow poses fascinating questions about the reasons for, approaches to, and integrity of preserving the choreography of modern dance pioneers such as Merce Cunningham, Pina Bausch and others. Both Cunningham and Bausch passed away in 2009.

I am interested in this, as for the second time, we are engaged with the Dance Heritage Coalition in developing a vision and strategy for preserving and accessing America’s dance legacy. Thanks to DHC, significant steps in documentation, preservation, education, and access have been taken over the past decade in response to the findings of the National Dance Heritage Leadership Forum that we facilitated in 1998-2000. Technology, funding, and the economy are all dynamic environments. Therefore dancers, choreographers and their companies, funders, and policy folks must all remain engaged in developing frameworks, tools, and agreements that assure issues of legacy are addressed intentionally and with great care. DHC is to be commended in this regard.

Yet, legacy goes well beyond artistic output. What lessons are learned over these fascinating careers that span decades, even centuries?  What did these pioneers learn about organizing in ways that support artistic impulse and intuition? For example Merce founded his company at Black Mountain College, a short-lived, yet furiously lively paragon of artistic creativity—where Buckminster Fuller built his first geodesic dome and William Burroughs published the first chapter of Naked Lunch. How might this inform how we develop supportive environments for artists? What lessons did they take from confronting the major challenges of their career? How did they manage the moments of no money, the vagaries of fickle philanthropy, and the misguided advice of well meaning managers?

And it’s not just choreographers from whom we should be learning. In the last 12 or so months we have lost some really important individuals in the field. What lessons about organizational effectiveness and impact did Paul Baker take with him as founder and long time leader of the Dallas Theatre Center; or Peter Donnelly from his forty-plus years at the helm of the Seattle Rep? Through his journey from Columbia University, to jail and torture in Brazil, to exile in Argentina, what helpful warnings about protecting free expression did Augusto Boal have to tell us? The indefatigable Gerald Arpino led the Joffrey from New York to Chicago and from financial ruin to prominence. What did he have to say to aspiring leaders about stamina, conflict, conviction, and grace?

It’s one thing to read their obituaries and then later, their biographies. It’s yet another to have their voices, their lessons, their insights and wisdom to draw on—forever. We need to capture and put to better use what our best and brightest have learned from their phenomenal leadership adventures, as it will certainly assist us on our own solitary expeditions.

Co-creating an Old Future for the Arts

In the beginning…

“This great Nation…is looking to this handful of extremely talented individuals, looking to you as the representatives of all fields of the arts, for ways in which the Government can maintain and can strengthen an atmosphere which will permit the arts to flourish and to become part of everyone’s life.” (President Lyndon Johnson)

The first meeting of the National Council on the Arts was held in Washington, D.C. on April 9 and 10, 1965. It was preceded by a 12:15 P.M. ceremony in the Cabinet Room of the White House, April 9, during which the members of the Council took the oath of office.  Included among those sworn in that day to govern the newly enacted National Endowment for the Arts were Ralph Ellison, John Steinbeck, Harper Lee, Isaac Stern, Leonard Bernstein and Gregory Peck.

Now 44 years later we read that…

“Between 2002 and 2008, the percentage of US adults attending arts events declined for every art form except musical plays.”

“Performing arts attendees are increasingly older than the average U.S. adult.”

“Since 1982, young adults (18-24 year old) attendance rates have declined significantly for jazz, classical music, ballet, and non-musical plays.”

“The percentage of college educated adults attending arts events decreased in every category from 1982-2008.”

“From 2002 to 2008, 45-54 year olds—historically a large component of arts audiences—showed the steepest decline in attendance for most arts events.”

These statements are all drawn from Arts Participation 2008, Highlights from a National Survey, published by the NEA.

Further, consider the following decreases in the percentage of the population attending performances of these art forms:

Ballet attendance fell from 4.2% to 2.9% of the population–a 31% rate of decline
(Why are we not looking at modern dance as well?)

Opera attendance fell from 3% to 2.1 % of the population–a 30% rate of decline

Attendance at straight plays fell from 11.9% of the population to 9.4%, a 21% rate of decline

For those who want to blame the recent recession, here is what the Rand Corporation said in its 2008 report Cultivating Demand for the Performing Arts, and based on analysis of data prior to the recent financial downturn: “Despite decades of effort to make high-quality works of art accessible to all Americans, demand for the arts has not kept pace with supply. Those who participate in the arts remain overwhelmingly white, educated, and affluent. Moreover, audiences for the arts are growing older: Each year, fewer young Americans visit art museums, listen to classical music, or attend jazz concerts or ballet performances.”

These declines are more than sobering, they’re staggering.  They are especially astounding in light of the incredible investment states and local communities (i.e., taxpayers), and private philanthropists have made in new arts facilities over the same quarter century.

Now what to do…

•    First, stop building. Have the “edifice complex” and “irrational exuberance” about capital projects finally caught up with us? As pointed out in a recent Urbanophile post, the $365 million dollars to open the Kauffman Center for the Arts in Kansas City could fund the operating budgets for the three primary tenants (Kansas City Ballet, Kansas City Symphony, and Lyric Opera) for 21 years. Or, if invested and getting a 5% return, that same amount could provide $18 million annually—enough to fund the entire operating budgets of these organizations in perpetuity. Bring artists into the organizational decision making process. They might be as enthusiastic about making more work over longer periods of time, as trustees and executives are exuberant about building new buildings.

•    Move from a commodity/customer orientation to an experience/participant orientation for fostering audience development.  Last Friday I attended the Bill T. Jones/Arnie Zane Dance Company presentation of Fondly do we Hope…Fervently do we Pray at the Yerba Buena Center for the Arts in San Francisco. The house was packed, with people of all ages. No less than half stayed for the post-production dialogue. Recently YBCA has implemented the “Immersive Visitor Experience” to attract and engage their audiences.  Is there a connection between this innovation and Friday’s experience?  How can we share such good practices across the field in support of our universal engagement goals?

•    Reduce the price of admission. How many families of five can afford $275 for ‘medium priced’ seats to attend A Christmas Carol?  No matter what the data say, in good times or in bad, prices like these are a limiting factor for a majority of the population.  A full house of heavily subsidized wealthy people is not the proverbial ‘wider audience’ for the arts so many organizations espouse in their mission statements.

•    Embrace technology.  Investigate Internet2 as a springboard to new, less costly, and more engaging participation opportunities. Early adopters are showing the way! More on this in a week or so.

It remains an open question whether we can assure that the arts “become part of everyone’s life”, as was the aspiration on that April afternoon at the White House in 1965. What we must do at a minimum is place our priority on co-creating with our communities a more fertile future for the arts, and in so doing, even possibly reverse the current trend lines.

Strength through Coordination and Collaboration

Why do we have so many free-standing, poorly funded national 501c3 service organizations in the arts field? It seems that as each discipline matured, each created its own support entity. Now as a mature sector, with the arts providing almost $200 billion in financial activity annually, we must become much more strategic and more influential on the national stage than the current structure allows. Having a service organization catering to each discipline and sub-discipline is expensive and redundant, while providing little leverage—the exact opposite of what’s needed.

Let’s consolidate the numerous national discipline-specific arts service organizations into one robust, influential, and vital American Institute for the Arts. Each discipline would have its own division where areas of specific need could be addressed, yet the new Institute would provide substantial economies of scale (no need for many CEO’s, development officers, etc. etc.), and a cohesive, coordinated approach toward three significant outcomes:

Establish a set of unifying priorities for the arts industry. Strategic action requires rigorous priority setting. Without field-wide statements of possibility and intention, there is little chance of being heard above the din of a 24-hour news cycle. The arts could and should stand alongside education, energy, health and other national priorities. However the idea of a cabinet level designation for arts and culture is a pipedream without a compelling and unifying message that articulates the ways in which the endeavors of America’s artists and arts organizations can have optimal impact.

Turn information into knowledge, knowledge into learning, and learning into innovation. While there are discipline-specific realities and needs that should be identified and addressed; national priorities should drive an interdisciplinary approach to data gathering, and determining how such data can be helpful across all arts sectors. Such knowledge and learning would encourage bolder and more innovative strides toward a more sustainable future for the field.

Penetrate the public consciousness about the public value created by the arts. This should not be the purview of a single foundation or think tank—or for each discipline to attempt one by one. This is the critical collective responsibility of our field.  Unless we succeed, not only do we risk being further marginalized, but becoming insignificant within the discourse about our nation’s future.

Is now the time to acknowledge the inefficiency and ineffectiveness of the present system and to consider seriously the opportunities of a more united and robust approach? Why not a new, vigorous, and influential American Institute for the Arts, generating and distributing knowledge and learning; stabilizing and improving the health of the sector; and increasing the awareness of the substantial contribution arts and cultural endeavors make toward a better nation?

Happy New Year!

Finding happiness in this new year is hardly the easiest chore one can take on. In my travels to Washington, DC and New York City over the past week, I have encountered individuals who are frightened, confused, and at a minimum, quite concerned about the current realities facing arts organizations.

Three occurrences are happening at once. The rapid erosion of trust in institutions; a redefinition of the power structures that have been setting the meta agenda;  and a rethinking of what is fundamentally important—both to the individual and to community. Taken as a whole, this implies that no enterprise is immune to scrutiny, no matter how venerable, noble, or historically significant…whether they be established museums, theatres, orchestras or the like. As I stated in the New York Times a few days ago, organizations who take this moment seriously will need to move from a place of comfort and complacency to one of relevance and adaptability. Relevance meaning that the priorities of the institution are made with, not for their commmunity, and adaptive in that old ways of getting business done give way to innovation and entrapreneurial thinking about engagement and sustainability—and how the formers actually serves the latter. Thinking creatively must trump merely surviving—and in doing such thinking, three strategies are timely for contemplation: increased impact through consolidation (new alliances and mergers); decreasing the importance of arbitrary barriers in the field (professional/amateur, for profit/non profit) to stimulate fresh possibilities; and new models of leadership (more distributed/less concentrated) as a means of bringing artists and trustees into roles of real organizational responsibility.