{"id":462,"date":"2014-07-02T16:03:34","date_gmt":"2014-07-02T14:03:34","guid":{"rendered":"http:\/\/www.artsjournal.com\/jumper\/?p=462"},"modified":"2014-07-03T07:43:18","modified_gmt":"2014-07-03T05:43:18","slug":"change-in-the-arts-sector-can-we-speed-it-up-or-must-we-wait-it-out","status":"publish","type":"post","link":"https:\/\/www.artsjournal.com\/jumper\/2014\/07\/change-in-the-arts-sector-can-we-speed-it-up-or-must-we-wait-it-out\/","title":{"rendered":"Change in the arts sector. Can we speed it up or must we wait it out?"},"content":{"rendered":"

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\"EvolveFish\"<\/a><\/p>\n

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Devon Smith has written a smart, provocative post on a debate she engaged in at the recent Americans for the Arts Conference in Nashville. It’s called\u00c2\u00a0We Should Allow Failing Arts Organizations to Die<\/a>\u00c2\u00a0and it has lit up the arts blogosphere, Twitter, and Facebook the past few days. So much so that she has added a second post<\/a>\u00c2\u00a0responding to the internet comments. This topic is close to my heart. In 2009 I was on a panel at the Grantmakers in the Arts Conference alled\u00c2\u00a0Graceful Exits<\/em>,What Can Funders Do When It’s Time to Pull the Plug.<\/em>\u00c2\u00a0In 2011 I was interviewing Rocco when he made his now infamous supply and demand comment. And over the past few years I’ve written four\u00c2\u00a0Jumper posts on the subject.***<\/p>\n

While one could argue that I’ve had more than my say on the topic, Devon’s terrific post, along with a recent academic article recommended by one of my PhD advisors, has\u00c2\u00a0inspired me out of an extended hiatus from Jumper (during which I’ve been working on my dissertation). I thought I would reflect on the following issues\u00c2\u00a0related to ossified organizations that fail to change or die: (1) why organizations arise in the first place; (2) why inertia sets in; and (3) how organizational change\u00c2\u00a0happens.<\/p>\n

The academic article\u00c2\u00a0that I’m referencing\u00c2\u00a0is called Structural Inertia and Organizational Change<\/em> and it is by Mike T. Hannan and John Freeman (who work in a realm of the social sciences known as organizational ecology).<\/p>\n

Why organizations arise in the first place:<\/strong><\/p>\n

One of the many provocative points that Devon makes is that a lot of what counts as culture, captures our interest and imagination, and gives meaning to our lives does not, necessarily require an arts organization to be created or delivered. She writes:<\/p>\n

I don’t have the stats to support this, but for every hour of “traditional” nonprofit arts that a consumer experiences this year, they’ll spend 20 or 30 times times that experiencing “nontraditional” arts and culture. Those experiences that reveal or question our humanity. That enable us to see the world and each other in a new light. Those experiences that delight our mind and our senses. That teach us about other cultures and expand our capacity for imagination.\u00c2\u00a0Because for me, those “nontraditional” experiences include going to a folk music concert, funding a poetry book on Kickstarter, appreciating the aesthetic design of an especially beautiful video game, the art of a pulling a great shot of espresso, and the craft of a great pair of raw denim jeans. All things that I’ve done these past 3 days in Nashville. And none of those experience required an arts organization to support them.<\/span><\/p><\/blockquote>\n

Many of them\u00c2\u00a0did, however, require organizations (video game companies, coffee houses, fashion houses and manufacturers, etc.). This raises a couple interesting questions. Why do organizations arise, generally? And why do we see a sector made up of arts organizations more so than a sector made up of artist collectives that are not permanently\u00c2\u00a0structured\u00c2\u00a0into organizational form?<\/p>\n

If I asked a room of arts conference attendees this question they would probably answer that you can only get grants if you are formed as an organization and this may, indeed, be\u00c2\u00a0a significant part of the story. At the heart of it, organizations are means by which a collective of individuals can pursue common goals and also aggregate resources. While economists tend to explain the emergence of organizations in terms of efficiency organizational ecologists looks at it differently. They argue\u00c2\u00a0that organizations are favored over loose collectives because they are reliable<\/em> (i.e., they can reproduce a given product at a certain level of quality) and they are accountable<\/em> (i.e., they are able to rationalize their decisions and account for their actions to customers, investors, governments, et cetera).<\/p>\n

The nonprofit<\/em> organizational form, in particular, was not heavily utilized in the US until the mid-twentieth century when it became authorized\u00c2\u00a0(the IRS began to approve its use\u00c2\u00a0among\u00c2\u00a0arts organizations), legitimate (donors and others had begun to recognize\u00c2\u00a0arts organizations as having a valid educational or charitable social purpose, worthy of contributions), and materially beneficial (there were actually sources of funding that opened up that made the nonprofit form preferable to the LLC or other forms).<\/p>\n

Why inertia sets in:<\/strong><\/p>\n

In the article mentioned above, Hannan and Freeman make\u00c2\u00a0the case that structural inertia (meaning a failure to change, or change fast enough, in response to changes in the environment) is an outcome of a system that tends to select organizations (over unincorporated collectives) and certain kinds of organizations (those perceived as reliable and accountable) over others.<\/p>\n

In the arts sector, with\u00c2\u00a0the emergence of grants\u00c2\u00a0from government agencies and funders\u00c2\u00a0came\u00c2\u00a0the emergence of eligibility requirements: the presence of managerial staff, minimum number of years in existence, minimum number of weeks of programming per year,\u00c2\u00a0track record of producing good works as demonstrated by positive reviews, a minimum\u00c2\u00a0level of\u00c2\u00a0annual operating budget,\u00c2\u00a0stable operations (lack of turnover), a\u00c2\u00a0persuasive mission statement, clear organizational goals, and a long-range plan. These are basically\u00c2\u00a0signs of reliability and\u00c2\u00a0accountability.<\/p>\n

And it stands to reason that within a given field it is often the oldest organizations that are perceived to be most reliable and accountable. So funding tends to gravitate toward them–funding which enables them in many cases to build buildings or hire staff, which further contribute to their structural inertia.<\/p>\n

Not only does structural inertia increase with age and size but\u00c2\u00a0transformation is\u00c2\u00a0a gamble for organizations as it may jeopardize their perceived reliability and accountability. Big change seems to have paid off pretty well for Diane Paulus at American Repertory Theatre, but not so well at New York City Opera, where\u00c2\u00a0attempts to reinvent in the final years (when the organization was already in a weakened state financially) resulted in a loss of confidence among stakeholders.<\/p>\n

For this reason, large, old under-performing organizations often resist transformation. This is the idea at the heart of the book, Permanently Failing Organizations<\/em>, in which the authors essentially ask why low-performing organizations persist. They answer that it’s largely due to the fact that those who rely upon the organization for a livelihood and also have the power to make decisions (i.e., managers) keep organizations alive (so they can continue to earn a living) but fail to make necessary changes that might lead to higher performance because doing so is a gamble that could result in outright failure.<\/p>\n

Other internal factors that contribute to structural intertia are\u00c2\u00a0sunk costs; political alliances; and the tendency for precedents (things that worked once) to become norms (the way things are done around here).<\/p>\n

There’s much more I could write as it’s a complex subject but these are the key points that seem relevant for the current conversation.<\/p>\n

How organizational change happens:<\/strong><\/p>\n

So if inertia is a consequence of these external and internal factors, and seems almost inevitable, how does change happen?<\/p>\n

I’m oversimplifying things, but there are basically three major points of view on this: individual organizations can make conscious decisions to adapt to their environments (rational adaptation); individual organizations do change but often such change\u00c2\u00a0is random, rather than in rational response to goals or the external environment (random transformation); and\u00c2\u00a0that change tends to happen at the population level, rather than at the individual organization level. Meaning, change happens with the death of some organizations\u00c2\u00a0and their replacement by those with different traits (more suitable or favored in the current environment).<\/p>\n

The last perspective is that of population ecology<\/em> and the one advanced by Hannan and Freeman.<\/p>\n

While these are divergent points of view on organizational change it is also fair to say that all three types of change can be observed. Those who advance the idea of population ecology, for instance, also recognize that there are types of organizations, and points in the life cycles of organizations, when organizations can and do change individually. A population ecology perspective would also suggest, however, that this type of change\u00c2\u00a0can be\u00c2\u00a0challenging and risky (as noted above).<\/p>\n

So if I put this all together\u00c2\u00a0and reflect on Devon’s post, here’s the picture:<\/p>\n