Wednesday, June 28, 2017

Are Cultural Organizations Built to Fail to Scale?

My new audial obsession is the podcast How I Built This, in which Guy Raz interviews entrepreneurs who built notable companies. The podcast offers incredible stories behind the making of businesses like Chuck E Cheese, Southwest Airlines, and Zuumba.

One of the biggest questions on my mind as I listen is: why isn’t my industry scaling up the way these businesses do? I can think of many extraordinary innovators in the nonprofit cultural sector--people and organizations creating brilliant programs, site-based experiences, and products. Many of these projects seem replicable. But I can think of only a few who have scaled up and out in a meaningful way.

Why aren’t our collective best ideas growing and spreading all over the world? Why aren’t more cultural organizations franchising, scaling, and replicating like comparable businesses?

Here are a few of my hypotheses (and I’d love to hear yours in the comments). I am not suggesting that any of these factors are bad or immutable. I'm suggesting they may be reasons we aren't scaling.

Precarious business model. Even if an institution or a project is fabulous, it may not have a solid, replicable business model behind it. If the work is financially dicey on the scale of one building, it can be disastrous to scale up.

Too much emphasis on innovation. The more we tinker with and change our products, the less time we spend scaling those products. Arts institutions have beat the innovation drum for decades now. Change may be necessary... or it may distract us from opportunities to grow.

Too complex and diversified a business. Cultural organizations tend to have many programs, projects, audiences, and goals. Businesses that scale are simpler and more focused. If it would take a thousand-page manual to replicate your programs (which are always changing!), it's too hard to reproduce.

Friendly industry that encourages sharing and copying. There are no NDAs in the nonprofit culture sector. Professionals share program models, exhibitions, and design techniques across organizations, often for free. This intermixing means there's less distinctive value to scaling any one entity's offerings.

Too much emphasis on unique experience and local idiosyncrasy. Many cultural organizations put the singular, authentic experience first. Many of us are proud of how our cultural organizations reflect and respond to our local communities. This can lead to assumptions--not always true--that what works here can't be copied and won’t work somewhere else.

Skills mismatch. The skills needed to create an incredible program are different from those needed to spread that program around the world. Our industry cultivates and rewards creative dilettantes who make beautiful things. We often look with suspicion on MBAs and people who want to commodify our work.

Mission mismatch. What's the upside for cultural organizations to scale? Most don't see any benefit to spreading that program around the world. It might be nice if it happened, but it's not the goal. The goal is local engagement, authenticity, scholarship, prestige, or keeping the lights on and the art pumping. I suspect most of us would be loathe to cut programs or make hard tradeoffs in favor of scale. The argument for it isn't worth the pain.


What's missing on this list? What counter-examples have you seen?

Please share your questions or comments! If you are reading this via email, you can join the conversation here.

Wednesday, May 31, 2017

Why We Moved the Abbott Square Opening - A Mistake, a Tough Call, & a Pivot: Introducing Abbott Square, Bonus Post

Excited to open... but not quite yet.
This is the eleventh in a series of posts on the Santa Cruz Museum of Art & History (MAH)'s development of Abbott Square, a new creative community plaza in downtown Santa Cruz.

Twelve days ago, we started the two-week countdown to opening Abbott Square. We sent out hundreds of flyers with the eight-night Opening Week schedule. We lined up press. We shifted staff schedules. We had 2,000 t-shirts to give away, 850 balls to drop, and over a hundred artists, accordionists, salsa dancers, taiko drummers, and bubble ladies ready to go.

Ten days ago, we called it all off.

Why? The reason is simple: we weren’t ready. Abbott Square is a plaza, a garden, and a marketplace with 6 restaurants and 2 bars. Marketplace construction isn’t complete. All those chefs haven’t had a chance to stock their food or train their staff. We know food and drink are essential parts of Abbott Square. They are worth the wait. And so, at the last moment, we pulled the rip cord and postponed the events.

The more interesting question is this: why did it take so long to make this decision?

I knew for months that construction was delayed. I knew for weeks that we weren’t going to be able to do all the restaurant prep we had planned for. Why didn’t I make the decision to postpone sooner?

I think the answer comes down to three things.

1. I was too optimistic.
Leading an entrepreneurial project requires a lot of optimism. For years, I’ve been a cheerleader, fundraiser, and spokesperson for this project. When people were skeptical of the vision three years ago, it was my job to win them over. When we needed funds two years ago, it was my job to inspire people to give. When staff were unsure how it would change their jobs a year ago, it was my job to get colleagues onboard. And now in construction, I’ve been telling the community how great the project will be when it opens.

And let’s be clear: it WILL be great. But my realist brain never got the full attention of my cheerleader brain. Partly, I was inexperienced; when construction managers gave me a date, I figured they knew more than I did. But considering how often those dates slid, I should have seen the writing on the wall sooner. I should have taken a break from cheerleading to identify the likely outcome of the trend of construction delays.

2. We had a hard opening date instead of a go/no go threshold.
Back in March, I asked our market partner when he thought construction would be done. He said April 15. And then they’d want two weeks of soft opening - May 1. We added a month to be safe and agreed to have a big grand opening June 2-9. Once we locked this in, I focused on those dates, driving towards them, cranking to get done in time. I felt that a reasonable goal would focus us to get to a successful opening. As that goal became unreasonable, instead of adjusting, I dug in harder. I pushed to open on time, and got more and more stressed as it seemed like we might not hit our dates. By the time of that key decision, I’d barely slept in days.

How could we have avoided this? Instead of pushing to hit a date, I wish I had defined thresholds for a quality grand opening, like “we must have a Certificate of Occupancy at least three weeks prior” or “chefs must have at least 2 weeks to train/soft open.” If I had taken that tack, we would have postponed sooner.

3. It felt easier to commit to dates than to embrace ambiguity.
I felt pressure, both in myself and within our staff team, to provide a date. We are pros at event planning at the MAH, but all event plans start the same way: with a date. It felt like we needed to lock in a date so we could book collaborators, schedule staff, market the activities, and plan everything. So we did. We picked dates we thought were extremely safe… until they weren’t. When construction delays started to get too close to June 2, we started reframing the events—calling them “previews” instead of “opening.” Ultimately, even this reframing wasn’t going to fly, and we had to postpone.

Weirdly, once we decided to postpone, it seemed much less overwhelming than I expected to move everything. Now it feels like we have an amazing event-in-a-box ready to go whenever we are able to lock in new dates. That fixation on dates may have been unhelpful from the start.


I am so grateful to our staff, board, and community for supporting this change. I made the mistake, and they made the solution work. Our staff did an amazing job communicating the change with press, members, and partners—even shifting a huge cover story that went to print just hours after we made the change. Our team clearly, quickly told everyone about the change, and we emphasized that we were postponing so we could offer members the best experience possible. People were understanding about the delay and excited about the opening to come. And I went back to sleeping at night... while spending my days working hard to make the project live up to our community's biggest dreams.

Have we reset new opening dates? Heck no! Here’s our new strategy:
  • We’ll host an Abbott Square Preview Night on June 2 as part of First Friday activities.
  • When the Market gets its Certificate of Occupancy, we will work with the Market management to determine how many weeks of training and soft opening they need to open successfully. We'll start soft opening our new programming in the plaza during this period too.
  • We’ll set new grand opening dates based on soft opening needs and fire up our events plan with a few tweaks. 
And next time we open something comparably complex, we’ll set this kind of plan from the start.


Please share your questions or comments! If you are reading this via email, you can join the conversation here.

Wednesday, May 17, 2017

Ask Me Anything about our Expansion... and Enjoy All the Posts in the Abbott Square Series

We’re just weeks away from opening Abbott Square to the public here in Santa Cruz, CA. Over the past ten weeks, I’ve written about some of the most potent, confounding, and pivotal moments in making this $5,000,000 community plaza project real.

Here are all the posts in the series. For every story I wrote down, there are ten others rattling around in my head. I’d love to hear your questions and comments. What do you want to know about the project or the process? No question too small. Let's learn more together.

Add your questions to the comments here. Enjoy these posts. And if you are in the area, join us for the Abbott Square Preview June 2 in downtown Santa Cruz. You can also check out the great cover story in the Good Times.

INTRODUCING ABBOTT SQUARE

  1. Introducing Abbott Square - welcome to the blog series
  2. Why We're Expanding in Public Space - and Why You Should Consider it Too - if our community lives beyond our walls, shouldn't our work go outside too? 
  3. Community Participation Builds a Community Plaza - how we involved community stakeholders and citizens from day 1
  4. The Most Important Question to Ask in a Capital Campaign - what is your project worth?
  5. What a Board is For - how trustees help you go beyond your limits
  6. Two Prioritization Techniques We Used to Negotiate a Great Lease - how can you decide collectively what you value most?
  7. How Getting Sued Ruined My Vacation and Taught Me about Stress - a cautionary tale
  8. From Mine to Ours - Sharing Ownership of Our Expansion - when and how do you bring your staff into a new project?
  9. Think Like a Real Estate Developer - a new way of looking at opportunities on the horizon
  10. What's More Inclusive: Food or Art? - questioning long-held beliefs about gentrification and inclusion

Please share your questions or comments! You can join the conversation here.

Wednesday, May 10, 2017

What's More Inclusive: Food or Art? Introducing Abbott Square, Part 10

This is the tenth in a series of posts on the Santa Cruz Museum of Art & History (MAH)'s development of Abbott Square, a new creative community plaza in downtown Santa Cruz.

When we started working on the food side of the Abbott Square project, it raised some basic questions about community inclusion. How could we build a market that was as diverse as our museum? Would adding a major commercial component to the project make it more or less welcoming?

Our staff and community saw these questions differently from the start. Staff members wanted to protect the MAH’s focus on reflecting the diversity of our community. We’ve worked hard for years to make the MAH a place that includes and welcomes people of all backgrounds. Success for us looks like MAH participants reflecting the age, ethnic, and economic diversity of our county. We’re very close to hitting all these targets. We didn’t want Abbott Square to be a step back on the path to community representation.

At the same time, we heard from community members how essential food was to make Abbott Square a compelling place to visit. People were hungry for more lunch, dinner, and happy hour options downtown. And the kind of food they wanted—fresh, local, diverse cuisine—didn’t lend itself to the cheapest options possible.

When we started working with the master tenant/developer on the market, he promised the market would feature “real food for real people.” Diverse chefs would present cuisines from around the world. There would be no white tablecloths—nor any table service at all. But some of us were still wary. Were we creating a gentrifying space instead of an inclusive one?

So our whole staff went to visit another public market the developer had started: San Pedro Square Market in San Jose. The food was mid-range in price. The cuisine represented many countries and flavors. The space was loud, friendly, and packed. And the staff and clientele were more ethnically diverse than any museum in the region--including ours.

Visiting San Pedro Square Market was a humbling wakeup call for me. Here we were, feeling righteous about our inclusive work, and there they were feeding a more diverse crowd than participated at the MAH.

No matter how focused we are on inclusive work at the MAH, we’re still doing it in the frame of a museum. To many people, an art museum is a more potent symbol of exclusivity and elitism than a hipster coffeeshop or a poke bar. In some communities’ eyes, art is a bigger gentrification concern than food.

Visiting San Pedro Square Market reminded me of all the community members who got excited about Abbott Square and the MAH because of the food. There are many, many people in this world who do not feel welcome, invited, or interested in museums. All those people eat. Many of them (more and more every year) eat out. More people, and more diverse people, go to restaurants than go to museums. Many people might feel a greater sense of invitation from a West African rice bowl or custom popsicle in Abbott Square Market than from MAH exhibitions.

I don’t want to discount the potential for Abbott Square Market to be a force for gentrification. It could be. We have to be attentive to its impact on the MAH community and our downtown. But I'm not willing to give the MAH or any art institution a pass in this attentiveness. I don't assume that nonprofits are automatically more inclusive than businesses.

We have to keep working on many levels to include diverse participants—and we will keep doing so, indoors and out. In Abbott Square Market, we’re working with diverse chefs, with diverse staffs, to welcome diverse customers who like to eat out. In the plaza and the museum, we're working with diverse partners, on diverse programs, to welcome diverse visitors who like to connect through creativity and culture. We’re offering many experiences, at many price points, with many partners. It’s all part of opening up the MAH to more of our community.


If you are reading this via email and would like to share a response or question, you can join the conversation here.

Wednesday, May 03, 2017

Think Like a (Real Estate) Developer: Introducing Abbott Square, Part 9

This is the ninth in a series of posts on the Santa Cruz Museum of Art & History (MAH)'s development of Abbott Square, a new creative community plaza in downtown Santa Cruz.

Studying engineering taught me to think like a designer: state the problem, brainstorm, test, iterate.
Working with creative people taught me to think like an artist: observe, explore, dive in, look out.
Partnering in community taught me to think like an organizer: listen, connect, build shared purpose.
Building the Abbott Square project taught me a whole new mindset: that of the real estate developer.

Real estate developers have two distinctive qualities I’m learning to adopt: they think from the outside in, and they balance flexible optimism with clear criteria for success.

OUTSIDE IN

Before the Abbott Square project, I approached planning from an internally-driven perspective. We develop the ideas. We explore the possible programs. We develop the projects. The “we” isn’t always staff; in most cases, our staff work with community partners in a participatory, co-creative model. But we mostly start projects from the dreams and challenges of the partners in the room.

Real estate developers don’t think this way. They approach planning from the outside in, starting with the external conditions of the land around them. Each site provides its own set of opportunities and constraints. The question is not, “what do I want to do?” but “what can I do with this?”

This mindset expands my world. Even as we talk about “abundance thinking” in nonprofits, we tend to restrict ourselves to a limited landscape of opportunities. We don’t look too far beyond our existing programs, sites, and partners. We don’t scan every new encounter for its potential. Because we want control, we start by controlling ourselves, pre-selecting a narrow window of possibilities based on the frames we’ve already installed.

Real estate developers taught me to stop focusing on my own locus of control. Now I look outside the window and wonder what opportunities different sites and partners could unlock. It’s like Pokemon Go for professional opportunities; that site has some gold sparkles, that park is hopping with party animals, that collaboration request has a rainbow guarded by trolls.

FLEXIBLE OPTIMISM + HARD CRITERIA

Real estate developers blend optimism and flexibility with clear-eyed assessment of what external conditions make a project go. Developers will move mountains to make a project they believe in work—but they’ll also drop a project in an instant if the external conditions make it untenable. If a project doesn’t pencil out or meet the criteria they feel spell success, developers walk away. There will always be another site, another project, another opportunity for a better fit.

This approach requires being explicit and honest about criteria for success or failure. Every developer I’ve talked with can list specific things that will make them pursue or drop a project—at any stage. One guy will only work in specific municipalities. Another has to own the building. It doesn’t matter how attractive the project is if they can’t have what they feel they need to make it succeed.

In my nonprofit world, I’m neither required nor challenged to develop such clear criteria. My general nonprofit MO is to pursue a project and to keep adjusting and learning our way to the finish line. There are some projects that go on too long before they get axed. We identify flaws emergently rather than starting with clear “go/no go” criteria.”

Thinking like a developer has made me more comfortable pursuing many early-stage possibilities in parallel instead of marching forward in sequence. I assume most early-stage opportunities won’t end up lining up, but I won’t know which ones are viable until we get further down the road. I want the “deal flow” of opportunities—and I’m working to hone my own mental checklist of necessary criteria.

***

An engineer says: “I’ll try this and learn something, then I’ll try that and learn something, and eventually I’ll get it right.”

An artist says: “I’ll explore the world, pull ideas from it, and craft a response.”

A nonprofit manager says: “Based on what we’ve learned and the partnerships we’ve built, we’ll move forward like this, together.”

A developer says: “I’ll open many conversations, and when I find the one that meets all my criteria, I’ll go full steam ahead on that one and drop the others that don’t.”

All of these are valid ways to approach the world. Which will you use for your next project?


If you are reading this via email and would like to share a response or question, you can join the conversation here.


Tuesday, April 25, 2017

From Mine to Ours - Sharing Ownership of Our Expansion: Introducing Abbott Square, Part 8

MAH staffer Sandino Gomez extolls the virtues of Abbott Square.
This is the eighth in a series of posts on the Santa Cruz Museum of Art & History (MAH)'s development of Abbott Square, a new creative community plaza in downtown Santa Cruz.

When we started the Abbott Square expansion project, I knew it would change our facility. I knew it would change the museum visitor experience. I knew it would change our downtown.

But I completely missed something else it would change: our staff.

It's absurd in retrospect to think this project could change the downtown without changing our organization. But when we started Abbott Square, I saw it as a new program. I assumed it would grow alongside our existing work rather than reshaping it. We were developing something that departed from our core services, on a site that we didn’t currently activate, with money we didn’t yet have. It felt separate from the ongoing work of the organization. For the first two years, the board was deeply involved. The staff was not.

The Abbott Square development team started with one staff member and one trustee. I brought the community visioning and planning process. Peter Orr (the trustee) brought the business planning and operational know-how. For over a year, Peter and I built the plan, negotiated partnerships, crunched numbers. We worked with community partners, stakeholders, and trustees to hone the plan.

When the capital campaign started, the staff team grew from one to three. I hired a development director whose primary focus was the capital campaign. Our marketing and engagement coordinator expanded her role to produce campaign collateral. Working closely with trustees and community partners, we raised the $5,000,000 needed to make the Abbott Square a reality.

All our staff members worked fundraising events. They heard the pitch. They knew the broad strokes of the project. But internally, many staff (including me) treated the Abbott Square project as “my” project. I felt both excited and isolated by the project. I sat alone in the corner reviewing contracts and architectural plans. Abbott Square was still an idea conjured in site plans and fundraising brochures. It existed outside the real world of museum exhibits, events, and visitors our staff worked with every day.

For the first couple years, I was comfortable with this division of labor. I had my job; my colleagues had theirs. Since there wasn’t yet concrete work for them to DO related to Abbott Square, separation felt appropriate. In staff meetings, I treated Abbott Square as an inspiring distraction. Something to be aware of and informed about. Not something to focus on.

But as we started shifting from vision to action, we had to change this approach. Abbott Square wasn’t shaping up to be another project in a portfolio of MAH projects. It was changing our community, and it had to change our organization. I needed to desilo the project. I needed to open it up to our staff’s expertise. I needed to invite staff members to feel like owners of it.

Even once I understood this, I wasn’t sure when and how to shift. There were so many questions about Abbott Square where the answer was, “I don’t know yet.” There were so many parts of the project that took up a ton of my time but shouldn’t concern others. There were stressful moments—getting permits, settling the lawsuit—that could have been big distractions for our staff. I felt protective of their time. I wanted to insulate them from the strange world of the project. I wanted to wait until I could answer their questions with something other than “I don’t know yet.”

And so I waited.

It never felt like the right time to make the shift. I never felt like I had enough information for staff. I never felt ready to ask people to shift their attention to something that didn’t exist yet. I hated being unsure of dates and timelines. I kept telling myself we should wait a little longer.

But then two things happened that made me feel like I had to act. First, our Development Director moved on from the MAH when the campaign wrapped up. My main staff partner on the project was gone. And Intersection for the Arts fell into crisis.

Intersection is a San Francisco-based arts organization I had long admired. In the mid-2000s, under the leadership of Deborah Cullinan, they entered into a partnership with a real estate developer to move into a new building and transform their business model. The move was ambitious, innovative, and bold—everything Deborah was known for. Three years after the move, Deborah left Intersection to become the new CEO of the Yerba Buena Center for the Arts. She thought she was leaving Intersection in a strong position. Instead, within a year, it fell into financial crisis.

I know very little about Intersection’s move, meltdown, and subsequent regrowth. But I do know this: the financial crisis underscored the need for the whole organization to understand and embrace the move in all its complexity.

The Intersection crisis was a wakeup call for me. If Abbott Square launched as “my” project, or even as the board’s project, MAH staff might not be ready to lead it. They might not seize all the opportunities it presents. They might struggle to tackle the challenges it introduces.

And so I started opening up. I asked colleagues to partner with me on an operational vision. I invited them take the lead on several key elements. I got more comfortable saying, “I don’t know.”

The more I did this, the more it became clear that Abbott Square could and should have a transformative impact on our whole organization. About a year before opening, we did a major restructuring of our staff to meet the opportunity of Abbott Square. At first, I’d assumed two or three people’s jobs would be impacted by Abbott Square. Instead, everyone’s job changed. To treat Abbott Square as an expansion of the MAH and not an ancillary project, we all had to reset our idea of what the MAH is and what we do here.

The restructuring was tough, time-consuming, and necessary. We rewrote job descriptions, reoriented teams, and redistributed work. Now, we have a staff team who think of MAH + Abbott Square as one big entity which we are all responsible for.

This transition work is far from done. There are still aspects of the project I have a hard time letting go of. Every day, I have to tell a colleague “I don’t know” when I wish I could give them a definitive answer. But I’m trying to be honest about these items as they arise. Our goal is that when we open this summer, the operation of the expanded MAH is in the hands of our whole team. I think we’re getting there.

I still wonder what would have happened if I hadn't had that wakeup call. I still wonder when the perfect moment was to start this transition. Should I have started sooner, so more staff members co-owned the nascent vision? Should I have waited longer, so staff could do their best work on existing programs and not waste energy on uncertain outcomes? When we’re in this situation someday with the next big project, what will we do?


If you are reading this via email and would like to share a response or question, you can join the conversation here.

Tuesday, April 18, 2017

Introducing Abbott Square Part 7: How Getting Sued Ruined My Vacation and Taught Me about Stress

This is the seventh in a series of posts on the Santa Cruz Museum of Art & History (MAH)'s development of Abbott Square, a new creative community plaza in downtown Santa Cruz.


My husband and I had just come back from a glorious four-day trek through the Pasayten wilderness in the fall of 2015. We were reconnecting with family at dinner when the email came in. My museum was being sued over the Abbott Square project.

All the energy I’d restored on our hike came crashing down around me. I couldn’t sleep. I couldn’t calm down. I didn’t have the tools to make it right.

Before Abbott Square, I thought I knew how to manage stress. I come from a family of hard-driving women. I love intense challenges and the bursts of stress that come with them. I see stress as a motivating factor, a catalyst for action. Even in tough situations, I find ways to push through, solve the problem, make a decision, and get zooming again.

When the Abbott Square project started, a trustee told me: “this is a marathon, not a sprint.” And while I heard him, I didn’t listen. I thought I’d be fine. I didn’t take the time to learn how to retrain my energy for the long haul.

Four years and too many sleepless nights later, I’m still slowly, painfully learning. Abbott Square laid bare the fact that I’m only good at managing stress in situations where I have a lot of control and can work my way out of the stress. I can’t apply hustle to resolve a lawsuit. I can’t push through a lack of communication from a regulatory agency. When it rains, we can’t pour concrete.

It turns out this isn’t a marathon at all. It’s a group road trip where you don’t always get to have your hands on the wheel.

I wish I could tell you that I’ve figured out ways to manage this kind of “group road trip” stress. I haven’t. I’ve learned some small things: how to stop obsessing when it’s not my turn to drive, apply my energy more judiciously, and be more protective of time away from work. The lawsuit was instructive because it had rules, like a game. In the most stressful of situations, I learned to play my turn and stay in my role. A year later, we settled the lawsuit. We were zooming again. But I still had—and have—more sleepless, obsessive nights than I’d like.

I’ve been told that the hardest things to change are the things you feel naturally good at. Until you’re pushed to the limit, you don’t see them as areas for growth. And once you're at that limit and decide you need to grow, it’s hard to abandon patterns that have felt successful for so long. I’d always told myself that I knew how to make stress work for me. Now I’m a little more humble and cautious. If I want to grow and work on even bigger projects, I’ve got to feel okay about those times when my hands aren’t on the wheel.

If you are reading this via email and would like to share a response or question, you can join the conversation here.

Tuesday, April 11, 2017

Introducing Abbott Square Part 6: Two Prioritization Techniques We Used to Negotiate a Great Lease

This is the sixth in a series of posts on the Santa Cruz Museum of Art & History (MAH)'s development of Abbott Square, a new creative community plaza in downtown Santa Cruz.

Imagine this situation: you’re about to negotiate a long-term partnership for a massive expansion project. Money is on the table. Values are on the table. Everything’s on the table. How do you decide what to prioritize?

18 months ago, I entered lease negotiations with real estate developer, John McEnery IV, who our board had selected to develop the food component of Abbott Square. John would run Abbott Square Market, a multi-vendor food and drink business, adjacent to the plaza, adjacent to the museum. John would manage the food, the MAH would manage the museum, and we would co-manage the plaza. That’s all we knew going into negotiations.

There were lots of big unresolved questions. How much money would we each bring to the table? How much would John pay for rent and how should we structure it? Who would manage construction? Who would steer the design? Who would pick the food vendors? Who would be responsible for what in the plaza? When would the market be open and under what conditions?

I was overwhelmed and under-confident. I needed a way to focus. I needed a way to get direction from our board and staff on what was inviolate and what was negotiable. I needed the board’s leadership without having all of them involved in every little deal point.

So we did two exercises—with board and staff, separately—to develop our priorities. I suspect these exercises might be useful in any complicated project. It is in that spirit that I share them with you.

MISSION/MONEY MATRIX

Nonprofit folk are familiar with this 2x2 grid, with mission fulfillment on one axis and financial sustainability on the other. Nonprofits use this grid to analyze program performance and to explore ways to shift UP towards higher mission fulfillment and/or RIGHT towards higher profitability.

In the case of the Abbott Square Market negotiation, we used this matrix to get a basic sense of our goals. We'd been leasing the site of the future Market as commercial office space for years: solidly profitable, with no mission impact. That (red) dot was our starting point.

We gave board and staff members this diagram and asked them: when the Abbott Square project is complete, where do you want this dot to go? Do you want us to make the same amount of money but increase the mission impact? Would you sacrifice some money for greater mission impact? Would you sacrifice some mission potential for more money?

They drew their dots, building consensus around the blue dot shown. The project had to increase mission impact. And it had to do as well--or better--than the office building financially.

So we structured the rent in a “base with kicker” format. The museum is guaranteed a monthly base rent that is stable and comparable to what we were receiving when the space was leased for offices. But if the Market does better than a certain threshold, we get more money - a kicker - above the base. That's the dotted line potential for the revenue to increase.

YOUR TOP THREE PRIORITIES

In the months leading up to the lease negotiation, trustees and staff voiced lots of different priorities for the project. Some focused on the need for Abbott Square to be as welcoming and inclusive as the MAH. Others cared about it being clean. Still others wanted local food vendors. And so on.

We couldn’t succeed in negotiations if everything was a top priority. There had to be some things we could trade to get other things that mattered more.

So I wrote up ten distinct priorities we’d heard throughout the process and invited board and staff members to each pick their top three.

We tabulated all the top priorities by votes to generate a ranked list. While trustees and staff had different top priorities, the cumulative priorities were clear. We were able to split the original ten priorities into five “must-haves” and five non-essential preferences. You can see them in this chart. The must-haves on the left, and the negotiable non-essentials on the right.

Unsurprisingly, the five must-haves were the ones that hewed closest to the MAH mission. But they were not the ones people talked about the most in the months leading up to this exercise. Once we had to prioritize, some sexy, much-discussed ideas—like celebrating local food—gave way to core MAH values—like celebrating cultural diversity.

Focusing on five priorities gave me focus and freedom. I could focus on what was important, and I had the freedom to pursue and protect those important elements in whatever way I felt best. In many ways, the five “non-essentials” were even more helpful than the must-haves, because I knew I could deal them away as needed.

In the end, we signed a contract that answered all the big questions about how to manage the project. Any contract would have done that. But the answers hewed to the priorities articulated through these two exercises. No matter how small the deal point, I knew I could use these big priorities as a guiding light. And board and staff knew that I was acting on their collective wisdom and our shared vision for success.

What techniques have you used to set priorities for a big, complicated negotiation?

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Tuesday, April 04, 2017

Introducing Abbott Square Part 5: What a Board is For

This is the fifth in a series of posts on the Santa Cruz Museum of Art & History (MAH)'s development of Abbott Square, a new creative community plaza in downtown Santa Cruz.

I’m embarrassed to admit it, but for my first couple years as nonprofit executive director, I was mystified about the board of trustees. Beyond the legal requirements, I didn’t understand what it was for and why it was necessary. It took an ambitious expansion project--Abbott Square--for me to learn how a great board makes the impossible possible.

I came to the MAH at a time of transition and turnaround six years ago. The board that hired me included many dedicated, exhausted people who were ready to move on. We expanded the board, bringing new energy and diverse thinking into the room.

I liked my board. I admired them. But I still didn’t know what the board was for. I thought of the board as a benign, friendly force. I saw them as supporters, advisors, fundraisers, and champions. I expected them to provide guidance to keep the organization on the right track, like bumpers on bowling lanes. But I also saw their role as responsive to my actions as the executive director. I didn’t want them getting too involved in our programmatic changes. I wanted their support, participation, and advice, but—when I’m being really honest with myself—not their leadership.

All that changed when we started the Abbott Square project in 2013. Suddenly, I was way out of my comfort zone. I knew a bit about community planning, creative placemaking, and business planning, but that was it. I knew nothing about capital campaigns, real estate development, contract negotiations, nor city permitting processes. I didn't need a little advice; I needed deep partners to explore what the project could be and how it would work.

And so I turned to my board. There was the farmer who built the business plan with me. The retired judge who guided us through complicated lease negotiations for the market. The designer and the city councilman who saw the full creative potential of the site. The fundraisers who honed our campaign structure and outreach plan.

Every step of the project, board members extended our reach and improved the project. They provided superb expertise matched by thoughtful enthusiasm that money couldn’t buy. And they took ownership alongside me of the key decisions, budget allocations, and struggles along the way.

The most important thing they took co-ownership of was the courage to see the project through. When I asked them if I should be spending half my time on this expansion, they said yes. When I asked them if we could raise $5,000,000, they said yes. When I asked them if it was worth the pain, they said yes.

If they hadn’t been there to say yes, I would have said no at some point. I probably would have pulled back or shrunk the project at key stress points. We might not have completed the project at all.

This project taught me that a great board is not one that supports the staff and buys into the Executive Director’s vision. A great board supplements the staff and expands the vision. They take you places you could never go by yourself.

If you want to reach beyond your limits to achieve your mission, you need your board. They are the people who will push you over the edge, pull you up when you stumble, and make the organization soar. Sure, our organization could manage without a board of trustees. But we can only fly because of them.

If you are reading this via email and would like to share a response or question, you can join the conversation here.

Tuesday, March 28, 2017

Introducing Abbott Square Part 4: The Most Important Question to Ask in a Capital Campaign


This is the fourth in a series of posts on the Santa Cruz Museum of Art & History (MAH)'s development of Abbott Square, a new creative community plaza in downtown Santa Cruz.

When you embark on a big capital campaign for a community project, don’t ask how much the project will cost. Ask how much it’s worth.

When we started the Abbott Square project, we focused on how much the project would cost. We were brand new to capital fundraising, and we were nervous about what we could afford. We had no idea what it would take to do a big campaign. We knew we’d have to reach out to new donors who weren’t connected to the MAH. We’d have to find them, get them involved, and get them invested. It all sounded daunting—especially for an organization that had no development director when we started the project.

So we played it cautious. At first, we wanted to fix up the plaza and add some art. We put a $250,000 price tag on that. Then, we realized we wanted to do more, maybe add some food, definitely make spaces for performances, and improve the infrastructure for community festivals and events. That brought the price tag to $1,000,000.

And then I sat down with a major donor—someone I hoped would give a big gift to the project. She changed my whole way of seeing the project. She taught me two crucial things:
  1. The project price tag is what it’s worth, not what it costs. She said, “This project is worth more than a million dollars. Having a town plaza, a place to connect in the middle of downtown, a creative gathering place—that’s huge. That’s worth a lot more than a million dollars.”
  2. Mega-donors make decisions based on the value and price tag of the project… not the balance in their bank accounts. She said, “Here’s how I look at things. I’m considering a project and let’s say I’ve bought in. I want to pay for a percentage of the project - let’s say 15%. So if you tell me the project costs $1,000,000, I’ll give you $150,000. If you tell me it’s $5,000,000, I’ll give you $750,000.”
Her insights blew my mind… and sent our team back to the campaign drawing board.

We made a crucial shift from scarcity thinking (“What’s the least we could do? What’s the least we could pay?”) to abundance thinking (“What’s the most we could do? What’s the full value of this project?”). Inspired by our supporters’ big dreams for the project’s potential, we started thinking bigger, too.

That donor encouraged us to think about what it would take to make the best possible version of Abbott Square. She pushed us to crunch the numbers on a meaningful food experience. We started to pencil out what it would cost to fill the plaza with great events and art activities every week. We talked to other donors to gauge what they thought the project was worth.

We got to $5,000,000.

We didn’t get there by inflating the budget. We didn’t get there through cost overruns. We got there by finding people who dreamed of a creative gathering place, listening to them, believing in their aspirations, and matching the scale of the project to the value they told us was there. We raised all $5,000,000, ahead of schedule. (And that donor? She gave $800,000.)

Now when people talk with me about their capital campaigns, I don’t ask how much the project will cost. I ask how much it’s worth—to their donors, and more importantly, to their community.

If the project is worth as much or more than it costs, you’re in for a pleasure of a fundraising campaign. If it’s worth less than it costs, hit the pause button and ask yourself—why are we doing this? Who is it for? How can we make it something so valuable to our community that it will feel more than worth the cost?

If you are reading this via email and would like to share a response or question, you can join the conversation here.