EmcArts frames the development of innovative strategies in three stages:
1. The emergence of “big ideas” from a background of no ideas
2. Moving significant strategic ideas to the point of sufficient clarity and ownership within the organization that they have a chance of being implemented
3. Getting fully shaped and supported strategies actually implemented
On this blog and in their innovation labs, EmcArts has focused on the process of getting from stage 2 to stage 3, or in other words, in getting good ideas off the ground. This is the hardest part; the leap of faith.
But what happens after innovative ideas and strategies are implemented? When should organizations attempt to measure the success of their changes, and how? If unintended consequences are inevitable, is it possible–or even desirable–to safeguard against failure?
These are questions weighing heavily on my mind in light of recent news out of the Twin Cities. The St. Paul Chamber Orchestra (SPCO), the only full-time professional chamber orchestra in the U.S. and long the model for new models, is in trouble.
Here’s the history. In 2002, facing record-low subscriptions, the SPCO board of directors and leadership undertook a major strategic planning process. As a result, the board dissolved its executive committee in 2004 and the position of Music Director was eliminated in order to establish the Artistic Partnership Model, which transferred artistic responsibilities to the SPCO musicians and a group of diverse Artistic Partners. In 2005, ticket prices to the orchestra’s Neighborhood Series were reduced to flat rates of $10 or $25, and in 2010, ticket prices for the mainstage series at the Ordway followed with reductions to $10, $25, or $40. Taken as a whole, the SPCO’s entire business model and culture was changed to reflect a commitment to democracy, accessibility, and community.
The orchestra was hailed as innovative and bold, and for good reason. In her May 2011 thesis for the Bolz Center for Arts Administration, Laura Beussman summarized the SPCO’s success as follows:
Since the SPCO began this process in 2002, its subscriptions have increased by 40%. Because of the reduced ticket prices, ticket revenue has still declined by over half a million dollars. However, the SPCO has simultaneously cut $1 million in marketing expenses, for an increase in net revenue of $482,000. The organization sold almost 30,000 more seats in FY09 compared to FY02. When examining contributed revenue, the number of subscribers that give has gone up by 45%, while the average subscriber gift size has gone up 7%. When it comes to major donors, the average board gift has more than tripled.
But in the past year, this picture of successful innovation has grown cloudy. During a visit to the Twin Cities in November 2011, then executive director Sarah Lutman maintained the importance and urgency of lower ticket prices while conceding that sales had plateaued and external support was no longer making up the difference [note: see comment from SPCO representative Jessica Etten below for clarification]. In December, the SPCO began publicly projecting a $1M deficit for the 2011-2012 season. This spring, Lutman departed to focus on consulting, and she was followed by her VP of Development, who transferred to the Cleveland Orchestra. News in June was worse: the only chamber orchestra in the U.S. with full-time salaried musicians might be going part-time, as the board seeks to cut $1.5M in musician-related expenses. The Star-Tribune article hinted that some musicians were countering with a call for increased ticket prices, suggesting the players may not have been fully supportive of the administration’s pricing strategy.
Here is an organization that thought big, carefully implemented deep change, weathered the worst of the recession, and just a year ago looked strong. That picture has changed dramatically, but were the SPCO’s changes for naught? A mission-based perspective would certainly validate the accessibility initiatives for bringing in a wider audience, but that’s come at a financial cost that could jeopardize the orchestra’s ability to perform at the highest possible level, another component of its mission.
Still, I would wager that had the SPCO tempered its changes for fear of failure, the outcome as of today would be no better, if not worse. The temporary turn-around increased the orchestra’s network of donors, greatly expanded its footprint in the community, and enhanced its reputation as a pioneer, changes that may still yield greater rewards in the future. More importantly, going through the process of innovation builds adaptive capacity, the ability to change in the future.
I had started this post thinking very logically about what a fourth stage of innovation might look like, feeling that the SPCO had worked their way through the first three and were now floundering. I thought it might have something to do with reevaluation and asking whether or not the implemented changes are working and why. That needs to happen, but I also like the idea of just going back to the first stage and starting the cycle over again. If changes have been made, depending on how deep they run, they are likely the new normal. Isn’t it time, then, for new ideas? Evaluation becomes a constant in this scenario, and if we can get comfortable with ignoring sunk costs and learning from mistakes—being nimble—then forward motion is inevitable. Any true innovation carries the risk of failure by someone’s definition. It’s the ability to begin the process anew that makes failure an option again in the future.