Business and creativity

business creativity and the creative economy and business creativity exercises
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AustinMcmahon,United Kingdom,Researcher
Published Date:16-07-2017
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T­ Shirts and Suits A Guide to the Business of Creativity David Parrish Foreword by Shaun Woodward MP Minister for Creative Industries and Tourism Reprinted with new Foreword Creativity versus Business ? Some people regard creativity and business as being like oil and water – they just don’t mix. They think it’s a question of choosing between creativity or business. I disagree. At a conference I attended on the theme of creativity, some people understood creativity to mean ‘art’, done by artists of one kind or another – all of them wearing T­ shirts. These artists realised that sometimes (unfortunately) they had to ‘ speak with beings from a parallel universe, ie the business world – people in suits who think differently and speak in strange tongues – and inevitably don’t understand them. I reject the idea that business and creativity are incompatible opposites. At that conference I pointed out that I am both a 5 6 published poet and an MBA, which perhaps unsettled a few people for a moment. I went on to say that my best creativity is not my poetry but my inventiveness within the business world, adapting ideas and methods to new circumstances across the boundaries of industries, sectors and cultures internationally. Other delegates confirmed that ’ they had seen far more creativity in engineering firms than in some advertising agencies. Creativity is not the monopoly of the ‘artist’: it is much wider than that and can be found in education, science and elsewhere. Creativity is in and around us all. 7 Creative Alchemy The most exciting creativity, I believe, is the alchemy of blending apparent opposites, what we often call ‘art’ and ‘science’, recognising that they are not opposites at all, from which we have to choose either/or in a binary fashion, but the yin and yang of a whole. This book is about bringing together ‘ creativity and business as allies. It’s about combining the best ideas of both ‘T­ shirts’ and ‘Suits’ in the business of creativity, turning creative talent into income streams. Successful creative entrepreneurs embrace both creativity and business. Perhaps they don’t use business jargon and maybe profit is not their primary aim. Sometimes they will proceed on a hunch, or put their success down to good luck, but there is nevertheless a method behind their apparent madness, whether they recognise it or not. The art of business is to select from a palette of infinite ’ choices to draw together a specific product or service, with specific customers’ needs, in a way that adds up Business Formula financially. The resulting picture is a unique business see page 97 formula for a successful enterprise. Naturally, creative businesses tend to have a high concentration of new ideas in their product or service. Successful organisations of all kinds combine all the essential business elements creatively. Successful creative enterprises need to have a creative product or service; they also need to invent a special and workable formula which combines all the essential ingredients of business. The Art of not ‘Selling Out’ I am often asked whether making a business out of art or creativity inevitably means compromising artistic integrity or in other words, ‘selling out’. My answer is that it can do, but it doesn’t have to. The solution is in the formula mentioned above which refers to specific products/services and specific customers who, if chosen carefully, are essential ingredients in the formula for success. If you combine the wrong customers with your product or service there will be a mismatch leading to a choice between selling out or going 8 bust. You cannot sell all of your products to all customers all Selecting the right customers of the time, but if we apply some creativity to selecting the see page 36 right customers, choosing appropriate products from our portfolio, whilst making the books balance at the same time, we can devise a feasible business formula. Success The meaning of ‘success’ is for you to define, not me. There are no value judgements here about what exactly ‘success’ might mean. Bigger is not necessarily better; often small is beautiful. You must decide where you want your creative enterprise to be in the future. As they say: “if you don’t know where you want to be, then you will never figure out which Vision road to take”. So your road to success depends on your see page 11 destination – where you want to be in the future – your Vision. Profit ? Profit is not always the point – though even not­ for­ profit organisations cannot survive if expenditure exceeds total 7 income. As well as spanning 13 sub­ sectors, there are different economics models adopted in the creative and cultural industries sector: commercial businesses seeking profit, not­ for­ profit or charitable organisations and social enterprises. That’s why I refer to ‘the desired financial result’ rather than necessarily ‘making profits’. Many arts organisations are constituted as charities and their income Triple Bottom Line approach includes grants and subsidies. Social enterprises define see page 99 success with the Triple Bottom Line approach, measuring success on three counts: financial, social and environmental. Some creative entrepreneurs are also ‘social entrepreneurs’. Lifestyle ‘Lifestyle businesses’ succeed by delivering both a healthy income and a rich quality of life for their owners. For others, success means building a profitable business that eventually doesn’t need them, so they can sell it and move on. And some people want their creativity to sit alongside another career as a hobby rather than a business. 9 Why do it ? For those about to embark on a journey into creative enterprise, the first question must be: Why do it? Why build a business around your creative passion? The obvious answer is to express your creativity and make a good living at the same time. But is it that simple? This book outlines a range of challenges affecting businesses and offers some pointers towards solutions. There are many hurdles to overcome, compromises to be made and tough decisions to make along the way. So first it’s worth taking stock of what’s ‘ at the heart of your creative enterprise and why you do it – or plan to do it. Though the intention is to allow your creativity ‘free rein’ by doing it full­ time as a business, some people complain that now they are in business they have less time for their creative passion, not more. Others have considered changing to a conventional job to earn money so as to be able to indulge their creativity in a pure way, free of the constraints and pressures of business. Perhaps it is better to separate earning a living on the one hand and creativity on the other so as to do each one to the utmost, rather than doing neither one properly. Is there a risk ’ that your creativity will be curbed by business? You may consider this suggestion inappropriate in a book like this, but it is better to deal with this issue frankly now if it is a matter you are facing – or likely to face in the future. Yes, there is a risk of compromising your creativity with business – and compromising your business profitability Business Formula by indulging your creativity – if you don’t get the business see page 97 formula right. For example a financial formula that works for a hobby usually does not work for a business when higher prices need to be charged to cover the real costs of labour and other expenses. 10 Where ? Where do you want to be in the future? Pick a significant future date or milestone in your life (it doesn’t have to be ‘in five years time’, though it could be). Describe what your business will look like. Who will be your clients? How many people will be involved? What level of income will you achieve? Draw up a blueprint for your goals. Be ambitious. Select a destination which is out of reach but not out Vision of sight. This is your Vision. What ? What business are you in? The best people to answer this are your customers. You might think you’re in the website design business but your customers see you as their marketing consultant; you might describe yourself as a theatre company but what your customers are buying is a Listening to customers medium for communicating messages about social issues. see page 38 Listen to customers to find out what they really value about you. What is the value to add for customers and your contribution to a better world? Answer the customer’s question ‘What’s in it for me?’ to find out what it is you really Mission do for them. This is your Mission. You don’t need to have a ‘mission statement’ (especially not a glib one), but you do need to understand what customers value about your business and what they really pay you for. How ? How do you do business, ie what are your beliefs, morals Values and ethics? Your Values. Sometimes these are so much a part of us we cannot see them, or just take them for granted. For example, my clients pointed out that my ability to listen, respect others’ views and help them achieve their goals in their own way were my special values; but they were so much an integral part of me that I couldn’t see them. I had missed the point and my publicity highlighted my professional qualifications instead. Ask other people: associates, friends, colleagues and especially customers in order to see yourself and your business more clearly. See Chapter 2: Know Yourself. 11 Vision, Mission and Values Vision describes where we are going – the ‘promised land’. The Vision is the enterprise’s ‘dream’ of the future, a picture painted in words (and numbers) which is intended to inspire people by appealing to the heart as well as the head. Mission describes what we are going to do to achieve our Vision. A mission statement is simply a specific description of what the organisation actually does – its contribution to the world and society – so that employees, customers and other stakeholders understand what the business needs to excel at. Values describe how we are going to conduct ourselves along the road to success. When ? Is the time right? Are you ready to go into business now or Ideas in Action — see page 14 should you wait until a better time? Sharon Mutch left her photographic art under dust covers for nine years before setting up in business. When you have put together the answers to the Where, What, How and When questions, the next matter to consider is whether or not it all adds up into a workable business Feasibility Filter formula, a business model that’s realistic and achievable. see page 89 Later in the book, the Feasibility Filter will help you to examine the feasibility of different options. This book will help you to achieve success in two ways: 1 Challenge you to define success in your own terms, in other words to specify your goals. 2 Find a route to success which is realistic and workable. 12 Key Points 1 Some people think that creativity and business don’t mix. I disagree. Think of business and creativity as partners, not opposites. 2 Combine the best ideas of both T­shirts and Suits to turn your creative talent into income streams. 3 Creative talent does not automatically ‘deserve’ business success. Not all creative ideas make feasible businesses. 4 Making a business out of creativity does not involve selling out – so long as you invent the right business formula. 5 As well as a creative product or service, you will need to create a unique and feasible business formula. 6 Be clear about your own definition of success. Know where you want to get to – your Vision. 7 Clarify your specific business Mission. 8 Recognise and hold on to your Values. 9 Decide whether now is the right time to start or expand. 10 These principles apply to not­ for­ profit organisations as well as commercial businesses. 13 Ideas in Action Sharon Mutch Photographic Artist Sharon Mutch is an artist with a passion for approach the top art markets in the world: her work and a head for business. New York, London and Paris. She was prepared to ‘say no’ to lesser opportunities so Her artistic passion is born of her experience. as to concentrate all her efforts on breaking “During the second year of my Fine Art degree into New York City’s Chelsea and Soho area I suffered an ectopic pregnancy and nearly despite being advised by the British Consulate died. I began to incorporate this experience that this is “the most difficult art scene in the into my photographic art and many of my world for finding gallery representation”. works are images of women: Feminae in Vitro (Women within Glass) is the name of the Sharon was aware of the challenge but she collection of my work,” she said. also knew that if she could succeed here, then other exhibitions and sales would follow. After graduation, Sharon exhibited at Having devised her strategy she researched several high­profile photographers’ galleries. the selected markets, at first through desk “However, the timing was not right for me. research, trawling websites and examining I recognised immediately that my work was galleries’ submissions criteria. With the help strong in both imagery, content and depth of UK Trade and Investment’s ‘Passport to of meaning. I also realised that the emotive Export’ scheme, and the assistance of the symbolism of my work hit a raw nerve with British Consulate in New York, she attended many women regardless of social status, the New York Art Expo and visited galleries views and personal experience. Even though with her portfolio. This resulted in offers of my work was receiving quite a bit of attention, exhibitions from two galleries and she chose I felt as though I didn’t belong in the ‘art world’, the Viridian Artists Gallery. Her work was that it was happening too quickly,” she recalled. exhibited there in July / August 2005. Nine years later she unwrapped the dust This success – which will no doubt lead to sheets from her work and felt the time was other exhibitions and sales – was the result right to go into business and she set up as a not only of artistic passion and talent but also sole trader. “I am the artist and I am also my of using a business head to break into the manager / agent, my business brain is the difficult yet lucrative New York market. ruling factor when it comes to commission rates, gallery representation and marketing,” she explains. Her business brain decided to 14 ‘Vessel of Confinement’ © Sharon Mutch Links to related ideas and topics in book: Combining the best of ‘T­shirts’ and ‘Suits’ (see pg 8) The timing of setting up in business (see pg 12) Targeting specific markets / customers (see pg 36) Market Research (see pg 38) Saying No (see pg 92) 2 Know Yourself — In this chapter we look at a technique for objectively assessing your own strengths and weaknesses as part of the process of finding your feasible business formula. — We look at the core competencies on which you can build your creative enterprise. — In addition there are some thoughts about learning, training and continuing professional development. 16In The Art of War, Chinese military strategist Sun Tzu wrote: “If you know the enemy and know yourself, your victory will 8 not stand in doubt”. 9 Whether or not you regard business as a kind of warfare, his point is that knowing one’s own strengths and weaknesses will help you to decide when, how and where to proceed. It will help you recognise the customers, competition and conditions that are most likely to suit you – or not. Yet ‘knowing ‘ ourselves’, in the sense of making objective and critical assessments of our shortcomings and special qualities, is very difficult. It is much easier to assess another enterprise than our own and that’s why it is useful to get outsiders’ views if we are to get a clear picture of ourselves. Knowing yourself applies not only to your personal creativity, skills and aptitudes. We need to understand the strengths and weaknesses of our business or organisation taking into account all the people involved in the core team and wider ’ ‘family’ of stakeholders including associates and advisers. We also need to assess our assets, reputation, knowledge of the market and intellectual capital. Evaluating Strengths and Weaknesses Rather than simply attempting to write down all the strengths and weaknesses we can think of on a blank sheet PRIMEFACT checklist of paper, the PRIMEFACTchecklist on the following page provides a useful structure for a comprehensive analysis. I devised this checklist specifically for the creative and cultural industries and have used it successfully with a range of clients. 17 The PRIMEFACT Checklist People What are the strengths and weaknesses of our people? Employees, directors, members, associates, advisers and other stakeholders. Reputation (or Brand) What is our reputation with our target customers? What are the strengths – or weaknesses – of our brand or brands? Intellectual Property see page 54 Intellectual Property What intellectual property do we have? How is it protected? How easily can it be turned into income streams? Market Research see page 38 Market Research / Market Information What information do we have about market segments and market trends? What do we know about individual clients and their specific needs? Values see page 11 Ethos (or Values or Culture) What is our ethos, our values and our organisational culture? Do all stakeholders subscribe to this same ethos? Finances see page 64 Finances (ie Money) What is the current state of profitability, cashflow and assets? How much money do we have to invest or can we borrow? Agility (or Nimbleness or Change­ability) Are we agile enough to seize new opportunities? Are people prepared to change and ready for change? Are there barriers to change? Collaborators (Alliances, Partnerships and Networks) What are the strengths and weaknesses of our associations with other businesses and organisations (including government)? Talents (Competencies and Skills) What are our core competencies? What skills do we have available and what gaps are there? How will we learn new skills? 18 Be frank about your weaknesses too. Remember that not all weaknesses need to be fixed. Maybe you can find a new market position where your weaknesses are not so significant. The important thing here is to recognise your strengths and weaknesses in relation to competitors. You may have a particular strength, but if your competitors Competitive Advantage have it too, or are even better, then it does not give you see page 45 Competitive Advantage. Core Competencies Core Competencies Your Core Competencies are the key skills on which you base your business success. These are often ‘deeper’ than first thought. For example Canon recognised that their core competencies were not in cameras, but more fundamentally in optics and this allowed them to see that they could transfer their expertise into the photocopier market. Similarly Sony’s core competency is not electronics but miniaturisation; Honda’s is not cars but engines – which helped them see beyond cars into motor boat and lawnmower markets. Richard Branson’s Virgin brand is fundamentally about customer service, so it can be applied not only to music but also to airlines, trains, financial services and mobile phones. Some theatre companies view their core competency as ‘communicating a message’ using drama – rather than drama in its own right. In some cases web designers have a core competency in branding and marketing consultancy. Ideas in Action — see page 24 Peppered Sprout’s core competency is not publishing but ‘delivering ideas to clients’. Deep down, what are your core competencies? 19 The Hedgehog One of the reasons to assess your competitive strengths is to answer the question: What can your business be world­ class at? Note that the question is not what you would like to be world­ class at, but what you can be. Knowing this, and then playing ruthlessly to your key strength, is part of a successful Hedgehog Strategy 10 Hedgehog Strategy. The fox, renowned for his cunning, has many strategies for 11 killing the hedgehog . On the other hand, the hedgehog has only one strategy for defending itself. Whenever the fox attacks, from whatever direction, the hedgehog rolls itself into a ball of spikes. It works every time. The hedgehog is supremely good at one thing, and it survives by sticking to its winning strategy. Identifying your own enterprise’s Hedgehog Strategy flows from a thorough and objective understanding of what you can (and cannot) be world­class at. The 95:5 Rule When searching for opportunities and threats, the knack is to pick out the important few from the trivial many, because here, as elsewhere, the Pareto Principle applies. Based on economist Wilfredo Pareto’s observation that 80% of the wealth was owned by 20% of the population in Italy at the time, the Pareto Principle is also known as the ‘80:20 Rule’. 95:5 Rule I find it’s usually more of a 95:5 Rule. The 95:5 Rule describes the way that an important few things are responsible for most of the impact on events. For example 95% of sales can come from 5% of products. 95% of profits can come from 5% of customers. Or 95% of your competitive advantage could be derived from just 5% of your strengths. (Also, 95% of headaches are caused by 5% of colleagues) Etcetera... 20 Weaknesses may be plentiful and can be found in any area of the PRIMEFACT checklist. The good news is that they don’t all need to be fixed. Playing to your strengths also includes playing away from your weaknesses. Your business formula includes deciding what not to do. Only weaknesses which could jeopardise your business ‘ strategy need to be rectified. See Chapter 11: Your Route to Success. Skills: Training or Learning ? There are many more ways of learning than attending training courses. As well as recognising your enterprise’s key skills (core competencies), there will be areas where skills need to be improved, and given the changing external environment and changing needs of customers, constant learning is inevitably an ingredient of success. A training needs analysis can be undertaken to assess the gaps in skills and knowledge essential to the business strategy, ’ though personally I prefer to focus on ‘learning needs’ rather than ‘training needs’. Learning is much wider than training. A culture of encouraging learning is much more important than a budget for training. Continuing Professional Lifelong learning is not just a buzzword but a fact of life and Development a programme of Continuing Professional Development (CPD) is essential for all individuals playing a part in the enterprise to ensure that their skills and knowledge are kept up to date for the benefit of the business and its customers. Each person could have a Personal Development Portfolio Ideas in Action — see page 86 or plan (PDP), as do staff members at The Team. 21 The Learning Organisation At a corporate level there needs to be a philosophy of Learning Organisation building a Learning Organisation, which I describe as a company or other institution within which everybody continuously learns: from customers, from the competition Ideas in Action — see page 86 and from colleagues. See The Team. Just as important is a culture where this learning is shared with colleagues and through systems this knowledge is embedded within the organisation as ‘structural intellectual capital’. This is the know­ how in the firm which is more than the sum total of individuals’ expertise and belongs to the organisation rather than (or as well as) the people working within it. Business Dashboard In a creative enterprise, constant learning and the build­ up see page 99 of knowledge should be part of a Business Dashboard and monitored as closely as financial measures of success. Crucially, the priorities for learning must be aligned to the overall business strategy, rather than individuals’ personal preferences. ‘ ’ 22 Key Points 1 Assess the strengths and weaknesses of yourself and your business, including all stakeholders. 2 Use the PRIMEFACT checklist. 3 Ask outsiders to help – they may see weaknesses and strengths you don’t. 4 Remember that not all weaknesses need to be fixed. 5 Identify the core competencies at the root of your success. 6 Think of the hedgehog’s strategy to find out what you can be world­ class at. 7 Use the 95:5 Rule to identify the most important 5% of your strengths and weaknesses. 8 Identify the additional learning and skills needs required to support the business strategy. 9 A culture of encouraging learning is much more important than a budget for training. 10 There are many more ways of learning than attending training courses. Think ‘learning’ rather than ‘training’ so as to open new possibilities for increasing knowledge and skills. 23 Ideas in Action Peppered Sprout / Plastic Rhino Advertising “We liked the product so much, we shredded it.” “The best thing we did was to set out our stall,” This was (almost) what Chris Morris said when says Chris as he told me how he and Peter he was telling me about how they set out to worked out clear aims for the business in the win new business from Puma UK for his early days. They had been publishers and company Peppered Sprout. Chris and could have focused on publishing Plastic Rhino, business partner Peter Kellett decided that defining their business as publishing. Instead Puma was one of their target clients and they recognised that their core competencies decided to impress them with their are in delivering ideas to clients and the outrageous creativity, publishing photos of magazine is just one manifestation of that Puma shoes shredded into hairpieces in their capability. And so it sits under the umbrella magazine Plastic Rhino. They won the account. of Peppered Sprout which provides advertising for clients through in­store installations, Deliberately following in the footsteps of David photography and illustration, packaging and Ogilvy, founder of world­famous advertising bespoke publishing. agency Ogilvy and Mather, Chris doesn’t fit the stereotype of the striped shirt and braces The team at Peppered Sprout know where Manhattan executive. His casual clothes and they’re going, play to their strengths, are clear easy manner disguise a shrewd business brain. about what business they are in, and which Like David Ogilvy, Chris and Peter have a target clients they intend to win to develop their list of clients they intend to work with and they creative enterprise in the chosen direction. actively pursue them. They don’t advertise. They don’t do tendering. They go for the jugular. Plastic Rhino, their magazine, was originally “a folly”, confesses this advertising man, but in practice it has turned out to be the most effective way of promoting themselves – a showcase for the ideas generated by their 8 staff and international database of freelance artists. With distribution in 15 countries, Plastic Rhino is a success in its own right. 24 Photograph: Mark McNulty Links to related ideas and topics in book: Selecting the right customers (see pg 36) Know where you are going – Vision (see pg 11) Recognise Core Competencies (see pg 19) Mix of employees and freelancers (see pg 84)

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