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As art museums have expanded in the past few decades, Cassandras have warned that one day there would be a none-too-pretty reckoning. With easy money, stratospheric ambitions, hometown pride and trustee egos all at work, many arts institutions—like many homeowners—overreached.

In the past few months, the Asian Art Museum of San Francisco has had its moment of truth. Fortunately, in a deal reached earlier this month, it was able to refinance a debt load that last fall threatened to throw that institution into bankruptcy. But while officials there portray the AAM as a victim of the Great Recession, it’s an open question whether AAM—or other arts institutions—should have borrowed so much money and dabbled in variable-rate demand bonds and interest-rate swaps at all. In years past, most museums would manage their endowments and borrowings conservatively. But new financial instruments have tempted them, like everyone else, to take more risks.

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Judith H. Dobrzynski
Wall Street Journal

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What do chief executive officers really want? The answer bears important consequences for management as well as companies’ customers and shareholders. The qualities that a CEO values most in the company team set a standard that affects everything from product development and sales to the long-term success of an enterprise.

There is compelling new evidence that CEOs’ priorities in this area are changing in important ways. According to a new survey of 1,500 chief executives conducted by IBM’s Institute for Business Value (IBM), CEOs identify “creativity” as the most important leadership competency for the successful enterprise of the future.

That’s creativity—not operational effectiveness, influence, or even dedication. Coming out of the worst economic downturn in their professional lifetimes, when managerial discipline and rigor ruled the day, this indicates a remarkable shift in attitude. It is consistent with the study’s other major finding: Global complexity is the foremost issue confronting these CEOs and their enterprises. The chief executives see a large gap between the level of complexity coming at them and their confidence that their enterprises are equipped to deal with it.

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Frank Kern
Businessweek

tickets

Doug McLennan provokes a rather central question in his blog post this week: are arts organizations in the business of selling tickets? Says he:

If you believe your business model is the classic consumer transaction (I make the performance, you buy the ticket) then you’re done. Sorry.

He goes on to suggest that arts organizations are providing a much more complex service than a play or a performance or an exhibition, and that arts consumers are seeking a complex bundle of goods in their purchase decisions.

People aren’t comparing you with other orchestras or theatre or dance companies; they’re measuring whether classical music or theatre or dance is something they want to choose at the moment. They’re deciding whether they want an active or passive experience; they’re trying to determine what level of social encounter they feel like today. They’re weighing whether they want a predictable, known, comfortable quantity or whether they want to be adventurous and try something new.

His provocation is right on the mark, and central to any thoughtful discussion of the future of arts enterprise and cultural management. But I’d suggest that it’s missing an important wrinkle.

The deeper challenge for arts organizations is that they DO sell a product, even as they DON’T. That is, an important segment of any arts audience doesn’t recognize the complex bundle they’re seeking when they buy a symphony or theater ticket. They’ve come to use that event as a placeholder or proxy for that bundle, without even knowing it. To this core group (often the most passionate about the art form, the most loyal buyers, the most committed donors) the bundle IS the product. And as you innovate around the delivery or context of your creative work, you challenge their passionate connection to the discipline’s tradition.

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Andrew Taylor
The Artful Manager