not cut and dried

I have taken quite a bit of time thinking about the question of whether or not cutting arts organization budgets is a good way to their improved health.  It’s a complicated question, one that the best minds in the industry can spend time arguing over ad infinitum.  I’ve come to the conclusion that cost-cutting is analogous to the geometric relationship of squares to rectangles:  All squares are rectangles, but not all rectangles are squares.  Therefore: All cuts may save money, but not all cuts may help improve revenues. You can cut costs, but that only trims one side of the balance sheet.  It doesn’t improve your revenue, it just makes it appear better because the costs it is balanced against appear smaller.

It’s also helpful to know how the public (both the foundation/donor subset and the general public at large) will perceive the cost cutting measures.  If the cuts make basic sense, in the greater scheme of improving the health and efficiency of the organization, then that can be a good public relations boon for the organization.  Cuts as a comprehensive and far-reaching plan are generally perceived as a good thing.  Cuts for their own sake are often seen as desperate acts by an organization on the brink of collapse.  Look at Honolulu and Charleston for good examples of how not to make cuts. UPDATE: and now look at what is being asked of the musicians in Detroit.

What you cut is almost as important as how much you cut.  If you take a look at your organization’s offerings and decide that you’re competing too much with yourself, then pruning out less successful and redundant programs can make what’s left over more attractive to prospective patrons.  In addition, cutting selected repeats to create more ticket scarcity might help to create a healthy demand for the remaining performances.  This has to be done with care, however, as it tends to be (along with salary and health care benefit cuts) very alarming to the musicians or artists of the organization (see Sam Bergman’s quote in yesterday’s post).  For example, cutting all pops programming because “the audience is all dying anyway” is catastrophic cutting, whereas searching for the audience that we most want to develop and then catering to them within the general pops genre is the better route, though possibly more expensive and time consuming. The difference is what you or I might do to our prized Japanese maple tree if we just randomly hack off stray limbs instead of hiring a skilled arborist to perform careful pruning to make the tree more healthy.

I think that the point Michael Kaiser is making is more complex than it has been portrayed by most journalists.  I think he’s against dumb, short-sighted management.  To manage effectively, you’ve got to develop a plan, then do what needs to be done in order to effect the plan.  You need to realize that selectively cutting expenses can make room for careful expansion or experimentation.  Being conservative doesn’t always mean you’re being safe – it can just mean that you’re scared, or incompetent.  The best managers seem to have dozens of balls in the air at once, and everything is a balancing act – and not just an act of balancing the budget.  Even if they don’t have a clear vision of the future of the organization, they do have a clear vision of where they don’t want it to end up.  That’s what has been sadly lacking in arts organizations over the years, especially in Portland.  We are fortunate that here in 2010, we have our major arts organizations run by very competent professionals who not only compete for donor dollars, but also collaborate in ways to improve everyone’s lot – just as they should in such a close-knit artistic community.

As the African proverb goes: Knowledge without wisdom is like water in the sand.

Questions? Comments?