[MUSIC] Today we're gonna ask the biggest question of all, which is what is strategy in the arts and cultural sector. This is an enormous question, and we're actually gonna spend the rest of the class taking apart pieces of the idea of strategy, and breaking it into a bunch serious and manageable components. But we have to start somewhere, so in week one we're gonna start with the big question of, how do you think about this question of strategy? How do we start to define it? How do we start to think about it? And I'm gonna introduce a framework for you to use, that I think might be helpful. It's gonna say, that strategy has three parts to it. Three parts that have to be all understood at the same time. First is the value question. What is the organization producing that's valuable? Second, the question of capacity. What is the operational ability of the organization, to deliver on the value claim? Third, support. What is there around the organization that will allow you to do this work? Are there people who believe and authorize and support, what you want to do? And the argument we wanna make, is that strategy involves the achievement, of alignment, fit and coherence among these three elements. Something has to be both valuable and feasible, and at the same time supportable for it to be a strategic action. So what we're gonna say is that strategy involves looking across these three big questions, and asking if the action in hand, no matter what it is. And we're gonna ask, does it produce value? Is it operationally do able and feasible? And is it supportable and authorizable? If it meets those three tests, we're gonna say that it's gonna be a strategic decision, a strategic action. So let's talk a little bit more about each of these three elements of strategy, and then we'll see how it all pulls together, and the challenges of actually achieving strategic alignment. What do we mean by value? The first component of strategy. Value is the impact and difference you make in the world. Value is the thing that you're presenting to the world and saying, this is worth doing. Value has to have a component, where it is moving the needle. It has to make a difference in the world, if it's gonna claim to be valuable. Now the interesting also about value is that it's different than mission. Often you'll find the value proposition, or the value claim embedded in the mission statement of an organization. The mission statement could be long and flowery, and have a lot of components about how the organizations does what it does. Why it does what it does, the underlying values and assumptions of the organization. But embedded somewhere in that mission statement, often is the value proposition. The claim about what the organization produces that's valuable. And that's gonna be a central element. To be very clear about value, and to argue that you have something in fact is wanted and needed. Now you may say who determines what's valuable? How do we know if something is worth doing? I think there are two possible ways. One is to say, that the supply side of the equation is going to determine value. And that means the organization itself, the leadership of the organization, is gonna declare something to be valuable and pursue it. And this is often the way, things work in the arts. Someone has a powerful vision, they say this is what we're going to do. This is valuable, we're gonna deliver it to the community, and they are gonna come along and see that it's valuable, see that it's powerful, see that it's worthwhile. So, value can be driven by leadership and vision, on the front end. But it can also be defined a second way which is, on the demand side. Value can be a function of people saying that they want something, and that there's an actual demand for which people willing to pay, and give their time and effort to actually consume a particular service or program. So value cannot just be seen as something that is given, that you as the manager or the leader say is valuable. Nor can it be strictly thrown across the transom to the demand side, and say that the market always knows what's best. In fact, value is gonna be a very complex dialectic between supply and demand, between leadership and the market. Capacity, the second component of our framework. What do we mean by capacity? I mean the operational ability of the organization, to deliver what it promises. Capacity is not limited, though, strictly to the organizational boundaries. That is, we're not talking about organizational capacity. I wanna talk about operational capacity, which includes capacity both inside the formal boundaries and outside the boundaries. Many things get done in the arts and cultural sector, not just by having the resources inside the organization to carry them up, but by partnering and bring other organizations along, and coproducing various programs and activities. So capacity has to be construed as bigger than organizational boundaries. It has to span beyond it, into the partners and the collaborators that you might engage in your work. Capacity is a critical component of the strategic question, because without the ability to deliver, without the capacity to actually make a value real, you don't have much. But, there's a third component I mentioned, and that's support. That's the last, and in some ways, critical component of a good strategic analysis. Support is what the world outside the organization is willing to authorize, and get behind. You can act without support, but it can be very painful and difficult, it often involves a lonely trip. Now, in the arts and culture sector there are a lot of people who are in a position to provide support, authorization and legitimacy. Donors, private foundations, corporations, the media, local arts councils, local government. All external actors, who are in a position to give the organization the resources and authorization, to kind of move forward and to do what they want to do. So authorization, at its surface level, seems to be something that's strictly environmental, something that comes from outside the organization, and that makes the work possible. But you also need to think about support as having an internal component. You can't get much done unless the staff, the volunteers, and board members are behind what you want to do. So support, on the surface, looks like it's something that you get from outside, but really at its deepest level, support is both internal and external. And it requires getting all stakeholders behind the value that you're claiming to want to produce. So think about a venn diagram with value, support, and capacity and you'll see that there's a sweet spot in the center. And we call that point, the moment of alignment, fit and coherence. If you can achieve that point where what you have is valuable, where you have the capacity to deliver it, and where there's support and interest in it, in doing the work, then you have an action that is in alignment, that is coherent. But you'll note there are a lot of other possible positions you could find yourself in. Fact there are eight total possible combinations. We just run through these. You can imagine that you have an idea or a program, that is neither valuable, nor feasible, nor supportable. That's called, in some cases, an academic idea. It's something for which there's no interest, there's no capacity, and no value. Hopefully, you won't have that type of idea. You'll let academics have those ideas. But, there's a lot of other combinations. You can have in a situation, where you have a valuable proposition, but it's not feasible or supportable. That's something that you believe is terrific, but for which it's impossible to get done, and there's no real interest. You can have something that valuable and feasible, but not supportable. You can also has something that's valuable and supportable, but not feasible. You can even imagine something as feasible and very do able, but that's really not very valuable or even supportable. And you can also think about the combination of feasible and supportable, but not valuable. So there a lot of possible combinations out there. The last would be supportable, but not valuable or feasible. All these are possible. You can be anywhere in that venn diagram. But my concern, is that it's very rare that you hit that sweet spot, where you have a proposition that immediately is valuable, feasible, and supportable. But when you achieve that, that's when you know you're in that moment of alignment, fit, and coherence. The reality though, I think is that, you're gonna face a world where you're probably gonna be in one of those seven other contingencies. Where you're gonna have something that might be valuable, but not feasible and marginally supportable. Or something that's very demanded by the community, but what you don't really believe in, and that you don't have the capacity to deliver. You're often gonna find yourself where you have one or two of these components in place, but not all three. So what do you need to do? I would say that strategy involves, the careful calculation of the road to the greater alignment, fit, and coherence. That no matter how close you find yourself to that moment of sweet spot of where all three are brought together, you need to work on figuring out how do I move the organization? How do I make adjustments in our capacity, or in our support, or even in our value proposition, to get them to get the alignment greater and greater. And the big question I think you might wanna ask is, well which of these three points do you wanna act on first? Where do you enter the strategic calculus? And how do you find that first move, to bring your organization closer into alignment? It's tempting to believe that support is the key problem, that if only you could get more money, more people behind you, anythings possible. At the same time, it's tempting to believe that this starting point is capacity. If only you could hire more people, if only you had more volunteers anything would be possible. I want to argue that support and capacity are in fact very flexible and movable. But mission also has to be part of the calculus. You have to be ready to adjust the mission, to what the support environment dictates, and to what is feasible in terms of capacity and your ability to deliver. So, as you think about strategic alignment, I'd like you to think about three things. Your organization is gonna move continuously, in and out of alignment. It may achieve moments where everything is working perfectly, where the value proposition is well received, where the capacity is there, and the support is overwhelming. But most of the time you're gonna be in one of those other seven scenarios I described, where one or two of these pieces are gonna be in place, but you're gonna have to make adjustments. >> And strategy, I think involves the careful understanding of just how much movement is needed, to bring the organization into alignment. It's not and something that has to be done once. Strategic alignment is something has to be done, over and over again. Your gonna make choices, your gonna make adjustments, your gonna add capacity, your gonna build support, your gonna shift mission and value. But over time your gonna need to revisit and come back over and over again, to these questions of alignment. Because the world will change, and while you might make changes that in the short run get you closer to that moment of fit, over time you may drift in and out of alignment. So the second point is, you have to do something continually. It's not something that you're done, once and over. And then the final point comes back to what I had mentioned just a little bit earlier, that to be a strategic manager, you have to put mission and value on the table as one of the elements of your calculus. You cannot hold mission as sacrosanct and untouchable and immutable. It's not a crime to say the mission is flexible. It doesn't mean you're selling out. It means that you're being a realist and a strategic actor, and seeing that all three of these components are critical. And that some solutions require adjustments in capacity. Some require adjustments in support. But some actually do require adjustments in value and mission. So. Use the strategic triangle as a starting point. Ask yourself how well your organization is in alignment, what it could do to heighten that fit, that coherence among these three elements, and you'll find that it's a powerful tool for both examining immediate short term actions, and also long term organizational development. [MUSIC]
