Insights

I am a systemic optimist. And I am quite sure that the 3,000 odd participants in this livestream are also highly skewed toward systemic optimism compared with a cross-section of the population. It is a necessary – not sufficient, alas, but necessary – attribute if you are to survive and thrive in the cultural sector. But optimism is not the same as naivety and only a naïf would suggest that some restructuring – and in some cases, radical reinvention – of significant parts of the cultural sector was not overdue before the pandemic. And is likely to be even more needed after it passes.  It may seem unreasonable to raise this now, but it would be derelict not to.

Generalization is dangerous but here goes: we have been working harder and harder to keep the show on the road; and high fixed costs have rendered our organizations vulnerable to exogenous shocks, even to milder ones that the current pandemic. We run microbusinesses that are competing with a well-capitalized and vertically integrated entertainment industry, and our search for a galvanizing social mandate is only sporadically successful.

The pandemic and its aftermath are going to accelerate the process of gradual restructuring that we have been witnessing. It has happened to the travel industry, the music industry, the publishing industry, and it will happen to much of the cultural sector. The process is muffled by the absence of an integrated capital market in the non-profit sector. But it is only muffled, it is not prevented.

And there is a significant chance that your organization will be a casualty of this process. I therefore want to suggest – unreasonably – that this crisis is a context for taking a degree of control of the process and thereby helping to ensure that you are not its victim. The suggestion is unreasonable because the short-term situation in which you find yourself is so overwhelming and the longer term is so opaque. You are between a rock and a hard place.

The overwhelming short term is of course: cash flow management; emergency fundraising; the HR nightmare of furloughs and layoffs; a digital stampede; a need to stay in touch with multiple stakeholders; navigating the physical mechanics of reopening; and the life/work car-crash that is living through Zoom, almost certainly in a house with either too many or too few other people.  Suggesting that you to think about the long term is like asking you to think about your pension arrangements when you are figuring out how you can pay off your minimum on your credit card at the end of the month. 

And how do you think about it anyway? The opaque long term is a shifting landscape comprising the four horsemen of this apocalypse: the partially understood attributes of the virus itself and its interaction with medical science (testing, antivirals); the utter chaos that is public policy; the impact of a looming recession on employment, consumer spending, trade and travel; and, fourth, the as-yet-unknown behavioral changes to which this amalgam will give rise in different demographic groups. These are Donald Rumsfield’s  ‘known unknowns’. But there are doubtless other unknown unknowns somewhere out there waiting to present themselves.

But what will happen if you don’t think about it? You will either run out of road before you can reopen – a victim of Joseph Schumpeter’s forces of creative destruction -  or, when you do, you will be running a structurally unchanged organization at - what? - 60 per cent of capacity, in a very changed landscape. Good luck with that.  And, remember, you can do things now that you could never do in a more normal environment. I don’t mean dastardly, underhand things – I mean organizational reforms that you know you need to make and have already probably thought through in detail in calmer times.  But the context and the burning platform never presented itself to act.

Here is a simple way of approaching this. Think of two columns…In column A list all the qualities you want to preserve and protect at all costs. The core assets. In Column B put everything else, to which, if you are unsentimental, you have only a contingent attachment. It could be your way of governance, your CRM, your approach to HR, the programs foist on you that you never had the will to veto or the energy to sort through…Think about what is in column A for your department (department heads), or your organization  (CEOs); your part of the cultural sector (sector bodies); or the sector (funders). Now apply your best thinking to Column B. How can it be improved as a support for all that you (should) care about -  i.e. Column A? There has never been either a better time or a more necessary time for doing this.

You will apply your own criteria to B  – for me the criteria would be around agility, ‘anti-fragility’, and resilience because I personally see this pandemic as part of a longer-term trend for large exogenous shocks to our world – climate crisis; a reversal of globalization; other lurking Covids, etc. – that are going to favor the organizations with the highest ratio of variable to fixed costs.  (I read last week that Larry Gagosian, the king of mega galleries, said Fixed costs are the mother of invention…) You may have other criteria and scenarios to explore.  Scenario planning offers one such tool for trying to navigate one's way through the mist. But whatever your lens, you want to be able to look back on this dark chapter and say ‘Thank you for the opportunity…’

Erik, Thank you for the opportunity.

Comments made in an interview with Erik Gensler at the Capacity Interactive Bootcamp Livestream on April 23, 2020