It's Not the Business Model That is Broken

by Vincent VanVleet, Managing Director | Phoenix Theatre

“There is much discussion recently of the non-profit arts business model being broken. Some even suggest it is dying. While many things about how organizations operate should be put to rest, I believe there is a growing insurrection to challenge the status quo of how our field can work.”

A year ago, I sat through a presentation at a national theater conference and listened to a self-described “fixer” talk about why he’s “successful.” The fixer proclaimed, “I’m the guy you call when your non-profit arts organization is bleeding out. When I lop off the limb and put a tourniquet on it, I don’t feel bad. Yes, it puts people out of work, but they put themselves in that position in the first place.” It’s this mentality that Simon Sinek refers to in his book Leaders Eat Last when he puts forth the idea that sometime post-1980 the United States entered an era of “profits ahead of taking care of people.” I don’t personally subscribe to this kind of “leadership.” Quite the contrary, I think our work at Phoenix Theatre is the antidote to that philosophy. It is well known that companies with great cultures prepare their people for success and they win. Time and time again. Companies that prioritize money over people may soar for a while. However, the inevitable happens, and profitability slows down, silos develop, and decision-making moves from what’s best for the company to what’s best for “me.” Often the CEO is fired. The board then moves on to the next CEO who prioritizes profits over people, and the cycle starts again.

Innovation comes from a healthy work environment. A work environment that puts its people first, inspires its employees to push themselves, invests in their wellbeing, and personal development. By doing this, the organization will grow with employees and alongside them. Smart leaders are the ones that know enough to know what they don’t know. They “hire up” to get the people who do know and clear the path for them to excel and succeed. They keep their eyes open for chances to promote from within. This allows the leader to spend their time framing out an exceptional culture and holding people to the values of that culture.

“As a leader, if you do that then you will never need to fire anyone again. Folks will excel and the ones that don’t, will know it’s not for them - that culture of accountability will send them packing on their own every time. I haven’t fired anyone in a decade.”

Photo credit: Reg Madison Photography

I’ve come close, but culture ultimately wins and through that self-selection starts to occur. You learn to hire differently, to explain the culture, and filter for folks that won’t mesh well with it by being transparent with them in the interview process.

Leaders get in the trenches and get their hands dirty. They don’t curate hypothetical situations from the executive office suite. The harder thing to do, the leadership thing to do, is to change the culture and keep the people. If people don’t like the new culture, they will go on their own. I know firsthand the gems that can be uncovered with a little bit of time and investment spent in this arena.

Like many, our organization experienced a setback in 2008. But the effects have been longer lasting in our industry because we’ve not innovated our cultures. We went from “it’s not broken, don’t fix it” in pre-2008 to “it’s so broken it’s not fixable ever” in post 2008.

Photo credit: Reg Madison Photography

In the present day, “throw the entire non-profit arts model out” seems to be an emerging theme. Here are some of my favorite arts leader quotes I’ve heard over the past few years as context:

“This is just the way we do things” “20 years ago…” “We are too financially strapped to consider investing in new things. Let’s dig out first” “Our audience is dying and young people aren’t interested” “The board won’t let us make change” “If we just keep cutting, eventually things will even out”

I don’t believe that people are no longer interested in the arts. I think we stopped being relevant to their lives, and our field pretended it wasn’t happening. Stuck in our old ways of doing things, no one has been a disruptor. And yet, I have immense confidence there is a path forward for the field if we can just envision a different way of operating.

“I argue that we need to focus on leadership, and specifically leaders who excel at creating exceptional cultures. We must create organizations where everyone wants to work because we provide one of the best possible places to work. Let’s learn from other great leaders and institutions.”

I learned from TRG Arts about using Patrick Thean’s book Rhythm: How to Achieve Breakthrough Execution and Accelerate Growth to strategically plan. I try to live by Howard Buffet’s idea that non-profits have an oversized responsibility to make the world a better place, yet we often make excuses to pay our employees less: “we’re non-profit so we can’t pay what forprofits do.” Quite the contrary. Buffet contends that if we want the best people to solve the world’s greatest problems (and create the world’s greatest art), we should pay them more and we will be rewarded in both mission and results.

In fact, I subscribe to an unconventional philosophy that I believe has been one of the keys to our high degree of success as an organization – I tend to manage to the employee rather than the position. Several times I have modified a job description, restructured the team, or created a new position to maximize the skill set of an employee. This resulted in industry-leading innovations in programmatic management and revenue generation.

People have a need to connect and share experiences. It brings us closer together. It’s why we get out, go to restaurants and coffee shops, gardens and museums, and theaters.

“That is why I believe in our model: It is bent, not broken.”