Wednesday, June 28, 2017

Are Cultural Organizations Built to Fail to Scale?

My new audial obsession is the podcast How I Built This, in which Guy Raz interviews entrepreneurs who built notable companies. The podcast offers incredible stories behind the making of businesses like Chuck E Cheese, Southwest Airlines, and Zuumba. I've also been reading more about social impact nonprofits that went big, like Goodwill, CASA, and YMCA.

One of the biggest questions on my mind as I listen is: why isn’t my industry scaling up the way these organizations do? I can think of many extraordinary innovators in the nonprofit cultural sector--people and organizations creating brilliant programs, site-based experiences, and products. Many of these projects seem replicable. But I can think of only a few who have scaled up and out in a meaningful way.

Why aren’t our collective best ideas growing and spreading all over the world? Why aren’t more cultural organizations franchising, scaling, and replicating like comparable businesses?

Here are a few of my hypotheses (and I’d love to hear yours in the comments). I am not suggesting that any of these factors are bad or immutable. I'm suggesting they may be reasons we aren't scaling.

Precarious business model. Even if an institution or a project is fabulous, it may not have a solid, replicable business model behind it. If the work is financially dicey on the scale of one building, it can be disastrous to scale up.

Too much emphasis on innovation. The more we tinker with and change our products, the less time we spend scaling those products. Arts institutions have beat the innovation drum for decades now. Change may be necessary... or it may distract us from opportunities to grow.

Too complex and diversified a business. Cultural organizations tend to have many programs, projects, audiences, and goals. Businesses that scale are simpler and more focused. If it would take a thousand-page manual to replicate your programs (which are always changing!), it's too hard to reproduce.

Friendly industry that encourages sharing and copying. There are no NDAs in the nonprofit culture sector. Professionals share program models, exhibitions, and design techniques across organizations, often for free. This intermixing means there's less distinctive value to scaling any one entity's offerings.

Too much emphasis on unique experience and local idiosyncrasy. Many cultural organizations put the singular, authentic experience first. Many of us are proud of how our cultural organizations reflect and respond to our local communities. This can lead to assumptions--not always true--that what works here can't be copied and won’t work somewhere else.

Skills mismatch. The skills needed to create an incredible program are different from those needed to spread that program around the world. Our industry cultivates and rewards creative dilettantes who make beautiful things. We often look with suspicion on MBAs and people who want to commodify our work.

Mission mismatch. What's the upside for cultural organizations to scale? Most don't see any benefit to spreading that program around the world. It might be nice if it happened, but it's not the goal. The goal is local engagement, authenticity, scholarship, prestige, or keeping the lights on and the art pumping. I suspect most of us would be loathe to cut programs or make hard tradeoffs in favor of scale. The argument for it isn't worth the pain.

What's missing on this list? What counter-examples have you seen?

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