The Art of the Turnaround: fifteen transformative rules

Fifteen rules to get your arts organisation up and dancing…

The ten rules put forward by Michael Kaiser in his ground-breaking 2008 book The Art of the Turnaround remain some of the best advice around for arts leaders looking to transform arts organizations – particularly in the critical first 100 days.

I was recently asked to work with some MA Arts Management students in a seminar entitled The Art of the Turnaround, and returned to Kaiser’s book to refresh my memory on his ten rules. I discovered them to be just as cogent, simple and inspirational as I did on first reading.

Perhaps inevitably I found myself adding a few more rules based on my own experiences.

Kaiser summarises his approach to arts management in the following general terms:

“Despite the glut of entertainment options, when audience members and donors are excited about a particular performance, that performance will sell tickets and receive funding. This excitement arises from a great idea that is intelligently marketed. For this reason, my mantra for running successful arts organizations is, Good art, well marketed. It is really as simple as that. I have yet to see an arts organization that produces excellent art and knows how to market that art aggressively that does not create the financial strength needed to pursue its mission in a consistent manner.” – Michael Kaiser

And here’s a summary of the Fifteen Rules which make a turnaround happen. Nine of them are put forward by Michael Kaiser in the first chapter of The Art of the Turnaround (UPNE: Hanover & London, 2008). Kaiser’s rules can be identified by an asterisk.

All quotations are from The Art of the Turnaround. You can preview this excellent work here – I highly recommend it, particularly the first chapter.

1. Someone must lead.*

“Someone must be selected to run the turnaround. This person must have a single unified vision for the organization, have the courage to make difficult decisions in the face of controversy, possess strong negotiating skills, respect all parties including artists, work incredibly hard, and have an obsessive focus on solving the problem. This person must also understand marketing, fund-raising, and financial management. It is a hard job description to meet but the job cannot be divided among many people.”

2. The leader must have a plan.*

“The plan must include

  • An explicit discussion of the mission of the organization. If the goals of the organization are not clearly delineated, and priorities clearly set, it will be impossible to develop a suitable plan.
  • A cogent review of the environment in which the organization operates. Without an understanding of the constraints and opportunities presented by the outside world, it is difficult to create a strong game plan.
  • An honest evaluation of the strengths and weaknesses of the organization. This must give due credit to the assets of the organization while maturely and forthrightly delineating the weaknesses.
  • A coherent set of strategies that will help the organization achieve its mission given the environment in which it operates and its own assets and liabilities.
  • A detailed implementation plan that assigns responsibility for every strategy to one or several stakeholders.
  • A financial plan that reveals the fiscal implications of the plan.”

3. Get a grip on the money.

As the leader, it’s your responsibility to get as thorough a grasp as possible on the finances of your organisation. You may think you know nothing about organisational finances, but you’ll be surprised how quickly you pick it up. Read the last three years of your organisation’s annual reports & accounts, in detail. Work out which lines in the accounts are responsible for the bulk of your income and expenditure. Learn the accountancy software. Don’t leave it to the Finance Director or Bookkeeper. Simplify the reporting. Work with your chair to identify the absolutely critical performance indicators. Cashflow is king. The bottom line is how much it costs each week to keep the staff paid and the doors open – this figure will represent the surplus you need to generate weekly to keep your organisation afloat.

4. You cannot save your way to health.*

“Budget cuts might be advisable but where one cuts is crucial. Cutting into non-strategic costs is beneficial; cutting those activities that lead to revenue is foolhardy. But the amounts saved by cutting expenditures on non-strategic areas rarely change the fortunes of a troubled organization. While it is scary for many board members to acknowledge this, cutting these costs does not create [the] “engine.” Revenue is the problem with most arts organizations, not cost. Organizations focused simply on reducing costs will continue to get smaller and smaller and will never create the economic engine that is required for long-term stability and growth.”

5. Focus on today and tomorrow, not yesterday.*

“There are so many things to worry about when one attempts to change the fortunes of a troubled arts organization. First, one must attend to current cash concerns. […]What one must not do is waste time rehashing the past, pointing fingers, and looking for scapegoats. These activities stall all progress and deflate the hope and optimism that can emerge from the planning process. Historians do not make turnaround kings!”

6. Consult the community.

Every arts organisation has a core stakeholder or user group that are the opinion makers. Consult your community directly, meeting with the most important stakeholders personally. Listen to the good and the bad. Make notes. Make sure everyone knows that change is about to happen – is happening – and that you are listening to them. Survey your community, and press release that you’re going to do the survey. Press release the outline results of the survey, and publish the full results online, edited if need be. Where change is resisted by senior management or others, use the comments gathered in the survey to clarify why change is needed. Read all the comments, good and bad, in a special senior management meeting. The results of the survey are a public mandate for change. Use them.

7. Get to know your team.

In the first three days, meet all members of the senior management team. In the first two weeks, meet all members of staff. Set a date for a staff meeting at the start of the third week, once you’ve met everyone. In your meetings, listen, don’t talk. You know what you think about the organisation, so use the meetings to find out as much as you can about your staff and what their views are. If you spot quick wins to raise morale – issues around staff parking, for example, or other small operational issues – make the change quickly. Show your team that you can listen and make change happen. This is a key way to earn trust. You’ll need their trust for the bigger changes later. Keep personalities and emotion out of it. Ask the same core questions of every staff member. Note their replies. Explain why you’re taking notes.

Consider forming a ‘friendship partnership’ with a larger arts organisation who will act as an organisational mentor. Take your senior team on a staff outing to your partner organisation to meet their counterparts for an informal chat over coffee. Get your team excited about the future.

8. Extend your programming planning calendar.*

“Too many arts organizations plan their programming only one or two years in advance, and troubled organizations typically reduce this time-frame. Many arts executives have suggested it would be foolhardy to plan further into the future since the future seems so uncertain. This has been an argument I have heard most often among smaller institutions […]. And yet, if one does not plan far into the future, it is virtually impossible to develop the large, exciting projects that will reinvigorate the audience and donors. When one creates programming ideas years into the future:

i. You can ensure that the artists you want to work with are available.
ii. You are far more likely to raise the funding required for a large project.
iii. You are far more likely to get important advance press.
iv. You are far more likely to negotiate a successful tour.”

9. Marketing is much more than brochures and advertisements.*

“[…] Too few organizations spend any time or effort performing institutional marketing, the marketing of the entire institutional image that gets people excited about supporting the company. While institutional marketing can help sell tickets (people visit La Scala in Milan because it is La Scala; this reduces the amount the organization must spend on programmatic marketing), it has a bigger role in increasing contributed income. There are many ways to increase institutional visibility, special gala performances, unusual exhibitions and lectures, the use of celebrities, important performance and education programming that captures the imagination of the press, appearances on important television and radio programs, stories in major print outlets, and involvement in high-visibility public functions.

While many of these techniques represent an intersection with programmatic marketing, most organizations do not create a systematic program of public relations and other activities aimed at increasing institutional visibility. I believe large organizations should have at least one “hit” a month, not a small mention in a newspaper but a major event or press coverage that impresses donors and prospects about the importance of the organization. Smaller organizations should aim for one hit each quarter.”

10. There must be only one spokesman, and the message must be positive.*

“If institutional marketing is central to a turnaround, then controlling the message by controlling the messenger is also crucial. One of the challenges faced by troubled arts organizations is that the public begins to hear from a variety of disgruntled voices, It is not unusual for artists, board members, staff members, and others to talk with the press about the problems facing the organization. […] When so many people are communicating with the press, no one is controlling the message. News reports, therefore, become focused solely on the problems, when they occurred, and who caused them. This focus only exacerbates the problem. The message for every arts organization must focus on its reason for being, its mission. And the news that is broadcast must focus on the wonderful projects that the organization is planning to support this mission, rather than on the latest financial crisis. This is one reason why planning programming far in advance is such an important turnaround technique.”

11. Focus on the biggest lines in the budget.

The biggest lines are the ones which can yield the greatest results from small percentage changes. Typically, the biggest income lines for arts organisations are state or private funding and sales/box office income. The biggest expenditures are usually wages and rent. A 5% increase in these income lines will be of far greater benefit than a 70% increase in post-card sales, and a 5% decrease in these expenditure lines delivers a greater benefit than removing light-bulbs to save on electricity. Focus on the big stuff first. Renegotiate deals and look for the 5% increase or decrease.

12. The board must allow itself to be restructured.*

“The heart of this growth was the restructuring of the board. We got rid of the dead weight. hired new members, gave a clear orientation, were explicit about our needs, created a workable plan, helped our board members raise funds, and did the marketing and programming that made them excited to participate. The new board members also spurred the more senior members to greater involvement.”

13. Master the art of saying yes – with strings attached.

Publicise an open-door policy for the first 100 days, and listen to everyone who walks in – particularly artists. Master the art of saying yes to their proposals – but with strings attached. I used to agree to any project that fitted with our vision, and would gladly commit resources where we had capacity. We had barely any money or staff time available, so these were out. But we had rehearsal space, so this was always offered. Offer what you can, and be clear about what you can’t offer. Artists are so used to being refused that you’ll find this policy has miraculous results. The busier the building, the more life and energy it will have.

14. Embrace the 80 hour week, for the first 100 days.

Spending time physically at work for the first three months is critical. Nothing shows your commitment in this period more than actually being present. There is so much to learn and to work on in this period that you’ll need to be spending this level of time at work. It also sets a strong example to your team. Remember to look after your health, eating properly and getting ‘thinking time’ on your own. After six months, you should be spending no more than forty hours per week at work. If you’re still working 70-80 hour weeks, that’s a sign of poor time management or poor organisational processes. Saving twenty minutes a day by automating an activity is the equivalent of two weeks of work saved a year. That’s a lot. Your hard work for the first three months will pay dividends later – and remember, first impressions count.

15. The best arts organisations sell time.

Ultimately, the best arts organisations can be measured by the amount of time their audience spend engaging with them. Consider your audience’s experience extremely closely. Make your venue, building, or project one that encourages the audience to spend time there. Is the context for the art beautiful, relaxing, engaging or inspirational? In a theatre, is the bar literally the best bar in town? If not, why not? In a visual art installation, can it be comfortably enjoyed by the audience? Could your aged uncle spend an hour there?

All art must be able to be consumed by the audience. There should be joy in the consumption. Unless the point of the art is that it is difficult to engage with, consider the comfort and enjoyment of your audience at all times. If your building is dirty, has a ‘conference-centre’ aesthetic, is uncomfortable, has a poor hospitality offering, or unwelcoming staff, then don’t be surprised if you struggle to attract audiences even though the art is great.

Your aim should be to instill a habit of attendance in your audience, and the best way to do this is to consider their perspective in detail at all times. You are most likely to do this effectively in your first 100 days while your first impressions of the organisation are fresh in your mind. Here’s a useful post about generating ‘habitual attendance’.

16. The organization must have the discipline to follow each of these rules.*

“There is not one of these rules that can be sacrificed in the pursuit of a turnaround. All are equally important. This puts the leaders of turnarounds in a difficult situation. They must be able to balance many competing needs at the same time. They must deal with the current, short-term cash needs while also addressing the future. They must deal with the great stress induced by these problems while also presenting a strong and upbeat face to the outside world. They must present solutions rather than problems to anyone who has the power to help: board members, staff members, donors, and the public. They must also work quickly and rather ruthlessly to make the changes necessary. Truly troubled arts organizations do not have the time for consensus building, numerous staff meetings, or focus groups. They require quick, smart, determined action. Not everyone in the organization will agree with the leader or even like the leader. But, ideally, at the end of the turnaround, all will respect that something miraculous has transpired.”

Rules with an asterisk * following the title and with the paragraph text in quotation marks are quoted from Chapter One of Michael Kaiser’s The Art of the Turnaround (UPNE: Hanover & London, 2008).  You can preview this excellent work here

If you’ve been inspired by Michael Kaiser’s work, have a look at his website.

These notes were originally disseminated as part of a 1/2 day seminar given by Miles Gregory to students on the MA Arts Management course at Whitecliffe College of Arts & Design, Auckland, on 28 October 2012.

2 responses to “The Art of the Turnaround: fifteen transformative rules

  1. Thank you so much for pointing out that a great turnaround is about today and the future, not yesterday as all yesterday can do is slow you down. About a week ago, I was talking with my sister about the metal refinery downtown. It seems like their production has slowed. I imagine that your tips could apply to most business turnarounds, not just the arts! I wonder if the refinery should look into management services that could help them get back up to speed and stay profitable.

    • Glad you enjoyed the post Greta! There needs to be lots of organisational buy-in to make a strong turnaround achievable in the right timescale. A good board, strong leadership, and a management team that is communicated with really well. Good luck!

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