Can arts organisations become ‘exponential organisations’?

I more-or-less consider myself to be an arts worker, and seeing the rapid changes that new technologies have brought about in society and business, I’ve often pondered the role that arts organisations will have from now and into the future.

In a recent post to wherewordsfailblog.com I wrote about a book called Exponential Organizations: Why new organizations are ten times better, faster, and cheaper than yours (and what to do about it) by Salim Ismail, Michael S. Malone and Yuri van Geest. In the post I discussed how the book influenced me, as the owner of a non-tech based events management and consulting business, to find ways to leverage new technologies in order to advance business growth.

It’s widely accepted, as the authors of Exponential Organizations point out, that “we are rapidly changing the filter through which we deal with the world from a physical, materially-based perspective to an information and knowledge-based one”.

This presents both threats and opportunities to arts organisations. As the arts largely deals with the physical and material (in that, for example, productions need performers and performers need stages and costumes), and the personal, philosophical and spiritual (in that the arts explores and gets us to reflect on such things), it’s not immediately apparent how the arts fits into a world that increasingly operates with an information and knowledge-based filter of perception.

In many ways the arts are more important than ever, and in this particular regard the arts serves as an anti-dote to the worst effects that an information and knowledge based world can bring about. The arts allow us to remain connected to other people in an actual, as opposed to a virtual sense. The arts allow us to connect to the physical, material, personal, philosophical and spiritual in a way that access to information and knowledge doesn’t.

This doesn’t mean that the arts doesn’t have a role to play in the information and knowledge based world, as the arts has always provided a means to retain and share information and knowledge, and perhaps more importantly, the arts gives us tools which allow us to interpret information and knowledge.

New information and knowledge based technologies have been very useful for artists and arts organisations to disseminate and promote their artistic product around the world. But is this where an arts organisations usage of technology begins and ends, with the sharing of stuff on social media?

For some time, I thought that it was. I’d heard that kids were making millions of dollars from their bedrooms almost overnight by developing apps and I read business articles that often proclaimed that all businesses need to use tech to innovate, with the mantra being to disrupt, or be ready to be disrupted. I pondered this in relation to arts organisations, and just couldn’t see how arts organisations, that deal more in the physical, material, personal, philosophical and spiritual, could use information and knowledge based technology to achieve exponential growth in the same way that organisations like Google or Uber has. To my mind, arts organisations weren’t anything like tech companies, and never the twain shall meet.

As I wrote about in The skills to pay the bills. Business studies versus business books, organisations like Google and Uber are ‘exponential organisations’, which are defined by the authors of the book Exponential Organizations as being organisations:

“whose impact (or output) is disproportionally large – at least 10x larger – compared to its peers because of the use of new organizational techniques that leverage accelerating technologies.”

The book then goes on to discuss how organisations can use new technologies to achieve exponential growth. Early on, I couldn’t see what use any of the information provided could be to arts organisations, but gradually it dawned on me; arts organisations don’t need to become tech companies, they need to use new technologies to leverage growth. As the authors succinctly write:

“the goal here isn’t to become Rackspace (or Amazon or Microsoft), it’s to build your big idea atop their infrastructure”.

TED Talks is a perfect example of an organisation that produces real world events and is also an exponential organisation; it’s not a tech company, but it leverages new technologies to grow.

In Exponential Organizations the authors discuss exponential technologies, such as VR, network sensors, AI, robotics, synthetic biology and 3D printing, before going on to challenge that:

“If you’re running a big company today and are not aware of these technologies— not to mention how they might impact your company— you are simply not doing your job. For any large organization, it is critical that its senior leadership bridges that gap to avoid becoming the next Kodak, Blackberry or Nokia”.

Managers of arts organisations might be inclined to avoid considering how they can leverage new technologies to aid business growth for the following reasons:

• They don’t have knowledge of the new technologies or time to learn about them
• They don’t see how information and knowledge based technologies are relevant to arts organisations
• Growth is not an organisational priority
• They don’t consider themselves to be technically minded
• They think that it’s too expensive
• They think that it’s all too hard

All of which is fair enough, but this type of resistance to incorporating new technologies into strategies to aid business growth is dangerous, because arts organisations that rely on traditional business models are highly likely to have their operations ‘disrupted’ by other organisations that do have the ability to leverage new technologies to achieve exponential growth. There are oft-cited examples of how this has happened in the non-arts world, the prime ones being Kodak and Blockbuster, and arts organisations aren’t immune to the threat of disruption.

Imagine that you are the manager of a city’s orchestra or concert hall. One day you read about another orchestra on the other side of the world that uses virtual reality to broadcast performances on the internet; that must be expensive, you shrug. A year later you notice a dramatic decline in your audience and engage a tremendously expensive consultant to work out where they went. Six months later, the consultant concludes that your former audience is enjoying live or replayed performances by the other orchestra using virtual reality headsets, which puts them in the best seats of the best concert halls to enjoy the finest orchestral performances at a tenth of the ticket price to attend one of your concerts. Their outstanding home sound and visual systems give them a superior experience to your live concerts which they used to attend. At home they can arrive late, dress as they please, pause the action and move around the auditorium to get different views, such as sitting right next to the conductor. They can eat, drink, cough, sneeze, take phone calls and toilet breaks and make as much noise as they like – hell, they can even dust off their violin and play along! So while you’re struggling to cover costs at sixty dollars a head for a single performance and limited by the seating capacity of your venue, your new competitor is selling fifty thousand tickets at six dollars each for concerts that are constantly available on demand and have no practical audience limitations. You’ve been disrupted!

Your refusal to look into leveraging new technologies has meant that someone has disrupted your business before you even had a chance to realise you could have disrupted theirs. When your government funders ask you what technologies you’ve been using to leverage growth and you’ve got no answers, they think to themselves as they sharpen their pencils, “if you’re not doing anything to advance growth why should we fund your organisation over those who do?” and you lose your funding. It’s too late for you to start now – game over.

In my home country of Australia, most not-for-profit arts organisations rely heavily on government subsidies to exist. Generally speaking, Australian governments are, to varying degrees, looking to get out of funding the arts as much as they can. Because new technologies can be leveraged for growth, arts organisations will find ways to use them, and the organisations that use them first, the early adopters, will be in the most advantageous position. It’s likely that government funders will question applicants about what they are doing to use new technologies to leverage growth, and if the answer demonstrates little or no initiative, they are less likely to receive funding. The late or non-adopters will be the first to fall behind or be critically disrupted, and the first to close their doors.

In The skills to pay the bills. Business studies versus business books I wrote about Silicon Valley’s Singularity University. SU is a respected institution which has been described as a “school for futurists” that ‘was created to study the impact of exponentially growing technologies on companies, industries and humanity’s grand challenges’.

Tania de Jong is an inspirational Australian speaker, acclaimed soprano and social entrepreneur who has founded a number of successful businesses. Last year, de Jong attended and performed at the Executive Program of Singularity University where she joined leaders from a wide variety of sectors and nations for an intensive one-week program. Following her time at SU, de Jong concluded in an article for artshub.com, What the arts can learn from Silicon Valley, that “as the leading hub for technology, innovation and entrepreneurship, Silicon Valley may hold the answers for the arts”.

de Jong’s article is a must read for every art manager and in it she lists five things that the arts “can learn from Silicon Valley”. The arts sector, it’s organisations and workers need to:

1. focus on cross-pollination across art forms and genres
2. foster a results-oriented meritocracy
3. build a climate that rewards risk-taking and tolerates failure
4. become more entrepreneurial and stop relying on the government for funding
5. develop a more open and collaborative environment

Unfortunately, speaking from over twenty years of experience of working with hundreds of arts organisations and practitioners around the world, this is the exact opposite to how most arts organisations currently function.

Few arts organisations reward risk-taking or tolerate failure or understand how to collaborate or the benefits that collaboration can bring.

Most arts organisations that I’ve worked for or with produce and promote artistic product through the silo like thinking of artistic genres. Box-office or project failures can mean an arts manager cops the wrath of their board of directors, thus reducing the likeliness of engaging further with any future risk. There is no sense of entrepreneurialism and the organisation’s existence depends solely on the provision of adequate government funding. Organisations are so protective of their IP, systems and contacts and fear their competitors so much that collaboration is out-of-the-question.

This type of thinking is antiquated, redundant and just plain stupid. Look at the most successful businesses of the last five to ten years and their approach has been the opposite of this. These are not just things that arts organisations “can” learn from Silicon Valley, but are rather things that they “must” learn to stay relevant and survive. This type of thinking isn’t something to bear in mind for later – the time is now!

“Too hard”, I hear you say.

“no time”

“no money”

“no resources”

Nonsense!

Here’s the good news for arts organisations and their staff:

• You don’t need to have a lot of money to use new technologies to leverage growth. You can use many already existing, and often free technologies, such as blogs or social media

• You don’t need a high degree of technical knowledge, as many of the technologies you could use to leverage growth are easy-to-use

• You don’t need to use the most high-tech gear, you can often use very basic technologies to aid growth, particularly with automated processes

• Consider partnership and sharing options, renting or bartering to access the tech you need within your budget

• Even international partnerships and collaborations are more beneficial and simpler to organise than you might think

Let me tell you, I wasn’t remotely interested in how tech can aid growth until I saw how a few people within my network were using the simplest technologies in the cleverest of ways to drive growth. It’s not necessarily the technology that counts but how creatively you use it!

If you want to know more about how to use new technologies to leverage growth for your organisation be sure to contact League Cultural Diplomacy. Alternatively or in addition, read some of the following books which will open your mind to some of the possibilities.

Exponential Organizations: Why new organizations are ten times better, faster, and cheaper than yours (and what to do about it) by Salim Ismail, Michael S. Malone and Yuri van Geest showed me how to use new technologies to achieve growth.

The 4-Hour Work Week: Escape the 9-5, Live Anywhere and Join the New Rich by Timothy Ferriss opened my eyes to how technology can improve operational efficiencies.

Progressive Partnerships: The Future of Business by Callum Laing (see my review here) taught me how to build great networks and get things that I want through partnerships and collaborations.

Bold: How to Go Big, Create Wealth and Impact the World by Peter H. Diamandis and Steven Kotler told me about the current and future technologies and how they can allow me to become bolder in my ambitions.

The Lean Startup: How Today’s Entrepreneurs Use Continuous Innovation to Create Radically Successful Businesses by Eric Ries tells you how to get there!