Worst case scenario

Going to the wall is a new medal of honour. Everyone looks gloomily at the near-death experience they are convinced that they are going to face. Debtors are extending their position from 30 days to 90, credit controllers are insisting on cash on delivery, the bank is tetchy about the overdraft and, mysteriously, every invoice you raise seems to get lost in the post. Then the message comes through that you need to cut costs by 20% – as if costs weren’t always nailed flat in the first place. In the world of business triage, is there anything that can be done to reduce the pain? As former Royal Opera House head Jeremy Isaacs once pointed out, the lowest cost art is no art at all. How do we balance the pursuit of excellence with a frugal mindset? We must think before we act. The difference between cutting costs and sabotaging the future isn’t always clear at the time. Before laying off the workforce or using scare tactics, we need to be clear what the core competence of the company actually is and how to protect it. Remember Michael Hammer and ‘Re-engineering’ in the early 1990s: strip out all the middle management and you’ll make it, but for the fact that the know-how, expertise and man management have all been removed. Keeping your head whilst all around folk appear to be losing theirs not only makes you look smart, but it means your business is less damaged, and you recover faster when the tide turns.

Light at the end?
The year ahead won’t be about cost, it will be about perceived value for money. Businesses that focus on their people and on building value survive downturns better, and emerge faster when the market conditions improve. We have to act and focus on the issues and situations that our audiences will connect with. They still want treats, they still want to escape, they still want to socialise, and they want quality and integrity more than ever. We need to provide hope and certainty for the communities we serve. Faith in the arts and our integrity are key messages of the day. If we focus on the gloom we become part of it. If we focus on what would be better, then we have a fighting chance of creating new relationships. Communications matter more than ever. We need to emphasise the strength of our offer. The arts already provide value for money compared to other leisure options, but we don’t emphasise our outstanding value enough. We need to be clear and confident about why the arts are necessary.
Recession lessons
We need to think about what we present, and to make sure we know why people want and enjoy our work. What experience are they buying into? Who else is positively informing our audience locally and nationally? A heavy emphasis on service skills to retain existing customers is important. Don’t forget that the arts are often a low-cost choice. People may need more information on their options to choose the arts. Arts organisations can still build their fan base during tough times, by creating a beacon of ideas and working with the community. We can still enthral and delight. Key messages are still: know your performances or content in detail; be completely confident about what you are presenting and why; know how it is made and what makes it special, and don’t get in the way of it with secondary issues; focus on the experience; personalise the marketing message and avoid the corporate marketing voice; and accept that price isn’t the only sales driver. Knowing our strengths in a crisis and focusing on our audiences will give us the best chance of thriving amidst the chaos.
We need to be in touch with the communities we serve and to foster their sense of well-being. That will mean different things for different audiences. My experience suggests that a peculiarity of recessionary markets is that when people go out they still have a high propensity to upgrade if they really want what is being presented: the special occasions still happen, they just happen less often. We need to ask questions so that we can reinforce the audience’s confidence in us, and we need to stick to the excellence principle. In world that looks like it has lost its confidence, arts organisations need to stand at their full height and keep their integrity.