Thriving on Chaos: How to Adapt to Rapid Change
Organizations with business models based on long-standing predictable revenue streams are grappling with forces that threaten to undermine their ability to pursue or even maintain current efforts toward their mission. What’s the right response when your business model becomes–dare we say it–obsolete?
A recent NYT article, “Opera Has a Problem, Fans Aren’t Subscribing” highlighted the challenges even the oldest and strongest nonprofits face in these changing times. Like Lyric Opera of Chicago, many traditional performing arts organizations face skyrocketing costs and generationally shrinking audiences. Cutbacks won’t save them, their business model is broken. They need bold new solutions.
One might say that nonprofits are constantly adapting, but for the last few years the pace of change has been accelerating. Organizations with business models based on long-standing predictable revenue streams are grappling with forces that threaten to undermine their ability to pursue or even maintain current efforts toward their mission. And it’s not just the opera. Similar disruptions to longstanding business models abound, in fields ranging from behavioral health and addictions treatment to consumer advocacy to community development.
In pondering this challenge, I found myself drawn to the Tom Peters 1987 classic, Thriving on Chaos. It’s a product of the American economy in the 1980s, which faced a level of disruption not unlike our own today. He recommended a response focused on a set of “new basics”:
- Emphasis on quality and service
- Enhanced responsiveness
- Continuous innovation
- Creating new markets
- Flatter, more nimble organizations
These concepts have since been renamed in some cases (for example “flatter and more nimble” has become “agile”) but they remain relevant for us today. Nonprofits like Lyric Opera will navigate change and succeed in the face of uncertainty through a combination of these priorities, if well-executed. Recognizing the writing on the wall is the first step. Then they must get close to their current and potential constituent base to understand what they want and need today — and, more importantly, what they are likely to respond to tomorrow. Through careful but flexible planning that is responsive to both their mission and their audience, they must create new markets through innovation while maintaining quality programming.
Opera, like many nonprofit sub-sectors, will likely see its business model completely transform in the next decade, but leading with the basics suggests a path forward, even amid the chaos.