Bigger is not always better - the six key risks in growing your organisation

Author:   |   Date: 18/03/2016   |   Categories: Leadership, Strategic Planning

I have yet to meet a CEO who did not want to grow their arts organisation: be it new programming, larger audiences, more participants or increased revenue. 

Ambition is a great thing.  It gets us up in the morning, motivates us and others and, most importantly, allows us to make the sacrifices needed to achieve greater goals.

However, misplaced ambition can have you chasing unrealistic or unproductive goals that put at risk your organisation, your mission and your wellbeing.

Becoming a bigger organisation through increasing revenue, staffing or activity is attractive.  Particularly when you feel like you are working on a shoestring and there is no respite from funding worries and increasing costs.

Being bigger can increase your impact and your position in the market but  there are often hidden costs in growth that may erode the impact and sustainability of your organisation.

Before you lay out that ambitious strategic plan, take a step back and think about what could go wrong.

Outstripping your governance and operational framework

Lots of arts organisations are like beautiful swans up top and ugly madly paddling ducklings underneath. Many times the problem is that there has been no planning for growth, and the systems and framework to support your performances and programs are either not there or no longer suitable. 

Good governance is paramount to guide decision-making and ensure the future sustainability of the organisation. By that I mean clean, clear policies and processes around expenditure, budgeting, employment, contracting etc.  From my experience, it is often the number 1 reason why arts organisations come unstuck. 

Over-staffing

This is another common mistake. You get a bunch of new money for a new program, so you bring on new staff.  Then the funding stops but the staff member remains because they have become “essential” to the organisation.  Then they leave and you recruit for the same role because it is “critical”.  However there is no revenue for this role and you now have a cost to the organisation that you may not be able to sustain. 

Make sure all recruitment is scrutinised by CEO (and board if you are in or at risk of a deficit) and that you are getting the skills you need now for the work you have ahead. Have your managers make a written business case as to what value this role will bring to the organisation in terms of costs saved, risks managed or revenue raised. Realise that each extra staff member costs the company not just their salary, but approx.. 20-30% more in on costs plus at least 10-20% of managers’ time.

If you are already managing more than two or three people, think carefully if you need more staff or if some external contractors could not do the work quicker, better and without needing the time, energy and input that a responsible manager should be giving their staff.

Increasing non-productive work

Unless you have the governance and staff issues well under control, growing is likely to mean the CEO and leadership team end up with a lot of unproductive work in extra meetings and staff management responsibilities. Without an effective governance framework, you can spend too much time working out how to do things that could be systematised.  Every extra staff member requires management, development, general care and attention.

If you find yourself managing too much administrative trivia and spending too much time in internal meetings, you need to go back and address points 1 and 2.

Losing focus and relevance

Even if you are managing the three points above, you can still be at risk of losing your place in the market if your offerings become too divergent and diverse.  If you find you have a hard time making a succinct and coherent narrative around your offerings (i.e. you can longer simply say what you do and why you exist) than you may have got too big.  There are no wins in being all things to all people.  It is much better to be knowing for what you do by the people to whom you matter.  

Missing strategic opportunities

Not having focus means you can become more easily distracted by “noise” around you of everyone else’s activity and not able to see clearly the opportunities that are best going to move your organisation forward.  If you have too many options on the table, it is harder to see which will best contribute to your organisation’s mission and artistic program. If you feel overwhelmed by the options out there, take a step back and ask yourself what you want to be known for in five years’ time.  Then drop anything that does not resonate.

Slowing everything down

Every time you grow and become a more complex organisation, you risk slowing everything down.  More people means more time to make and implement decisions.  Getting bigger can mean losing your agility to respond to opportunities in a timely manner.  Being slow can cost you more money and absorb unnecessary resources. 


If you would like to discuss coaching options with Albany Lane, please send an enquiry.

Comments

Case Studies

Megan Hipwell

Albany Lane recently worked with Megan as she set up her new business venture.

View Case Study

Libby Varcoe

Albany Lane has been working with Libby as she was transitioning through a career and life mid-point.

View Case Study