Leading Through Scarcity: Purpose Over Panic

[Music] Welcome to The Soap from BCG. The podcast that explores the big ideas, shaping business, the economy and society. I'm Georgie Frost. In this episode, leaders today are increasingly being asked to deliver more with less, less certainty for your resources less time. Yet the organisations that keep making progress aren't always the biggest or best funded, they're the ones with real clarity on purpose, on who they serve and on how to create value in new ways. Because sometimes the most important shift isn't a new strategy. Redefining the role your organisation plays and building the trust, partnerships and relevance to make long-term impact possible. So what does it take to lead that kind of shift? We're joining me, Ejon Shriver, CEO of New Jersey Performing Arts Centre, a non-profit arts organisation in Newark and Rishi Varma who leads BCG's global HR and People Tax Centre. Welcome to you both. John, if you would, for listeners who may not know Newark, can you just set the scene for us? So I turned up here in Newark in 2011, about 15 years ago, and the City of Newark was still recovering from what we call the Newark Rebellion, and that was unrest that occurred in 1967 of all times. Now while other cities recovered more quickly, from the urban violence of the late '60s, it took Newark a long, long time to do that. So visionary, Governor Tom Kane, decided in the late '80s that a major performing arts centre could help with the revitalization of Newark. And so the New Jersey Performing Arts Centre, we call it NJPAC, was built. It opened in 1997, and it was a revelatory for the community. Because all of a sudden, literally hundreds of thousands of people were coming to the downtown to see performances who otherwise would not have had a reason to come downtown. And then as a result of that, a major arena was built, a few blocks from us, and all of a sudden there began to be some vibrancy in the downtown that didn't exist before. That ended up being table stakes when I showed up in 2011, because we saw an opportunity to not only present hundreds of events a year at our place, but to expand the footprint and the impact and the reach of the arts centre throughout our greater Newark community. When you arrived, and I guess this is a lesson for all leaders arriving at a new organisation, but what made it particularly clear to you? So the organisation didn't just need to perform better. It needed to reshape. How does different focus? The organisation, when I arrived, was one that operated as a traditional performing arts centre. That is an audience of folks who were 45 years of age or older, primarily white, primarily coming from the suburbs into the downtown. And what they do is they would come here, they would park their car, they would walk the 90 seconds it took from the parking garage to the theatre, they would see the show, and then they would go home. And when I arrived, I realised that that was not a formula for sustainability. Our audiences were diminishing. We had a structural deficit of several million dollars, and we realised that we needed to diversify our programming mix, and we had been presenting diverse attractions, appealing to our African-American audience, our Indian audiences, our South Asian audiences, our Brazilian Portuguese. We were presenting those performances in a 250 seat space in our theatres. And we said, "Gosh, we need to present to those audiences in our Carnegie Hall size 2800 seat venue." And when we started to do that, working with local promoters who knew those audiences well, all of a sudden we opened the doors to folks who never ever would have thought to come here. And that has been a secret to the sustainability that we were able to achieve in a few years, programming intentionally, robustly, to 15 different ethnicities and nationalities, with attractions we understood they wanted to see. That was a revolutionary for our business, and that became the basis for everything else we worked on. We presented 1200 events last year, last season. I would say 25% of those events were free cultural events in community, of 100% of what we put on our stages. 40% of it we know will lose money because it's fine arts programming, like jazz or classical music or dance. These are conscious decisions we make as business operators, and with all of that, with a 70 million, 75 million dollar budget, we spend about 8 million dollars a year on social impact programs that return almost nothing and earn revenue, right? So how does one manage a business model that has all of these wild cards built into it? And working with BCG, I, as the leader, began to prioritize our work in ways that I hadn't before. It was all a bit of a measma to me. We were doing so many things, and we were not properly prioritizing them to the benefit, the long-term benefit of the business. Jump from your side. What did that BCG relationship look like, particularly at the start? I didn't know anything about how organizations like BCG operated, so I was a little dubious, of course, and I went to their offices and I sat down and I started to talk about our business, and I shared with them our successes, our challenges, and my really fundamental confusion about how to prioritize our work. And so that was the start of our journey together with, you know, I had the opportunity to meet John and Dave and others. I was really impressed with what they were doing, but the problem statement as John had presented to me then was not one that, you know, was around thinking about the great opportunities that John was presented on a daily basis. But how do they choose the right ones to really workshop and progress that will have meaningful impact to them as they think about their future? You know, that is where we found our initial connection to say, let's develop a strategic plan for ENJAPAC that really articulates what we, what ENJAPAC wants to be over the next three to five years. And what it meant was a really fascinating and kind of granular analysis of a nonprofit performing arts business that was in transition. And together with the team that BCG put together with leadership from Rishi and from Michael, we came up with a strategic plan that was actually actionable because other strategic plans that I'd been in love with and get done and then they get put in a drawer and everything, you know, and that's that. But this strategic plan spoke to who we were and who we aspired to be. And now five years later, as we refresh that plan, we have discovered we don't have to rewrite it or reinvent it or transform it. And sometimes when you come into an organization and this could be a big brand that people know well, it feels like you're messing with something that's part of the family and that's even more difficult, isn't it? It's funny. I was in the movie business before I got here. And as I was leaving California to come to work in Newark, believe me, you know, having lunch with George Clooney and Beverly Hills and, you know, having a sandwich at a hobby, still like a test at a Newark, these are two different worlds, right? But someone said to me something very wise, you said, you know, you're going to start a new job, you have to go in wide open to who's there, what their capabilities are. And as you listen and learn about the organization, so you'll begin to understand who's aligned with your work ethic, who's aligned with your vision for the future. And I was sure I would learn and I did from the, from many of the team members that I met on day one, but this time went on, we made some changes. We made some significant changes in our senior team. Again, not because these were not great people who had done great service, but because the business that we were in had evolved and we had not evolved as the business had. So we needed to be smarter in the way we programmed our building, right? And we needed to, as I said earlier, we needed to diversify the product line. We needed to give people more choices. We need to give more people more choices. And as we evolved that new strategy, that strategy operated inside our building and outside our building. On our stages and in our community. And most of the team appreciated that and enjoyed that challenge and wanted to be part of it. Some folks said, since I joined the company 20 years after opening, some people said, you know what, that's, that's not who we are. And so, you know, whenever a new leader comes on, I imagine some folks stay on the bus and others choose not to. And I've been a producer for 50 years. I tell everybody who works here think like a producer, right? You know, you are an owner of this business and you have a unique and indispensable role to play. In anything we do, there are a hundred different pieces that have to work right in order for the show to go on. And a sense of ownership, responsibility, pride, and professionalism in that work. That's what we work up every day around here. And to the extent that it can, it works. However, the business is entirely unpredictable. So a good year this year, if the economy softens, if people aren't buying, you know, the bottom can fall out of our bottom line. So we have to be meticulous micro managers of our business as we expand our mission. And the thing that BCG did for me, and they do it every day, because Rishi is a member of our executive committee, BCG helped me prioritize our work so that we could take care of the business at hand, and having done that, and doing that, expand our mission, our social impact mission, which is so important to who we are. Well, she is zooming out, then what are the broader lessons here for business leaders trying to keep their organization's relevant and resilient as expectations, cost pressures, the economy, shift all around them. And whatever that budget. Yeah, George, I think the key messages for me on that front are like listen, change, and adversity. Are your best friends. You have to live through them. You have to find your way. In each situation, I'm sure we all are constrained on resources. Any one of the leaders that I've spoken to regardless of size of organization has never said, "Oh my God, I have an abundance of that." You know, it's always about changing times, you know, technologically, and politically, and various other circumstances that we all live through is a constant. And so in that world, how do you think about leading through that work? I think anchoring on purpose is of course a really, really good idea. Just be clear, ask that level of clarity of why you are and how you want to show up. Think about not just doing what you do on a daily basis, but how do you improve on that? How do you, you know, bring that producer's mindset to it? That says, "All right, I'm not going to be satisfied with what I have now. Let me go back and workshop that a little bit more." Again, it doesn't have to be step change improvements every time, but it could be small increments. And over time, you'll be surprised how far you've gotten from your original point. There's a lot of resources that are available to us that span outside our traditional thinking and traditional boundaries. How do you tap into those resources will become a critical part of your success? And so I hope people will take inspiration from that to say, "All right, in a world that is constrained, there are ways to create leverage. There's ways to improve my reach. Much beyond my four walls and how do I integrate into the broader ecosystem that will build me strength and help me grow?" How do you maintain resilience and sustainability when you don't have buckets of cash? This is something that we work closely with John and Timon, is to really understand the drivers of the business. Where are we making money? Where are we not making money? What are we putting up? And really inspecting that and looking at that closely to say, "Here's where we play today. Where are the opportunities to grow into? That will continue to help us diversify our revenue streams and how we think about the impact that we have. And so one of the main pillars of success for us for the strategic plan was to drive greater predictability, sustainability, and resilience in everything John and Tim do, which they do exceptionally well in terms of workshopping amazing new ideas and opportunities. John, what did that look like from your perspective and what advice would you give to any leaders who are going into that situation? So we have to make choices every single day. We have to figure out what's the right price to pay ex artists, right? What's the right deal to make with that artist? Now we are doing that in ways we hadn't before and we've advanced these nontraditional earned revenue streams. We're building a movie studio with Lionsgate in the southward of Newark. We won't operate the studio, but we'll landlord. We'll make a million dollars a year on that and we'll handle community engagement and we'll do an education program. So here we're making money and we're advancing mission. These are the types of enterprises that to me are the home runs that we're looking for. They all are not home runs, right? Sometimes we hit a single and sometimes we strike out. We're not persistence and grit and being open minded to the point where we can learn from our mistakes is really key. So the kind of iconoclastic CEO is to my mind to think of the past. I think listening, collaborating and ideating together has been a key to our success. How do you judge when mission expansion accelerates your impact and when it risks overreach and how do you persuade the many stakeholders you must have for your vision for the organization? The decisions that I make as the leader that are unusual or unexpected. I always workshop with the members of my executive committee, many of whom are CEOs of major businesses. You know, issues remember my executive committee, the CEO of potential financial is the chair of my board. So I have these resources and these individuals that I can turn to and say, you know, I like this from a mission perspective. Let's think it through from a business perspective because if we make the wrong call, we could sink the business based on a wrong decision relative to admission. For example, I spent a year traveling around the country ideating around a arts infused K to eight school that I wanted to build on our campus. Right? Big idea, unusual idea unique in the country. I discovered as we toured that the idea I had wasn't being done anywhere and I figured out there must be a reason for that. Integrating the arts into every aspect of curriculum wasn't happening and we were not ready to pioneer it and then the cost of doing it, you know, would have cost me $125 million to build a brand new school. And then out of that idea came another idea and that was to build a 60,000 square foot education and community center that was going to be programmed for everybody from mothers and babies to older adults. Free programs, five or six days a week and that cost the 70 million dollars. Well, she what question should leaders be asking themselves before they put it step outside of their lanes? So I think John's story is just just resonates so much, but I would say the part of it that I find unusual is his humility in what he just described. The ability for leaders fall in love with the ideas like truly they almost died to becoming part of their legacy. And you know the moment you do that, that is when you know you tend to lose the plot a little bit, put your milestones in place, you know, what the litmus desk in place and also always and I you know shared this story with the recent CEO. I told that CEO as she was taking on her new role of a large corporation in the US. There's a one thing she put on her board of all the lessons I share with her is find my contrarian. And so you know that is what I would recommend people do don't fall in love with your ideas and you know think about finding that contrarian finding that voice of reason that is going to challenge you and then nowhere to walk away. John I did want to ask you about coalition's collaboration. How do you build those cross-sector coalitions that actually unlock value? That's the most fun I have and we have and that is exploring collaboration right. We have in Newark and I'm the co-chair of it we have what's called the Newark anchor collaborative and it's 22 different entities in our community. We all gather and we talk about what's happening in community and how we can be helpful to each other in ways that advance the well-being of community. So the art center is smack dab in the middle of that conversation. Newark is a very poor city. If I was the CEO of Lincoln Center in New York City I wouldn't have the same imperative to be engaged in community that we do here in Newark. A place like us if we choose can play an outsized role in the future of many many lives. What an awesome responsibility. What a great job right. Absolutely so give me a flavor then if you would John come on. What could we expect to see what have been some of the things that we do? success is one of the things you're most proud of, because it's not just been limited to New York, has it? No, it's not the limited to New York. And we created an event years ago called the hip hop nut cracker. And a Gen Weber is the choreographer. And it was a, it is a take on Chakowsky's classic, the Chakowsky scores there, but the cast are hip hop dancers. And what's remarkable about it is it's an intergenerational event. You see everybody from, from older adults to grandkids. It draws the most diverse audience. And for, for many of our attendees at those shows, it's the first nut cracker they've ever seen. So here, an audience is being introduced to hip hop dancing, Chakowsky's music. In this remarkable mashup, Curtis Blow has been our MC for it for its entire existence. We did it for 12 years. And we toured it around at its height to 40 cities. This is an example of doing good and doing well. We created a new revenue source. We grossed over $2 million with this property over years. But we also delivered diversity programming to places all over the country. You might not have any. So that's an example of mission and business that work together. Obviously, I'm not trying to retire you off already, John. But what do you want your legacy to be when you do move on? He worked with colleagues to evolve a vision and a mission that will continue. What we've evolved the work to is not only traditional presenting, but non-traditional engagement with community in ways that accrue to their betterment of their mental and physical health. We now have a program called ArtsRx where we literally work with Horizon Blue Cross Blue Shield and others, including Rutgers Newark, the City of Newark. And we prescribe arts experiences for community members. You sign up, you tell us what you're interested in. And you can choose from a dozen different experiences. We pay for the experiences at places like the Newark Museum of Art and Glass Roots, which is a glass-blowing nonprofit or symphony hall where they do line dancing. Any number of nonprofits. And then we test and we research and we try to understand what the impact of participating in arts is meant to somebody. And so the more arts, one experiences, the data proves, the happier and healthier one has the potential to be. So these are the sorts of things that I'm so proud of and I want to ensure continue. John, as you think about the early days that we put the planet together and then the impact of that when COVID happened and the refresh that we had to do when war on the left, there was so many twists and turns in this overall story that we've endured together. Any reflections on some of those moments from your side? It's just the perpetual necessity to be nimble and to not take anything for granted and for essentially nothing to be settled law. Now I try to lead with confidence but I have fever dreams every night about the future of our business because we are dependent on constituents to make that possible. And it's a decision to buy a ticket to move into some apartment building that we've developed to for donors to continue to give. We have many plates in the air at all times and I think our ability to acknowledge that, not be intimidated by that and see that as an opportunity for growth versus intimidation is a key to our ability to prevail. Being our young people to have a sense of confidence by engagement with the arts, whether they become an artist or a dentist, that is life-changing for a young person. Especially our young people, many of whom come from most of whom come from economically disadvantaged backgrounds. They're being raised by a grandma's or a single parents. They are sometimes going to schools that are less than best. Many of them can find a home with us and find voice with us and find a confidence in themselves with us that they might not find otherwise. What a gift to be able to try to provide that. Rishi, John, thank you so much. Enter you for listening. To read John's excellent piece, when strategy follows purpose, the art of revival, which contains a number of insightful leadership lessons, follow the link in the show notes.