“I came expecting math class and I got philosophy class.”
A few weeks ago we hosted an Executive Summit, where 12 leaders from different genres and geographical locations gathered at the TRG Arts Center for Results in Colorado Springs. We began hosting these gatherings several years ago, and each one provides a snapshot of how leadership issues are changing over time.
The January 2016 Executive Summit
TRG’s reputation as data geeks preceded us, as you might guess from the first line of this post which is a direct quote from one of the participants. The executives came ready to talk about donation and ticket income, attendance numbers, and per capita revenue. But, instead of solely discussing data-guided revenue strategies, participants in the two-day session found themselves moving out of the day-to-day. Instead, we asked them to think broadly about leadership and its impact.
The need: integrated loyalty development
The leadership issue that continues to come up in our work and in the conversations during the Summit is the concept of integrated loyalty development. By that, I mean the practices that position individual departments to not only think just about their own revenue goals, but also how to develop patron relationships and revenue everywhere in the organization, in partnership with all departments. You might have learned about how this theory actually manifests in TRG Fellow Vincent VanVleet's posts about patron services offices, or in some of our recent case studies. This January, the executives who joined us came to the Executive Summit wanting and expecting to learn more about how to do this right and well.
This isn’t an issue unique to arts and cultural organizations that happen to have ticket buyers managed by one team and donors managed by another. According to Nancy Henjum, TRG’s organizational development advisor and faculty member at the Center for Creative Leadership (CCL), it’s a now-ubiquitous business issue.
“The opportunities made available to businesses that integrate strategy and operations under a common vision are enormous. Everyone can see that now, and wants to do it. But the challenges in leading that change and creating the culture required in the organization that actually works as an ensemble…that is typically the most difficult and demands attention to our practices, behaviors and beliefs,” she told me recently.
So, it’s easier said than done. The organizations that get it right are able to build sustainability for their organizations, generate working capital, and better connect with and engage audiences and communities.
The work is hard, and sometimes downright ugly. It can be confusing and intimidating because it’s not just one tactical change that allows integration to happen. When I talk to leaders about integrated loyalty, the first “place” they tend to go is combining marketing and development departments, or putting one leader in charge of both. That’s a fine idea, but today I’d argue that titles and reporting structure don’t matter nearly as much as having the knowledge of how patrons upgrade and incentives in place that encourage teams to work together to accomplish integrated goals.
So what does work and what does it look like? Three themes emerged from our conversation at the Executive Summit:
1. Lead with vision, manage with courage.
Today, executives must manage a variety of polarities, which are interdependent realities that either support or undermine each other in organizations. One of these polarities in executive leadership is managing tactically vs. leading inspirationally. The words ”managing” and “leading” are sometimes used interchangeably, but they’re not the same.
To inspire groups of people to change, leaders must invest time in creating a positive case for that change and constantly, repeatedly communicate it. In the case of integrated patronage, that means describing a reality where revenues are repeatable and sustainable because patron loyalty is ever-growing. The tone of the leader’s communication must pull people together around a common vision of a different future. And to achieve that reality, management has to set clear expectations, hold people accountable, and constantly celebrate success.
2. People make it happen—or not.
Management also has to change what isn’t—and sometimes who isn’t—getting results. January’s Executive Summit leaders spent much time talking about this latter issue, recognizing that their approach has too often been soft on managing expectations and even softer on consequences when expectations aren’t met. It’s understandable—in this field we hire often arts-loving staff members who aren’t necessarily trained for the new expectations we have. We’re sometimes insecure about their compensation levels, fearing that we’re “lucky” to have adequate staff at all. And sometimes staff have been in positions for so long that we feel completely unable to address performance issues for fear of legal retribution or a negative morale hit.
Leaders have a responsibility to create an environment where success is possible and expected, while allowing for staff to take measured risks and innovate. And yet, once leaders have created a meaningful case for change, they must manage in such a way that their teams believe they’re really committed to and invested in that change.
3. Data guides strategy: technology doesn’t lead, people do.
On a related note, another robust conversational thread during the Summit was around how executive leaders use data to inform strategies and know if their team is achieving expected results. CRM systems are helping people get more serious about developing patrons and tracking patron development with hard data, and yet, there’s still work to do. The technology doesn’t lead, people do. When this group of CEOs was asked to consider how they themselves, were using data to measure patron revenue results in their institutions the answers fell into three basic areas:
a) “We have too much data and we need focus. I need to three or four things to track…not 27.”
b) “I’m personally not looking at patron data at all. My staff uses it, but I don’t.”
c) “None of our objectives are cross-departmental. We use data to track marketing and development goals, but nothing institution-wide.”
Here’s the deal: leaders must provide focus for teams. And to do this, they must first understand which activities will provide the biggest impact across departmental lines. For example, TRG recommends prioritizing specific loyalty activities—things like reducing single ticket buyer churn and growing first time member renewal rates—and then projecting the potential revenues from these specific activities. We also recommend that leaders make clear that they value action on a manageable set of data points that are important to the business—not 20-30 different data points, but more like four, or six (suggestions here). Staff can and should present recommendations about why certain metrics are key, but leaders make the ultimate decisions about focus.
This is a critical part of creating the case for change, says TRG’s VP of Client Service Keri Mesropov. Today, she’s regularly citing the case of a client with an annual operating budget of $10 million which was able to identify an additional $2 million from a combination of patron loyalty initiatives. Staff drove this analysis, but the executive leader reviewed the results with the team, helped decide where to focus, and then insisted on measuring against those metrics all season long.
Leaders set the tone and create an environment where inquiry, curiosity, and analytic rigor are not just welcomed, but expected. And then they set priorities and manage against them.
Join a community of executives who are innovating around integrated loyalty development. We still have a few open slots for our July and October Executive Summits. Learn more and request your invitation here>>