October 12, 2010

Innovation, insecurity, and the real reason we need new business models

A young friend of mine who works at a major American arts institution tells a chilling story about the departmental brainstorming meetings he and his colleagues are asked to attend every few months. 'We need new ideas,' they’re told — and they come up with them. They put their heads and hearts into it. They get excited. You can feel the energy in the room. And then…

And then the department head, a veteran with a powerful reputation in the organization, wraps up the meeting with a blanket dismissal: Those kinds of things, she tells her staff as the smiles fade, just aren’t the way we do things at this organization.

In answer to your question, yes, my friend is looking for another job.

But wherever he lands next on the arts and culture landscape, it's likely to be at an institution that has trouble with change and risk. In fact, in my decade or so of working with nonprofits organizations, I’ve begun to wonder if that phrase, "an institution that has trouble with change and risk," isn’t a redundancy. Could it be that part of what that defines institutions as we know them is a systemic, structured-in aversion to risk?

If so, there’s a lot at stake. Without risk we can’t have innovation, and without innovation we’re doomed to stasis which, in a changing culture, sooner or later means irrelevance.

My friend’s tale notwithstanding, the problem isn’t usually people. Or rather, it's not the people as individuals. Over and over, I’ve seen creative, thoughtful museum and arts professionals, people with energy and passion and a wide sphere of reference, get excited about a new idea or way of doing things…and I‘ve watched as that idea works its way through the organization’s process, becoming less interesting, risky, innovative, and appealing at every step.

Sometimes the idea makes it all the way to implementation, but in barely recognizable form. Sometimes it's abandoned along the way, victim of senior-level dismissal or, more commonly, vague resistance and a failure to "gain traction."

What’s going on? Why do those institutional processes (call them 'planning' or 'development' or anything else) so reliably have those effects? . . .

I used to think the answer was, "Because the system is broken." But lately I’m reminded of a story that used to circulate about a brilliant professor’s crowded freshman engineering course. On the first day of the semester, the professor shows a picture of a skyscraper and asks the students why the building stands up instead of falling down.

One by one, the students raise their hands, tentatively offering guesses about steel trusses, stress coefficients, and wind loading. The professor is unimpressed, silent. The students grow bewildered, then frustrated. Finally an impatient voice calls out, "Because it was designed that way!" The professor’s face breaks into a smile, and the course can begin.

Maybe the same answer applies to our arts and culture institutions and the decision-making processes that go on within them. They do what they do because they were designed that way. They were designed to make sure change is rare and not easy to achieve. Designed to harness the brains and energy of smart, creative people without taking on the downside risk of their creativity. Designed to maintain stability and, with it, the status quo (which is delicate enough anyway, at least in financial terms), and therefore to slow or stop the progress of anything that might increase uncertainty.

This, of course, is one meaning of the word "management": the act of keeping it all together, keeping the horse under control and trotting calmly in the right direction. Remember that "innovation" was once a term of blame, as when the Church fathers used it to describe scary new musical conventions (like the use of instruments in church alongside the singers).

Now, all this makes the innovation-eroding process sound impersonal and mechanistic, which is obviously not how it feels when it's happening to you and your idea. Personalities, power dynamics, and staff and board politics play a huge role, as my friend and his brainstorming buddies learned. Fundamental insecurities may underlie a lot of this. But even those personalities and insecurities can be seen as part of that designed-in defense against risk, because the collective manifestation of individual insecurity is institutional insecurity, in which the whole system isn’t confident enough to embrace change.

In such an environment, there isn’t always an ogre above us on the ladder who’s bashing down our ideas. Sometimes the bashing is self-inflicted, even as we ascribe the resistance to someone else. I often hear a marketing director fret, "It’s a great idea, but the musicians will never go for it." An educator will say, "I love it. But the development people won’t go for it." Or the curators. Or the director. Or the trustees. By the way, it doesn’t matter whether the idea in question came from the staff themselves, from audiences (via our research), or from consultants; the prediction is the same: Sorry, it’ll never fly here.

And to fight for an innovation that you care about only brings you into conflict with others, including your superiorsand isn’t it your job to make your superiors‘ jobs easier, not more contentious? So the rational choice is to let it go, compromise, and tell yourself that the idea is still pretty good even though it’s different now. Or internalize the institutional critique and decide the idea was never workable in the first place.

To me, all this sheds light on the conversation in the arts and culture sector about 'new business models.' That conversation has been bubbling along for several years now, with foundations and consultants and some service organizations agreeing on the need to develop alternatives to the standard 501(c)3 nonprofit structure. There’s some excitement around the hybrid L3C structure, which is somewhere between nonprofit and for-profit, and around small, "indie" for-profit models, B Corps, collectives, and “distributed” organizations-without-the-organization.

But almost no one’s talking about why we need those alternative structures (beyond the obvious notion that they’re out there already and we’d better find a way to fund them and tap their energy), nor how to sort out the most useful models from less useful ones. If I’m right about the ways the standard organizational model is designed to minimize risk and innovation, then what we should be looking for is new models that are designed to maximize them. We should be experimenting with new structures that will allow us to experiment.

In other words, let’s first make explicit in this conversation about new business models that one of the problems we’re trying to solve is the way the current model works against what the anthropologist Jay Rounds has referred to as “adaptive thinking” and “explorative behavior.” Then let’s try to envision models that free up, instead of bottling up, the creative power of the individuals that work within them and that mandate and reward the exploration of new possibilities.

This will be a new conversation, not just about the structure of organizations but about their spirit. It‘ll be about how to keep an organization from becoming an institution. And the right answer will be, “Because it was designed that way.”

Nina Simon — October 12, 2010

Wonderful post, Peter. Makes me cheer, makes me think about how to communicate core values around innovation when working with clients or on my own projects.

I think Beck Tench at the Museum of Life and Science (http://www.ncmls.org) is one of the real leaders these days in changing institutional culture to support innovation. She hosts happy hours and brainstorming lunches. She manages a "failure portfolio." And while she's supported by an institution that champions her approach, it took her initiative, creativity, and "well, what would happen if we DID try that?" attitude to make it happen. Her presentations, like this one on becoming an agent of change in your organization (http://www.slideshare.net/btench/becomin...) are really inspiring.

Peter Linett — October 12, 2010

Now THAT's the way to do it. She sounds wonderful. And your comment reminds me that my post presents a pretty bleak picture, to which there are actually plenty of exceptions around the field. Thanks for pointing us to one of those, Nina, and for reminding us that it can be done, even within the familiar organizational model.

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