While at first glance it may seem crazy to "overpay" employees, Jim makes a strong case for it in his post The Competitive Advantages of Overpaying: "Just because tons of free artistic labor is available doesn’t mean that’s what you have to pay. In fact, I believe strongly* that strategically overpaying for talent is one of the smartest things a business or organization can do. Pay 'market,' get 'market.' Pay better than market in an area where people are hungry, and...

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When businesses and organizations reduce their costs, one of two things happens. Either they stop being able to do something useful that they previously could do, or they stop wasting resources that weren’t doing them any good. Of course, it’s more nuanced than that. Most budget cuts probably do at least a smidgeon of both, though I would say that in most cases, it’s clearly more one than the other. All organizations gradually accumulate “wasted” costs. It’s pretty natural because...

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When people inside an organization either can’t or won’t confront the reality of their business model, bad things tend to happen. Symphonies and orchestras are having an increasingly hard time balancing their P&Ls. Here are two unfortunate but typical recent stories detailing these challengs, about the Green Bay Symphony Orchestra and the Delaware Symphony Orchestra. It’s because people don’t care about those genres anymore, while costs just keep going up, right? And with little to no government involvement and a donor base...

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Every now and then, someone in the arts world says something like, “We should let the weak arts organizations die.” This is a recent example. My initial reaction whenever anyone recommends that somebody (or somebody’s organization) be made into a noble sacrifice for the greater good is, “You first.” Fire yourself and everyone you’re working with. Of course, the person who expresses these kinds of sentiments never thinks that he or she is part of the “weak.” Naturally. But once I’ve had...

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What nearly killed General Motors was not so much the core business of producing decent cars and selling them profitably. They did that OK. (Not great, but OK.) What nearly killed them was that in addition to all that, they had legacy and overhead that dwarfed the rest of the operation. At one point, nearly one million people were due a pension from General Motors at a time when they employed more like 100,000. I remember someone calling them "a...

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Cincinnati is a small market, not known for fabulous wealth or la-di-da citizenry. In 2009, according to this article, the Cincinnati Symphony Orchestra, like many orchestras nationally, was "facing an existential question" and " ... had to make dramatic course corrections quickly for us to continue on," according to Trey Devey of the CSO. They focused on growing audiences, not necessarily ticket buyers but those aware and engaged with them in any form, to grow the financial base. They increased...

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This infographic about music sales in 2013 is designed to entertain you, but I think it needs a headline. I'll give it one now: Recorded Music Sales Shrink Again. Let's give it a subhed or two: Even Most Popular Albums Sell Relatively Few Copies. Digital Formats No Longer Growing in Sales. Remember this whenever you start feeling a little whine coming on because you're in the live entertainment business.

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Ken Davenport points out on his blog, The Producer's Perspective, that the highest-grossing Broadway show of 2013 was not The Book of Mormon, or Kinky Boots or any of the sexy young things of recent fame, but Disney’s good old, 16-year-old The Lion King. How is it done? According to Ken, "All this proves the ol’ axiom, that the secret to a long running, super high grossing show is to make your show the star."

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This article about the closing of the New York City Opera's interesting because it explores several different themes about why the organization failed recently. It compares the death of the New York City Opera itself to the tragic life story of Anna Nicole Smith, who was the subject of the New York City Opera's final performance. It may be intellectually interesting to try to find the broader cause of a failure like this one, but until someone does and shares...

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Don't expect the drumbeat of financial trouble for orchestras to stop. Here are a couple quotes that I think are helpful in thinking about the long-term resolution of this. First, from the Chairman of the orchestra's board, "Despite the Brooklyn Philharmonic's tremendous artistic successes over the last couple of years, the orchestra continues to experience financial difficulties." If an organization's definition of artistic success diverges too much from the definition of its audience or the potential audience that it needs, those...

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