Sunday, April 14, 2013

Why is it difficult to successfully conduct strategic planning in arts sector?

Why is it difficult to successfully conduct strategic planning in arts sector?

Reviewing articles and previous lectures, I spent some time to ponder upon the on-going, never-ending question I have “why is it more difficult to conduct strategic planning in arts organizations?’ and tried to put together my thoughts with theories.

1) Can’t predict, can’t change perception

Who can predict if classical music audience will dig Mahler in year 2015?
Who knows if Damien Hirst will create controversial piece once and start to dwindle away?
Can we forecast how nutcracker will perform if another christmas ballet suddenly breaks out?

As many business areas where ‘adoptive’ type of strategic planning is suitable do, it is difficult for art organizations to predict how market is going to change and how to accordingly change strategy of their businesses. It may differ from organization to organization depending on size or layer in the field, but some may lead or shape the market based on power or history of the organization, or intuition of great(!) arts managers within.
While there are readable changes in political or economical environment or in patterns of trends, it is common for arts organizations to think that art is so unique product/service that it can’t be predicted, and hence, we can’t do anything about it.

2) No competitor mind
Defining competitors for business can be tricky. The HBR article “Competitor analysis: Understand Your Opponents” defines it as ‘any company that aims to satisfy the same customer needs that you do.’ In terms of customer’s needs, perhaps arts and cultural or entertainment sector would struggle the most on how to segment its customers. Their needs on artistic activity is not as frequent as other needs in lower level in Maslow’s hierarchy of needs, which makes it harder to interpret and analyze, and the most personalized than any other needs. So, if you go as broad as, say, someone’s need is to fill up his/her extra time on saturday evening, every single experience-base service provider in the region can be competitor, but is you go as specific as someone’s need is to see Don Giovanni’s opera in Pittsburgh, you may have no competitor.
Often times, arts organizations make mistakes to determine, their productions/pieces of work are so great and different that other can’t really satisfy same desire a customer may have.

3) Board-driven decision making

As ‘10 keys to successful Strategic Planning for Nonprofit and Foundation Leaders’ talks about, one of the important factor for strategic planning is ‘An empowered planning
committee.’ It is not only applicable to not-for-profit sector, but also to corporate businesses. Sometimes great amount of time and money they put into the strategy development can be so easily altered in a way CEO or any powerful high level executive wants. Board members in not-for-profit organizations play even more critical roles, sometimes organizations spell out its role as to determine strategic plans. As much as ‘Involvement of senior management’ and ‘Sharing of responsibility by board and staff members’ is important, entrusted and empowered committee should be prioritized to avoid biased/less-thorough planning, but to achieve more objective, facts/analysis based results.

4) No money, no time excuses
(I may be able to think more deeply when we go over internal analysis.)

* Reference :
TCC Group briefing paper "Ten keys to successful Strategic Planning for Nonprofit and Foundation Leaders"
HBR article "Competitor Analysis : understand your opponents"

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