What Three Things Must You Get Right?

Many of you are heading to industry conferences this month, and I’ll be speaking at several of them. Each year, I come back with a notebook filled with ideas that typically find their way to the bottom of a pile on my desk, out of sight and out of mind, just days after I insisted to myself that I’d immediately put these plans into action.

At this time of year I think of my friend Jeff, an investor in start-up companies whom I’ve heard ask young CEOs the same question countless times: “Of all the many things you need to do over the next year to be successful, what three things must you absolutely get right?” Each time I hear him ask this, it reminds me that all of us managers have a natural tendency to lose sight of the forest for the trees. His suggestion is related to the Pareto principle, sometimes known as the 80/20 rule. The rule suggests that “for many events, roughly 80% of the effects come from 20% of the causes.”  

Are you aware of the significant “levers” that drive your organization? The 20% that’s having an outsize effect? Is it your major donors? Or the quality of your education program? Or your public relations? If you had to rank-order the things that truly matter, what would your list look like? You may end up doing lots of things right, but you won’t be a success unless you know which things make the most difference.

As many of you prepare to attend this season’s conferences, your heads will soon be packed with dozens of new ideas. So, in the spirit of my friend Jeff, I’ve come up with my own list of the “three biggies” that I believe all arts organizations must get right. If you agree or disagree with my list, I hope you’ll keep your own top three in mind as you attend session after session. Your list will help you select sessions to attend, and will guide you to the things you want to put into action. Here’s my list:

1. It’s all about the art. What you present on your stage (or on your walls) matters the most. Recently I spoke with a client who runs a summer festival, who told me their ticket sales were running 60% ahead of last year’s. She explained the increase was based on the fact that they were producing some very popular shows and tickets were flying out of the box office. Even when I was the Executive Director of the American Symphony, we had a sixth sense of what our audience would be particularly interested in.

What you put out in front of the public is everything. It’s what you stand for — it’s your mission, and it’s what you’re asking the public to invest their time and money in versus all the other choices they have in their complex lives. If your artistic “product” isn’t compelling and doesn’t engage the audience, you likely won’t succeed.

2. It’s all about recurring revenue. A dollar today is nice, but a dollar today that comes again year after year is much, much more valuable. Behind the endless debate over life or death of subscriptions is something far more economically fundamental: The people who keep on buying from you (either subscribers or members or repeat ticket buyers) are your most important audience. It’s much more cost-effective to nurture and motivate them than it is to find someone new. And this goes for donors as well. A foundation or corporate donor that has given in the past should be much easier to renew than an entirely new donor. Yet many managers chase new ticket buyers (“the audience of the future”) or new donors at the expense of nurturing those already in the tent.   

One thing to ask yourself is this: How much recurring revenue do you bring in per year, and how much do you spend on collecting it versus how much revenue do you bring in from first-time single ticket buyers — and how much did that cost you? Do you have the ability to run reports that track this kind of data exactly, and in real time? And do you have the ability to recognize those patrons at the box office, or by email, or by inviting them to special events? This is the essence of what CRM (customer relationship management) is all about, and why managers are replacing stand-alone ticketing and fundraising systems with CRM systems that enable them to manage this kind of reporting easily.

3. It’s all about your people. I realize it sounds like a cliché to say that your people (your staff and your board) are an incredibly important asset. Yet I see this pattern play out all across the country — the organizations that are thriving always seem to have the happiest employees. And the organizations that struggle seem to have departments that don’t talk with one another, don’t collaborate, and don’t go out for drinks together.

The kind of environment you create for your staff is central to your success. Without it, you’ve got resentment and mistrust, and that always leads to turnover — the scourge of our industry that nobody really talks about. Just as with recurring revenue, it’s so much easier to promote and nurture someone who’s been at your organization than it is to find, hire, and train someone new. If you’re a leader, I believe this is as important as either of the two items above.

If I were in your shoes, running a department or an entire organization, those are the things I’d be focusing on, and I’d pick conference sessions that relate to those topics. I hope you’ll generate your own list and go to these conferences with your eyes and ears open to all sorts of new ideas — but with a commitment to putting into action things that relate to your “top three.”  

And then when it’s time to look at your list six months later, I hope you’ll have improved the things that will really make your organization successful.

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2 responses to “What Three Things Must You Get Right?

  1. Right on! I’m thrilled to be working with an organization that, not only, helps me accomplish the detailed tasks of my day-to-day work, but also reminds me of the big picture. Gene, you’ve been a leader since the Wired/Email/Signup for Culture series of books. Thank you.

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