Tag Archives: arts management

What Does Digital Mean to Your Arts Organization and its Customer?

I read a lot of McKinsey and Company newsletters, posts and articles.  While they are rarely nonprofit focused with even fewer pieces involving the arts, I find their insights immensely useful.  As we all know, business is business at the end of the day, and McKinsey and Company is a leader in that space.

A recent article by Karel Dörner and David Edelman What Digital Really Means struck a chord for me. From a business perspective, it seems that everyone wants to and, in fact, needs to be successful in the digital sphere. Yet, the word digital  itself is a vexed in today’s discourse, in the arts and in the news.   It means different things to different people within a company, to the company’s markets, and then there is the company’s own language in its strategies and implementation of said digital technologies.  If you think about, how might you answer the following questions? What about someone not at your pay-grade? Is your company deploying digital initiatives? Is it engaging digitally with its audiences? Is it implementing new digital solutions to handle customer relations, facility needs, HR or payroll? Who is aware of the various digital interventions in your organization?

So what can digital mean to an arts enterprise? As Edleman and Dörner note: “Business leaders must have a clear and common understanding of exactly what digital means to them and, as a result, what it means to their business.”  They break down digital into 3 realms:  creating value at new frontiers, creating value in the core business line, and building organization capacities. The first two focus on the product and its audience, the last on the internal operations of the organization.  So,what does this mean for the arts?

CREATING VALUE AT NEW FRONTIERS

Much of what we read in the arena of the arts and digital programming focuses on creating new values — streaming productions, adding beacons to customize the customer journey, and finding digital art-making journeys to engage the customer.  Many of these opportunities create new audiences and/or have potential for developing earned income streams.  Yet, there is a financial, technical, or human resource hurdle to achieve this in many arts organizations.  Thus, it requires focused strategy, investment, and planned implementation if an organization wants to try a new frontier in digital programming.

CREATING VALUE IN THE CORE BUSINESS LINE

If new frontiers are difficult, what about using  technology to deepen their core business? This entails a “an obsession with understanding each step of a customer’s purchasing journey—regardless of channel—and thinking about how digital capabilities can design and deliver the best possible experience, across all parts of the business.”  Thus, creating value in core business requires staff with knowledge in how to mine data and/or provide  avenues for fruitful data collection.  Edelman and Dörner break it down into 4 core capabilities:

Proactive decision making. Data-informed decisions that “deliver content and experiences that are personalized and relevant to the customer.” This comes down to customer customization in at least the purchase path. Customization is, of course, difficult in the program side of the equiation, because the journey through the art itself is at times quite prescribed.  Successful interventions in this realm include places like the Cleveland Museum of Arts Gallery One and performance experiences like Sleep No More.

Contextual interactivity requires knowing how your customer interacts with your brand in real-time.  How can the arts become better at knowing what their audiences are doing, on what platform, and when?  Again, this requires a staff person who can pull real-time analytics and engage with customers where they are and in a way they understand.  The next step is to empower a process of communication and engagement for all staff.

Real-time Automation is something we as customers expect and is already in the hands of most arts organizations. Yet, automation is rarely implemented in arts organization’s communication strategies or systems.  Most CRM’s allow for individualized, timed communications depending on a customer’s behavior.  The key is to identify key customer positions, triggers and messages.   For example, if a first time visitor at a theatre has a higher likelihood of returning for a second time if s/he receives an encouraging and informative email and social media contact within 24 hours of seeing a show, why wait to send weekly emails. Furthermore, why send marketing pushes and not interesting communications.

Finally, Journey – focused Innovation allows the customer to adapt and expand with the company in a way driven by the company.  This arena is, like automation, quite easy for many arts organizations to do.  A concierge approach via technology.  It, however, requires significant real-time communication, product message pivoting, and unique opportunities for interaction to engage customers on an individual basis.  This is often too time intensive for a limited staff in an arts organization to accomplish.

BUILDING ORGANIZATION CAPACITIES

Having a strong digital strategy requires leadership in arts organizations to think differently. They must quickly adapt  organization capacities. The organization needs a leader to model a digital mindset and provide the means for a strong digital infrastructure.  Technology can no longer be a low-priority investment. Furthermore, it must become a thread that weaves throughout the organization for day-to-day business as well as the customer-facing work detailed above.

Digital opportunities abound.  It takes a savvy arts leader and manager to navigate the perpetually shifting environment.  Curious if you are that arts leader? If you want to understand or raise your digital quotient, pend some time with McKinsey’s work of the same title:  http://www.mckinsey.com/features/raise_your_digital_quotient. 

And share your successes!  Every arts organization that shares its success garners more success for the field.

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Nonprofit Arts as Lean Start Ups

I am reading THE LEAN STARTUP by Eric Reis.  I was inspired after attending a session at the NTEN conference where a nonprofit environmental group explained how their operations were fueled by startup models. 

I am increasingly convinced that arts organizations will find greater success if they turn to startup or entrepreneurial models over traditional institutional structures.  Nonprofits are indeed corporations but they are SMALL businesses, not large multi-nationals.  They serve a community and are literally small in comparison in the operating budget schema. However, they are even more like a start-up than a traditional small business — let me refer to Reis’s frameworks to demonstrate. Notice the crossovers:

1. Entrepreneurs are everywhere: The concept is “a human institution designed to create new products and services under conditions of extreme uncertainty.” 

That uncertainty is the crux of constructing a season or a work of art — each one is incredibly unique and who knows if the audience will come.

2. Entrepreneurship is management: “A startup is an institution, not just a product, and so it requires a new kind of management specifically geared to its context of extreme uncertainty.”

3. Validated learning: Startups exist not just to make stuff . . . or even serve customers. They exist to learn how to build a sustainable business.” 

Most arts organizations have post-mortems for their art making — not their business making.  How can we ‘make stuff better’? Why not do that for the business as well?

4. Build-Measure-Learn: “The fundamental activity of a startup is to trun ideas into products, measure how customers respond, and then learn whether to pivot or persevere. While nonprofit arts are geared to a community service and learning track, the concept holds true. And we need to measure and learn more to best serve our communities.

4. Innovative accounting: “To improve entrepreneurial outcomes and hold innovators accountable, we need to focus on the boring stuff: how to measure progress, how to set up milestones, and how to prioritize work.”

It is about making the art, but in order to succeed the arts administrators need to set up milestones, to measure, to know how to prioritize, because most of us are continuing to do “more with less” — the mantra of the new economy.

Whether you read Reis’ text or not, I recommend that arts managers deeply consider how to embrace the uncertainty of art-making by turning to structures and systems that support it.  Keep making but start setting measurable goals and prioritizing to mission.  Arts organizations are cultural entrepreneurs.