Why best practices for business are useless for the arts

In the area of non-profit cultural enterprise, we are accustomed to having government and commercial institutions talking down to us. Through our boards of directors and funding relationships we are fed a continuous stream of "best practices," usually about five years after they've lost favour in the sector that spawned them. From industries that failed to anticipate rising fuel prices and from governments that can't run a gun registry, we get scandalously bad practices from scoundrels and ne'er-do-wells who oblige us to adopt them uncritically just to get along.

Examples? The Harvard planning model and the SWOT analysis are techniques that only work for organizations that have sufficient resources to do really solid research, analysis, and who can employ the relevant conclusions with enough process integrity to produce a result that offers better than average prospects of success. Those preconditions disqualify about 90% of the non-profits arts organizations that have been employing those methods to satisfy the business people on their boards, as well as the public and private sector funders on whom they depend.

Another great example is a study done by a well-meaning management consulting firm that tried to draw lessons from the airline industry for the performing arts. Their results were published and widely quoted for a brief time in the late '80's or early '90's. They noted, as Julia did in reference to Godin's article, that both industries offer time-bound products, so they both faced the same supply-demand, pricing, and inventory management dilemmas.

There, in my mind, the similarity ended and I recall little of interest in the study's findings. But how could the world's most credentialed multinational consulting firm fail to observe the fundamental differences between these enterprises? Even a lay analyst would conclude that these differences spoil all but the narrowest and least valuable analogies between them.

One industry is well capitalized, with a highly trained, unionized workforce and a high degree of price elasticity in most market segments. The other was never capitalized, always operates out of cash flow, has a transient workforce in all but the largest companies, and can charge only enough for its tickets to recapture a fraction of its operating and production costs. Can you guess which the airline industry is and which is the theatre industry in Canada?

One is faced with intense competition with others in its industry group, however customers have no real alternative to purchasing from one or another of that group. The other industry competes not only with others in the same category; it competes with all other leisure activities for the spare time and disposable income of its customers. Again, can you tell which one is which?

For anyone who wishes to maintain that there is a profound resemblance between the airline industry and the commercial theatre industry (as opposed to nonprofits), I have two responses, either one of which should decide the matter. First, most of the performing arts activities in Canada is nonprofit, not commercial, and even the commercial activity depends on the broad base of subsidized nonprofit activity beneath it for its audience and talent development. Second, airlines and theatres are not even time-bound in the same way, which was the primary point of comparison, after all. Anyone who has arrived a few minutes after the curtain has gone up at the theatre, or a few minutes after boarding has ended at the airport, can tell you that it is infinitely easier to be shown to your seat at the theatre than it is to sprint with your baggage down the runway, grasping for the landing gear. They are fundamentally different enterprises that operate in completely different circumstances, all of which affect the ways in which they market their products and manage their inventories.

People in business and government are always trying to share their wisdom with the arts, even though their own performance often puts that wisdom in doubt, and even though the techniques they offer may be unsuited to the practical realities of the arts enterprise.

Photo credit: Corex