Growing Model of Performing Art Organizations: Checklist for Management Decisions

Yuko Oki Kyoto Sangyo University, Kamigamo Motoyama, Kitaku, Kyoto, Japan

After graduated from Tokyo National University of Fine arts and Music, Yuko Oki worked as a viola player in Tokyo City Philharmonic Orchestra. MBA and Ph, D. in international studies at Waseda University. Lecturer at Showa Music University and Kyoto Sangyo University, then become Associate Professor at Kyoto Sangyo University since 2005.

Abstract In this paper I make checklist for management decisions for performing art organizations, through two case studies; Shiki Theatre Company and Japan Philharmonic Orchestra. By these case studies, I found 5 common stages of growing model for arts organizations according “Stage Gate Model” (Cooper, 1993). First stage is starting up period, Second stage is making solid contents and seeking core audience period, Third stage is pursuit originality and seeking new audience period. Fourth stage is strategic marketing for repeat audience and expanding activities including oversea countries. Fifth stage is trial of new fund raising and expanding business period. As in each stage, important issues of strategic management decisions are different; I pick up check items using Skill Readiness, Market Readiness, Commercial Readiness and Management Readiness of “Cloverleaf Model” (Heslop et al., 2001) including external and internal environment of the organizations.

Keywords Growing Model, strategic management, art organizations, Cloverleaf Model, Stage Gate Model

1. Introduction

So far, research on the growth model for the management strategic decision has been mainly studied for the venture enterprise that aims to introducing their stocks to the public. Though in general the purpose for venture enterprise concludes maximization of sales and profit or rise in their stock price, a success of the art organization shouldn't be necessarily measured only with factors of financial affairs. Considering the difference of venture enterprise and art organization, I decide the general idea of the growth mode to art organization in this research.

The objects of this research are arts performing organizations like Orchestra, Drama Company, Chorus, Opera Company or Dance Company. There are three final purposes in this research, firstly to make checklists for strategic management for art organization, secondly to pick up successful points of management according to growing steps, thirdly to study impact of art organization’s success to local society. This paper is the first step of this research and make trial checklist of art organizations for strategic management. I use the approach of qualitative investigation of current and past circumstances using case analysis. Data is being gathered from a variety of resources, including periodicals, published and unpublished reports of organizations as well as researcher interviews with organization persons of leadership. Through two case analysis, Shiki Theatre Company that continue surplus management among red deficit of most theatre company and Japan Philharmonic Orchestra

1 which is one of the typical orchestras, I study process of their growth and pick up items of checklist.

2. Theoretical Perspective

(1) Previous Study of Venture Enterprise

Most of the research on the growth model was accumulated in the study on the venture enterprise. So as for this research as well, I adopt the growth model of venture enterprise as framework. According to Kiyonari et al. (1972), venture enterprise is defined as "the new development creative enterprise, which has intensive ability of R&D.” Matsuda (2001) classified venture enterprises by their business type, 1) distribution service project type, 2) skill based project type, 3) research and development project type, and also by the created value added 1) self supporting type, 2) employment creation type and 3) high technology type as shown in the Figure 1. According Matsuda’s classification there are 9 categories in venture enterprise. Most of the art organization belongs to the self-supporting type by the created value added category. By the business type, most of art performing organizations belong to skill based project type or distribution service type, although research and development type exists in case of experimental trial or combination of the different kind arts.

Figure1: Classification of Venture Business

business type distribution skill based R&D type created value Service type type added

self supporting type Art Organizations

employment creation type

high technology type Matsuda (2001)

(2) Growing Stage of Organization and Management

Flamholtz (2000) proposes the outline to appreciate the stage of growth of any organization. According to this outline, at the first stage of new venture business creation, market and a product are the important development fields. At the second stage of business expansion, resources and an operation, at the third stage of Professionalization building of management system, at the fourth stage of consolidation the establishment of the enterprise culture are important. Although Flamholts concentrate internal resources, it might be necessary that the both internal structure and market environment are comprehensively put in its research outline for the right examination of the company growth. Nonaka (1982) examined the relationship between market environment and organizational structure. Nonaka’s research shows the critical influence of market to the organization strategies.

2 (3) Research of Technology Venture

As most of art organization based on artists’ skills, research of technology-based venture might give suggestions the framework of this research. First, I pick up “Cloverleaf Model” of Heslop et al. (2001). The research of the technological venture, which is one category of the venture business, gives suggestions for the framework of my research. This is the model to measure the preparation progress conditions of the technology transfer from the research organization to the enterprise, and aims at providing the tool to judge the timing for the person in charge when to move technology to the enterprise. As shown in Figure 2, Technology Readiness, Market Readiness, Commercial Readiness and Management Readiness leads to Technology Transfer Readiness.

Figure 2: Cloverleaf Model

Commercial Readiness Market Readiness

Technology Transfer Readiness

Management Readiness Technology Readiness

Heslop et al. (2001)

Second, I use "Stage Gate Model" by Cooper (1993). This model shows that they must pass through five gates so that there may be five stages and it may shift from each stage to the next stage before the idea of the technology is supplied to the market as a product as shown in the figure 3. In this research, he investigates check items for manager to pass each gate.

Figure 3: Stage Gate Model

DISCOVERY DRIVING NEW PRODUCTS TO MARKET

GATE 1 SECOND GO TO GO TO GO TO SCREEN DEVELOPMENT TESTING LAUNCH

GATE STAGE 1 STAGE 2 GATE STAGE 3 GATE STAGE 4 GATE STAGE 5 2 3 4 5

SCOPING BUILD DEVELOPMENT TESTING & LAUNCH BUSINESS CASE VALIDATION $

POST-LAUNCHREVIEW

Cooper (1993)

3 This checklist was composed by about thirty items, and it aimed at raising the probability of success to shift to the development of the new articles. I adopt the idea in "Stage Gate Model" which shows there exists several gate to shift from each stage to the next for thinking the growth model of the art organization by this research

3. Growing Model of Art Organizations

(1) Shiki Theatre Company

Shiki Theatre Company has founded in 1953 by several young actors. Since 1960 they chose its company status as profit organization and tried to make living only on the stage. They built temporally theatre for long-run musical, and now own 7 theatres all over Japan. Their specialty is imported Broadway musical, and they are quite successful to collect full amount of audience to the theatres. They play 2,886 performances in 2003 and their income is over 25 billion yen. They start playing performances overseas including Korea and China. Asari who is Managing and Artistic director of this company, is the entrepreneur to popularization drama and musical in Japan and tried to rationalize the management of art organization.

1) The First Stage 1950’s

Shiki Theatre Company has founded by the student of France literary course of universities in Tokyo for the purpose of playing French drama in 1953. At the beginning they play only French works of Anouilh or Giraudoux, after they start Japanese works they lose 3/4 of their audiences. Actors must sell the thicket by hands and work for living outside theatre. As for the first stage, their activities are mainly presentation of French drama and concentrate straight play. They establish the basic skills for their activity and the time of trial and error for challenging creative productions. It is important specially to form the strength of skill itself in this time.

2) The Second Stage 1960s

After established of Nissei Theatre in Tokyo, Asari had engaged in there as an art director and Shiki’s direction had been decided in the close relations with Nissei Theatre. In1964, Shiki performed “Naked King” musical for children. In those period they adopted the salary system that pool actors’ income of movie or broadcasting as “ primitive communism” and they paid by themselves the costs of building their own rehearsal room. In 1972 Shiki performed Broadway musical “Applause” with chansonnier Fubuki Koshiji. Musical with Koshiji had continued as “Mame” in 1973, “ Except Sunday” in 1974. Leading part had fixed only by Koshiji and other casts had been gathered by public audition. The second stage is the time of encounter of musical for Shiki. They collect audience with the big power by star singer. At this period it is important to establish the strength of their skill, which is suitable for the applicable market.

3) The Third Stage 1970’

Starting with “Jesus Christ Superstar” in 1973, Shiki performed Broadway musical following “Westside Story” in 1974, “Chorus Line” in 1979 and “Evita” in 1982. Asari has arranged “Jesus Christ Superstar” to Japanese version and Shiki’s original ensemble system without star singer or actor has established. The third stage is the time of pursuing originality by arranging the works of Broadway musical in Shiki’s way and of conversion from star system to ensemble. For the expansion of their audience they chose familiar musical to the public and tried to alleviate

4 the personnel expenses in the organization. It is necessary to make commercial readiness by aggressive cultivation of the market in this period.

4) The Fourth Stage 1980’-1990’s

“Cats” in 1983 had become the opening of the new stage for Shiki. Shiki has built temporary theatre for long run performances with the sponsor of Ajinomoto and Fuji Sankei Group. Shiki asked Ticket Pia Corporation, which was ticket sales agency, to establish the online system to sell big amount of ticket for long run performances. “Cats” performed in Osaka, Nagoya, Fukuoka and Sapporo as well. Long run musicals were followed by “Crazy for you” in 1993, “Beauty and Beast” in 1995 and “Lion King” in 1998. They also start performing tour in abroad as in late 1980’s “Hans” in Beijing, original musical “Rikouran” in China in 1992, in Singapore in 1997 and Japanese version of “Jesus Christ Super Star” in Korea in 1994. The fourth stage is the time of risk taken to construct their own theatre for long run performances. They tried to increase the number of their repertories to enclose the repeat audience. At this period, it was important to form an alliance with operation system which made possible the bulk sale of the tickets and supporting funds from Japanese corporation. They also start to focus the market in abroad for preparation of the market maturity in Japan.

5) The Fifth Stage 2000’s

Since 2000’s Shiki’s activities have newly expanded. In addition to their specialty “Broadway Musical” they started to focus their original straight play or musical again. Now they have 8 own theaters all over Japan and also plans to construct another 2 theaters in Tokyo. They perform musicals and play at 10 theatres, scheduling 8 Broadway musicals, 2 original musicals, 2 straight plays including preparing works. Asari mentions that all the employees including actors or any professionals should have creative attitude, professional skills and general economic sense when they work in art organization. In 2001, Shiki announced that they want to open their stocks to the public and now preparing the new fund raising system from market because of the limitation of management support from private enterprises according to the enlargement of their activity scale.

6) Prototype of Growing Model from Shiki’s case

It seems there are 5 stages of growing model for the art organization by analyzing Shiki’s case. The 5 stages are following;

The First Stage: Starting and Core skill establishment period The Second Stage: Solid contents and Acquisition of core audience period The Third Stage: Pursuing originality and Expanding audience The Fourth Stage: Impounding audience and Abroad tour The Fifth Stage: New fund-raising and expanding business line

(2) Japan Philharmonic Orchestra

Japan Philharmonic Orchestra was established as a part office of Bunka Broadcasting in 1956. After opening of Fuji Television, Fuji group has sponsored to the orchestra, but as the heavy burden of their costs they stop supporting in 1972. Musicians were divided into two groups of Japan Philharmonic Orchestra and New Japan Philharmonic Orchestra. In 1973, Japan Philharmonic Orchestra has re-constructed with the mission “an orchestra to walk with the

5 citizen”. They perform over 160 concerts per year mainly symphony concerts, and also expand their activities to children’s or family concerts as well.

1) The First Stage: Starting and Core Skill Establishment Period in 1950’s

When Japan Philharmonic Orchestra has established, the orchestra members has engaged with excellent salary and benefits. Akeo Watanabe had nominated as a Music Director and had aimed to be representative orchestra in Japan. At the beginning the main activities are broadcasting, and also they started subscription concerts in 1957. Mr. Ale has been invited as a guest concertmaster for building musicians basic skills for orchestra playing. Japan Philharmonic Orchestra has born as a broadcasting orchestra and the first stage is the time of establishing the basic skill for the activities. As it was one part of Broadcasting Company, it was not necessary to think about management system or fund-raising for the orchestra.

2) The Second Stage: Solid Contents and Acquisition of Core Audience Period in 1960’s

After opening of Fuji Television in 1959, the sponsor company of Japan Philharmonic Orchestra has started to be cost conscious. In 1968, Seiji Ozawa had invited as musical advisor and several members had bee dismissed. Against such rationalization as applied in U.S. business, the orchestra members started to fight Sponsor Company and finally Fuji Television had decided to stop the sponsorship in 1972. The orchestra members has separated in two groups; Japan Philharmonic Orchestra with continuing the fighting with Fuji Television and aiming the re-construction of Foundation, and New Japan Philharmonic Orchestra with Seiji Ozawa for new activities. The second stage is the time of acquisition of the core audience by the subscription at the switchover term from the broadcasting to the concert orchestra. But the conflict in the organization has caused the loss of sponsorship. At this period, it is important to establish the strength of own skills as the base of art organization and try to plan consistency of their activities with the applicable market.

3) The Third Stage: Pursuing Originality and Expanding Audience in 1970’s

Japan Philharmonic Association was established by the chorus and subscription members with the aim of re-foundation as non-profit organization in 1973. As for the activities, one subscription concert per month in Tokyo and concerts tours in whole part of Japan. Orchestra members stand in the street to collect donations or carry out handbills to appeal the necessity of funds to buy large instruments. In 1975 they started family concerts with familiar works and also go to schools for introducing orchestra music to the schoolteachers aiming to acquire new audience. The second stage is the time of changing their style from “the elite orchestra” to “citizen’s orchestra” as they were obliged to change its style due to loss of sponsorship. They started to pursue their originality by trial and error and to choose small donations by many citizens for funding instead of big amount of money from private company to create new applicable market.

4) The Fourth Stage: Impounding Audience and Abroad Tour in 1980’s

In 1980’s they started children’s concerts in summer. They tried to have closer distance between audience and musicians through the chamber music at the lobby before subscription concerts. In 1985 they carried out European concerts tour for 50 days and several tours in the States as well. The fourth stage is the time of interchange with musicians and audience to secure subscription by regular audience. Musicians’ collection of donations on the street has fruited to buy large instruments like contrabasses or timpani. It is necessary for this time to

6 grasp the situation of the market and develop the contents for the applicable market, and for sophisticating musicians’ skill to play in European countries where classical music comes from.

5) The Fifth Stage: New Fund-raising and Expanding Business Line since 1990’

Since 1995 the alliance with Suginami-ku in Tokyo has started and they will franchise new renovated Suginami public hall as their activity base in 2006. They have played chamber music concerts at the every local elementary school to enhance the audience. New music director Kenichiro Kobayashi who has numbers of his fans has been called after long blank of first music director Akeo Watanabe in 2004. They started 3 subscription series in Tokyo, Yokohama and Saitama. They also continue concerts tours all over Japan and for children summer concerts or concerts at the school. Their income in 2000 is about 1 billion yen, which follows Yomiuri and NHK symphony orchestra. The income from concerts is 77.1% of their total revenue, which accounts for well over the average of 53.7% of orchestras in Japan. The fifth stage is the time of alliance with outside organizations for expanding activities. The quality and quantity of alliance become important to secure support for management from outside. Then, it is the time for art director to give the good direction to establish the strength of orchestra’s skills.

4. Making Checklists

(1) Conditions for Art Organization’s Growth

The conditions for art organizations growth could be quoted from “Cloverleaf Model” and sorted out as follows.

Internal Conditions

Skill Readiness: basic skills, artist’s ability, art director, human resources management Management Readiness: management skill Commercial Readiness: plan and project for contents

Market Mechanism Conditions

Market Readiness: market conditions, overseas activities for expansion Commercial Readiness: various risks from outside Management Readiness: fund-raising, alliance with outside organizations

(2) Internal Conditions

1) Core Skill

Core skill in internal conditions contains accumulated skill through large experience, cost for introducing skills, and capability for extending its repertoire. Ensemble by artist s will lead to art organizations’ performances, but the time for rehearsal should be reasonably short in time owing to accumulated skill. Also, full examination whether the planned project could be achieved with its own internal resources is necessary. If the internal resources are not enough for the project, then the success rate will be low because of the coming high cost for securing right resources. Furthermore, how the current accumulated skill could be accepted by other

7 artistic fields will be a good hint for judging the organization’s basis for future expansion of its repertoire.

2) Ability of Artists’ Team

Ability of artists’ team connotes artists’ understanding of its business, skill and its conformity to ensemble, artists’ background, assessment of artists by specialists, and so on. Individual skill can only be appreciated when it properly fits the ensemble. Artists in art organizations are required to be “generalists” who have a broad view to understand the market and audience, as well as “specialists” of art. Artists’ background such as school, teacher, and overseas activities are important for the ensemble which has delicate and subtle expression. Evaluation of artists on how professional they are, is performed by specialists in art business.

3) Art Director

The growth of an art organization fully depends on its art director how clearly he or she sets forth the organization’s objective. Besides leadership with artistic ability, the art director is required to have capability to obtain large audience, popularity to be captured by the mass media, and so forth.

4) Human Resources Management

Keys to human resources management are to secure talented artists from the market, to enhance consciousness of entrepreneurship among artists, and to foster artists and staff with creativity.

5) Contents Development

Contents development is crucial as “contents” is the important interface with the audience. Vital points for contents development are; speed to plan a project to acquire potential audience, price competitiveness, numbers of project lines and teams, building such concept as to attract audience and artists, and a focus on specific minor performances. A focus on specific minor but potential performance, together with a number of projects lines and teams, can make the organization distinctive and competitive.

6) Management

Management of organization is especially important as the performing art is not a profitable business. Top management with high level of commitment to the organization is imperative. Administration with certain numbers of specialists, as well as the executives, well versed in art itself, with qualification and understanding to run art organization, are required. With wide perspective and knowledge, executives should have a long-term view and plan for attracting current audience, and also, if necessary, make decisions to exit from certain performance.

(3) Market Mechanism Conditions

1) Market Conditions

Market conditions should be taken into account as for market mechanism. Items to be considered are:

8 ƒ Marketability of products and service, ƒ The result of pre-marketing, competitiveness of products and production process, ƒ Competition with others, ƒ Customer satisfaction, ƒ Low marketing cost, ƒ Market growth rate, ƒ Access to the market.

2) Overseas Performances

The growth of the market is indispensable for the growth of organization. The more the domestic market matures, the more the organization is obliged to go outside for expanding its market. Overseas performances could be a good topic, and may lead to favorable brand-image of the organization to the public.

3) External Risk

External risks are mainly the risks in terms of law and regulations including infringement of copyright, contract conditions with artists from abroad, dispute with labor union. Non-profit art organizations, living on public donations and fund, are sometimes exposed to such risks as tax system on donation, corporate tax, the governmental policy on culture and related distribution of budget.

4) Fund-Raising

For most of art performing organizations, income by ticket sales is not enough. At the time of foundation, the organization decides its status as “non-profit” or “profit”. Then, the organization will have to study how it should raise a fund. The fund could be from the organization’s direct sponsor, governmental organizations and subsidiaries, private corporations, individuals, and from provisions of ticket sales and other business activities.

5) Alliance with Outside Organizations

Alliance with outside organizations is desirable for an art organization with poor financial background. In this case, quality and numbers of alliance will be important.

(4) Checklist

Considering above, I will show Table 1. as a checklist for strategic management of art organization. At each stage, importance of each item is different. The checklist will be shown to art organizations, and then more sophisticated checklist is expected after examination.

9 Table 1: Management Checklist

12345 Core Skill experiential accumulation of skill skill introduction costs possibility of spread to other repertories Ability of artists team understanding art business suit individual skill to ensemble artists background evaluation from professionals Artistic Director artistic vision artistic ability ability of assembling audience topicality from mass media Human Resource Management supply artists from the market enhance the entrepreneurship raise creative staff and artists Contents Development speed of contents development price competitiveness number of project lines construction of concept focus to specialty Management clear mission commitment of top management construction of management system CEO's skill of manage art organization CEO's artistic background ability of decision making Market Conditions market possibility of product or service result of pre-marketing competitiveness of products or process rival organizations sufficiency of audience needs low marketing costs market growth rate access to the market Oversea Performance expand market on abroad topic making by abroad performance External Risk risks on the law and regulations tax system direction of cultural policy and distribution of budget Fundraising choice of non-profit or for profit acquisition of sponsorship government subsidiary public support individual donations provision of ticket sales provision of other business income Alliance with other organizations quality of alliance number of alliance

5. Conclusion

In this paper I made checklists as the first step of the growth model research of art organization through two case studies. The second stage I will make enquiries of this checklist and send to lots of art organizations, and scale important items for sophisticated checklists in each growth stage of organizations. This checklist will help art organizations for successful management because they might be able to realize the important management point at each stage where they are and make suitable strategy according the process of their growth. I believe that success of art organization impact local society so I will make a suggestion of construction of local milieu including art industry.

10 References

Cooper, R. 1993. Winning at New Products: Accelerating the Process from Idea to Launch. New York: Perseus books. Flamholtz, E. 2000. Growing Pains: Transitioning from an Entrepreneurship to a Professionally Managed Firm, California: Jossey-Bess Inc. Publishers. Heslop, L., E. McGregor and M. Griffith. 2001. “Development of a Technology Readiness Assessment Measure: The Cloverleaf Model of Technology Transfer.” Journal of Technology Transfer, Dordrecht: Kluwer Academic Publishers, Vol. 26(4), pp.369-84. Kiyonari, D., S. Nakamura and K. Hirao. 1972. Venture Business. Tokyo: Nihon keizai shinbunsya. Matsuda S. 2001. Venture Corporation. Tokyo: Nihon Keizai Shinbunsya. Nonaka I. 1982. Organization and Market. Tokyo: Chikura shobou. Oki Y. 2004. Management of Orchestra. Tokyo: Bunshindo.

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