The Challenges of Resilience for Cultural Organisations

With the announcement about the next round of NPOs due in a couple of days, I’ve been thinking about Resilience and what it is that makes a resilient organisation. All over England, cultural organisations are facing a period of fundamental change in the ecology of the country’s arts.  Long held beliefs and assumptions about the relationship between the arts and government, the arts and funding, about the nature of arts organisations themselves, are being challenged.  As in other sectors, competitive advantages have become transient. We are facing situations where advantages are copied quickly, technology is just one constant change, our customers seek other alternatives and things move on faster and faster.  In this challenging context, creating clear goals and linking/aligning innovation to more agile strategies for growth, differentiation and disruption is a vital role for CEOs and senior executives.  They cannot abdicate this role.

But for arts organisations, this requires volte-face.  Stability, so long the ambition for so many in the sector, is now seen as mere 20th century thinking.  As Professor Rita Gunther McGrath, a professor at Columbia Business School in New York and one of the world’s leading experts on strategy, points out:  “The presumption of stability creates all the wrong reflexes. It allows for inertia and power to build up along the lines of an existing business model. It allows people to fall into routines and habits of mind. It creates the conditions for turf wars and organizational rigidity. It inhibits innovation.  It tends to foster the denial reaction rather than proactive design of a strategic next step… A preference for equilibrium and stability means that many shifts in the marketplace are met by business leaders denying that these shifts mean anything negative for them.”

The long held dream of stability in arts organisations must now give way to a practice that is highly flexible, agile, embracing a constellation of emerging business principles that ‘builds upon the ethos of imagination, exploration, experimentation, discovery and collaboration’ (Steve Denning, World Bank), an ethos claimed by any arts organisation.  In 21st century England, our arts organisations must become canny in applying their skills in “improvisational entrepreneurship”[1], strengthening their technical skills (business modelling, financial planning, efficiency ratios etc) and then taking an informed view of new opportunities that make sense in the context of their own organisations.    On the grounds that you can’t break the rules until you know what the rules are, there is no escape in the arts from having to understand the basic requirements for financial resilience, i.e. the management of assets and liabilities, reserves, profitability and diversity of funding; nor from the need to be confident and competent in applying controls, managing the organisational risk appetite and creating a culture of entrepreneurialism.   But these standard requirements of organisational leaders are now made more complex in the context of acquiring the ability to anticipate and adapt to change.

Hence a need for attitudinal shift.   Leaders have to be prepared to move away from much of what they have worked on throughout their careers, i.e. honing a highly efficient and effective organisation that minimises the risks, reduces the surprises and works away in a highly predictable and steady way.   Now they need to develop an innovation-geared organization that has clear goals, principles, values and attitudes that is working towards a range of organisational possibilities.   Cultural diversity, technology and environmental sustainability are the sine qua non of a 21st century resilient organisation. This organisation must be ready to capitalize on emerging opportunities and aligned to exploit them.  They must have in place the capabilities to build rapidly on these opportunities, and to exploit them through new learning, new insights and growing connections, thus extending the possibilities even further.  The strategy will have to adapt constantly, giving the organization a new, more demanding, competitive advantage:  one that is built on anticipating and managing constant change, never standing still, always evolving.

Anamaria Wills                              Photo    Developing Cultural Sector Resilience – with                                                                                                                                                               CidaCo – working with 26 arts organisations in                                                                                                                                                           Birmingham and East London, funded by ACE

[1] “Creative organisations are under-capitalised and under-managed.  They get by with improvisational entrepreneurship”  (Charles Leadbeater, 2004)