The (In)Efficiencies of Scale (Part One)

Posted by Michael Hickey On January - 22 - 2013

Michael Hickey

ARTSBlog recently hosted a [Blog Salon] called: “Scaling Up: Does Size Matter?” The short answer is hell yes it does, but I disagree with a few of the writers about why.

I found the best piece in the series was penned by the whip-smart Ian David Moss (“Economies and Diseconomies of Scale in the Arts – Take Two”), and it was his post that inspired both me to both write an initial comment, and then to take on the subject more fully below.

You see, dear reader, like many of my fellow funders and financiers I’ve often touted the benefits of moving toward greater scale: improved operational efficiencies, greater programmatic reach, increased access to resources, heavier political punch. But I’ve also struggled with the oft recognized but seldom addressed reality that scale is not an answer in and of itself, and that sometimes scaled solutions leave even larger problems in their wake. Thanks to Ian, I think I got the mental kick in the epiphany I needed.

I hope you’ll enjoy this two-part miniseries on why I think scale sometimes, well, stinks up the joint.

The Mechanics of Moving Capital

I don’t care how you’re doing it, when it comes to getting money out the door it’s always easier to do it in big chunks. Whether you’re making a grant, extending a loan, or placing private equity, cost per transaction is lower if you make fewer, larger transactions. This is axiomatic. Read the rest of this entry »

Small Enough to Succeed

Posted by Doug Borwick On December - 6 - 2012

Doug Borwick

I have, for most of my life, been suspicious of the “growth is good” assumption that we often make in this country or did as I was growing up. (Sometimes when I replay in my mind the famous Gordon Gecko speech from Wall Street, it’s not greed I hear him praise but growth.)

At the risk of appearing to trivialize something that is incredibly serious, cancer is a demonstration (an extreme one to be sure) that not all growth is beneficial. Less hyperbolically, the quest for resources to support program growth as well as the need for expanding infrastructure to sustain it often creates a situation in which the mission out of which the program sprang gets left in the dust. The attention required to amass funding and personnel gets in the way of focusing on the reason the program was created. But that is a systemic (and management theory) issue that I am sure others participating in this Blog Salon will address.

Some in the for-profit world have been questioning the merits of “bigness” for years. Right-sizing, just-in-time production, and Jim Collins’ Hedgehog Concept (for focus on a core) and “Stop Doing List” (one of my favorites) all address the issue that big is not necessarily better, even in financial terms. In the not-for-profit arts world, the recent University of Chicago study, Set in Stone arrives at a similar conclusion about the dangers of facilities creep.

My principal interest is in effective community engagement in the service of creating healthier communities. This work is relationship driven and relationships cannot be mass-produced. However, as I discussed in a blog post some time ago–The Magic of Small Groups–megachurches, in creating and nurturing small subsets of the whole, have discovered a volunteer-labor-intensive path around that problem. Read the rest of this entry »

Defining, and Scaling, Our Terms

Posted by Andrew Taylor On December - 5 - 2012

Andrew Taylor

Before we can have a useful conversation about taking cultural enterprises or community arts efforts “to scale,” we need to define what we mean by that. “Going to scale” usually means serving more people in more places with the same service structure. But that can happen in a number of ways.

First, a single organization can successfully increase its reach or impact by expanding. Second, other individuals or organizations can replicate successful projects or programs to serve more people in more places, while the original organization remains much the same. Finally, you can scale through a hybrid of the two approaches above, where a successful program provider creates a “franchise” to license or sell or support multiple instances of the same program.

In the commercial world, scalability of a project or business has mostly to do with economics, and the interplay of fixed and variable costs (sorry, we have to go there…but I’ll be brief). It all begins with the fixed investment required to build the project or process…how big the machine or system or service network needs to be to launch.

After that, it’s all about incremental revenue. Projects can scale if the incremental revenue from additional users is large enough to surpass the fixed costs quickly, and leave them in the dust (the customer pays you $10 and they only cost you $1, for example). When incremental revenue is slim (customer pays you $10, but cost you $9 to serve), a project can’t capture its fixed costs quickly, can’t surpass those fixed costs dramatically, and therefore can’t scale very well. Read the rest of this entry »

There is No Such Thing as ‘McArt’

Posted by MK Wegmann On December - 4 - 2012

MK Wegmann

The topic of scalability, model projects, and replicability evokes the idea of franchising: perfect a process, carefully design the ingredients, control the actions of the people according to a script, create a unified brand, and BANG! you’ve done it again and it tastes the same. Thank Goodness. I want something familiar. Is art like that?

In considering whether a successful project, organization, or structure is viable for replication, one variable to consider is the role the individual artist(s) hold in the projects and organizations.

If some creative process, product, or system of program delivery is created to respond to a particular issue or circumstance, to address a problem or to inspire a particular community, what happens when that art/work gets translated somewhere else?

When the artist is the driver and initiator, how do we analyze it to understand if it can be “picked up” and moved to another place and circumstance, and be successful in the same way—with perhaps other artists and in a different community context.

Analysis can illustrate the bones of the process or structure, but to some degree, the interactive nature of this kind of work means that it is situational and may be tied to a specific artist or group of artists, and they have the right to control it. Read the rest of this entry »

Hope is Vital…But Is It Scalable?

Posted by Michael Rohd On December - 3 - 2012

Michael Rohd

In 1991, I founded a theater-based civic dialogue program in Washington, DC called Hope Is Vital. It brought a group of local teens and a group of HIV+ men who were receiving services at a center called Health Care for the Homeless into meaningful, productive collaboration with each other.

For 18 months, we created and conducted performance workshops all over the metro D.C. area for hundreds of young people focused on HIV/AIDS prevention and sexuality education. We worked at schools, youth shelters, correctional facilities, hospital drop-in clinics, churches, and afterschool programs.

After a period of challenging but immensely rewarding work, we felt that our approach—our model—could be useful in other places. The group gave me a mission: take our product, which was in fact a process, and try, at the age of 25, to head out into the world and spread the word.

Pre-email and pre-cellphone, I accepted the recklessly ambitious and well-meaning, impact-based, artistic necessity of scaling up. Community by community, program by program. I spent almost seven years doing that. I learned some things.

First, do the thing

In 1993, one of the first things I did was write Madonna a letter. I asked her to help fund our idea for a national network of programs like ours. Instant scalability via pop star. She was a big funder of HIV/AIDS prevention work back in the day, so it was only a half crazy gesture. Madonna did not write me back. Read the rest of this entry »