Sunday night our study group changed. My fellow swots are Sandra Christie, NHS Wirral, who I also sit next to in class, Danielle Silverstein, Toronto Blue Jays Baseball Club, Canada, Luke Ifland, Global Healing, USA and Colleen Bailey, The National Steinbeck Museum, USA. Tonight, we collectively and very quickly, decided to have a short session and get an early night but somehow we started talking and time flew! Politics, funding, the Tea Party, Greenpeace, the recent earthquakes... you name it, we touched on it. Then we heard a great ruckus in the Rosenberg Lounge - what was up? When we arrived we discovered everyone was watching football! And now I'm watching Glee and multi-tasking. It's called balance!
Corporate Strategy
This session investigated multi-layered non-profits that establish income generating social enterprises to supplement or replace diminishing government and/or other forms of funding - especially in a recession or post a major disaster, when money gets tight. The idea is that by diversifying you make your organisation more financially viable, with an aim in some cases to become self-sufficient. In class, we looked at the impact this had on organisations and examined how diversification can add costs or constraints that might put added stresses on a company. Again, Prof. Jim Phills led the questions: How do these organisations distinguish growth and evolution with say, mission creep and/or conflicts of interest? Is it better to partner or collaborate? The question being: is the whole greater than the sum of its party? Oops! I meant parts.
Downstage has three distinct non-profit units. They are the Hannah Playhouse Trust (the venue), the Downstage Theatre Society (membership and fundraising) and us, the Downstage Theatre Trust (the company), and to one degree or another we all raise revenue. This is not an unusual structure for companies such as ours. The Royal Court in London, Steppenwolfe in Chicago and Malthouse in Melbourne all have similar structures; they have separate business structures that operate the venue, production company and catering, generally, meaning the bars and hosting, or as in our case, fundraising.
The difference with our company, however, is we don't have one overarching Board setting goals for the three entities, which in our case are Trusts. The Trusts work autonomously for the "greater good" of providing Wellington with professional theatre, a mandate first articulated in the 60s that remains with us today. The economic logic of how we fit together is based on a lot of historical arrangements, the most predominant being the Trusts have been run by its founding members or associates. The other more contentious arrangement has been the role the other two Trusts have played when the company is in financial trouble, as it frequently has been over its checkered history, they bail us out. Sadly, it has become almost a badge of honour for those Trusts and a reason for not changing the structure. "If it hadn't been for us, the company wouldn't be here today." And I agree, there has been a great deal of generosity and fiscal commitment to keeping the theatre operational.
But is this the most proactive, clearly planned way of operating a business? Other decisions, while having good intent, have had negative impact on our organisation, such as outsourcing the ground floor to what has now become a sports bar. All Black supporters are audible throughout the theatre on nights a game is played. God knows what it will be like during World Rugby Cup! In addition, the ongoing maintenance and upgrade of the building has been approached on a case by case basis, rather than an overall strategy for venue management. The membership and some fundraising is the responsibility of a volunteer workforce and managed by a tireless and dedicated committee. They can (and do) make autonomous decisions outside of the theatre's brief. And I have no doubt that from another POV, the company has made decisions with consequences for our two partners.
A diversified organisation has competitive advantages, it enhances it's business opportunities and shares risks. This is a good thing. But the time is ripe for the three trusts to sit down and design another governance model, one that relies less on past history and is built for the future.
Balancing Business and Social Objects
I think that this session brought so many of our discussions and questions succinctly together. It looked at the real role of leadership in non profit organisations, balancing business and social objectives or as we might say in our sector, the art and business of running a theatre. This cultural tension has to be continually addressed, especially when some shows are financially risky but artistically vital to the health and development of the art form. Our professor, Bill Barnett, said it this way: it's a case of balancing the purist with the pragmatist. He suggested we don't separate the tension, you lose the debate.
This was music to my ears. Bill also said, entrepreneurship is stifled when the fear of failure outweighs the hope of being a genius. I see this happen time and time again in our sector, where great ideas lose momentum because being knocked back by the funders is the first taste of failure. At Downstage, because our key staff have all been practitioners, we have the ability to see the issues through artists eyes and then address those issues by reflecting our insights into their concerns. It's a powerful dialogue.
If everyone is agreeing with us - we're not cutting edge. So we don't necessarily want people to agree with our model, just respect our right to run our organisation as we see fit. Nor do we want to control the artistic process, we leave that to the independent artists and the companies we engage. My belief was echoed today in Bill's words, if you control the process you prevent foolishness - this is where the real artistry begins - the ability to explore freely a concept or idea in a non-judgemental environment. My job when I get back is to make sense of all of this! What we need is a corporate strategy and possible restructure of our current governance framework.
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