Culture Strategy Partners

There is an alternative to closure or selling off collections: Sharing

Published in The Art Newspaper April 2009

The near-death experiences of Brandeis University’s Rose Art Museum and the Museum of Contemporary Art Los Angeles, among other more recent tales of woe, provide graphic evidence of the financial stresses bearing down on museums. These events highlight the need for solutions that are healthier than closing down, selling a collection, or being subsumed by a larger enterprise. Fortunately, better options exist. The one I recommend has the advantage of employing assets that museums already have in place. All that is required is embracing that quintessential childhood behaviour: sharing.

It is time for museums to leverage their investments by sharing operating structures across two or more institutions. Well-crafted, cross-institutional partnerships can bring increased efficiency and expanded capability—without risking the loss of integrity.

By consolidating duplicated operational efforts, museums can become more efficient and proficient. The concept echoes the shared-services model that many for-profit industries use to control cost. Importantly, sharing can help reduce the reliance on revenue-generating activities that may conflict with mission-strengthening activities—a persistent hazard when museums pursue many business strategies.

Partnering is most appropriate for the back-office or front-of-house departments that do not deal with proprietary assets. Those proprietary activities, which could include issues of pricing, exhibit selection and creation, acquisitions, and fundraising, define the unique character of a given museum and must remain in their exclusive and local control. It’s worth noting, however, that the definition of proprietary can change over time as a given partnership matures.

There are at least three profound benefits to this collaborative model. Put simply, in terms of cost control and purchasing power, running one department for two users is cheaper than running two departments for two users. In addition, grouping purchases ranging from paperclips and shopping bags to software, shipping, storage, and insurance should lower costs.

Second, by expanding the range and depth of a department’s activities, it’s likely that it will become better at what it does. For example, registrars who track collections at two or more museums might develop enhanced database tools for recording and cross-referencing those specific collections.

Third, collaborations might enable one partner to bring certain activities in-house, for which it had previously paid inflated prices on a contract basis. The conservation department, which tends to require a significant investment in space and equipment, comes to mind. Other areas might include graphic design, website management, and technology management.

“But this is a terrible idea!”
You can almost hear the resistance to partnering as soon as the idea is raised (and I have heard it in the past): “We can’t partner with them because: they don’t get what we do; our art is so much different from theirs; they just want a free ride on our superior capabilities; our intellectual property and confidentiality will be at risk; we compete for funding from the same supporters!” And concerns about logistics can be just as strident: “How will we allocate expenses? Who gets priority when we both need the same resource? Our internal departments work cross-functionally—how can we extract particular aspects and still be effective?”

These are all great questions. But in light of the foreseeable economy and future of non-profit funding, the bigger question of “How can any of us survive in the long run with an old, inefficient, and expensive operational model?” trumps them all. An incremental approach to partnering is one way to alleviate some of these valid concerns. For instance, it might be best to ease into partnerships via less contentious functions (e.g., purchasing and technology management) and, once successful, move to a deeper engagement.

Unintended consequences
Of course, there can be negative consequences from developing a shared-services model. Depending on how you design your shared resources, department consolidation could result in layoffs. That can create stress among employees, and territorial tension across museums. In addition, competition for the consolidated resources will come up frequently, especially when there is concurrent demand because of overlaps in scheduling. There will also be conflicts because every organisation has its own way of doing things, from the trivial (for instance, assigning purchase-order numbers) to the strategic (for instance, healthcare benefits.) Obligating, and then empowering, the departments to come to their own joint resolutions will need to be an important part of the working agreement.

However, the potential positive consequences outweigh the negative. Bringing together the best thinking from multiple organisations should result in better processes and practices. Also, as employees talk across organisations, they might develop synergies that have nothing to do with shared resources. For example, an art museum and a natural history museum might start lending works or exhibits to each other; museums might begin to coordinate their exhibition schedules and openings, and there may be opportunities for region-wide collaboration. Shared resources apply most readily to museums in the same geographical area. Regardless of location, however, museums that have a similar focus or budget might also have opportunity—for instance, new ways of sharing exhibitions, collection management, or conservation. In creating world-class centres of excellence, museums might become outsource providers to other non-partner museums. Becoming a regional resource can lead to continued improvement in process and capabilities.

Sharing resources runs on a continuum from collegial dialogue at one extreme, to near-merger at the other. So, where to start? First, make sure you know what you do well and what could be improved. By knowing what you need, you are in a better position to pick a partner; by recognising your strengths, you know how appealing you might be to a potential partner. Next, work out how much you can save. Ensure that the scale of benefit warrants the investment of time, resources, and management focus. Finally, it is vital to pick the right partner. Beforehand, consider the following questions. Do you have a history of collaboration or competition with that partner? Is the partner financially stable? Would the combined effort be adequate to service you both? Can you accept relinquishing some control? Are you of reasonably matched size?

In any case, don’t allow the details of these investigations to get too much in the way. In a discussion with potential partners, you might discover new opportunities and consider options you had not previously imagined. It is this openness to improvement and change that underpins successful sharing. Only when your organisation is open to flexibly approaching its operations can it take advantage of these benefits. Put another way, remaining stuck in your current operating rut could be a recipe for financial disaster.