There was only one catch and that was Catch-22, which specified that a concern for one's own safety in the face of dangers that were real and immediate was the process of a rational mind. Orr was crazy and could be grounded. All he had to do was ask; and as soon as he did, he would no longer be crazy and would have to fly more missions. Orr would be crazy to fly more missions and sane if he didn't, but if he was sane, he had to fly them. If he flew them, he was crazy and didn't have to; but if he didn't want to, he was sane and had to. Yossarian was moved very deeply by the absolute simplicity of this clause of Catch-22 and let out a respectful whistle. Joseph Heller, Catch 22
Talking with friends, colleagues and clients in recent weeks I have been struck by the real challenges faced by arts organisations in planning for next year. It seems to me that many leadership teams and boards face a real Catch-22: how to balance the urgent need to budget for austerity with the important need to plan for an uncertain future.
Budgeting for the short term against a background of substantial drops in income (quantum unknown) is about cutting costs as income generation takes time to bear fruit. How severe those cuts need to be depends:
- on your view of the likely drop in funding
- the possible impact of the cuts on your customers' behaviour eg artist studio holders, public sector employees who use your cafe but may be made redundant
- on the organisation's reserve levels
- the cash profile of its business model
Cost reduction usually involves
- more central control over the spending of money
- reduced discretionary spending (training and marketing are the usual first targets)
- looking at ways to reduce staff costs (almost always a major cost in arts organisations) through recruitment freezes, redundancies, wage freezes or reductions, reductions in working hours etc
- re-negotiating contracts
Planning for an uncertain future on the other hand needs to focus on
- creating and nurturing individual and organisational capacity especially flexibility and knowledge sharing
- finding the time and resources to explore and exploit new opportunities around say income generation, audience development, joint working
- active stakeholder management
- developing appropriate financial strategies around risk management, reserve levels and contingencies
Austerity budgeting is largely tactical and often about 'command and control' management and collective introspection whilst planning for an uncertain future is a strategic process which should nurture and develop the people you do have whilst being focussed on and responsive to the external environment. A real Catch-22!
Are we, I wonder, 'merely' heading into a nasty period of belt tightening or are we at the beginning of a radical re-structuring of the arts 'industry'?
At the moment I don't have many answers, but I do have some ideas, which I will be trying out on you over the coming weeks.
Thanks for reading