Designing A Modern Performing Arts Organization
An Organizational Design Consultant Meets Nonprofit Structure
For a long time, arts organizations large and small alike have relied on an organizational structure built around one goal: producing great art. That makes sense because for a long time, that structure worked just fine — we filled our houses, paid our artists, and raised the money necessary to support that work.
However, with the dual pandemics of Covid-19 and racial and social injustice, coupled with changes in the nonprofit landscape like the need for digital transformation and more innovative business models, the old org chart isn’t effectively serving our work anymore.
In this post, I’m joined by Julian Chender of Accenture’s Organizational Design practice and founder of 11A Collaborative. He works with these types of issues every day, and he knows the arts too by virtue of being married to a musician in the Metropolitan Opera Orchestra. The following was written in collaboration.
The Current Structure
Before we look at a new approach, let’s examine the current setup. Typically, arts institutions are organized by function. Marketing is different from Development, which in turn sits apart from Production, which is separate from Education, etc. The benefit of a functional structure is that it produces deep specialization and expertise in each category. Marketing becomes very good at what it does, while Production excels in its role. This is called vertical work.
There are two main developments that now make the traditional functional structure untenable. First, the performing arts world — and literally the entire world around us — is increasingly complex and uncertain, especially compared to 60 years ago when the current structure was adopted. Second, the work of a performing arts organization is becoming increasingly holistic, requiring it to work across the silos created in a functional organization.
Said differently, now more is demanded of our institutions. These demands mean that functional excellence is no longer enough. Having great departments doesn’t suffice. If Artistic + Production + Development, et al = great art, today the equation doesn’t solve. The whole needs to be greater than the sum of its parts. This multiplier comes from horizontal work.
So how do we find or create this multiplier? Where do we begin?
Start with Strategy
All organization design is based on bringing an organization’s unique strategy to life. For the purposes of this article, we assume the strategy is to attract, engage, and retain paying customers while keeping them physically safe — and simultaneously respond to local, regional, and global community needs such as social, racial, and environmental justice. In other words, if the old strategy was to serve the art, which in turn attracted customers, the new strategy flips that: serve the customer and community, which in turn results in funding the art.
Whatever your strategy, start with that. Hint: it’s likely multi-faceted. And multi-faceted means complex. And complexity is where functional, vertical structures fall apart — or at least fall short of being able to fully and efficiently execute on said multi-faceted strategy.
Put differently, it is not possible to manage complexity in functional silos. Therefore, we need to develop cross-functional structures that integrate the important strategies and goals across the organization.
Years of organizational design research suggest a structure with both vertical and horizontal components is necessary. Another way to think about vertical vs horizontal work is that vertical work is comprised of tasks or bodies of execution that don’t require everyone’s attention, i.e. only the product people (artists) are creating the product, only the revenue people are writing email blasts, and only the infrastructure people are doing payroll, for example. Horizontal work, by comparison, entails bodies of execution that do require everyone’s attention.
In this case, if the strategy is to focus on engagement to attract paying customers combined with a loyalty plan to retain them, then a modern arts organization structure should be built around revenue, product, and infrastructure (vertical), with customer and community needs as the underlying institutional-wide focus across every team (horizontal).
To break it down:
Each vertical component requires specific skills, roles, and bodies of work.
- Revenue = attract, engage, and retain patrons in order to generate funding for the product
- Product = the excellent art produced, with ability to be made even better as funding/revenue increases
- Infrastructure = supports all the above, on stage and off, in the galleries and in the office
Each horizontal component requires active participation from all roles to execute the body of work.
- Customer needs = entertainment, health, safety, belonging
- Community needs = social, racial, environmental justice
How This Plays Out in Practice
The following describes the various vertical teams or bodies of work we’d form instead of the traditional marketing, development, operations, et al siloed model. Some of this is similar to what we know in typical nonprofit structure, and some of it means redrawing department lines. The idea is that this approach to a new structure can be carried out by performing arts organizations of varying sizes: while larger organizations have more people and roles and smaller organizations tend to have people playing multiple roles, the skills and bodies of work necessary are largely the same.
CONTENT & MEDIA — includes digital, website, streaming, social content for artists and staff, not just the brand account
CUSTOMER EXPERIENCE — physical/in-person/analog activity including box office, guest services, front of house, ushers, catering
CUSTOMER RETENTION — includes Long Haul Model execution, building the audience journey from first attendance to repeat attendance and ultimately driving recurring revenue via subscribers and low-level donors
CUSTOMER ADVANCEMENT — includes one-on-one donor relationships (in contrast to mass communications relationships above), meaning major gift prospects, major gifts, and special events
INSTITUTIONAL GIVING — corporate sponsorship, grants, and government donor relationships
EDUCATION — whether serving children or adults, the work of filling in the arts education gaps increasingly left by our public school system becomes more integrated into revenue in this structure, meaning we educate in order to drive future sales. This is the original idea behind the education initiatives most organizations deploy, and we often literally call this work “engagement.” How to make education more directly connected to revenue is mentioned in a previous post here.
ARTISTS—the people creating the art, including orchestra members, singers, solists, other performers, artistic/music director
ARTIST ADMINISTRATION—season planning, contracting artists
ARTISTIC PRODUCTION—non-digital production and operations, touring
PEOPLE OPERATIONS (HR)— Fair and equitable hiring process consistent across the organization, compensation including tracking equal pay ranges across level bands, and performance evaluation. This includes staff personnel management as well as orchestra/artist personnel management.
FINANCE — budget development, forecasting, accounting, payroll, endowment management in partnership with the board
IT — responsible for the tools to empower employees to do their best work, remotely, in the office, and as a hybrid combination. Also includes CRM database management, ethical use of consumer data, processes for data hygiene, cyber security, and PCI compliance.
While the above are overarching recommendations, we acknowledge that they will need to be adapted to fit the special circumstances of each organization.
“It is not possible to manage complexity in functional silos.”
Overlay the Horizontal Work
Once the vertical work is determined, it’s time to juice up this equation with horizontal multipliers. In the strategy outlined at the top, we identified customer and community needs as the horizontal work, the underlying institutional-wide focus across every team. Again, this means it is everyone’s responsibility to some degree to contribute to these bodies of work.
Take racial justice, for example. Most often defined as “systematic fair treatment of people of all races, resulting in equitable opportunities and outcomes for all,” every person in the institution is either advancing this work or not. It means HR (people operations) is examining compensation practices and ensuring equitable pay ranges across each level band. It means our artistic personnel are working to create more fair and equitable audition practices, developing more inclusive substitute lists, and doing away with no-hire auditions and trial weeks. It means our content teams are using digital offerings to provide access. It means our advancement folks are not assuming BIPOC attendees and donors have lower levels of income. Every role and vertical function is contributing to this work.
For customer needs, such as a sense of belonging, it means our advertising people are choosing images that reflect the customer (audience shots over just the conductor, for instance). It means our information technology people are doubling down on protecting our customers’ data. Artistic teams are programming repertoire representative of community makeup (more composers of color, female composers, and Black, Latinx, and female guest artists and conductors — and measuring those choices against community demographics). Our finance people are developing budgets that prioritize all this work.
“The current model has worked well for arts organizations for a long time because they had to be really good at one thing: putting out high quality art. Now the world demands more.”
How do we make sure these things are happening across an entire institution though? It’s one thing to say this is what should be happening. It’s another to execute organization wide.
How to Ensure Horizontal Work
Though every company will experience silos no matter how it is designed, organization design research shows proven ways to mitigate them. Redrawing department lines helps, but doesn’t guarantee anything. The key to ensuring horizontal work is to incentivize it. The organization design world calls these incentives cross-functional integrators.
Types of cross-functional integrators include:
- Aligned metrics. Let’s be clear: traditional departmental revenue goals are distinctively disincentivizing cross-functional work; they’re driving the over-solicitation frenzy on both the marketing and development teams…and the operations, artistic, and education teams have no real revenue responsibility at all. Instead, if the horizontal work is customer need, evaluate performance not on revenue alone, but on metrics that measure customer loyalty and retention across all departments (yes, this work definitely requires production and artistic teams’ help to truly, fully serve the customer, and thus these metrics should be part of their evaluation too). In another example, if we’re saying social justice is important, then every first-round candidate pool for every open role should be measured for how diverse it is, and if it’s not representative of the community or has only token (singular) candidates from different backgrounds or identities, the hiring manager should go back to the application stack. In other words, what gets measured gets managed.
- Management processes, digital tools, and routines. How many times has an artist contract (soloist, guest conductor, opera singer, etc.) been negotiated by the artistic/operations team without talking to development (who definitely wants that superstar to do a donor reception when they come to town) or education (who definitely wants that performer to attend a school visit)? The answer is it happens that way regularly. If these are customer (i.e. donor) and community (i.e. education/engagement) needs, then the horizontal work requires a different process. I was recently speaking with a prominent soloist who was telling me about the frustration they experience when they don’t hear from these other teams until well after the contract is negotiated, when this could fairly easily be rectified by having a joint planning call with all those parties during the contracting process. Yes, this is a change to the current process, and that’s the entire point. Sidenote: so many digital tools for project management exist now that help embed this type of work across teams. We have incredibly powerful and economical tools available to us that didn’t exist even a decade ago to help with updating our processes and routines for cross-functional work.
- Integrator roles. One organization I worked with decided they were going to get serious about horizontal work across teams, so they created a role that did just that. That person attended multiple departments’ meetings, shared reporting with two different managers (they laid out a whole system to help with inherent challenges with this type of reporting structure), and — most important — were given autonomy to make decisions on behalf of the teams with whom they were collaborating. This “two boss” system is also called a matrix approach (see chart below). Sometimes this type of work is achieved with a chief of staff role, and more and more arts organizations are bringing this type of position into the fold. So good.
- Team structures. Most management and org design experts say there are 4–7 main types of team structures, several of which we’ve already mentioned in this post: project teams (such as functional, cross-functional, or matrix), operational teams (made to provide support to other teams, such as the infrastructure teams in this model), virtual teams (hello, pandemic and the increasing trend of remote work), self-managed teams (relatively autonomous teams, which are more common in smaller organizations with less hierarchy), and leadership teams (yes, this framework suggests our leadership team composition would shift as well). The way we design our teams directly relates to how we incentivize the horizontal work we need.
Lastly: All this Creates Organizational Agility
As we’ve learned the last two years, if there’s anything a modern arts institution needs, it’s greater capacity for agility. Organizational design experts say org agility comes from coherence across four essential components: strategy and design (on which we’ve spent the most time in this article), culture, and leadership. And while an entirely separate article could be dedicated to the latter two topics (future post!), for now consider that each of these informs the other. If you are tracking with everything covered here, it probably makes sense that organizational culture and organizational design are closely intertwined. In fact, a lot of the horizontal work is driven by organization values, which is an integral part of company culture. Each informs the other.
Finally, a word on leadership. Like anything at any company, this work starts at the top. Then when we have clarity on our strategy, we can better create the profiles for who we need at all levels of seniority (someone who understands how to create a performance review system based on org-wide values and metrics, for example. Someone who understands how our artists absolutely support revenue-generation, not just the “marketing and fundraising people.”). All this helps us understand how to channel professional development and coaching for our talent too. Again, all of these elements are intertwined, and when we move all of them forward, we become more agile institutions as a result.
In the end, this isn’t more work, it’s better work. Work smarter, right?
Art is a central part of the human experience, an expression of the ineffable qualities of our lives. This means that the modern arts organization needs to be proactive in embedding itself in the evolving landscape of our world if it is going to stay relevant to the fast-changing human experience. Doing so requires a complexity, agility, structure, and strategy that many institutions have not needed to have before. Organization design is key to that.
About the Authors
Hailed as “the Steve Jobs of classical music” (Observer), Aubrey Bergauer is known for her results-driven, customer-centric, data-obsessed pursuit of changing the narrative for symphony orchestras. A “dynamic administrator” with an “unquenchable drive for canny innovation” (San Francisco Chronicle), her leadership as Executive Director of the California Symphony propelled the organization to double the size of its audience and nearly quadruple the donor base.
In 2019, the side hustle became the main hustle as she moved her consulting practice full time and has now served dozens of clients across artistic disciplines, geographies, and budgets up to $300M. Bergauer’s ability to cast and communicate vision moves teams forward and brings stakeholders together across the institution, earning her “a reputation for coming up with great ideas and then realizing them” (San Francisco Classical Voice).
A graduate of Rice University with degrees in Music Performance and Business, Bergauer’s work and leadership has been covered in national publications including Entrepreneur, Thrive Global, Wall Street Journal, and Southwest Airlines and Symphony magazines, and she is a frequent speaker at universities and conferences inside and outside the arts. www.aubreybergauer.com
Julian Chender is a manager with the Kates Kesler Organization Design practice at Accenture where he helps leaders and their teams create vibrant organizations that accomplish their missions through the strategic alignment of structure, processes, metrics, and people practices. He has worked across sectors and has a particular interest in nonprofit organizations, especially those working to forward the arts, housing, and mental health. To support this interest, he has created 11A Collaborative, a gathering place, research center, and learning organization to further healthy society in NYC and beyond. Prior to his consulting career, Julian spearheaded leadership development at the National Institute of Allergy and Infectious Disease during the most recent Ebola and Zika outbreaks. www.11Acollaborative.com