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Defining R & D in the cultural sector: why we need innovation in grantmaking strategy

As part of the research project I’m working on with the Philadelphia-based Wyncote Foundation (see previous posts), I recently had the opportunity to attend the Annual Forum for Nesta‘s Digital R & D Fund for the Arts in London. To give you the lay of the land in case you don’t already know anything about it, Nesta calls itself “an innovation charity with a mission to help people and organizations bring great ideas to life.” R D Annual ForumNesta works in partnership with other businesses, nonprofits, government agencies, and funders to increase social impact and to innovate around ways to test new ideas, new financing methods, and new ways to gather and analyze results. Through research, piloting, convening, and publishing, Nesta spreads knowledge and improves practice around innovation, approaching its work across sectors and disciplines. If you’re interested in these topics you really should scour the website and follow Nesta and its principals on social media. They’re a font of useful information about emerging practice in many different fields.

The Digital R & D Fund for the Arts is a multi-year collaboration among Nesta, the Arts Council England, and the Arts and Humanities Research Council. The Fund was established to help “accelerate effective innovation and experiment, bringing together researchers, technology businesses and arts organizations.” The Fund’s £7 million budget (about $11.7 million in US dollars) has been distributed via 3 two-year grant cycles with maximum awards of £125,000 ($210,000). It was created in response to the one-two punch of challenging economic conditions and the onslaught of digital technologies that together have required arts organizations “to sharpen up their thinking about how to relate to audiences, and how to develop business models that can bring more revenue.” (Check out the first year report here.)

It would be great to have something like this in the U.S. The Fund is supporting really interesting projects. (Examples: the Imperial War Museum partnering with HistoryPin to invite the public to help curate the content in its First World War paintings collection, Dance Digital‘s development of an animated learning tool to help children create dances, and Cambridge Junction‘s effort to interest youth in digital music production through the development of a customizable and codable musical instrument.) But what interests me even more is the methodology. The underlying questions being asked at the grantmaking table are not about which projects are “the best” but rather which projects ask the best questions and are best designed to deliver answers that will result in field-wide learning. Nesta is taking a crack at defining the nature of R & D as it applies to the cultural sector, using the Fund’s architecture to innovate in processes that result in learning andfailbetter632 progress. The Fund’s goals are to generate knowledge, to share knowledge efficiently, and to speed up the rate of learning not just in the individual organizations that receive support but among the broader field of practice.

Field-wide sharing and learning was the topic of the Annual Forum, held in Vinopolis, a sprawling wine emporium and conference center at Borough Market in Southwark, conveniently adjacent to one of my favorite coffee shops. About 250 people from across the U.K. gathered for the day, many with job titles like Digital Producer, Digital Communications Officer, Developer, Creative Director, Senior Innovation Consultant, or my favorite, Imagination Catalyst (@KnowNOW_KnowHow). We heard a strong panel on “What is R & D in the Arts?” along with panel presentations from funded projects, keynotes delivered from a business’ (Patrick Bradley) and then a cultural organization’s (Nick Starr) perspective, and an interesting panel on the role of data as it applies to creativity and learning. Program highlights are viewable online and Nesta promises more coverage in future editions of its on-line publication, Native.

Nesta gave me a copy of the application form for the Fund (it’s not available online because applications are closed). The Fund’s specific interests are in expanding audience reach and engagement, and in the exploration of new business models (or a combination of these two). Each applicant must collaborate with a researcher and a technology provider, and is asked to propose “investigations from which the wider arts sector might learn.” Applicants incorporate a plan for the action research methods — created with the third-party research collaborator — that can capture lessons from their proposed experiments. This supports the Fund’s overarching goal to “extract lessons and transferable insights to contribute to a growing body of evidence and data on digital innovation in the arts.” The quality of the team — organization, researchers, technologists — and the clarity and importance of the question being asked, are determining factors in funding.

Nesta’s R & D orientation is different from the logic model-driven funding approach so pervasive among U.S. funders. The differences are more than semantic. Logic models detail intended inputs, outputs, and impacts, and are oriented toward planning, delivery, and evaluation. Logic models ask us to demonstrate the causal relationships between what we do (inputs) and what will happen (outputs and impacts). Logic models say, “If we do x, then y will happen.”

What Nesta has designed is a process based on “trying and learning.” It is iterative, modeling a creative process. Their model requires the development and clarification of an important question, one worth asking, and one for which the answer or answers are not known. In their model, the planning rigor is around the quality of the question and in how it will be investigated.  Their inquiry asks, “If we do x, what will happen?” The outcome is not planned, it is sought.

Perhaps I’m out of touch and if that’s the case, please, pile on the examples! But I don’t remember ever being asked by a funder, “What idea are you testing?” and “What data, evidence, and research findings can your project deliver?” and “How is this learning beneficial to the wider arts sector?” Einstein quote

Shouldn’t this methodology be added to the ideas and instruments grantmakers deploy in their program architecture? Certainly, we need operating support grants, capitalization grants, and support for major projects and initiatives, all funding mechanisms represented in contemporary grantmaking. But what would it look like if we also had specific support for R & D in separate programs whose purpose lies in the testing, documenting, learning, sharing, and iterating of new ideas?In thinking about anything at all comparable in U.S. private sector arts grantmaking, what comes to mind are the reports and publications about what the grantmakers are learning, not so much about what the grantees are learning.

In an environment in which the purpose of a grant is to learn, organizations have full permission to innovate, to fail, and to iterate. When the knowledge gained is shared, other organizations have access to data and results, and they’re encouraged to adopt and use tools and practices that work. Some of the Digital R & D Fund projects have been major flops, with audiences, or technically, or otherwise. And some are delivering very promising results. All learning is welcomed.

At a time when it seems especially important for cultural organizations to be able to try new things and iterate, Nesta’s approach is both sophisticated and refreshing. I’d love to see R & D approaches modeled locally, regionally, or nationally. What is stopping U.S. grantmakers from building similar efforts in our country?

Announcing Hothouse: Exploring new ideas in co-working with the Minneapolis Institute of Arts

Something new is launching in Minneapolis next week! I’m excited to announce Hothouse, a 12-week pilot co-working project I’ve created as MIA Entrepreneur in Residence. In collaboration with Hunter Palmer Wright, Venture Innovation Director of the Minneapolis Institute of Arts, Hothouse will explore whether and how the museum can foster a creative co-working space that is inspired by the museum’s collections, capabilities, and setting but operates independently as a lively incubator and convener. The pilot will demonstrate newHOUTHOUSE-02 ways the museum can use its assets, including its facilities, collection, and staff, for imaginative new civic purposes, and will encourage civic connectors and animators to draw on the museum’s resources to power their individual and collective work and impact.

The project will allow exploration of a co-working strategy that is new to the Minneapolis-St Paul region. The vision for Hothouse is to create a space not only for co-working, but also for fostering public discourse and civic engagement, reflecting and amplifying ideas and projects from the co-working community, and inviting the public in as participants and co-developers. Participants interested in this public programming orientation have been intentionally recruited for the Hothouse pilot. The group includes artists, journalists, non-profit organizations, small businesses, and independent producers and consultants.

(Who will be there? Here’s a list, some with links  — the list is still growing. Lutman & Associates, Ben Hertz, Coffee House Press, Collective Eye Productions, Copilot Web Services, Danger Boat Productions LLC, The Drawing Project, e-democracy/Open Twin Cities, Northern Lights, Pollen, Kate Nordstrum Projects, Chris Farrell (MPR))

The co-working group will share the MIA’s Villa Rosa Room, a large sunny meeting and event room on the top floor of the MIA, as well as using other museum spaces for programming. Co-workers will be encouraged to draw on the museum’s collection for inspiration and metaphor, collaborate with museum staff, and help identify opportunities and obstacles that can inform the feasibility of an ongoing co-working and alternative programming space. We’ll share our learning in a final report.HOUTHOUSE-02

During the 12-week pilot we plan to:

  • Explore the benefits of a co-working space connected to a museum
  • Identify new civic purposes for MIA’s less-used and rental spaces
  • Introduce new people to MIA
  • Discover ways the co-working community can draw on the MIA’s assets across their varied occupations and disciplines
  • Identify obstacles to public participation as co-workers create programs independently and “beyond the museum”
  • ​Foster new connections between co-workers and MIA
  • Encourage collaborations among the co-working participants that are new and actionable
  • Inform MIA future choices and directions

The Hothouse co-working pilot project has resonances for any cultural nonprofit that owns and operates its own buildings. What are the highest and best purposes for these structures and how can new creative uses be explored? How can we share infrastructure and ideas in new ways? And how can our increasingly independent workforce find ways to connect with each other and to cultural institutions in ways that amplify and extend the work? We will be working to discover the answers to these questions over the next twelve weeks. To track our progress, follow #Hothouse on Twitter.

Hothouse houseIf you think about it, there are all kinds of civic buildings — wherever you may live — that can be adapted to new uses and can become part of the sharing economy. If you know of other tests or projects going on that resonate with our ideas, please be in touch. And we’ll let you know how things go.

 

 

 

 

 

Reflections on a week at Harvard Business School (and thank you NAS)

For the past two weeks I have been digesting theHarvard Business School classroom terrific week of learning at Harvard Business School that National Arts Strategies offered as part of its Chief Executive Program.

The week’s theme was The New Nature of Relevance, and our case studies, HBR articles, and group exercises were designed to foster conversation about leadership and how to steer our organizations through the opportunities and obstacles presented by the post-recession, digitally-enabled, generationally-shifting, globally-connected world.

For me, the location of our conversations was a vivid reminder of the challenges we face. That’s because the business of higher education is undergoing the same sea change we are navigating in the nonprofit cultural sector. I was gob-smacked when on the second morning of program, the weekly email from Strategy + Business landed in my In Box, this one titled “The University’s Dilemma” with the subtitle, “In the face of disruptive change, higher education needs a new, more innovative business model.” After I read the piece, by Tim Laseter, the entire week became a play within a play. On the one hand we were having deep conversations about boldly creating new organizational forms, new outcome norms, and new ways to engage people in the arts. On the other hand, we were doing it within a delivery system that is itself grappling with the need to change. (More than one professor told us that in 20 years, more than half the colleges in the U.S. will no longer exist.)

Don’t get me wrong. Harvard executive education is an extraordinary experience. We worked in state-of-the-art classrooms in a beautiful setting; read outstanding preparatory materials; engaged with well-prepared, articulate and challenging professors; ate really good food (at least by institutional standards!); and were attended to by a courteous, helpful staff. The gym was palatial, the reception areas spacious, and everything was spotless.

But as Laseter points out in his essay on why education needs to change, universities are failing on multiple fronts. Costs are skyrocketing (Harvard’s website estimates the cost of a year at the Business School for a single person is about $87,000); fewer than two-thirds of students enrolled in a four-year institution attain the targeted degree (national data from Laseter); and even as college enrollment has grown, employment forecasts predict a shortage of employees appropriately prepared for the kinds of jobs being created. The employer/university relationship is frayed because higher ed is not keeping pace with employers’ needs; its relevance is being directly confronted. The value proposition — that a college education will result in a better, higher paying job, justifying the time and expense of college – has eroded. Sound familiar?

Laseter says, “In the business world, such poor performance typically leads to industry re-structuring fueled by new entrants, as well as innovation by a subset of incumbents. Those moving too slowly or in the wrong direction don’t survive … Although [those] few elite institutions may be buffered from disruptive forces, the vast majority of institutions of higher education face disintermediation in their existing relationships among employers and students. Pressure from new entrants as well as the leaders among existing players could squeeze out weaker institutions, repeating the pattern of so many other industries. To navigate through these forces, universities need to follow the example of their business counterparts and fundamentally rethink what they do. They need to foster new capabilities, reconsider their means of attracting revenues, and allocate costs more closely to their value proposition. In short, using the language of strategy, it’s time for a new business model.”

Perhaps we can take some comfort in the notion that it’s not only the arts sector that faces these pressures. It means we all are in this together, that there’s no clear path out, no models to copy. It is a creative time to discover how to move forward. Fostering new capabilities, reconsidering means of attracting revenues, and allocating costs more closely to our value proposition are ideas the cultural sector has been grappling with for years.

So what to do? Laseter’s suggested actions correspond almost directly to our NAS/Harvard readings and case studies.

First, consider your potential rivals. “Benchmark your rival and potential rival innovators, not only in your own industry but across industries.” For the nonprofit cultural sector, this requires a close look at for-profit entertainment providers, user-generated projects and collaborations, peer-to-peer learning exchanges, amateur cultural activities, all variety of media consumption, and ways audiences have become participants, curating their own experiences, rather than passive, consuming programs of our design.

Laseter focuses on technological disruption in learning systems, and identifies on-line gaming, third-party credentialing organizations, and on-line courses as examples of disruptive entrants into higher ed’s space. Paralleling his ideas, as part of our Harvard course we read a case study of the Metropolitan Opera’s Live in HD program, and discussed whether this disruption strengthened or undermined the ecology of the cultural sector (with good arguments on both sides).

Second, know yourself. Organizations need to identify and understand their unique value propositions. This will differ across arts disciplines and might include an organization’s ability to curate (separating signal from noise, bringing unexpected or new work to light), to amplify (helping artists and projects achieve scale), to engage (creating clear pathways for cultural participation), to touch directly (offering face-to-face instead of mediated experiences), to expand knowledge (offering interpretative, participatory or scholarly programs), or to animate (bringing creativity and energy to cities or neighborhoods). Above all, Laseter warns, don’t try to be all things to all people. Determine how you can excel and then go for it.

Our readings included V. Kasturi Rangan’s 2004 Harvard Business Review article, Lofty Missions, Down-to-Earth Plans. The piece exhorts non-profit organizations to go beyond their “broad, inspiring mission statements” to create systematic methods of establishing a “strategy platform,” which determines how the mission will be achieved, including what programs will be run and how they will be run. Rangan says, “Instead of trying to be all things to all people, non-profits should pick a niche, craft an operational mission, and flowing from it, formulate a coherent strategy platform. Then it should vigorously pursue those programs that support the logic of the entire strategy.”

Now. Forward to the basics. Laseter says institutions — more than ever — must have a clear, explicit rationale for what they deliver, particularly in light of declining results and growing costs. And, he says, “Institutions of higher education have the ability to solve the crisis they currently face, but resolve presents the greatest impediment.” 

Consider this last observation as it applies to the arts. Cultural institutions have the ability to move forward energetically, if only they have the resolve. Often, colleagues in the NAS program report they “can see it,” they know what to do. But that does not make the “how to do it” any easier. It helps to discuss examples of successful change, to consider cross-sector examples, to think about rival innovators, to agree on the key value proposition, and to know we’re in it together.

(Our readings included Leading Change: Why Transformation Efforts Fail, by John Kotter.  A classic of the literature, this is a piece to read and re-visit regularly.)

I imagine that after we left, Harvard administrators were in meetings across their spectacular campus, engaged in a parallel conversation. Undoubtedly they are examining their fixed costs, thinking about technological innovation, creating new ways to engage students, and working to preserve their primary value proposition, that higher education is the gateway to a better life. How they will continue to deliver high quality educational experiences in a changing world? I hope that some of our creativity rubs off on them. They’ll need it to define the new nature of relevance. It will be interesting to see what comes next at Harvard.

Sarah Lutman

I am a Twin Cities-based independent consultant and writer working with cultural, philanthropic and public media organizations across the United States. You can read my entire bio on LinkedIn or read about current clients and projects on the Lutman & Associates web site.

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