A brighter future for entrepreneurs and opportunity-seekers

Misdirection in magic is as old as the hills. The Westcar Papyrus, which dates from around 1650 BCE, depicts ‘miracles’ performed by priests and magicians suggesting the cunning use of misdirection to distract the audience’s attention away from what’s really going on.

In our age of digital mass communication, misdirection is as strong as ever. On the day the UN announced five million Haitians were going hungry and needed food assistance, many UK media outlets pondered whether the National Trust’s scones had gone woke. 

On 24 March 2024, more than 100 people died in a terrorist attack on the Crocus City Concert Hall in Russia. There has been remarkably little discussion of the ramifications for audience security globally. On that day, the biggest topic of conversation on my social media feed was why a middled-aged middle-class white guy (I forget which one it was this time) couldn’t get his head around the point of trigger warnings.

Political misdirection is also rife. I’m tempted to dissect Jeremy Hunt’s recent budget, but in a few months the Conservatives will probably no longer be our problem. On the other side, the Labour Creatives conference in March caused a buzz in the sector, with Keir Starmer’s talk of learning to play the flute as a child. 

This successfully drew attention away from the reality that his party has no plan to invest in music education. There’s no guarantee tomorrow’s children will be able to follow in his footsteps and pick up so much as a publicly funded piccolo. 

The signal and the noise

As a small business CEO, every day for me involves separating the signal from the noise, as Nate Silver described it – in other words, deciding where to invest energy and resource, and setting aside distractions that get in the way. I use an Eisenhower Matrix as my to-do list. Tasks are marked urgent and important (focus), not urgent but important (monitor), urgent but not important (danger!), not urgent and not important (drop?).

For arts organisations, what often powerfully separates the signal from the noise is money. A sound financial footing makes creative and social impact possible. Unstable finances jeopardise everything.

In England, where I live, we forget sometimes that for all the complaints about how our Arts Council distributes funds and monitors its investments, it has yet to experience a significant cut to its funding. Real terms cuts are the result of standstill investment, with the occasional tens of millions of pounds in one-offs distributed either directly by DCMS or processed via ACE. 

Labour’s plan for future arts funding in England is to “work to make some de-risking capital available to act as a subordinated capital layer in a blended finance structure… this subordinated capital would come from a variety of sources, catalysed by a modest amount of government investment but including contributions from philanthropists, corporate foundations, social investors and trusts.”

I hope you got that faster than I did. Labour plans to use small amounts of government funding to unlock private investment from who knows quite where. Anywhere. In government, the party will then “take a collaborative approach, starting with making grants available to organisations to support them to create business plans and get ready for new kinds of investment”. 

This is the crux of it – new business plans. New business models for the sector.  

The direction of travel

Labour aren’t the only people signalling that we need to focus on new sources of income. In its draft 10-year strategy, Arts Council Northern Ireland (ACNI) names six outcomes it wants to see by 2034. The first is “a more financially stable arts sector”. 

As with Labour’s plan for ACE, the Northern Irish Arts Council will try to attract (i.e. compete for?) private investment, but there is also mention of an intention to support “programmes for financial sustainability” in the sector. 

Over the Irish sea in Wales, Arts Council-funded organisations are feeling the impact of a 10.5% cut for this financial year, while in Scotland a 10% (£6.6m) cut was announced, cancelled, re-announced and then cancelled once more. With friends like that…

This is of course far from new. Going back seven years, Westminster’s Mendoza review of museums led to an action plan in which the first priority was to support museums to adapt to tighter funding. Under the heading: “What does good look like?”, one of the top definitions was: “Museums increasing and diversifying income… and decreased reliance on public funding.”  

Though the road ahead sometimes seems shrouded in fog, when it comes to grant funding the direction of travel is very clear. 

Earned income is signal

A sound financial footing makes creative and social impact possible. This, right now, is the signal – so much else when it comes to talk of public funding is noise. 

I hope the mysterious future funds which promise to see private business pour millions into arts and culture come to pass, I really do, but if I were holding the financial reins of a cultural organisation today my focus would remain on earned income. A business model that stands on its own two feet, enriched by public funding, but not dependent on it.

Supported by ACE-funded Cause4, Baker Richards has recently created a programme – Uplift Earned Income – to help managers of funded arts organisations to develop this relentless focus, to diversify and optimise, to look beyond established norms and embrace entrepreneurialism.

There are many opportunities. Museums have seen a revolution in retail over the past decade, the potential of which has barely touched the sides of the performing arts. Location filming and hire packages are much more developed in visitor attractions. Brand is an under-appreciated superpower. There is untapped revenue potential in our spaces, in the knowledge and talents of our people, and in the collections and content we hold.

I was heartened recently to see a vacancy at the Philharmonia orchestra for a business development consultant, seeking a person with expertise in the commercial landscapes of film, TV and gaming. Someone who can find revenue opportunities in IP, and counsel the CEO on digital strategy. That’s what separating the signal from the noise looks like. A sound financial footing, making creative and social impact possible. 

Anticipating local and general elections, I feel that politicians and (social) media are engaged in spectacular levels of misdirection. There is so much noise out there. However the votes fall, I suspect our sector will remain as vulnerable as ever to funding cuts. Those arts leaders who place growing earned income under “urgent and important” on their own to-do lists will be shielding their organisations from the worst of the shocks to come – and will find themselves best primed for opportunities ahead.

 Robin Cantrill-Fenwick is Chief Executive Officer at Baker Richards.
 baker-richards.com
@BakerRichards | @RobinComms  

This article is one of a series of articles, case studies and industry insights looking at the power of data to inform strategic decision making.