Arts groups must be operated as businesses
The days of entitlement are over, Larry E. Clausen says.
Three years ago, Alberta Ballet reached its 50th season, but with a confluence of troubles in tow: the anniversary coincided with a severe province-wide downturn, and the ballet was looking seriously toward bankruptcy protection. The company faced hard questions as to how it might continue amid a difficult financial time.
That same year, I was approached to return to the board as its chair. Having served previously on Alberta Ballet’s board, I knew full well that, although the ballet’s artistic product was sound, the road ahead would be filled with financial challenges. When I returned to the board, I was surprised to find how stakeholder relations had eroded, despite well-meaning efforts.
My personal perspective is this: arts organizations succeed when they implement their mission through the lens of a strong business model. With this as a guiding principle, Alberta Ballet has spent the past three years rebuilding its team, directing focus on core business activities and re-invigorating stakeholder relations.
A sustainable business plan now guides the ballet as it celebrates and showcases dance with our patrons. The ballet is strategically investing in improving processes and modernizing operations. These investments free up resources: staff time and budgets that normally are applied to manual business process can be redirected to stakeholder and community engagement. It’s a formula that prioritizes the ballet’s relationships while keeping the ballet in good financial standing.
The ballet’s recent track record highlights powerful proof points for the success of this formula. The ballet over the past two years has managed to create nearly $1.9 million in surplus. This surplus is a major step to ensuring the ballet’s sustainability, eliminating the company’s deficit and re-establishing its working capital. When the company resumes normal operations it will do so in a fully disciplined fashion.
As I close my term with the board, it’s heartening to see a vibrant community celebrating the art of dance and an executive team confidently stewarding a sound business model, including a succession plan for the board.
One might wonder: what is the role of a board in this scenario? After the hard-won turnaround the ballet achieved in these past three years, my answer is this: the role of the board is to support the artistic direction while empowering management to embrace the business of managing.
Arts groups rely on stakeholders for success and gone are the days of artistic entitlement. If the art offered doesn’t satisfy the customer, then financial challenges are inevitable. The competition for eyes, ears and experiences is enormous — especially in our digital society. Thus, boards must always be conscious of quality of artistic presentation and receptivity of customers. If the two don’t align, then change is needed.
A harsher reality is the need to run the arts as a business. Strategic and sustainable plans executed by an experienced team is essential. Funding stakeholders expect high performance to attract their support. In a tight economy, they expect their investment will benefit society. Deficit funding is no longer an option.
I believe the arts are essential to our community. We live in a very different world where technology connects us with arts and entertainment on demand. Our expectations have changed. But nothing is more inspiring than to see “live” what the arts can do today.
The much-discussed matter of adequately funding the arts is a worthwhile discussion. Our community vibrancy, place-making, value, enjoyment, education and being kind to one another is part of a lifestyle every community seeks and is valuable. Let no one say that funding of the arts is not a good investment.
It’s heartening to see a vibrant community celebrating the art of dance and an executive team confidently stewarding a sound business model.