EmcArts office in Harlem, NYC

EmcArts Inc. is a social enterprise for learning and innovation in the arts.

This is a time in the arts when we need to try new things. But change is hard. Change is scary. Most people and organizations resist change. For innovative organiza-tional change to occur, arts and culture organizations have to not only do things differently, but get good at doing things differently. EmcArts helps organizations get good at doing things differently.

We provide programs to the arts and culture field around innovation and adaptive change and serve as a not-for-profit intermediary for many arts and culture funders. We strengthen the capacity of not-for-profit arts and cultural organizations to create genuinely new ways of working, thinking, and fulfilling their missions in order to increase public value.

The mission of EmcArts is threefold:

• To strengthen the capacities of cultural organizations across the country and advance the practices of innova-tion and adaptive change

• To achieve field-wide recognition for organizational inno-vation and adaptive leadership as essential organizational disciplines for the cultural sector in the 21st century

• To move the dialogue about these disciplines from the margins to the center of the field’s attention

Why are innovation & adaptive change so important for not-for-profits?

During the first 50-year phase of developing a pro-fessional arts and culture sector, the primary focus was on growth and longevity—on building sizeable audiences and organizations that occupied a perma-nent place in the landscape. Organizations generally adopted a corporate model, with strong staff hierar-

chies, and evolved command and control cultures that helped sustain the emphasis on excellence of artistry as well as efficiency of delivery systems. As arts and culture companies grew, maintain-ing organizational stability became their main concern; ‘best practices’ were defined and pur-sued, becoming ‘business-as-usual’ in their organizations and throughout the field.

To keep their core businesses on track and to better enable them to realize their goals with limited resources, arts and culture organizations developed technical competencies in many specialist areas (production, marketing, development, operations, governance). Many organizations received ‘technical assistance’ to strengthen these efforts. They backed up these organizational dynamics with increasingly widespread strategic planning—a relatively reliable method of projecting futures that were intended to look like the past, only more so. Underpinning the drive for permanence in these organizations was an emerging orthodoxy of balance sheet planning that emphasized capital endowments as a means of protecting them against market variables. In this vein, ‘growing up’ as an arts and culture organization meant owning a building and taking on fixed assets.

In the past 10 years, unprecedented developments in the operating environment have placed radical new demands on arts and culture organizations. The field must develop new responses if it is to remain healthy, resilient and able to maximize the delivery of public impact and value. Changes in patterns of public participation and in technological access to the arts, generational and demographic shifts, new forms of resource development, and many more factors have revealed that there is another dimension to the critical organizational qualities needed to thrive in the future. The ‘muscles’ we exer-cise to promote organizational stability now need to be bal-anced by equally strong ‘muscles’ around adaptive capacity.

Yet the adaptive capacities of many cultural organizations are typically under-developed. In the past, little attention has been given to strengthening qualities such as adaptive, dis-tributed leadership. With hierarchical staff structures, most companies have not focused on learning how to effectively use cross-functional, multi-constituent teams and have not yet evolved organizational cultures that are intrinsically flex-ible and responsive to fleeting opportunities and changing community dynamics. Nor have most organizations equipped themselves to continuously incubate and test new ideas and projects as an ongoing part of their business model. Notably absent to date—and urgently needed to foster innovation—is available change capital to underwrite well-designed new initiatives and enable them to reach new markets.

Antony Bugg-Levine, President of the Nonprofit Finance Fund, argues that only if nonprofits reframe their work and pursue new organizing questions will they be able to thrive in the future. In The Washington Post, he writes:

“For nonprofits, it’s time to end business-as-usual.”

The arts & culture sector is going through unprecedented changes that are profoundly disturbing ‘business-as-usual’ and increasing the need for organizations to find new path-ways to create public value.

PHOTO BY DALE DONG

Engaging the Future | Cleveland participant GroundWorks DanceTheater (OH)

Now is the time to provide support for innovation—the means by which organizations respond to adaptive challenges.

Instead of the ‘technical assistance’ of the past, the arts and culture sector now needs ‘adap-tive assistance’ that builds adaptive muscles, increases community impacts, and helps ensure a vital, engaged field that is ready to seize the future as a leading contributor to the vibrancy of our nation’s communities.

Critical Organizational Capacities

This graph illustrates the relationship between a traditional focus on organizational stability, and the new focus on adaptive capacity. Only if each organization finds its right new balance between stability and adaptability will the cultural sector see the public impact and value of its organizations sustained and increased.

Building long-term adaptive capacity in organizations is best addressed by doing real, urgent work on pressing adaptive challenges. It is through a focus on design-ing and implementing specific new approaches—conducting small experiments with radical intent—that organizations change their cultures and begin to institutionalize the new adaptive muscles needed to sustain transformational behaviors. As Jerry Sternin, a pioneer in devel-oping adaptive strategies to address complex social issues (and co-author of the book The Power of Positive Deviance) wrote:

“It is easier to act your way into a new way of thinking, than think your way into a new way of acting.”

Why are innovation & adaptive change so important for not-for-profits?

PHOTO BY DALE DONG

Engaging the Future | Cleveland participant GroundWorks DanceTheater (OH)

What is our definition of innovation?

• result from a shift in underlying organizational assumptions,

• are discontinuous from previous practice, and

• provide new pathways to creating public value.

The Roots of Innovation: A shift in underlying assumptions

Achieving organizational success over time means creating hypotheses about what is likely to succeed, acting on the basis of those hypotheses, and then reflecting on which ones turned out to be effective, and which did not. The latter are discarded, but the former become

guidelines for repeated success. For instance, the idea that recruiting highly skilled artists to a theater company will help draw an audience frequently turns out to be true. By contrast, the idea that, with varied ticket prices, people from all walks of life will become the audience is not typi-cally a reliable assumption.

As the justified hypotheses go on leading to successful results, organizational leaders stop regarding them as the-oretical, and assume they are reliable predictors of success. Over time, these assumptions no longer need to be dis-cussed; they become taken for granted, the bedrock on which the company builds its business. So much so, that leaders often come to regard them as ‘universal truths,’ invi-olable and surely apparent to everyone. Questioning these assumptions can make leaders feel threatened:

“What do you mean, the technical brilliance of our musicians may make them less interesting to listen to?”

“How can our shiny new venue create barriers to attendance for some people?”

Edgar Schein, Professor Emeritus at the MIT Sloan School of Management and ‘godfather’ of the study of organizational culture, notes the importance of questioning assumptions:

“Assumptions evolve as repeated successful solutions to problems. What was once a questionable hypothesis about how to proceed becomes a reality that is taken for granted. In order to innovate, organizations have to resurrect, examine, and then break the frame created by old assumptions.”

Innovation may be essential these days, but what does that mean in the not-for-profit sector?

We arrived at our own working definition of innovation through our research and the work of our partner organizations in the field. It places innovation in the context of organizational change, and over the last several years our definition has achieved real traction in the field, being adopted by funders and becoming a reference point for arts and culture leaders.

Organizational innovations are instances of organizational change that:

Innovation Lab for the Performing Arts Participant:

Dancewave (NY)

PHOTO BY TOM RAWE

Every organization operates on the basis of some set of shared assumptions about why it exists, what its business is, and how it relates to the world. These assumptions act powerfully within every organization. They give rise to the culture of the organization, inform and limit its capacity for change, and explain much of its institutional behavior.

Times of great and rapid change, such as the arts and culture sector is experiencing now, demand that each organization re-examine the assumptions and beliefs that have led it to success in the past, in order to see if and where those assumptions may need to change—where they no longer reliably predict success. New hypotheses about success drive innovation and generate effective new strategies for these challenging times.

Business Unusual: A break from previous practice

The second part of our definition notes that innova-tion is not incremental change, nor a logical exten-sion of ‘business-as-usual.’

Innovation takes an organization and its programs, down a new, previously unpredictable path—a path which turns out to be deeply linked to the organization’s purpose. For instance, varying ticket prices, up or down, to respond to economic and demographic changes is a logical step in extend-ing an organization’s business model. By contrast, changing the financial equation by moving an entire season from an expensive central perfor-mance space to a wide variety of community ven-ues, in order to reach more people at lower cost, is innovative change in the making—a break from the past that changes the game.

The Ultimate Purpose: New pathways to public value

It is possible to develop new approaches that demonstrate a shift in assumptions and discontinu-ity from past practices—but which are essentially change-for-change’s sake. The third part of the definition indicates that true innovations are not just novelties unrelated to an organization’s mis-sion—and they are not merely variations on existing strategies.

Innovation introduces an organization to alternative pathways of thinking and acting—ones never previously explored. Changes like this are always disruptive to some degree and, because they are

initially unproven, they can mean high levels of uncer-tainty for extended periods. So why would an organiza-tion pursue this kind of path? The answer, in part, is that these types of change promise to have an unusually high impact on the organization’s ability to generate public value. Across the country, for instance, involving audi-ences in program planning, or having teens design youth programs, are proving to be powerful ways to achieve artistic engagement—but they would have been largely unthinkable just a decade ago.

What is our definition of innovation?

Engaging the Future | Cleveland participant The Cleveland Orchestra (OH)

James Irvine Foundation Arts Innovation Fund Grantee: Oakland Museum of California

Are all organizational challenges the same?

There are two fundamentally different types of challenge that organizations face —‘technical’ problems and ‘adaptive’ challenges. This distinction is crucial to understanding innovation.

Arts and cultural organizations—typically built for continuity, not for innovation—often approach adaptive change with technical solutions and wonder why they don’t work.

To understand this distinction, we look to Ronald Heifetz, Senior Lecturer in Public Leadership and Co-Founder of the Center for Public Leadership at the John F. Kennedy School of Govern-ment, Harvard University, and his work on leadership and organizational change.

According to Heifetz:

Technical challenges are ones that can be solved by improving an organization’s current practices. Solutions already exist in the world and experts can be used to align the organiza-tion’s strategy with established ‘best practices.’ Problems of this type are easily identified and lend themselves to an incremental approach that modifies business-as-usual, without deviat-ing far from it.

By contrast, adaptive challenges are those that have no set procedures, no recognized experts, and no evident responses available to meet the challenge or solve the problem. They are more difficult to identify and easy to deny.

Heifetz explains:

“If you throw all the technical fixes you can at the problem and the problem persists, it’s a pretty clear signal that an underlying adaptive challenge still needs to be met. Adaptive challenges are often harder to pin down, and less clearly visible, than tech-nical ones, and certainly tougher to work on.”

To respond effectively, organizations have to question and disturb their fundamental assump-tions and beliefs about their business. That means that only the people who face the challenge can do the work of addressing it—and they will need to experiment with unfamiliar approaches that depart from previous practice.

This chart gives some examples of common adaptive challenges, showing ‘business-as-usual’ technical solutions vs. forward-thinking adaptive responses.

When there is evidence of a major challenge…

…do you focus on a technical fix?

…do you now need an adaptive response?

Subscriptions are down and people are booking indi-vidual tickets closer to the event.

We need to offer them better incentives to com-mit to the season in advance.

We need a completely dif-ferent pricing system and to build loyalty through direct participation.

Our campus is old, confus-ing and used inefficiently.

We need to invest in upgrading facilities and signage.

We need to leverage our off-campus successes into a new kind of home.

Our expenses continue to grow faster than our income, and we are expe-riencing persistent annual losses.

Our organization must generate more income and implement stronger cost controls.

Our organization must over-come its increasing aversion to risk by investing in new approaches.

OR

OR

OR

OR

The Story of EmcArts

EmcArts has evolved in three phases that resemble the stages of innovation we see in cultural organizations. A first phase of preparation and research began in 1990 when Richard Evans and John McCann met through their work as Field Consultants to the NEA Advance-ment Program. In 1994 they collaborated to run the program, as well as undertaking cultural planning and evaluation projects nationwide. They co-founded Emc.Arts LLC in 1999 as a consulting firm focused on orga-nizational change. Through large-scale contracts with the Andrew W. Mellon Foundation, the Corporation for Public Broadcasting, the New York Public Library, the Ford Foundation, Carnegie Hall and others, Emc.Arts began to experiment with new approaches to organi-zational change in the field—a second phase of proto-typing and assessment was beginning.

Recognizing the pressing need for field-wide change efforts, the company reincorporated in 2005 as EmcArts Inc., a not-for-profit corporation designed to systematize innovation and adaptive change in cultural organizations. Widespread interest in the distinctive programs and services offered by EmcArts developed, and a third phase, fully implementing key concepts and approaches, began to unfold.

In 2008, EmcArts launched the year-long national Innovation Lab for the Performing Arts, in which organizations research, design and prototype new approaches to complex adaptive challenges. The Inno-vation Lab for Museums followed in 2011. 2010 saw the launch of New Pathways for the Arts, a series of place-based programs that engage multiple organizations in workshops, coaching and a ‘deep dive’ into incubating innovation. In 2012, EmcArts turned its attention to the wider adoption of innovations, creating ArtsFwd.org as a vehicle for sector-wide dialogue around next prac-tices for arts leaders, and initiating innovation conven-ings to highlight emerging successes.

For information on our Programs & Services, please contact:

Melissa Dibble, Managing Director MDibble@EmcArts.org

EmcArts.org