League Conference: Russell Willis Taylor – How to put your organization out of business

Thursday afternoon’s general session began with a performance by the ASO brass quintet.

Jesse Rosen then recounted an experience he had playing bass trombone in the NYU orchestra. He was preparing his part for Brahms’ Requiem and was pleased to see that he had a lot of notes, including a few melodies. At the first rehearsal, he was shocked to find that the basses in the chorus were singing the same thing he was playing; he said it felt like a real bait and switch. But it was the most glorious sound in world, and he felt like he was riding on top of all those guys back there.

A perfect introduction to Ann Meier Baker, President and CEO of Chorus America since 2000. (Chorus America delegates joined League delegates for several general sessions.)

Ms. Baker then introduced Philip Kent, CEO of Turner Broadcasting and a board member of the of Woodruff Arts Center. He spoke about the clear connection between businesses and the arts.

Businesses want their employees to be happy and proud of their city, and proud that their employer supports these organizations. All businesses have a burning need to improve the quality of education in this country; early exposure to the arts is critical. Be connected to your communities, get kids to performances, get young professionals out to performances. Make it cool to go to a concert. Embrace technology – share what we have learned in the use of media technology. It would be a shame to waste a good crisis – it’s time to re-engage.

Then Wayne Brown, Director of Music and Opera at the NEA, spoke briefly about collaborations. He mentioned the NEA’s newest initiative, Art Works, which plays a small role in assisting arts organizations to engage better in their communities.

Finally, Jesse introduced Russell Willis Taylor,  the keynote speaker. Russell is President and CEO of National Arts Strategies and a very challenging, intense, and dynamic speaker (not to mention funny!). She told her daughter that she had explained to the League that she planned to give her honest thoughts at the League address and say exactly what she meant, and her daughter’s response was, “Don’t these people know you?”

The League has posted a PDF file of her complete speech, which you can access here. I’ve included a few highlights in this post (some of it paraphrased) – particularly her 10 rules for how to put your organization out of business!

And now for something completely different.

There are no crises, only tough decisions.

I have slides so that they’ll keep my image off the jumbotron!  Crisis in Greek is krisis, which means decision. We are facing a decisive moment, a turning point.

By the end of this talk I expect that about 25% of you will be angry with me, 30% will agree with me but not like it, and at least 10% of you will be depressed. Sorry about the latter. I will apologize in advance and ask only that the remaining 35% of the audience sees me to safety when I am done.

We have built a delivery structure that is not sustainable – the arts are experiencing a crisis of legitimacy. It has been a long time in coming. Legitimacy is bestowed, or conferred, or awarded; it is not simply appropriated. Some factors are beyond our control: a changing educational systems, shifts in consumer behavior, and a major and historic shift in the centers of wealth creation from the west to the east.

We’re at the center of something so profoundly altering, it’s hard to see just what a moment this is. We are naïve. We are not alone – things are out of our control, but changes were not unforeseeable.

I became fascinated with how businesses go out of business – those of you who have read Jim Collins latest book, How the Mighty Fall, will know the names of some. What behaviors, rather than characteristics, are coincidental to failure?

So, these jobs are hard, and times are hard, and maybe there is a crisis. Let’s just end the madness. Here is my formula for how to be absolutely sure you go out of business, quickly and efficiently:

Internal Behaviors

Rule 1: Keep fixed costs as high as possible, and variable costs as low as you can.

Rule 2: Confuse core values with core competencies.

These are related but you really need to conflate the two to destroy your business. For example, decide you must own and manage the perfect acoustic performance space – so you have to become an expert in retail space management.

Rule 3: Believe that growth only means getting bigger and more expensive.

This one is particularly useful when driving a nonprofit out of business. If you grow without identifying secure balancing income to match the growth, you create a larger problem. If you lose money on every transaction, volume is not your problem!

Rule 4: Never make empirical decisions. Ignore data.

The easiest way to achieve this is to not have any data. We did pretty well on this for quite a while. If you are saddled with inconvenient facts and numbers and analysis, you need to perfect the art of not using it for decision making if it says something you don’t like.

Rule 5: Create more value for employees than customers.

If you create more value for your employees than for your customers your financial structure will need to take into account that you are not creating sufficient value for financial and participation reward from the market, and you should limit the scope of your work accordingly. Or not, if you want to accelerate the process of exiting the field.

Rule 6: Fear new technologies of all kinds.

This is an ancient art. Socrates deplored writing because it would weaken the memories of young people. Ignoring the tectonic shift that technology has provided in the form of portable, self-curated culture will go a long way to accelerating your exit, stage left. This is a major sociological change we are experiencing, not the age of gadgets.

Rule 7: Pretend that liquidity doesn’t matter – a lot.

External Behaviors

Rule 8: Blame your customer.

By believing that your customer isn’t smart enough, patient enough, interested enough, educated enough, or even in extreme cases grateful enough, you can shrink your market.

Rule 9: Pursue transactions rather than relationships.

Stop the strategic development of enriching relationships and go for short term gain.

Rule 10: Compete rather than collaborate.

Rule 11: Ignore the global pro-am revolution.

This is Charles Leadbetter’s term for the fundamental shift in cultural consumption over the past two decades. Audiences are not as passive as they may have been in times gone by.

Rule 12: Don’t accept that uncertainty is the price of innovation.

If you feel pretty comfortable and generally ticking along with business as usual, then you are probably not being particularly innovative and are making progress toward closure.

What if you decide you didn’t want to go away. Not all value is created in markets and we in the arts actually have an essential role to play in advancing society and developing economies of meaning rather than just economies of money.

Public schools are no longer engaged in audience development – we must reach into the schools and fill them with music to build institutions of value for the next generation.

What if you already embrace the idea that arts organizations can no longer just be about something, they have to be for somebody – a lot of “somebodies,” and that you are going to make your organization an indispensable part of your community — even if it means that you have to take the component pieces of it and rearrange them and refit them and redefine them until you are indivisible from how your community sees itself and celebrates itself?

And what if you each and collectively have decided that our most enduring and pervasive legitimacy in the arts will come from the creation of relationships, not just the amassing of audiences?

Well, if you can choose these paths in this time of crisis – as the Greeks understood the word krisis – if you can make this a time of tough but intelligent decisions rather than a time of feeling victimized by circumstance and buffeted by ill fortune, then I am very much afraid that your organizations are going to be around in American life for a very, very long time. Maybe even – in one form or another – forever.