A Blue Ocean Strategy for the American Symphony Orchestra
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University of Pennsylvania ScholarlyCommons Master of Science in Organizational Dynamics Theses Organizational Dynamics Programs 5-8-2015 A Blue Ocean Strategy for the American Symphony Orchestra Jennifer A. Buchness University of Pennsylvania, [email protected] Follow this and additional works at: https://repository.upenn.edu/od_theses_msod Buchness, Jennifer A., "A Blue Ocean Strategy for the American Symphony Orchestra" (2015). Master of Science in Organizational Dynamics Theses. 76. https://repository.upenn.edu/od_theses_msod/76 Submitted to the Program of Organizational Dynamics, College of Liberal and Professional Studies, in the School of Arts and Sciences in Partial Fulfillment of the Requirements for the Degree of Master of Science in Organizational Dynamics at the University of Pennsylvania. Advisor: Jean-Marc Choukroun This paper is posted at ScholarlyCommons. https://repository.upenn.edu/od_theses_msod/76 For more information, please contact [email protected]. A Blue Ocean Strategy for the American Symphony Orchestra Abstract The thesis that follows provides a history of symphony orchestras in America, and examines innovation opportunities and strategies that could be employed to attract a younger audience and return the institution to the heyday it once enjoyed. Drawing largely on the Blue Ocean strategy, I attempt to create a landscape wherein American symphony orchestras enjoy an environment with no competitors, instead residing in a blue ocean of uncontested market space. This topic was derived from my genuine interest in hearing orchestras play on, without the imminent threat of bankruptcy and a declining customer base. Keywords Blue ocean strategy, innovation, American symphony orchestra, Philadelphia Orchestra, innovative orchestra, orchestra history Comments Submitted to the Program of Organizational Dynamics, College of Liberal and Professional Studies, in the School of Arts and Sciences in Partial Fulfillment of the Requirements for the Degree of Master of Science in Organizational Dynamics at the University of Pennsylvania. Advisor: Jean-Marc Choukroun This thesis or dissertation is available at ScholarlyCommons: https://repository.upenn.edu/od_theses_msod/76 A BLUE OCEAN STRATEGY FOR THE AMERICAN SYMPHONY ORCHESTRA By Jennifer A. Buchness Submitted to the Program of Organizational Dynamics, College of Liberal and Professional Studies, in the School of Arts and Sciences in Partial Fulfillment of the Requirements for the Degree of Master of Science in Organizational Dynamics at the University of Pennsylvania Philadelphia, Pennsylvania 2015 A BLUE OCEAN STRATEGY FOR THE AMERICAN SYMPHONY ORCHESTRA Approved by: _________________________________________________ Jean-Marc Choukroun, Ph.D., Advisor __________________________________________________ Syd Havely, Ph.D., Reader __________________________________________________ Richard E Smith, MPhil, MSOD, Reader ABSTRACT The thesis that follows provides a history of symphony orchestras in America, and examines innovation opportunities and strategies that could be employed to attract a younger audience and return the institution to the heyday it once enjoyed. Drawing largely on the Blue Ocean strategy, I attempt to create a landscape wherein American symphony orchestras enjoy an environment with no competitors, instead residing in a blue ocean of uncontested market space. This topic was derived from my genuine interest in hearing orchestras play on, without the imminent threat of bankruptcy and a declining customer base. ACKNOWLEDGEMENTS Gratitude is extended to Dr. Jean-Marc Choukroun, my capstone course advisor, and to Dr. Syd Havely and Richard E. Smith, my capstone readers, for their help and guidance during the preparation of this document. I would also like to thank Dr. Alan Barstow, Dr. Syd Havely, Dr. Janet L. Greco and Richard E. Smith for their support, advice and encouragement throughout my tenure in the Organizational Dynamics program. I would be remiss if I did not mention my colleagues at Wharton External Affairs for their never-ending supply of support, enthusiasm, suggestions and good humor when juggling a career and school became a bit overwhelming for me at times. I would like to thank my parents, Anthony and Loretta Del Vacchio for allowing me to find my own way in life, which landed me here—a good place to be. And finally, my husband Daniel, who endured several away trips, late school nights, weekends full of studying and stressed out moments as I pursued this degree for the past seven years. His support was integral to my success and completion of this program. iii LIST OF TABLES Page Table 1: Orchestras by Date of Founding 6 Table 2. Breakdown in Entertainment Spending - 1953 8 Table 3. Failing Orchestras from 1981-1986 10 Table 4. A Snapshot of Blue Ocean Creation 15 Table 5. Age and Income Levels 23 Table 6. Income Bracket Sorted Responses 24 Table 7. Age Bracket Sorted Responses 25 Table 8. Strategy Canvas for Philadelphia Orchestra 30 Table 9. Four Actions Grid for Philadelphia Orchestra 31 Table 10. Looking Across Alternative Industries 36 Table 11. Looking Across Strategic Groups Within Industries 37 Table 12. Updated Strategy Canvas for the Philadelphia Orchestra 49 iv LIST OF FIGURES Page Figure 1. The Symphony of 1000 1 Figure 2. Image of an Assyrian Orchestra (7th Century BC) 5 Figure 3. Six Paths Framework 35 Figure 4. A Guide to Creating a Social Media Strategy 42 Figure 5. Philadelphia Orchestra Social Media Presence 43 v TABLE OF CONTENTS ABSTRACT iii ACKNOWLEDGEMENTS iii LIST OF TABLES iv LIST OF FIGURES v CHAPTER 1 1 THE AMERICAN SYMPHONY ORCHESTRA 1 Purpose of Capstone/Thesis 1 A Brief History 4 Changing Landscape 9 CHAPTER 2 12 WHY THE BLUE OCEAN? 12 Making a Case for the Blue Ocean Strategy 12 Criticisms of Blue Ocean Strategy 18 CHAPTER 3 21 SURVEY RESULTS 21 CHAPTER 4 27 TOOLS AND FRAMEWORK APPLIED 27 Strategy Canvas 27 The Four Actions Framework 30 Exploring the Six Paths Framework 34 Tipping Point Mentality 37 Social Media and the Orchestra 40 The Lost Sonata- Fun with Gaming 45 Frameworks for the Future 46 CHAPTER FIVE 47 CONCLUSION 47 An Innovative Orchestra 47 Updated Canvas 48 Tools Redefined 50 Final Words 52 REFERENCES 54 vi APPENDIX A 58 APPENDIX B 64 APPENDIX C 70 APPENDIX D 92 vii 1 CHAPTER 1 THE AMERICAN SYMPHONY ORCHESTRA Figure 1. The Symphony of 1000 Source: Leopold Stokowski: Making Music Matter (Hassen, 2011) “A symphony must be like the world. It must contain everything.” Gustav Mahler Purpose of Capstone/Thesis The year was 1916 and the crowd at the Academy of Music exploded in thunderous applause (Figure 1). Amid the augmented orchestra of 110 musicians, two 400 person choruses, a 150-member children’s chorus, eight soloists and $14,000 of enhancements to allow for stage modifications to accommodate such a large ensemble, Leopold Stokowski had just conducted the first ever US performance of Mahler’s 8th 2 Symphony, The Symphony of 1000, a piece he considered "one of the greatest compositions of the twentieth century" (Hassen). “The event earned Stokowski, the Orchestra and Philadelphia national attention on a grand scale, and brought the thirty-three-year-old conductor to the forefront of his profession" (Hassen). This monumental event helped to establish the distinguished reputation that the Philadelphia Orchestra would enjoy for years to come. Now fast forward 100 years. Since the Philadelphia Orchestra's shocking application for Chapter 11 Bankruptcy protection in April of 2011, commentators, bloggers and musicians have all shared opinions on the uncertain future of symphony orchestras across America. Faltering ticket sales, lower donations and the aging and decline of the symphony’s oldest and most loyal supporters have proven detrimental to the future of the Philadelphia Orchestra and other famous symphonies around the world. Many full- time orchestral positions have been frozen or done away with all together, creating a practice of hiring temporary musicians to fill in—a cost saving measure from a business standpoint but a hardened reality for highly trained musicians who are now out of work. This is not to mention the effect to musical integrity when bringing in "newbies" to play with the company for the first time during a big performance. In the case of Philadelphia, what exactly happened in the storied history of this famed, nationally acclaimed orchestra, and how did they land in bankruptcy court? On a larger scale, what is the current state of the American symphony orchestra, and can an innovation strategy preserve the future of this institution? The blue ocean strategy, coined by Kim and Mauborgne in a book of the same name, looks at the idea of recreating a company by moving to a "blue ocean" or 3 uncontested marketplace without competitors. Rather than further inundate an overcrowded marketplace or "red ocean," one should move beyond their current model and redefine the business in a way that draws their existing customer base into a new and exciting product offering, leveling off all previous competition (Kim & Mauborgne, Blue Ocean Strategy: Creating an Uncontested Marketplace). The authors liken this strategy to the reinvention of the circus, aka Cirque du Soleil, which has been met with highly acclaimed success. The model focuses on four specific principles by which to frame a company's future: 1. How to create uncontested market space by reconstructing market boundaries 2. Focusing on the big picture 3. Reaching beyond existing demand 4. Getting the strategic sequence right. The blue ocean strategy is an interesting possibility in attempting to reframe the current business model of failing orchestras across America. In the course of this paper I will demonstrate how the principles discussed by Kim and Mauborgne can be applied. I will suggest ways in which innovation can be incorporated at all levels of an orchestra to increase viability in an overcrowded marketplace and amid tepid interest in our younger generation. Lastly, I will envision a place where the orchestra plays a more prominent role, the role it has been intended to play since its inception in the late 19th century.