Proposing an Entrepreneurial Journey Canvas

The publication in 2010 of Alexander Osterwalder and Yves Pigneur’s Business Model Generation has proven highly influential in both the theory and practice of management consulting. The book’s lasting gift to this world has been the Business Model Canvas (BMC), a cartographical representation of nine elements of a business model.

BMC snip

The widespread adoption of the BMC as a tool for identifying and exploring the connections between various elements of business models is not just due to Osterwalder & Pigneur’s decision to publish this work under creative commons. It also defines the often ambiguous term “business model” through the articulation of its component parts, allowing an easily accessible starting point for definitional debate. It also illustrates its own definition neatly on one page, in a layout which, taking its lead from design thinking principles and left brain/right brain interaction, prompts engagement and connection spotting from those working with it.

The BMC is not an insubstantial thought bubble from the latest management theorist du jour. The research upon which it is based comes from Osterwalder’s doctoral thesis of 2004, The Business Model Ontology: A proposition in a design science approach. Osterwalder describes business model ontology as “a set of elements and their relationships that aim at describing the money earning logic of a firm” (Osterwalder 2004). From here, he dissects existing approaches to describing models and comes up with his own framework, which he then tests on a creative industries business (the Montreux Jazz Festival). In his description of the building blocks of a business model, we can see the nine elements which eventually found their place on the BMC.

osterwalder snip

Since 2010, I have often used the BMC as a consulting tool in my work with businesses and not-for-profit organisations. My approach to using the canvas is, I suspect, a common one. Participants are presented with a large scale printout of the canvas (A0 size), and through a structured conversation, I invite them to fill in the elements of the canvas in sequence, starting with the value proposition and the customer segments, two closely related components.

Participants are asked to describe what makes up each element and their responses are written on post-it notes, which are stuck on the canvas in the appropriate square. Although the workshop follows a methodical “one square at a time” approach, participants are able to apply post-it notes to any square at any time, in a way which doesn’t restrict participation to a strictly linear thought process. The result of a successful BMC session is a fully notated canvas, which serves as a map of a company’s business model, through which its strengths, weaknesses and opportunities become apparent.

The BMC is not without its limitations. It has no obvious placement for consideration of market forces and/or competition, which may influence the development of a business model. In addition, there’s no prescribed method for what to do with a completed canvas – participants must formulate their own next steps. As a tool, it is illustrative rather than diagnostic. However, I have found it useful when helping someone test a potential business idea and to inform a decision to proceed or retreat from it.

Numerous adaptations of the canvas have sprung up, taking advantage of its status as a work published under creative commons. Although many of these stray from Osterwalder’s original principles of describing a business model, they can at times provide more practical tools for entrepreneurial planners. The Lean Canvas by Canvaniser, for instance, replaces the slightly pedestrian “infrastructure management” elements which Osterwalder favours, with a trendier “problem/solution” match. Other adaptors have nudged the BMC canvas away from business modelling,  to mapping value in other spheres. Emma Williams has proposed a Research Canvas for sketching out the elements of a research problem. Many more are easily found online, but the best adaptations are based on a sound understanding of Osterwalder & Pigneur’s original work and also mimic its careful approach to design. So canvasses have become a distinct genre within consulting methods (interestingly, as a concept, it predates the BMC. Osterwalder’s original thesis references Kim and Mauborgne’s “strategy canvas”, in an early indication of where his ideas were heading).

There are three aspects of this ongoing reimagining of the business model canvas which I’m thinking about, as I work towards formulating a method for my own research.

The first is the adoption of what we might call “canvassing” – the creation of a notated canvas in a workshop format, conducted a facilitated conversation – as a useful method for data collection. This is a technique which seems to have emerged from mind mapping and process mapping, to become something distinct among consulting methods, of value to both participants and facilitators. It seems there is something about facing a large scale map of an idea and physically interacting with it, which promotes a level of engagement with the topic and aids an analytical consideration of an idea’s component parts. It is possible, I suggest, that as a qualitative research method, canvassing would be a useful alternative to interviews.

The second is that the constant revision of the canvas into new forms establishes a precedent of adaptation, and offers the possibility of examining the journey of creative industry entrepreneurs in a similar way. A non-linear graphical approach may also suit the subjects, as it may aid those exhibiting entrepreneurial cognition (or creative cognition, as I imagined it here) and support their ability to spot linkages between seemingly disparate elements.

As discussed previously, entrepreneurship can be seen as a process and that process can be mapped in a way which demonstrates how entrepreneurs and their ventures develop. That entrepreneurial journey can, I suggest, be converted into a BMC-style canvas and used as a research tool for collecting data from creative industry entrepreneurs, in a workshop format.

A first version of an Entrepreneurial Journey Canvas (EJC) is presented here. It retains the linear progression of the entrepreneurial journey, as informed by Baron & Shane, but adopts a simplified BMC-style layout which hopefully prompts cognitive leaps between its various elements. Much like with a BMC session, the end result of the workshop would be a notated canvas of an entrepreneurs’ journey, from which key themes could be identified and easily coded.

The table below shows the nine elements of EJC: six process stages and three decision points. It also shows suggested questions which may be asked in a facilitated workshop format to elicit insight from participants.

Element Type of Element Suggested questions
Self-concept Process How did you imagine yourself to be an entrepreneur?

What role models did you have?

What made you think you could do it?

What did you imagine the rewards to be?

Idea Generation Process What sparked your idea?

What interests led you to it?

What dots did you connect to get to that idea?

Opportunity spotting Process What was the market opportunity you saw?

How did you identify it?

What helped you decide it was the right time to pursue the opportunity?

Decision to proceed Decision point What made you finally decide to press go?

What did you need to stop or give up to proceed?

Resource gathering Process What resources did you need?

How did you procure them?

What barriers did you face?

Launch Decision point What did it take to get here?

What happened immediately before and after launch?

Managing growth Process How did you grow/develop the venture?

What were the big moments?

What went well and what didn’t?

Harvesting rewards Process Were the rewards monetary or other?

Were they what you expected?

Were you satisfied with them?

Was it all worth it?

Exit Decision point How did you decide to exit?

Was it forced on you or was it entirely your choice?

What is the legacy of your entrepreneurial venture?

Feedback on this embryonic version of the EJC and its potential as a research tool is welcome, via the comments section. Does it have potential as a method for collecting data on the journeys of creative industries entrepreneurs? What problems do you foresee? What changes would you make to it? What is unclear about it? And is “canvassing” a viable research method to employ?

Download version 1 of the EJC.

With thanks to Wendy Mather, for valuable comments on the entrepreneurial process, non-linear thinking and for “gussying up” Version 1.

Kim, W. Chan. Mauborgne, Renée. (2005) Blue ocean strategy: how to create uncontested market space and make the competition irrelevant Boston, Mass. : Harvard Business School Press,
Osterwalder, Alexander. (2004). The Business Model Ontology – A Proposition in a Design Science Approach.
Osterwalder, Alexander; Pigneur, Yves. (2010). Business Model Generation. Hoboken, NJ: Wiley.
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Dimensions of entrepreneurship

Clarke’s law is, famously, “any sufficiently advanced technology is indistinguishable from magic.” Entrepreneurship is hardly advanced technology, but I think to those who don’t practice it, it can seem as dark an art as sorcery. An enigmatic practice of certain gifted people. When it works, there is something alchemical about it. A way for people to turn ideas into gold.

Researchers into entrepreneurship, and many others beside, have an interest in trying to demystify it and describe it as a process. Because once distilled into a process, entrepreneurship can be analysed, replicated and taught (perhaps even branded and sold). Repeated observation of entrepreneurial ventures has enabled researchers to document that process, but not so thoroughly as to illuminate all its mysteries.

Reading Baron and Shane’s Entrepreneurship: a process perspective has walked me through that process, but also highlighted its limitations. They point out that there is much debate about how much entrepreneurship is methodology and how much is psychology. Is it like a recipe which can be followed by anyone with access to the correct ingredients? Or is it something innate in certain people, more akin to individual talent – something you either have or haven’t got?

Certainly, entrepreneurship is a process which crosses disciplinary boundaries; it is both economic (in that it is about the exploitation of finite resources) and psychological. The stages of an entrepreneurial venture are clear enough to follow like steps in a manual: idea generation, opportunity recognition, resource gathering, decision making and so on. But although you can follow that process as if you’re assembling a model aeroplane, there’s no guarantee it will fly. Because entrepreneurship appears to need a human factor.

The key psychological element of the process is “entrepreneurial cognition,” a term which describes how entrepreneurs’ thought processes differ from non-entrepreneurs. It’s in the description of the elements of entrepreneurial cognition which aid entrepreneurs’ decision making (risk sensitivity, optimism, pattern recognition) that personal abilities and preferences become relevant. The relative importance of process to personal –  of the macro world in which entrepreneurial opportunities exist to the micro world of how people behave entrepreneurially – is still unknown.

I think there’s a similarity here between entrepreneurship and creativity. Both are essentially processes which require an element of individual talent for full success. You could follow a step by step process on how to write a novel, for instance, and it may still be rubbish. Perhaps “creative cognition” exists in a similar way to entrepreneurial cognition.

Below, my graphical representation of the process of entrepreneurship, as divided along two theoretical concepts about its conception and implementation: the micro and the macro. Not a strict retelling of Baron & Shane, but more of a mind map drawn by me in an attempt to capture the various ideas about entrepreneurship as a process. (In particular, the positioning of resource gathering in the process is mine.)

dimensions of entrepreneurship

Baron, R. A. and S. A. Shane (2008). Entrepreneurship: A Process Perspective, Thomson/South-Western.

Some initial thoughts on entrepreneurship, business, wealth and innovation.

Recently, I’ve been teaching a subject at AFTRS on Entrepreneurial Finance. This has been a useful exercise in exploring ideas about what an entrepreneur is and who identifies as an entrepreneur. Before I outline a few ideas which have sprung from that class, I must thank my seven students who have been willing to be dragged in a new direction, as I moved the subject from being purely accounting based, to include looking at stories of entrepreneurship, to thinking about types of finance available and to pitching for finance.  Their contributions have been insightful and informative.

In this subject, we have talked about entrepreneurship, but we’ve also been lucky enough to talk to four creative industries entrepreneurs about their careers and about what they do. This has resulted in an ongoing discussion about the personal attributes of entrepreneurs, such as risk-taking, passion, vision and perseverance. We have been hearing about the relationships between entrepreneurship and other social constructs, which seem to share the same space, like overlapping segments of a Venn diagram.

So, this post is a quick summary of a few thoughts about the interdependent relationships which entrepreneurship has with business, wealth and innovation. The blog equivalent of scribbled reminders on post-it notes.

Entrepreneurship and business

As part of Entrepreneurial Finance, I interviewed a film producer with a string of prominent feature credits to her name. Parallel to a successful producing career, she has also established, grew and sold a film related company. But when asked if she identified as an entrepreneur, she said no because in her view, to be an entrepreneur, you have to be in business.

The job of a film producer seems to me to be all business. It involves a range of tasks which are inherently entrepreneurial: raising finance, negotiating with talent, striking distribution deals and so on. Yet for my interviewee, this storm of production duties required to get a film made doesn’t feel like being in business. Business is not just busy-ness, but doing and something that looks and feels like a permanent, ongoing profit-making activity.

Are entrepreneurship and running a business essential companions? For me, the answer is no. I see entrepreneurship, and the ability to be entrepreneurial, active in a whole range of fields: in the arts, in not-for-profit organisations, in social enterprise. These are fields which may or may not be “in business.” Fields in which the participants (like this film producer) may not identify as being “in business.”

It seems to me like “entrepreneur” and “business person” are different roles. Like the person who has run a service station for thirty years, you can run a business without being an entrepreneur. Like someone who renovates and sells houses for profit, you can be an entrepreneur but not have a business. But there’s a set of implications about being in business – being self-directed, generating profit, financial risk taking, growing a company over time – which seems to sit comfortably alongside business as complementary ideas. They just seem like they go together, but they can and do exist separately.

(I’m grateful to my supervisor Kate Bowles for finding that term entrepreneur has its origins in 19th century France as “the manager or promoter of a theatre production.” Who’d have thought we’d have the creative industries to thank for the term?)

Entrepreneurship and wealth

Over on Radio National’s Big Ideas program, the Class Act podcast has detailed issues about Australia’s class system – insisting on its existence, detailing its complexity and talking about its effect on people and on. In its second episode, ANU’s Frank Bongiorno talks about the image of Australian entrepreneurs that developed in the 1980s. (Relevant section starts at 19 min 26 sec)

Australia became more unequal in the 1980s. Indeed, it was becoming more unequal from the 1970s, with the end of the long post war boom. And many of the long standing economic opportunities that existed within Australia, within industry and manufacturing, within the farm sector were closing off. During the 1980s, as Australia de-industrialised, as farm incomes and the farm economy came under increasing pressure, unemployment was very high, persistently high, much higher than today right through to the 1980s. Home ownership was declining and so, in many ways, that old image of Australia as a workers’ paradise or a working man’s paradise which goes right back to the 19th century… seems to be belied by the ways Australia was being transformed in the 1980s.

And so, you have the emergence of the figure of the entrepreneur, a term which was used in a non-pejorative way for most of the 1980s and then became more pejorative with the corporate collapses of the late 80s/early 90s and the recession. But you had this image really of the entrepreneur as a kind of public benefactor a public hero. Figures such as Alan Bond, for instance, or Robert Holmes à Court, Christopher Skase and they were held up as people to be emulated. The great irony of this, of course, is that it was a period of Labor government and, in many ways, the Hawke government and Paul Keating as treasurer held up these entrepreneurs as models to be emulated. They were new money as distinct from old money. They had a bit of “get up and go” about them. And, in many ways, a different kind of mass in popular culture where such figures, for the first time really in Australian history, I think, are being held up as real heroes. Their conspicuous consumption, their lavish lifestyles, were seen as admirable, because somehow or other we were able to share in them.

It is interesting to consider how our image of the entrepreneur in early 21st century Australia has changed since the time Bongiorno describes. Certainly, I think they are still held up as figures for emulation. We still think they have that bit of “get up and go” and that’s to be admired. But I think the connection to ostentatious displays of wealth is not so strong. The pervading image of an entrepreneur is much more likely to be of startup owners, app developers and hipsters in incubators. Their values seem to be presented as hard work, self-direction and innovation. Their wealth is mostly invisible and mostly presented, I’d suggest, as existing only as a future possibility.

We seem to have extended the definition of entrepreneur beyond the stratified giants of the AFR Rich List. But we’ve retained the idea of heroism and of an entrepreneur’s story being the highs, lows and ultimate triumph of the classic hero’s narrative.

One further thought: linking entrepreneurship and the drive to grow personal wealth is a challenge to the use of the term in the creative industries, where many activities are pursued without the desire to create wealth (in some cases, without the potential to create wealth). As noted previously, there’s a profit/not-for-profit divide within the creative industries and personal wealth creation sits on one side of it. Further, in the field of social entrepreneurship, I suspect it is absent entirely. It’s another example of how the concepts of wealth and entrepreneurship are drifting further apart from each other, through our wider definition of who an entrepreneur is.

Entrepreneurship and innovation

An ongoing conversation in Entrepreneurial Finance was around the role of innovation in entrepreneurship. One of my students, Daniel Punton, works in the startup space and saw innovation as fundamental; to be an entrepreneur, you must be creating something new. My discussion with Daniel and the rest of the class followed the stories told by our guest speakers, but also sprang from this definition of entrepreneurship from Howard Stephenson of Harvard Business School: “entrepreneurship is the pursuit of opportunity beyond resources controlled.” This definition, which doesn’t mention innovation, business or wealth, allows a wide range of activities to be classified as entrepreneurship.

But here’s another definition from Scott Shane and S. Venkataraman: “Entrepreneurship, as a field of business, seeks to understand how opportunities to create something new (e.g., new products or services, new markets, new production processes or raw materials, new ways of organizing existing technologies) arise and are discovered or created by specific individuals, who then use various means to exploit or develop them, thus producing a wide range of effects.” It mentions the word new five times, so they must really mean it.

For these researchers, newness can be explored in lots of different ways (it need not, for example, be a new product) but it is essential to entrepreneurship as a process. But how new is new? To take our aforementioned service station owner as an example, his business is not, a new idea. But the personal challenge of starting a business, the need to raise resources and to execute a strategy, may be a new opportunity for him/her. And if a service station in a new (geographic) market, for instance, could fit within Shane and Venkataraman’s definition, and certainly within Stephenson’s.

If we’re looking for a set formula for entrepreneurship, I don’t think we’ll find one. And, to speculate for a moment, the lack of a clear-cut definition seems to allow personal bias to influence perceptions of what entrepreneurship is. Viewed in this way, the extent to which any one aspect of entrepreneurship (newness, risk-taking, profit-making) is seen as essential, would be subjective, depending on each individual’s personal values. You might think of innovation as being essential to entrepreneurship, if you value innovation highly, and so forth. This allows Stephenson, Shane, Venkataraman and Punton to all be correct – but signals (another) a difficult definitional journey ahead.

Australian Broadcasting Corporation (2018). Part 2: How we got here. [podcast] Class Act. Available at: http://www.abc.net.au/radionational/projects/class-act/ [Accessed 20 May 2018].
Baron, R. and S. Shane (2007). Entrepreneurship: A Process Perspective, Cengage Learning.
Eisenmann, T. (2013). Entrepreneurship: A Working Definition, HBR.org, available at: https://hbr.org/2013/01/what-is-entrepreneurship [Accessed 20 May 2018].
Shane, S., & Venkataraman, S. (2000). The Promise of Entrepreneurship as a Field of Research. The Academy of Management Review, 25(1), 217-226. Retrieved from http://www.jstor.org/stable/259271

 

The pitch as storytelling and the storyteller’s shifting position

keith-johnston-221964Recently, I’ve had the pleasure of running a two-day clinic for artists seeking to improve their skills in attracting financial support from donors and sponsors. It’s the second time I’ve done this and both times it has been an engaging and rewarding experience.

Much time is spent at the clinic talking about the “ask” – how challenging and daunting it is for artists, and how asking positions the artist and their work. Each time I’ve run this event, discussing the ask has morphed into discussing the value of art, as perceived by consumers, donors, the general public and so on. In general terms, there’s uncertainty about what price to put on a piece of art but despite that uncertainty, there’s indignation when someone wants to access that art for a low or non-existent price.

So, the value placed on a piece of creative work is an ill-defined and touchy subject. It’s also one which is brought into sharp focus by the “ask”, which is ultimately about why anyone should hand over money for an artist’s work and if so, how much. These can be confronting questions for artists and I’ve seen firsthand the distress answering them can cause. Having to put a price on something you created, that has profound personal meaning for you and then justifying that price to a wary buyer? That’s tough.

The ask is part of a wider exercise we train these artists to undertake: the pitch. Pitching feels like something we’ve borrowed from the world of entrepreneurs, and specifically baseball loving American ones (pitch an idea to me, see if I take a swing at it or not). Pitching, which I think of as the act of presenting a potential supporter with an idea, challenges artists greatly and fundamentally. There are language barriers to break down (mainly, the tendency to hide behind incomprehensible jargon) and the need to build up the personal confidence to speak in front of people. The most crucial part though is simmering the artists’ projects down to its simplest and most compelling elements, that can make a potential supporter comfortable enough to say, “I get this and I want to help.”

The experience of talking these artists through this process got me thinking about the pitch as a form of story told by entrepreneurs. That story told well unlocks support, money, experience and advice. Told poorly it elicits indifference and/or distrust. It is in the storytelling nature of the pitch that artists have a natural advantage; they are all inherent storytellers, be they painters, filmmakers, dancers etc. If the pitch has been foisted upon artists by advocates of business practice, it is at least something which they can adapt and excel at.

*****

In 2001, researcher Ellen O’Connor spent months trailing the founder of a technology start-up and observed when and how he engaged in narrative practice. She used this experience to develop a typology of entrepreneurs’ narratives: personal, generic and situational. She observed that the founder in question moved between the types of story he was telling frequently, depending on his needs at the time and his audience.

She also noticed that depending on the type of story being told, the founder re-positioned himself in the narrative. Personal and generic stories had him positioned as the hero: a visionary, a creator, a person who made things happen. But situational stories, about the environment surrounding the founder and his nascent company, positioned him as a supporting character; only one of many players impacted by forces outside his control.

O’Connor’s Typology of Entrepreneurs’ Narratives

Type Type Description Subtype Subtype description Storyteller as character
Personal stories Authored by the company’s founder Founding stories Autobiographical in nature (“why I founded…”) May refer to a specific incident in founder’s life. Entrepreneur as the stories’ hero
Vision stories Focus on technological innovation and breakthrough as envisioned by the founder.
Generic stories Templates, required by conventional documents, such as a business plan. Marketing stories Plots the company against its competition and shows its superiority. Entrepreneur as the stories’ hero
Strategy stories Concretely plots the trajectory of the company from launch to success.
Situational stories Contextual storylines that the founder can do nothing about. Historical stories The longer and recent historical events of the industry in which the company is just one of many players. Entrepreneur as a minor player with little or no control
Conventional stories The “common sense” or widely held beliefs by industry insiders as well as the general public as to what companies in that industry and their founders do, should do and what they are like.

 

O’Connor’s story types correlate to the experience of creative industries practitioners in interesting and problematic ways. For creatives, telling personal stories is challenging; positioning themselves as the hero does not come naturally. It’s clear in how difficult they find the pitching process; generally, they have a natural tendency to deflect, to defer to a team’s contribution rather than their own and to downplay their achievements.

This is not just because of the stereotype of the introverted artist, but because it can be difficult to accept the credit for creative work, even if it’s entirely yours. Often acclaimed creative work depends on inspiration, luck, collaboration and strokes of genius that somehow just happen. It can be hard to take credit for this, because often an artist simply can’t explain how they made something great. Thus, a disconnection between the self and the work is always present which makes it difficult to replicate an entrepreneurs’ story of “this is how I made this.”

Generic stories are also challenging because often creatives aren’t trained to think about strategy or competition. There can be very little strategy employed in making a new creative work; there’s always a process but it doesn’t always have the clear objective which necessitates a strategy. If each piece is unique and a really good piece has an indefinable element to that uniqueness, then how could strategy to create it be devised? In this sense, artistic creation is almost antithetical to strategic thinking.

Competition (and in O’Connor’s sense, the ability to market your product’s advantages compared to that of your competitors) is equally challenging. Some of the more profit focused sectors in the creative industries (architecture, marketing and comms, etc) would be acutely aware of their competition. But artists tend to work in collaboration and to share information with their competitors in a way which other industries wouldn’t sanction. Artists in my clinics bristled at the thought of their peers as competitors, even though they often do compete for funding, opportunities etc.

It’s in the situational stories where creatives can flourish. My experience is that they are generally unworried by repositioning themselves as powerless sub characters within a narrative because the world around them is the inspiration for their work. They are more comfortable talking about the forces around them that shape their work, than how they created it. Perhaps it’s because the spotlight’s glare isn’t as bright, but I think it’s also a space they inhabit all the time. Entrepreneurs can use these situation stories to demonstrate a market opportunity; to show how the times we live in have created a chance to make some money. Artists use them to describe their muse.

*****

I hesitate now, because I seem to have fallen into a false binary: that artists and entrepreneurs are mutually exclusive. Of course, they are not. The cohort of artists I met in 2017 have proven that by harnessing the financial support they needed to create their work.

As I surveyed the 2017 group in preparation for meeting our 2018 clinic attendees, time and again they reported an increased confidence in making the ask. This confidence came from the responses they garnered from the donors and sponsors they approached. The consistent message was that they found people who wanted to feel involved with the work and wanted to help financially. They didn’t mind being asked and, in some cases, encouraged it. This, in turn, created a renewed confidence in the artists about the value of their art, because they found people who valued it as much or more than they did.

One of the 2017 mob said this: “I stopped thinking of it as an ask and started to think of it as an invitation. Because who doesn’t like to be invited to stuff?” In that remark, there is a repositioning, or a narrative sensemaking, as O’Connor would say. That artist repositioned himself from a beggar to the host of a fabulous party; from someone at the mercy of their situation to a hero, controlling the narrative. That’s the narrative transition that O’Connor spoke of entrepreneurs making, articulated proudly.

Storied Business: Typology, Intertextuality, and Traffic in Entrepreneurial Narrative” The Journal of Business Communication (1973), vol. 39, 1: pp. 36-54. First Published Jan 1, 2002

Are the arts central to defining the creative industries?

There’s more to talk about in the article by Julian Meyrick which I discussed last post. As I mentioned then, Meyrick is highly critical of measures used by successive governments to assess the arts on a “value for money” basis. As he writes:

The replacement of policy debate over the all-important question “what kind of culture do we want?” by reticulated, quantified, assessment procedures stems from a moment in time when governments became fixated on getting “value for money” for taxpayer spend.

The monocular vapidity of this reduction belies its administrative adhesion and political use. If you are forever demanding someone “demonstrate” the benefits they provide, you never have to describe or defend the world you want them to be of benefit to. In the 1980s and 1990s, artists and cultural organisations disappeared under a tsunami of Byzantine evaluative and audit tasks that disguised the heavily partisan beliefs that produced them.

The financial and statistical measurement of arts organisations for use in funding decisions and government policy is a world I inhabit and have done since the mid 2000s, a time, I note, significantly after the tsunami swept through. Still, I think that I’m familiar with the “evaluative and audit tasks” that Meyrick alludes to, and the type of arts organisations which are asked to complete them. I think it’s fair to say there are pros and cons to that regime, but some more from Meyrick first.

Meyrick notes that arts funding was one provided as part of “quality of life” legislation, as part of nation-building aspirations. To me, this sounds like what I know of as the “public good” argument for arts funding, and indeed, I have always thought of this as a thing of the past. Certainly, by the time I was running an arts organisation in the early 2000s, an organisation simply existing as a way of providing cultural benefits alone, was not an argument funding bodies supported.

(There is a notable anecdote which illustrates this shift in my paper about the rise and fall of professional regional theatre company Theatre South. When that company’s relationship with one of its key funders, the Australia Council, was floundering, the General Manager was called to a meeting there. In the face of criticism about the company’s performance, the General Manager responded with the argument that the most important aspect of Theatre South was that it existed, only to be flatly told that that was not enough. It’s worth mentioning that a key text for me in preparing that paper was Meyrick’s rigourous account of the Nimrod Theatre Company, See how it Runs: Nimrod and the New Wave.)

“In the last 40 years,” Meyrick writes, “arts and culture have found themselves weighed against criteria and targets not of their choosing.” I think Meyrick’s right that the arts industry has not been immune from the wider movement in management thinking which might be summarised in that old maxim, “you can’t manage what you can’t measure.” And if organisations and their boards have been encouraged to professionalise in order to, at least in part, comply with the measurement regimes imposed on them, that only underlines Meyrick’s point.

Meyrick seeks a more meaningful way to measure culture. “Australian culture is more than series of market preferences,” he argues, “It is more than a list of its impacts on well being, social cohesion, education levels, and the interstate sale of hotel beds.” And in the article co-written with Phiddian, Barnett and Maltby: “We argue that metrics systems for artistic quality imply a spurious homogeneity of purpose in the arts, invite political manipulation and sequester time, money and attention from arts organisations without proven benefit.”

Having seen this system in practice, I find much in Meyrick’s and his colleagues’ concerns to nod along to and to shake my head at, at various times. This is, I suppose, the difficulty of knowing about the nuance of a subject; there’s much to quibble with. So I won’t, certainly not on an open channel.

However, it’s worth revisiting the posited link between the desire to measure the arts along neo-liberal lines and the emergence of the term, “creative industries.” As I said last post, I think that relationship is of two separate but related things happening at the same time. But it might be useful to consider the conception of the creative industries that may have led to making this connection – a conception which places the arts as central to the creative industries. (Other models are available, as noted here)

Part of the issue is that any perception of the creative industries is influenced by the view from where you stand. The arts may only be central to the creative industries if that’s what our starting point is. I’m sure there are, for instance, marketing & communications professionals bemoaning the same rebadging of their industry and giving no thought at all to the arts.

But another factor is the high level of government involvement in the arts and that the fortunes of the arts rise and fall with decisions made by government. In this environment, no change of nomenclature is without motive, no change exists without an agenda to drive it. In this context, I can see how the link is made: government wants the arts to be economically viable and a reimagining of them as an industry (a term infused with economic and bureaucratic meaning) fits that agenda.

For me, the arts is a component of, not central to, the creative industries. It makes more sense to me as a categorisation of commercial sectors which have, within their business models, the exploitation of the creative process. And although my conception of it includes the arts, there’s an argument, I think, for excluding them from that definition, because they lack the commercial intent to make them truly industry-like.

And if that makes sense, then it might even lead us back to the public good argument. Because isn’t doing something for its inherent cultural or community benefit, with no need to measure its costs and returns, antithetical to what an industry is?

References: see last post.

Is “creative industries” just the new, economically justifiable version of “the arts”?

This article, by Julian Meyrick on the Conversation, has sparked so many thoughts that they have to marshaled into an orderly queue and forced to wait patiently. Its primary focus is the evaluation of the arts and its unquantifiable benefits in a policy environment which demands quantification. That issue is enormous, so I’ll put that aside for a moment and talk about discomfort over the term “creative industries”.

Simplifying the measurement of the arts to statistical and financial data and over-reliance on such measures in policy making around the arts concerns Meyrick. His piece in the Conversation contains this paragraph:

In the last 40 years, arts and culture have found themselves weighed against criteria and targets not of their choosing, while the sophisticated calculative practices constructed to do this have sometimes exacerbated the alienated character of the situation.

The hyperlink leads to a journal article by Meyrick and colleagues Robert Phiddian, Tully Barnett & Richard Maltby, critiquing a measurement regime called Culture Counts, then being considered for use within Australian government funding bodies for the arts. In it, further reservations are expressed about quantifying the arts as economic justification, but there is also a link to the emergence of the term, “creative industries”. Meyrick et al see it as linked to an increasing desire to measure the value of the arts; in fact, that it’s a reaction to it.

They talk about the work of academics such as Hawkins, Cunningham, Bennett and Stevenson who, they say, led “the pursuit for the biggest plausible GDP number” to attribute to the cultural sector.

These authors facilitated a shift in government understanding from a traditional concept of “the arts” to a contemporary concept of “the creative industries”, and a concomitant switch from an arts policy to a cultural policy. Quantification was key to this change, as was the alliance between left-of-centre cultural democracy advocates and right-wing free-market proponents.

There are a couple of things to note here. Firstly, that the term “creative industries” is seen as a successor to “the arts” – and not so much a natural evolutionary step, but part of a wider agenda to quantify the arts (which was “key to this change”). More than that, it was a kind of merging of points of view from the left and right. So here, the adoption of the term “creative industries” is seen, at least in part, as having a political dimension. They go on:

These parties found common ground in an instrumentalist cultural materialism with little interest in nuanced critical distinction making. Someone working in advertising or software design was a “creative” in much the same way as a violinist in a symphony orchestra.

Here they express a familiar criticism of creative industry definitions. They place wildly different professions next to each other – actors and architects, musicians and marketers – within in the same category. This discontinuity is even more palpable within those subcategories themselves. Not only, I’d suggest, does an architect not think of herself as in the creative industries with actors, she probably doesn’t even consider herself to be in the creative industries. It’s far more likely, she’d see herself as being in the architecture industry.

There is a problem here, well recognised by people (like me) who work across these boundaries. It’s that the inability of the individual sectors which fill up the grab bag of industries labelled the “creative industries” to coalesce into a unified group, has prevented effective lobbying to government to support those creative industries. That problem can be seen as an inevitable result of imposing a definition of creative industries on those sectors; the term didn’t come from them so no wonder they have trouble adopting it.

The political element is then expanded upon:

The Creative Industries in Australia was a “third way” rapprochement similar to Cool Britannia under Blair. From the historical moment that we are in now, it looks like a hubristic miscalculation of the stability of a liberal democratic centre and its capacity to constrain neoliberalism through neoliberalism’s own mechanisms.

Which, I think, is fascinating. They’re saying, “you tried to play the bean counters at their own game, but you got it wrong.” And what was wrong was, again, their measurement of value.

… its imprecise use of language reduced terms of policy capture like “excellence”, “access” and “innovation” to abstractions evacuated of precise critical meaning. At the same time, it presented numbers as a tool for demystification that stripped away the obfuscating rhetoric of public value to reveal its privileging of high art in comparison with popular culture. In this way, cultural studies researchers – those who should have been most alert to the inculcation of neoliberal techniques – condoned quantification as the price for a non-exclusivist conception of culture.

All of which leaves me pondering three (ish) questions.

  1. Is “creative industries” just a rebadged version of “the arts” designed to be more economically justifiable?

Personally, I have never seen it like this. My own experience is from working with the film and TV industry to then working within “the arts” sector, which existed, at least in a policy context, separately from film and TV. So that gave me the sense that there existed creative industries outside the arts. From there I moved to working in a quasi government role with creative industries businesses/organisations of which the arts was a subset, and the measurement of those organisations in that context was not about intrinsic value, but about performance improvement and sustainability. I’ve never felt that the Creative Industries was the Arts made more palatable to neoliberals, but it can clearly be read like that.

  1. Was adopting the term “creative industries” part of an agenda to measure the arts to death? Or were the two things just happening at the same time? (Is it correlation, not causation?)

To which I think it’s probably just both happening at the same time, but nothing ever exists in a vacuum. It seems plausible that both these developments – both seemingly motivated by a desire to change how those industries are viewed externally – fed off each other.

  1. Does the creation of the term “creative industries” have a political element?

And clearly for some people it does. This is a reminder that definitions themselves – what we list, what we include, what we leave out – create meaning. Definitions are therefore inherently political; you can’t create or adopt one in an ideological vacuum.

I have been thinking about how to talk about definitions of the creative industries without resorting to simply comparing and choosing between various lists of industry sectors. And here, I think, is an indication that definitions are never just that. They are designed for a purpose, informed by ideologies and infused with motives. They are, in themselves, narrative processes and the stories they tell are contested.

Meyrick, J (2017) “A new approach to culture”, The Conversation, viewed 30 Sep 17. https://theconversation.com/a-new-approach-to-culture-82448
Robert Phiddian, Julian Meyrick, Tully Barnett & Richard Maltby (2017), Counting culture to death: an Australian perspective on culture counts and quality metrics, Cultural Trends, 26:2, 174-180, DOI: 10.1080/09548963.2017.1324014

What made the creative industries different then, may not be so potent now.

Management consultants tend to come in two types; generalists and industry specialists. I’m the second type. If I was of the first type, I might tell you (as many have told me) that all businesses are essentially the same – you can consult as effectively to a chair maker as you would to an international arms dealer, because all businesses boil down to the creation of profit via a production process of some kind.

I have always maintained that creative industries businesses are different (well, I would, wouldn’t I? I’m an industry specialist). My point is that a creative work constructs value in a very different way. The profit generated by a chair can be traced through the cumulative addition of each of its components, up to completion when it can be sold for an amount which covers the cost of its production and then some. The profit created by, say, a hit song, is a dependent on a far more complicated formula, with many more unpredictable variables.

Richard E. Caves’ (dauntingly brainy but still pleasingly readable) book Creative Industries: Contracts between Art & Commerce starts with tackling this issue of what makes the creative industries different from all the other industries. He takes an economist’s view of this question, dispassionately considering the sellers and buyers of creative transactions and assuming the perfectly rational decision-making process which underlies economic theory. He lists 7 basic economic properties of creative industries, which, I think, describe the unique combination of complexities which influence the production of creative work.

Caves’ basic economic properties of creative industries

Name of property Summary Detail
Nobody Knows Demand is uncertain. It is almost impossible to tell how a creative product will be valued until it is completed, and by then the costs of producing the good have already been met.
Art for Art’s Sake Creative workers care about their product. Creatives are not indifferent to the traits and features of their work. Instead, they are deeply invested in aspects such as originality, technical prowess, resolution and harmony. In short, artistic achievement.
Motley crew Some creative products require diverse skills. A creative work such as a film requires the cooperation of many different collaborators. But unlike some other collaborative endeavours, a creative work is more than just the sum of the efforts of each part of a production line. It has a “multiplicative production function”, where each input must be present and “do its job – if any commercially valuable output is to result.”
Infinite variety Differentiated products. Creative work can be simultaneously vertically differentiated (a buyer will choose between two similar products on perceived quality) and horizontally differentiated (a buyer will choose between two similar products on personal taste). And the array of choice an artist has in producing a work, and the array of creative products a buyer can choose from, making this variety infinite.
A list/B list Vertically differentiated skills. Creative producers are ranked based on quality, reputation and so on – creating a hierarchy of artists.
Time flies Time is of the essence Maximising profitability of a creative product is dependent on it being finished by a certain date.
Ars longa Durable products and durable rents Creative work can continue to generate revenue after its initial production with no additional inputs, through the exploitation of copyright.

 

I can’t recall seeing these characteristics of the creative economy expressed so clearly. I can add one more:

Name of property Summary Detail
Inspiration knows no timetable How long it will take to come up with a creative concept is unknown. Unlike other industries, where the time taken to produce a good can be accurately predicted, creative concepts can emerge quickly or slowly, and you can’t tell which it will be. This matters because the creative concept is often the component of a creative work which consumers value most and increases profitability – but it’s the part of the process which is the least predictable.

 

Meanwhile, I have been prompted by my tutorial class of Management Consulting students to think about startups and their relationship to entrepreneurship. They have been asking about the threat which start-ups might present to bigger, more established companies, and the predilection of some multi-national corporations to acquiring start-ups. I suspect that this conversation, as with so many on this topic, is actually defining “start-ups” as newly established tech companies. It’s that subset of companies which we, as a society, seem particularly enamoured of.

That particular definition, personified in sneaker wearing, tablet wielding, young tech nerds, successfully raising capital to accelerate their SAAS product’s growth, has become an early 21st century archetype. That archetype is a kind of start-up rock star; the version of an entrepreneur where everything has gone right. I worry that the far more common experience of tech start-ups – the long, lonely slog with no money, no angel investors and time rapidly running out before they need to go get a job – is rarely talked about. If there’s a rerun of the 1990s dot com crash, this time starring exhausted start-ups which never accelerated beyond a brief canter, and with investors looking for their money back – what will this do to our current idolisation of entrepreneurship?

But putting that aside, it struck me that when Caves was writing about his economic properties of creative industries, it was in the immediate shadow of that dot com crash. Caves sought – as I have done – to differentiate the creative industries from the non-creative industries, and in 2000 he could clearly do that.

Would it be so easy now? Because if we consider the new breed of tech industry startups, typically pushing an online software product, across multiple platforms but addressing distinct, almost niche, customer needs… don’t all Caves’ properties apply to them? Is it possible that the distinction between creative industries and non-creative industries (the definition of creative industries, as I’ve been describing it) is actually getting harder over time?

If so, the reason why may be that today’s emerging industries look and feel more like creative industries than traditional industries; that the promising, rock star tech industries which we all have such a crush on, actually operate more like creative industries than anything else. In which case, studying what makes creative industries tick may have much wider future use and significance.

Caves, Richard E. Creative Industries: Contracts between Art & Commerce, Cambridge, Mass.: Harvard University Press, 2000.