"Good to Great" in the Arts?

Jim Collins says that greatness is not a function of circumstance. Greatness, he says, is largely a matter of conscious choice, and discipline. In his 2001 book, Good to Great ¹, Collins articulated the principles he believes differentiate companies that become great from those that do not. In his recently published monograph, "Good to Great and the Social Sectors" ², Collins addresses how these principles of greatness apply to nonprofits. Collins' framework for greatness in the social sectors encompasses five areas:

• calibrating success without business measures,
• getting things done within a diffuse power structure,
• getting the right people on the bus within the constraints of a social structure,
• rethinking the economic engine without a profit motive, and
• building momentum by building the brand.

One of Collins' cornerstone principles is that nonprofits need to separate their inputs (the resources needed to achieve great-ness) from their outputs (the measures of greatness). Collins contends that nonprofits should hold themselves accountable for progress in outputs, even if the outputs defy measurement. Collins explains that while money is both an input and an output in business, in the social sectors money is only an input and not a measure of greatness. In measuring outputs, Collins says the critical question for nonprofits is, “How effectively do we deliver on our mission and make a distinctive impact, relative to our resources?”

Collins' monograph is thought-provoking and worthwhile. In the following conversation (originally an email exchange), Bruce Sievers and I explore one of Collins' principles — calibrating success by measuring outputs. The debate over whether or not it is important, or even possible, for nonprofits to measure their outputs is a heated one. There's not even agreement on whether non-profits should be expected to have outputs. And even among those who agree that outputs should be defined, there is disagree-ment over what constitutes a legitimate output. Landing on and struggling with these questions was a bit like falling into quick-sand. The harder we wrestled with the question, the tougher it became. Ultimately, we ended up bumping into ideas that are at the heart of Alan Brown's great article, “An Architecture of Value,” in the spring 2006 GIA Reader: How do we even articulate — never mind evaluate, or measure, or increase — the intrinsic value of the arts?

Diane Ragsdale

The conversation was kicked off with an excerpt from “A Tale of Three Cities” by Bruce Sievers published March 2006 in Linkages from Rockefeller Philanthropy Advisors. The article was based on a keynote address for the annual meeting of the California Association of Nonprofits, March 21, 2006.

Bruce Sievers
I was delighted to see Collins say in his new piece, Good to Great and the Social Sectors, “We must reject the idea — well inten-tioned but dead wrong — that the primary path to greatness in the social sectors is to ‘become more like a business.’“ But then, as I read on, I became increasingly disappointed to see that he still stresses the product orientation of nonprofit work — outcomes, out-puts, performance, and so on — as opposed to the intrinsic value of the work itself. This is because, in my opinion, he fixated on the model of monetary investment in nonprofit work and therefore wants to see the greatest “bang for the buck.” An analogy would be to think of the primary point of participating in sports as winning a gold medal at the Olympics, rather than the intrinsic value of the participation itself. In civil society, as in sports, the means matter as much as the ends, because in many ways the values embodied in the means are the ends. So my primary point is that relationships with the market and the “business model” pose dangers for civil society. We're not just producers of solutions to social problems. And I would say this to funders even more than to nonprofits: don't fixate on “measurable outcomes” or “scale” or effectiveness” to the exclusion of supporting the mixture of ideals, motivations, compassion, and human interactions that constitute the essential quality of civil society organizations.

Diane Ragsdale
Bruce, first, I want to start by saying how much I enjoyed your entire article and would recommend that anyone reading our discussion of the Collins monograph start by reading your article. It appears that you think Collins is still pushing for the same old business metrics, whereas I think he is chastising nonprofits (and funders of nonprofits) for measuring things that have little or no correlation to the actual value that an organization is created to provide. I agree with Collins. We (arts nonprofits and their funders) have been counting the numbers that are easy to count — amount of press, box office sales, attendance demographics, free tickets distributed, etc. — but have tended not to measure or talk about whether or not the art itself is good or is having an emotional impact on audiences. Isn't this, arguably, the value of the arts above and beyond entertainment? Until we change the measures we use and find a way to assess our progress in, for example, “making great art that matters to people” (for lack of a more eloquent mission statement), it seems the arts will default to counting the things that are easy to count, but that don't really tell us whether or not we're doing great work.

Collins concedes that this is difficult. He says that the outputs you assemble may not be numbers at all, but qualitative evidence (he says to think like a trial lawyer assembling a body of evidence) that indicates whether or not you are making progress towards your goals. Collins challenges nonprofits saying, “What matters is settling on a consistent and intelligent method of assessing your output results, and then tracking your trajectory with rigor. What do you mean by great performance? Have you established a baseline? Are you improving? If not, why not?”

Bruce Sievers
Diane, thanks for your thoughtful words about the “Three Cities” piece and really insightful comments on Collins's discussion of performance assessment. I really appreciate your observations, coming as they do, from someone who is a leader in arts grantmaking and who is immersed in the day to day challenges of that work.

I think you and I are actually not all that far apart in our views on the complexities of evaluating arts organizations. We agree that assessing the work of organizations in the arts involves much more than financial performance, audience numbers, and other easily countable data. However, where we may differ is on what exactly is to be looked for beyond those numbers, and this relates to where we also may differ in our interpretations of Collins.

My argument with Collins is not that he is “attached to the same old business metrics” (which, as you rightly point out, he explicitly disavows) but rather that his assessment process is still rooted in the general conceptual framework of business performance — hence his use of such terms as “calibrating success.” Ultimately, that model flows from the concept of investment — investing shareholders' dollars in an enterprise that is designed to earn a profit and is evaluated on the level of that profit. A narrow focus on “metrics” can be one result, but the framework he uses is actually embedded in a much more general set of assumptions and values having to do with relating financial “inputs” to a yield of “outputs.”

The model is that of a “throughput” process in which the point of the enterprise is achieving the outputs, and thus “performance.” Because philanthropy, like business, involves the investment of funds toward desired ends, it seems reasonable to apply the investment model to our work and therefore to look for performance criteria that would be analogous to profit in the business world. But that, in my view, is where the model breaks down. The inter-subjective nature of the social world does not easily conform to the constraints and desired ends of the business world. Of course, nonprofit organizations do achieve some results that can be objectively assessed and used for investment comparisons. But interpreting their work primarily in such terms threatens to distort the distinctive character of civil society. This is a central theme of the “Three Cities” piece.

There are actually two kinds of problems inherent in the application of the performance model borrowed from business to the assessment of nonprofits: 1) the set of technical problems related to social causality: innumerable variables, the single input of foundation funds, absence of a single bottom-line test, inability to conduct controlled experimentation, and very long time horizons; and 2) the philosophical problem of translating one framework of meaning into another.

The first is familiar in all the evaluation literature. The second is rarely discussed but is the actually most relevant to our current topic, because it has to do with the difference between Collins's conceptual framework and the lived world of nonprofit organizations. In “Three Cities,” I refer to philosopher Jürgen Habermas's phrase, “colonization of the life-world,” as a brilliantly apt description of what I am talking about here. Many other modern philosophers — Donald Schoen, Gilbert Ryle, Karl Popper, and Charles Taylor among them — have addressed the conceptual problems in understanding social action across differing horizons of meaning. Their common theme as it relates to our topic is that the imposition of one meaning framework upon another tends to distort or miss essential features of the translated framework.

Thus, despite the fact that Collins suggests using the approach of a trial lawyer assembling evidence (an approach that is closer to understanding the nature of nonprofit work), he comes back to the notion of a “method of assessing your output results and tracking your trajectory with rigor,” a conceptual framework based on the throughput model. What I commend as an alternative here is a model of assessing nonprofits based on particularistic human judgment, much like the judgment involved in a literary prize, juried arts competition, or teaching award. In this I totally agree with your point about the need to evaluate arts organizations on, among other things, their emotional impact and how well their work illuminates the human condition. I just don't think this lends itself well to description in terms of a trajectory of outputs; rather I would see it as a kind of sui generis judgment call (based on full conversation with the nonprofit that is being assessed), with all the subjectivity and fallibility that such a judgment entails. This is especially true of the assessment of arts organizations but applies in many respects to all organizations that are part of civil society. In this sense I would suggest that the idea of seeking to “measure intrinsic value” borders on being a kind of oxymoron — and I would argue that understanding and endorsing (or not) the intrinsic value of the organization is the best we can do.

Diane Ragsdale
Bruce, after considering your points, I'm actually ready to concede that “measuring intrinsic value” may, indeed, be a rather “oxymoronic” concept. I also agree that organizations are by nature sui generis, and thus trying to come up with a standardized value system against which they are measured seems inappropriate. When you offered an alternative of assessing organizations “based on pluralistic human judgment, much like the judgment involved in a literary prize,” I was taken with the idea. I agree that this sort of assessment is ideal for evaluating an individual artist's value or contributions. The idea breaks down a bit for me when I think about nonprofit organizations (that are incorporated and given tax-exempt status and other privileges, and that receive donations) because they are established to fulfill missions that the IRS determines meet some social objective. How does one know whether or not that organization is fulfilling its mission and merits continued investment (and tax-exempt status) without measuring its work/value (outputs) somehow?

Collins' book is intended to examine what separates a great nonprofit from a good nonprofit. His argument is that, among other things, a great nonprofit has “piercing clarity” about its core values and fundamental purpose. Collins says, “to do the most good requires saying ‘no’ to pressures to stray, and the discipline to stop doing what does not fit.”

Arts organizations sometimes make choices to stray from their core values and competencies and grow their institutions and pro-grams (artistically and financially) beyond a level they can sustain. Although some might say growth in the arts is always good and there's no such thing as “too much art” in the world, there is such a thing as insufficient resources to support the number of arts organizations in any given community, and insufficient demand for the programs being offered. One of the only ways to know whether an arts organization can sustain itself over time, particularly in a competitive environment, is to assess the uniqueness and value of its mission and programs relative to its community. To become a great, enduring institution, it seems an organization must be continually increasing its value. I don't know how an organization could do this without setting some benchmark, and measuring its pro-gress, in whatever way it deems appropriate. I would actually be in favor of a periodic self-assessment designed to help a nonprofit organization achieve its goals, (as opposed to helping its funders achieve theirs).

Bruce, I believe that we agree more than disagree. Perhaps our debate is one of semantics rather than principles — not surprising given that there is often great variability in the way concepts like intrinsic value, strategy, measurable outputs, effectiveness, and innovation are understood and applied by funders and nonprofits. Furthermore, these concepts seem to get embraced, interpreted, debated, and then abandoned by funders (and then by the nonprofits they fund) every few years or so.

Bruce Sievers
Diane, this is such a useful and engaging exchange that I can't resist another comment. The two issues at the core of all this and that seem to create conundrums for us are: 1) the model of investing money; and 2) what counts as value.

Re the first, our impulse is to create an equation of:

$ input = something like $ output

because that's how business investments work. But the social world does not easily lend itself to quanta calculations of output that look like dollars. That is the danger I see in trying to show the public that they are getting a certain calculable benefit for their dol-lars invested. There are lots of reasons for tax deductions (home mortgages for example) that not translate into a demonstrable metric of yield for the public, yet we approve of them because of the general values they represent in society.

Which brings us to 2) — what counts as value. How do we assess what is important to us? Certainly one way is “bang for the buck.” But of course there are many other ways as well (hence the literary prize analogy). Perhaps the best way to think of this is the basis for our judgment about why we volunteer. Why would we volunteer to work for a theater group or a nursing home and not Microsoft or General Motors? All four entities create social value, and the difference is not that some are making money and some are not. (GM is not.) I suggest it is because we identify with the intrinsic values of the theater group and nursing home. Of course it is also important that there are people in the audience and that the nursing home is not gouging its residents. But our judgment about the value of the nonprofit missions is what leads us to connect with and support them.

Diane Ragsdale
Bruce, I agree that it is inappropriate to expect to make $ input into an arts organization and expect something like $ output or its equivalent “value.” I've always thought that the equation went the other way for nonprofits. Something more like:

“value” (output) > (leads to) $ (input) > increased “value” > increased $

In other words, nonprofits that are fulfilling their missions have every reason to expect investment from the community. Over time, however, arts organizations can lose sight of the fact that their “value” (output) may be going down or staying flat — while they are expecting the community to step up with a greater and greater financial investment. If arts organizations want to increase $, then I think they need to be conscious of increasing their value.

These things are clearly not scientific. The results are generally long-term, and gauging emotional impact and artistic impact is very difficult. A nonprofit's value is not something that should get written up on a report card and printed in its season program; but nonprofits do need to be honest with themselves about their value. Perhaps that value cannot be easily articulated or measured, but I believe it is important to try. Perhaps arts organizations count the numbers that are easy to count not only because funders have asked them to, but because it's easier than asking “Are we doing worthwhile artistic work?” and “Do we matter to this community?”

Diane Ragsdale is senior program associate, Performing Arts Program, the Andrew W. Mellon Foundation. Bruce Sievers is visiting scholar at Stanford University and senior fellow with Rockefeller Philanthropic Advisors. He has served on the boards of Grantmakers in the Arts and the Council on Foundations.

References

1. Jim Collins, Good to Great: Why Some Companies Make the Leap...and Others Don't, New York: HarperBusiness, 2001. 320 pages. Jim Collins's web site is www.jimcollins.com.
2. Jim Collins, “Good to Great and the Social Sectors: Why Business Thinking Is Not the Answer,” a monograph, published by Jim Collins, November, 2005, www.jimcollins.com.