On 29 March those organisations that submitted an NPO application will learn whether they are ‘in’ or ‘out’; in the following months the fortunate ones will agree with the Arts Council what being ‘in’ will mean for them in financial terms.
I discussed this process recently with a colleague David Worthington (UK Design Alliance, Media Square and CC Skills) and was really struck by his take on where the design industry, and indeed the wider creative industries were; they had, he believed ‘learnt to live on less’. I am not convinced that we have yet reached this level of acceptance. Hearsay suggests that many NPO applications, and their accompanying business plans, were predicated on levels of future public funding which seem, at best, unlikely. Cutting costs is not the same as learning to live with less: it is only the first stage.
Organisations which respond successfully to a major financial shock be that a drop in income or rise in costs, usually do three things. First, they cut costs to survive, to buy themselves time and to generate some money to invest in the next task. Secondly, they work on improving the performance of their people and assets. Lastly, and usually 2 – 3 years after the initial shock, they are in a position to focus on growth. Examples of the types of actions that are needed in all three phases can be found here.
No business ever secured its long-term future by cutting costs alone; viability comes from re-designing and re-making the organisation’s business model to succeed in the light of changed circumstances. It is not possible to ‘skip’ from cost cutting to revenue growth without paying some serious attention to ‘performance’.
Over the coming week I, and my fellow contributors, will be offering readers of this blog some ideas around adapting existing business models and creating new ones. Obviously we cannot hope to cover everything so I have included an initial resources list here.
If you have a good idea, case study or example to share please join in.
Thanks for reading