CLIENT SERVICES
In response to the persistent problems that ail the not-for-profit theatre, I offer two distinctive consulting services:
I. The Creation of Informative Financial Reports
Better Financial Statement Formats
Because You Cannot Know Where You Are Going Unless You Know Where You Are
Financial statements that summarize the financial results of many not-for-profit theatres are presented in formats that are not useful for making decisions. Such statements typically do not report three crucial measures:
financial results excluding non-operating items;
the separate contribution of three distinct income generating activities (productions, other earned income and contributed income); and
liquidity available without donor restrictions.
These omissions occur both in financial statements prepared for management and those prepared for boards. It is impossible to make good decisions for the short or long term without such financial information.
Over the last thirteen years, I have evaluated the Statements of Activities and Statements of Financial Position of dozens of performing arts organizations, especially theatres. That experience, coupled with my long career in the private sector in which I analyzed and forecasted financial statements for large and complex corporations, means I am exceptionally well-qualified to recommend improvements in not-for-profit theatre financial statement reporting that will lead to a better understanding of current performance and condition.
Better Metrics
Because What Gets Measured Gets Done
A crucially important additional element of informative financial reports is the identification and regular reporting of metrics that reveal whether progress towards financial and other objectives is being made. Many theatres, indeed many organizations, suffer from too much data yet too little information. Since 1973, I have been identifying and reporting Key Data for organizations of all sizes in both the for-profit and not-for-profit sectors.
Key Data for not-for-profit theatres should cut through data overload by focusing on statistics that measure ticket sales, contributed income (especially to current operations), website activity, social media engagement, patron satisfaction, as well as the Statement of Activities and the Statement of Financial Condition. For each of these general categories, customized metrics must be identified.
II. The Definition of Strategies of Substance
Because A Strategy That Does Not Define an Existing or Planned Competitive Advantage is No Strategy at All
The strategic plans of many theatres feature florid mission statements coupled with exhaustive to-do lists. Such plans do not constitute a strategy of substance, defined as: a succinct description of activities, policies, and resource allocations whose purpose is to create a competitive advantage and thereby generate superior financial results. A competitive advantage is a distinctive quality that is valued by customers who, in the case of not-for-profit theatres, include both ticket buyers and those who donate funds.[1]
For over forty years, I have been writing or analyzing strategic plans of organizations of all types and sizes. In my private sector career I led or participated in the creation of strategic plans for manufacturers of scientific instruments, clinical laboratories, companies engaged in environmental services, information services, and insurance. Since 2003, I have evaluated the strategies of numerous large and small not-for-profit theatres.
[1] This definition of strategy and its essential features are based on the work of James Phills, Jr. of Stanford University, Michael Porter of Harvard University and Garth Saloner, Andrea Shephard and Joel Podolny of Stanford University.