Are we a sector defined by our permanently failing organizations?

A few weeks back I wrote a post responding to a session at the Theatre Communications Group conference in which an esteemed leader of a resident theater (Michael Maso) called “bullshit” on some criticisms being lobbed at large theater institutions. I am incredibly grateful to all who took the time to read or respond to the post. The comments, including a link to Mr. Maso’s response, are well worth reading if you have not done so. I want to pick up on some of the ideas raised by Maso and others in a future post, but today I want to draw attention to comments posted by Corey Fischer at the recently closed Traveling Jewish Theater. In talking about the struggles the organization faced in trying to maintain its commitment to its mission and goals, Corey writes:

The sad part is that in the years leading up to our decision to finally close down, it seemed as if we were being punished for our commitment to be a home for artists. Some foundations and consultants implied and sometimes said straight out that to attempt to have artists at the center of the company and pay them a living wage was frivolous, unrealistic and irresponsible. Perhaps. But as economic conditions forced us to change that basic aspect of our identity, it became harder and harder for us to accomplish our mission of creating and presenting original work. When we recognized that the only way to even have a chance of surviving was to become one more theater producing plays that could just as easily be done by a host of other companies, we saw no reason to continue.

When I read Corey’s posts I was reminded of the 1989 book “Permanently Failing Organizations” by Marshall W. Meyer and Lynne G. Zucker, which I recently read on someone’s recommendation. The authors define permanently failing organizations as those that persist even though they are no longer achieving their goals. While economists and others have long theorized that higher performing organizations persist and those that are not high performing are driven out of business, Meyer & Zucker found that persistence and performance can become decoupled and companies that are no longer achieving their performance goals (e.g., profits to owners/shareholders in the case of for-profits; and artistic and social mission goals in the case of not-for-profits) can continue to exist for quite a long time.

Without going too deeply into the theory in this post, the researchers postulate that organizations reach a so-called ‘permanently failing’ state when those who are ‘dependent’ on the institution (primarily but not exclusively, managers who depend on the institution for a paycheck and who, therefore, often value maintenance of the organization over other performance goals) begin to amass power, which they then use to keep the organization alive, but in a low performance state. Why do these managers fail to pursue strategies that might lead to higher performance (e.g., higher profits or higher quality)? Because such strategies often entail taking risks that might lead to “outright failure”–something those running permanently failing organizations want to avoid at all costs.

It strikes me that in nonprofit arts organizations–in which there are no owners (or shareholders) in the legal sense, in which permanence is often a goal of the institution, in which mission and goals are notoriously difficult to define and measure, and in which it is actually quite difficult for up-and-coming innovators to access the resources and power necessary to give the most established institutions a run for their money–it would be particularly easy for organizations to drift towards a permanently failing state (or to become ‘nonprofit arts zombies’, to use the phrase coined by Brian Newman in his chapter in the book 20 under 40).

Interestingly, Traveling Jewish Theater clearly felt it had the option (and encouragement by funders and others, even) to pursue persistence at the expense of its mission and goals by becoming “just another theater company doing work any other theater company could do.” However, TJT chose the road less travled in the nonprofit arts sector. Laudably, TJT felt it was “more important to accomplish the mission, than to survive” (a phrase used by Woolly Mammoth board member, Pete Miller, at the Scarcity to Abundance conference at Arena Stage in January 2011).

In the nonprofit sector we have come to associate age and size with performance; and yet we have also become a sector in which there is an almost constant call for innovation and new models. Perhaps the two are not unrelated? Perhaps we perceive the arts sector itself as being in the doldrums not because there are no innovators in our midst (there are plenty), but because we have, for too long, held up our permanently failing organizations as leaders and, by doing so, have permitted them to define our sector’s goals and its performance.

Share on FacebookTweet about this on TwitterShare on RedditEmail this to someone


  1. says

    TJT’s response to its fiscal situation and the pressures placed on it by its funders has a timely parallel in the recent 13P implosion (so-called), and I’m not sure it would be accurate to call its decision “laudable” (however noble it was, it was a noble suicide) when it means closing its doors to what was essentially an open-ended mission (unlike 13P’s). Extending this somewhat, I wonder if this instinct to self-preservation at the cost of mission might characterize some of these institutions as “too big to fail.”

  2. says

    Hi Diane,

    A couple years ago, Mark Allen (of the amazing social practice Machine Project) told me his arts organization had a “deliberately unsustainable business model.” I was inspired to write more about the idea here:

    The desire to survive will always exist, whether you run a small institution or a giant one. It’s human nature to want to keep your job and keep doing what you’re doing. The challenge is not to make it your primary goal. Swing for the fences, do something great, and then figure out what comes next.

  3. John Abodeely says

    What a brilliant concept–permanently failing organizations. Thanks for this post, Diane.

    I think the fundamental question this post uncovers is: how is accountability defined and adhered to in these organizations? As you point out, age and size often define success, which means survival is the bar. The only way our organizations become great is when a person with the right internal accountability metrics ascends to power and implements those metrics throughout the organization.

    I would contend that funders, which are the closest analogy to shareholders in our tax structure, largely define expectations. Unfortunately, funders, as others, vary in their success as well as their strategy. And so, in the aggregate, they fail to hold us appropriately accountable.

    I believe, too, that the nonprofit board structure also contributes to the problem. Board-level accountability is distributed across all members of the board and, in actuality, ends up lowering accountability for each person. So no one feels fully accountable. Authority is also distributed, so no one feels fully in-charge and therefore engenders change.

    • Laura Anderson says

      I think you’ve raised an interesting point with board structure. My experience with non-profit boards, particularly with the current one I am involved with, is apathy. It’s not the non-profit’s responsibility to distribute board accountability, it’s the personal responsibility of each board member to be an active participant.

  4. MBW says

    I think that sometimes theatre companies wrongly see survival as a choice between “selling out” and shutting down.

    The problem in many cases, however, is that theatre companies fail to distinguish between tradition (the way things have always been done) and the core characteristics of their mission. Too often, what may seem “sacred” may not really have any direct bearing on the original mission.

  5. Rick St. Peter says

    This is a great post…almost every theatre I know of is a non-profit zombie if for no other reason than they are being forced to feed off the carcass of a dead idea. The 501-c-3 model is broken and I think institutional theatres are going the way of the dinosaur and the newspaper. We have seen a gradual removal of the artist from the center of creation in these non-profit entities. Look at the history, we started with the notion of resident companies and have slowly peeled away the onion on this idea until, like Peer Gynt, we have discovered there is no center there. First the resco’s were disbanded, then new work was abandoned, then designers were jobbed in and now we are seeing a greater and greater emphasis on the hiring of executive producers to lead our theatres…Middle management survives, the artist temps and hopes for the occassional phone call…

  6. says

    Wonderful. As always. I’ve been scratching my head since one of Adam Huttler’s recent blog posts about how “lean” and “efficient” non-profits manage to grow in size while not growing in stability (or therefore ability to make big decisions or try new things). That version of the story tells you about someone in one of these organizations who wants to do new wonderful things, but can’t because of the perpetual precariousness of leanness and efficiency. This version tells you about people who have incentives to not try to do new wonderful things because of the upside being so much smaller than the downside.

    I think both are completely right, and relate in interesting ways…

  7. says

    Honored to be quoted, Diane. In response to the ideas in posts by Nina Simon and others: When I look back on TJT’s 34 years, I find that those works I’m most proud of were, in many cases, ones that made the least sense financially. I’m thinking of the collaboration between co-founder Naomi Newman, John O’Neal of Junebug, and director Steve Kent, “Crossing the Broken Bridge,” that took a couple of years to create and required a lot of travel since the three lived in different cities. But the play, when it eventually toured, brought African-American and Jewish Communities together as co-producers, ending, in some cases, years of estrangement. Or “See Under: Love,” my adaptation of Israeli author David Grossman’s novel, which called for a much larger cast and — again — more development time than would have been financially prudent. We felt that Grossman’s voice so needed to be heard — particularly by the American Jewish community, that prudence held little sway. Because TJT’s artists were in leadership positions, and our administrators shared the company’s vision, we took on many projects that didn’t make a lot of financial sense. Please understand that for us, the “imprudence” consisted of supporting writers, directors, musicians and actors to work collaboratively for as long as it took. No wildly expensive sets or technology. Actually, I think it’s a miracle that we lasted 34 years, given our mission. But after 2008, what had been difficult became impossible. Our offerings in the seasons that followed were limited to existing plays that could be rehearsed in the standard four weeks (which seems to be shrinking to three in some LORT houses). In our last season, a particular combination of commissioning grants allowed us one more opportunity to do “slow theatre” (a phrase coined by former TJT member Helen Stoltzfus) and take two years and multiple workshops to develop “In the Maze of Our Own Lives” (based on the story of the Group Theatre). By then, we had decided it would be our last.

    • says

      Corey, thanks so much for weighing in again–and, again, with such rich thoughts. Your comments seem to suggest that “survival” in the American nonprofit theater may (for some, or perhaps many) demand a surrendering of the goals and values that many companies were formed to uphold. One has to ask, as you did, whether staying alive is worth it if it requires letting go of such principles as “slow theatre” … “adequate development time” … “supporting writers, directors, musicians and actors to work collaboratively as long as it takes”. You mentioned the Group Theatre today and in one of your comments a few weeks ago. While they didn’t plan to have a brief life it is noteworthy that, despite closing their doors after 7 years (because they were trying to support an Art Theater on a commercial model), they had enormous impact. While it’s obvious to state that a short life cannot be taken as an indication of high impact (and may, in fact, be an indication of its opposite), it is counter-intuitive, but nonetheless true, that a long life is also no indication of a meaningful existence.

  8. says

    Great post Diane! I’m struck by this calling out of managers and it makes me think more about this artists/institution dichotomy. So many theaters and artistic directors have given over the running of their theaters to the “money people” and this divide in our large not-for-profit theaters seems to be at the core of my definition of permanently failing theater, those that keep lopping off their mission in order to sell more tickets, in order to survive. So perhaps we should spend more time talking about managers/artists versus artists/institutions.

  9. Heather Good says

    Thanks for the post, Diane, and for much food for thought.

    One question that your post raises is whether we can judge the health of the entire arts sector based on the death or prolonged life of individual institutions. “The Arts” is indeed an complex ecosystem, with many players: individuals & organizations, professional and amateur, in different stages of development, dedicated to preserving tradition and/or to experimenting & innovating, employing a variety of tools to achieve their goals, and surrounded by myriad resources & structures that support or constrain their work (the legal mechanisms of non profit status for example). I am hesitant to read the success or failure of the entire sector into the actions of any number of individual players in that ecosystem, but I do think there is value in looking at the system as a whole and trying to better understand why and how things play out the way that they do. The system does make it hard to “slow down”; it does forge managers who must be the “money people” (why else were they hired?); mission creep happens. Why do these things happen? Perhaps its greed or stupidity or lack of vision, but it’s also possible that good people trying very hard to do a good job in their respective roles will be driven to behave a certain way by pressures within the system. We’ve all seen, for example, how non-profit incorporation and granting processes drive organizational behavior.

    The concept of a “permanently failing” organization is an interesting one. But if your organization is still in existence and you are still producing work, at some level you are not failing. There may be a disconnect between the work that you say that you do and what you actually do. You may be meeting goals other than the ones that originally launched your organization. I believe that a good organization can recognize this and act accordingly. TJT’s choice to die rather than sacrifice its original mission is one path. I don’t necessarily think it’s “selling out” to name and acknowledge new goals and a new place in the ecosystem (the evolution from “innovator” to “tradition preserver” for example). What’s dysfunctional is to preserve the facade of an old mission and purpose, when the day-to-day work has fundamentally changed.

    Maybe because I’m an arts manager, and I work very hard on behalf of a venue that serves a lot of people in my community, I am a little saddened by my perception that this is veering towards an “managers vs. artists” conversation in which the managers are presumed to be the bad guys. There are certainly serious and real issues to address (executive compensation, for example), but if we care about our fragile and beautiful arts ecosystem, I think we’re best served by understanding the valuable roles that each one of us plays in it, and the places where each of us has power to nudge the system in a healthier direction.

  10. Kate Bennet says

    As a self-proclaimed data junkie, I think your statement “in which mission and goals are notoriously difficult to define and measure” gives an unnecessary pass to institutions. Goals should always be well-defined and measurable. A mission statement can perhaps be more wishy-washy with lots of adjectives thrown around, but goals should be set, measured, and either attained or not.
    How many people will you serve?
    How will they respond to surveys?
    How many click-thrus?
    How many transactions?
    How many conversions from ticket-buyers to donors?
    The list can go on and on, with ever more increasing layers of complexity and analysis. An institution that tracks hard numbers in combination with innovative and strategic planning and programming will at least have a fighting chance.

  11. says

    OK, just to stir the pot of this richly simmering conversation, I want to tell you about my visit, last week, to the Oregon Shakespeare Festival, very much alive after 77 years. It was my first visit ever, though I’ve been hearing about it since 1962. So I can’t say how much of the vitality and generosity I experienced there is a recent development — since Bill Rauch became AD five years ago — and how much goes further back in OSF’s history. My hunch is that Bill, with his years as co-founder and AD of Cornerstone, brought his particular skills in building community and empowering creativity throughout an organization to an institution that had the means and the desire to grow in ways that might have astounded OSF’s founders. Or not. I wonder if there’s been any recent reportage or analysis of how OSF has been so successful in so many areas?

    While there, I saw a dress rehearsal of a play they had commissioned on LBJ and MLK and their roles in getting the Civil Rights act passed 1963-1964 (“All the Way” by Robert Schenkkan) and performances of “Medea/Macbeth/Cinderella,” a very challenging mash-up of those three plays, and “Animal Crackers” a revival of the Kaufman-Ryskind-Marx Brothers anarcho-musical farce. All three were, in my view, impeccably done, neccesary productions. But what most surprised me was that every show — from the dense bricolage of M/M/C to the gloriously slapstick “Animal Crackers” — played to a capacity audience that was enthralled and unabashedly appreciative.

    A few days later, back in SF, I met a drama teacher from an impoverished high school in Portland who told me stories of OSF’s very unusual generosity in making sure his students were able to get to Ashland regularly and experience OSF in depth. Perhaps this sounds like an uncritical gush. But is there another place/organization like OSF in this country? I imagine that some excellent work happens in many large resident theatres. But do they hire a company of actors for a nine-month season of rep that ranges from Shakespeare to new, experimental works? Do they anchor a town’s economic life? Do their stage crews — who turn over five or more shows a day — think of themselves as an ensemble and do physical warm-ups before starting work? Aside from all of OSF’s “measurable” successes, I witnessed signs an internal institutional culture informed by — no other word for it — love. I’ve experienced this in small “alternate” theatres and small co-op ventures here and there, but never in a large, long-lived, “mainstream” institution.

    So, the questions that might be relevant to this discussion: is OSF a unique, unreplicable confluence of phenomena? Is it a rare example of the upside to a being a large institution with abundant resources? Does it illustrate what can happen when an organization outlives its problems? Is their current flowering a result of a visionary leader from a particularly value- and mission-centered background being empowered to transform a conventional organization into something new? All, or none, of the above?

  12. says

    This is in essence a discussion about how to balance sound management with artistic goals, and yet only managers are participating and no (or very few) artists. (Or maybe there are some manger-artists.) How can you find the balance when artists are not even part of the discussion? How would a useful dialog between managers and artists be created?

    • says

      Though I prefer to call myself a “theatre-maker,” I also answer to “artist.” Few would mistake me for a manager or administrator. Can’t speak for anyone else being new to these parts.

    • Heather Good says

      I also answer to “artist” as well as “arts manager.” And I’m sure Diane would welcome more comments from artists, if you know any that you’d like to invite to participate. More artists commenting in the arts management blogosphere would be a good thing, in my opinion.

  13. says

    Love this discussion, and I particularly love that Corey has brought OSF into the mix. I can’t think of another theater that more embodies a bunch of blazing exceptions to all the trends we lament in American theater, from the end of resident companies to the lack of diversity, from the (arguable) imbalance between classic and contemporary work to the lack of audience engagement. I went to Ashland two summers ago, and I used to go regularly in the late 90s/early 00s, and I can testify that there is no other place like it in the U.S. Even before Bill took over, it had many of these things figured out, or was figuring them out; it’s only stepped up more since he came on board. Self-evidently, many of OSF’s successes can’t be duplicated in differently constituted cities and theater markets, and its success wasn’t built overnight, which are two objections I hear a lot whenever I suggest OSF as a model. Still, I’d love to see more theatermakers reckon with the ways OSF has addressed these challenges and how the lessons of its success might apply to their own work.

  14. Charlie R says

    Are we a sector defined by our permanently failing organizations?

    Yes, and we will be unless we restructure the “Foundation > Nonprofit > Grant > Product> Review ” system.

    Eliminate 501c3’s in the arts and fund artist positions directly in public, private, and personal projects. Let us do what we do best, and you will have relevant content that binds communities together, and achieves all of the “intended” goals.
    Face it, artists are not & should not be, or have to become to survive, experts at writing grant applications. Foundations have the rancid idea that we waste money. Show me one tangible, lasting, positive acheivement that the financial sector in and of itself, has produced.

    IMHO, the ‘Arts Sector’ is nothing more than a huge tax shelter.

  15. says

    I think you have identified a big problem, Diana. People working in non-profits are usually passionate about what they do but often come to confuse their mission and their institution. The idea of closing the institution then becomes a tragedy rather than a necessary re-focus and these organisations can often be kept going with support from friends and with a great deal of self-exploitation. This problem of zombie organisations doesn’t happen in the commercial sector since nobody will donate to a failing business and employees are unwilling to self-exploit. The main movers simple close the business down, dust themselves off and, in many cases, start afresh.

  16. says

    Hello all, I am an artist, unabashedly; altho’ not in theatre. I’m a self-managed concert pianist. I adore and play a great deal of the “standard” repertoire but have also commissioned, performed, and recorded a lot of new music. I find huge amounts of this entire discussion, with few changes, to be transferible to the music world. Greg Sandow, who also blogs on ARTSJOURNAL, has recently been writing quite a lot about how organizations like symphony orchestras need to change their thinking in terms of program design, audience outreach, etc etc; and I feel what’s being written here has everything to do with what he’s saying. JIMINY, how I wish I had time right now to weigh in on this discussion! But too busy preparing for various concerts, principally –as it happens– of music written for my most recent commissioning project “Canto de la Monarca: Mujeres en México / Song of the Monarch: Women in México”. For now, I just want to say that I think it is above all important to keep our artistic compasses fully activated and not get seduced into thinking that we must measure ourselves by the values of the financial community, if such it may be called. Money is important, obviously, but we mustn’t get confused about what it means. Part of that compass is the generosity Corey Fischer mentions when he talks about his experience with the OSF, and about which Polly Carl wrote in her extraordinary blog a year or so ago — which has been a big part of my own compass ever since, incidentally. And meanwhile, ¡¡BRAVA!! to Diane Ragsdale for this post and thank you to all of you for your own intellectual generosity and heart!

  17. Lance Olson says

    An outcomes-focused effort must organize around the efficient, effective accomplishment of its outcomes. If the outcome is the creation of new dances by Merce Cunningham the effort must be structured and measured very differently than, say, an effort with the outcome of engaging Ashland with exceptionally produced examples of current and historical theatrical storytelling. MCDC chose to disband soon after the founder’s passing. OSF has built a portfolio of support teams that produce great theater efficiently.

    In the early days of TCG when theaters were being planted in cities nationwide, a model was promulgated for building strong institutions. It had a foundation-like board representing the community; a resident company of artists who became fully engulfed in the community; a production team; an artistic leadership team; and a management team. In essence the plays were the interchangeable parts. As time passed, the jobs of each team became defined, ie, ED, AD, MD, DOD, etc. — yes we know them too well. Budgets rose, aspirations rose, and ADs widened their talent choices. Many of these resident theaters thrived. Public and foundation funders evaluated institutional future success largely on these adopted model structures, which led to a certain freezing of that business model. In essence, if you look capable, you must be capable.

    The strength of the institutional theaters is that they produce plays interchangeably, on a schedule, within budget, to defined standards. That’s a valuable outcome. It’s not necessarily a “zombie” effort. OSF and the Public show how exciting those outcomes can be. But it does tend toward interchangeability and locked structures.

    Clearly there are other ways of making art. Those efforts must define structures and teams appropriate to their planned outcomes, and potential funders must evaluate those structures for their ability to accomplish the outcome and the value of that outcome, rather than whether they have two assistant stage managers.

    Now that means this conversation is about people. How do they interact, work together, think in engagement, and work on shared outcomes. Forget institution vs. funder, board vs.professionals, artists vs. managers. Consider instead Ken Foster’s metaphor of the squishy amoeba teamwork, an inherently artistic and creative approach to managing resources. Structure your team to accomplish its outcomes. Perhaps one might go so far as to envision an institutional theater as a portfolio of teams, each bringing artists, managers, and production staff into engagement for producing its designated outcome in the most efficient manner, in its own time, and relying on certain pooled resources.

    • Douglas Clayton says

      Hey Larry – I don’t disagree generally with your point, but you casually brushed over the ‘shift’ in the outcomes/goals that were initially in place for the regional theaters (that included community investment at every level and resident artists) to the current outcomes/goals, that are about sustainability of a production structure.

      That adjustment is, to my mind, the destructive and insidious shift that threatens us. No longer are most of our institutional theaters about building relationships with their local communities or with resident artists (who become directly invested in their communities by virtue of long-term commitments). Instead, that has all been sacrificed on the altars of the Artistic Directors’ artistic vision, and moreso on the altar of this sustainability in this rigid model. (And the AD vision is usually sacrificed as well, these days.)

      While it’s fine to acknowledge the accomplishment of managing to sustain these ‘play-interchangeable’ producing structures, no one in 1950 set out to start the regional theatre movement with that structure as the goal. Sustainability, yes, but sustainability for artistic creation, artistic homes for artists, and relationship at all levels with the local community.

      Most of those outcomes have been tossed by the wayside. The places that they haven’t – to your point – are the very revered and successful regionals we now talk about, like OSF.

      Perhaps if our theatres re-embraced those original goals, instead of simple sustainability, it would be a great thing. I suggest that it would be.

  18. Erik J. says

    There are a number of elements that have contributed to the current state of the arts sector, leading to the rise of permanently failing organizations.

    Arts organizations often do a terrible job of board recruitment and orientation. We want board members who will write big checks but otherwise keep quiet. Yet at the same time we ask them to take full responsibility for the organization’s finances. We don’t take the time to explain the differences between managing a theater and, say, managing a bank. I’ve lost track of how many times I’ve worked with organizations where board members are still asking “Why don’t we do shows that make more money?”. That is a question they need to understand the answer to before they’re even appointed to the board. If they don’t like or understand the answer, they should not be on the board.

    We also continue to tolerate administrative and managerial incompetence. Because we’ve simply rolled over and decided that jobs in the nonprofit sector should pay less than their for-profit counterparts, we have severely limited our talent pool across all departments – accounting, development and marketing in particular. And the larger institutions, which we often perceive as more successful, are not immune to this.

    The peforming artists, as others have noted here, have also gotten a bad deal. I don’t blame organizations for this as much as I blame the American university system, which churns out twenty times more performing artists each year than there are full-time positions to fill. No other sector of the labor market is so overpopulated with workers.


Leave a Reply

Your email address will not be published. Required fields are marked *