Monday, April 16, 2012

Strategy and its “Near” Synonyms

At various points in the readings for this week, I found myself laughing out loud because I could identify a number of times in my work experience that I witnessed “bad” strategy, confusion over the definition of “strategy,” and complete avoidance of the difficult work of strategic planning, all of which were described in the articles. This past fall, my current place of work, the Greater Pittsburgh Arts Council (GPAC), was due for a revision of its strategic plan. My supervisors, in opting to update the plan rather than engage in a full strategic planning process, were provided with an opportunity to ask difficult questions about GPAC’s value to its customers. I had the good fortune to be privy to a number of conversations about “who we are,” “what we do,” and “why we exist.” The readings for this week suggest that we might have been able to expand on our answers to these questions a bit further.

GPAC is an arts service organization, formally known as a “local arts agency.” According to Mitch Menchaca, the Director of Local Arts Advancement at Americans for the Arts, a local arts agency is defined as, “a nonprofit or government entity that is created to meet the cultural needs of a community and to foster an environment in which artists and arts organizations can flourish.”1 This broad definition raises a number of questions and opportunities right from the start. Unlike a grocery store, which always sells food, or a steel manufacturing plant, which always produces steel, or an orchestra, which always produces music, local arts agencies drastically differ from locale to locale. Local arts agencies try to be everything to everybody in the local arts community, and thus their offerings adapt to an individual community’s needs. This being the case, it is easy for both “customers” and a local arts agency itself to be confused about why the organization exists. Identifying the different pieces and answering the questions that are involved in strategic planning, then, is difficult from the outset.

GPAC has not clearly identified an overarching strategy to guide its activities in either its strategic plan or its website. However, as per the article, “Types of Strategy: Which Fits Your Business?,”2 I think that GPAC likely follows a strategy of differentiation, as it generally seeks to provide services that arts organizations and individual artists cannot otherwise provide themselves. It clearly fills this niche, as it operates entirely in service to these groups. This “customer” definition, however, does not fit Robert Simons’ recommendation for the answer to the question, “Who is your primary customer?” in “Stress-Test Your Strategy: The 7 Questions to Ask.”3 Simons points out that identifying multiple customers “is a sure recipe for underperformance.” In serving both arts organizations and individual artists, it is impossible for GPAC to maximize its resources to just a few activities. Its “About Us” webpage defines its role to the arts community as a megaphone, counselor, bulletin board, laboratory, classroom, concierge, and researcher.4 This list of activities is characteristic of all local arts agencies who, like the arts groups that they serve, see a need and try to fix it with the programs that they provide. The difficulty for GPAC is in finding the link to tie all of the activities together.

I had to laugh when I read about the “template-style strategy” as a hallmark of “bad strategy” in Richard Rumelt’s “The perils of bad strategy.”5 At GPAC, my supervisors have often poked fun at themselves (even in their promotional videos!) for following the template-style strategy that Rumelt outlines – and then some. GPAC’s “About Us” webpage identifies each of the textbook-required elements of strategy: mission, vision, competencies, values, and goals.4 Rumelt’s lines about “make sure that [values] are noncontroversial”5 and “fill in a high-sounding, politically correct statement of the purpose of the business [for the mission]”5 ring very true. Although GPAC has identified each of the pieces of a strategic plan and even identified colloquial language to help readers to conceptualize each term (i.e. “What’s Important to Us (Our Values)”), it is missing a critical element to the plan: the actual strategy itself. GPAC is missing the diagnosis of its challenge, which Rumelt argues is the foundation of a strategic planning process.

To its credit, however, GPAC has covered the next two elements of Rumelt’s “good strategy” structure. It has identified a guiding policy and actions that are aligned with each of its four goals. GPAC’s guiding policy is to “define and serve the greater good,”4 which is admittedly broad and does not identify a focus on the arts, but it does outline a question to answer when reviewing its gamut of activities. It also provides a chart to visually and cohesively describe its activities, organized per goal, by highlighting past achievements, current aspirations, and happenings still to come. I would argue that these actions are organized, as Rumelt suggests, such that they coordinate with one another to accomplish the strategy of providing services that arts organizations and individual artists cannot otherwise provide themselves. Each of GPAC’s offerings are needed and valued by the arts community. In particular, GPAC provides a forum for its “customers” to learn from one another and improve their business practices, as not everyone has the luxury of learning from an arts management program. Therefore, what needs to change about what GPAC does to define a strategy AND continue to provide its wealth of resources to the whole arts community? Is it already operating under a strategy that is not clearly articulated, or must its activities also change to align with a strategy?

1Menchaca, Mitch. "So...What Exactly Is a Local Arts Agency?" ARTSblog. 16 Dec. 2009. Web. 16 Apr. 2012. .

2"Types of Strategy: Which Fits Your Business?" Harvard Business School Press (2006): 1-19. Print.

3Simons, Robert. "Stress-Test Your Strategy: The 7 Questions to Ask." Harvard Business Review (2010): 3-9. Print.

4"Greater Pittsburgh Arts Council." About Us. Web. 16 Apr. 2012. .

5Rumelt, Richard. "The Perils of Bad Strategy." McKinsey Quarterly June (2011): 2-10. Print.

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