For a cultural organisation, formulating a business strategy can feel like being locked in a dark cupboard with the lights off, then spun around a dozen times before being asked to find the way out. It doesn’t take too long to feel claustrophobic, with the walls closing in!
For people who run not-for-profit cultural organisations, we’re often considering business planning, strategic reviews, reporting and monitoring, leaving not much time for business development, and the challenging trade-offs between our artistic and business vision.
Cultural leaders are under enormous pressure, many of us are faced with decreased core funding (if you have it!), and increased competition for both revenue and capital funds. Has it ever been thus? As leaders we’re often seeking answers, reading countless reports and considering many ideas, some proven and others still to be truly tested.
Thinking about a strategy feels too hit-and-miss.
Many years ago I was tasked with re-launching an arts centre, one that had previously failed. I felt my previous experience would only take me so far, I was reaching for some inspiration. I recall going to an Arts Council conference in 2003 where two American cultural leaders presented a unique idea at the time, detailing how they were utilising their cultural buildings to enable creatives to engage and develop, building local creative ecosystems. My luck was in, grabbing this idea and adapting my new arts centre, I could do the same, and with luck create something which worked, and it did. My timing was right, both European funding, Arts Council grants, and local authority support fell into my lap.
But what would I have done if I hadn’t alighted upon this chance presentation which allowed me to consider this strategy for organisational change?
Many years later, I was tasked with a similar exercise, how to develop a strategic framework for The Guildhall Trust ( Venue Management | Events Management | The Guildhall Trust) . We know about establishing our mission, vision and values, but I wanted proven strategies which were established outside of the sector. I needed both growth and development, but my funding was being cut faster than I could grow my income.
I came across McKinsey’s Three Horizons Framework, an approach to developing a growth strategy and unlocking the potential within your organisation:
· ‘Horizon 1’ is about maintaining and improving your core business
· ‘Horizon 2’ is the nurturing and development phase of emerging business
· ‘Horizon 3’ is blue sky thinking which allows consideration for new business enterprises
For example, for Disney, Horizon 1 was their core business of theme parks and films, Horizon 2 was the development of a new film division, Touchstone Pictures, and Horizon 3 was a new merchandizing enterprise, including the Disney Stores.
After consulting with colleagues and our Board of Trustees, we agreed that at for Portsmouth Guildhall Horizon 1 was our concerts and conferencing, Horizon 2 was Portsmouth Comic Con ( https://portsmouthcomiccon.com/) and the new Lens Studio. But we needed a Horizon 3, a new cultural concept which we could nurture. The latter presented itself in early 2020 and became Dance Live!( Dance Live! – An exciting dance event for schools and colleges.). In time everything that sat in Horizons 2 and 3 in 2020, would move into Horizon 1 by 2023, therefore becoming core to what we do.
It would be easy to say that Covid set us back, in fact it was the application of the Three Horizon Strategy that gave us focus us as we emerged from this bleak period.
‘Protect your core business’ is the manta of Horizon 1, so throughout 2021-22 we built back our first horizon, but we made sure not to neglect our other horizon focused enterprises. Equally, we’ve proven that it is possible to adopt a growth strategy such as the Three Horizons framework and make it apply to a cultural organisation. We find it essential to break the horizons down into departmental plans, covering programming, learning and participation, events and much more. So, what next?
We’re achieving the growth I wanted us to, but as we’ve got larger, I now needed a framework which could help colleagues achieve their goals.
Like most organisations we have our plans, our KPI’s, our strategic vision, and our core purpose. So I went back to the performance framework I considered several years ago, The Balance Scorecard. During my research I came across OKR’s, which stands for ‘Objectives and Key Results’, a newer framework successfully adopted by Google and Intel. (What Matters: What is an OKR? OKR Meaning, Definition & Examples)
OKR’s feel like a better fit, they work alongside KPI’s helping you get there. There’s a fluidity about them which I like. I discussed OKR’s with my Chair and senior colleagues, we did some training and felt like they could really help us going forward.
We’re now on a new strategic journey, and OKR journey, and I see no reason that it can’t work for a cultural organisation in the not-for-profit sector such as ours. We still have our ‘Three Horizon’ growth framework, and now we’re embarking on a pilot year to see how OKR’s can take us forward.
Growth and development remain an essential tool in our armoury; with less funding we must explore all means to grow and develop.
As I’m writing this, I’m not sure if other cultural organisations have used something akin to the Three Horizons Framework, because it feels like the conversation about strategy to maintain and grow our businesses doesn’t really take place. We talk about artistic and heritage visioning but not necessarily the business behind it all.
What models do you use? How do you make sure your cultural organisation grows and develops? I’d be fascinated to find out other best practice in our industry – and happy to share our case study in more detail if you are interested.
Article written by Andy Grays, Guildhall Trust CEO
