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May 2016

Nonprofit Alliances Gone Wrong

JJ16_AmericanCraftThe June/July issue of American Craft (an art magazine) has an interesting article about the failed merger between the Museum of Contemporary Craft (MoCC) and the Pacific Northwest College of Art (PNCA). MoCC closed in April and the interview makes it clear the hoped-for synergies between MoCC and PNCA never developed. The people interviewed, especially on the now-defunct MoCC's side, have been quick to tout independence of museums as a core value. A staffer is quoted as saying: "We were told time and time again, 'You are to spend no more than 30 percent of your working hours on museum projects." The college projects would always trump the museum projects." Another says: "When you are independent, your programming takes a certain form. You are addressing broad communities. [After the merger,] Our focus shifted to serving students to faculty. [The new perspective [didn't work]."

This narrative about MoCC's sad demise (its exhibitions included Dropping the Urn by Ai Weiwei and Gestures of Resistance including Theaster Gates, leaving no doubt regarding the quality of its programming) was also apparent in a February blog post on the American Craft website when the news first broke that MoCC would close. The blog post provides more background on the history of MoCC's financial woes, which seem to have been triggered by a 2007 move to a new location, right before the Great Recession hit. The post's author notes: "The merger with PNCA seemed a lifeline to save an institution struggling with lingering relocation expenses during the economic downturn in 2008 [...but...] PNCA had its own financial difficulties and, in the years before its joint administration of MoCC, the college came within striking distance of losing its accreditation."

Later, we read: "More ominous is the seeming disregard by the college of the mission of the museum and the work it interprets. The move to jointly administer the museum in 2009 now appears to have been a Faustian bargain; it preserved MoCC for the time being, but put its future in the hands of an institution that doesn’t appear to care greatly about contemporary craft."

In the case of MoCC and PNCA, this might well be an accurate description of the pitfalls of nonprofit affiliations; however, while the blog post keeps its focus on the woes of MoCC, the people quoted in the June/July issue of the magazine seem at times to be drawing conclusions about the validity of nonprofit affiliations in general, along the lines that losing one's independent is bad. 

But to give an example, the Pennsylvania Shakespeare Festival has been affiliated with DeSales University in Center Valley, PA for two decades and this affiliation has allowed the DeSales theater students, who are trained in one of the best programs in the country, to tremendously benefit from observing and learning alongside seasoned actors every summer. PSF has been able to serve the broader community through the WillPower tour every fall (where young actors bring Shakespeare to high schools in PA, NJ and DE) as well as through "Shakespeare 4 Kids" productions in the summer. The PSF productions are held in the Labuda Theater where DeSales students have their own theater productions during the school year, allowing top-notch facilities to be used year-round. PSF's artistic director also has an appointment in the Division of Performing Arts, as do members of PSF's technical staff. Students benefit tremendously from the festival's presence on the university's grounds every summer.

Going back to MoCC and PNCA, it seems that the problem originated from a lack of structure to create the synergies needed to make the affiliation a success. The magazine article talks about meetings to suggest new curriculum that didn't go anywhere. What they might have needed, I'll suggest, is an approach in line with John Kotter's Leading Change framework:

  1. Establishing a sense of urgency. (You don't have round after round of meetings if you have a sense of urgency...)
  2. Creating a guiding coalition. (Both sides seem to be at each other's throat.)
  3. Developing a vision and strategy. (They do seem to have had some sort of high-level vision, although it might just have been paying lip service to what some people knew the vision should be.)
  4. Communicating the change vision. (Nothing about that is mentioned in the article.)
  5. Empowering employees for broad-based action. (This doesn't seem to have been the case.)
  6. Generating short-term wins. (There are very few student-related success stories.)
  7. Consolidating gains and producing more change. (This didn't seem to have happened.)
  8. Anchoring the new approach in the culture. (They never got to that point.)

It is a pity that the story ends in a seemingly acrimonious divorce between MoCC and PNCA. The students could have learned a lot from seeing the operations of a real museum up close. If too few students at PNCA were interested in craft and museums, this could have been the opportunity to develop a flagship summer program to bring in students from other institutions and give them hands-on learning. It would also have helped keeping the college's facilities operating year-round, increasing operating revenues, in addition to raising PNCA's visibility. So many missed opportunities here... What a shame.

What Barnes & Noble is doing wrong

Initially I wanted to write a post about B&N losing its prime location in downtown D.C., a few years after it lost its prime location in Lincoln Center in NYC, both at lease renewal time (put another way, the landlord wanted more money than B&N wanted to pay). Then I dropped by my local B&N earlier today and it was once again a struggle to pay because the cashier pushed and pushed and pushed for me to get the B&N member card, which I had no intention of getting.

This has happened every single time I've bought something at B&N so one has to conclude it is not an issue with a specific cashier but a company-wide policy probably incentivizes the clerks' annoying (I'm tempted to write: harassing) behavior. Somewhere the executives are popping the champagne at how easy B&N execs are making their job. The fact is, many years ago I used to have the membership card and I stopped renewing when they started requiring a credit card and forcing auto-renewal. I'm not sure they reverted to the old way but I never became a member again and haven't looked back. The cost of a yearly membership is $25 or a hardcover a year. Focusing on getting membership money by default instead of letting people opt back in makes B&N petty and out of touch with reality. 

This is where the fact that B&N lost its flagship store in D.C. comes in handy. Maybe headquarters should have put in more efforts in making sure that the Lincoln Triangle fiasco didn't happen again (I really miss that store) and fewer efforts in obsessing over membership money. Sure, given that B&N is a company - not a charity - it's probably priced at an amount that makes B&N come out ahead overall (many people probably get the membership but don't buy enough books to recoup their money in book discount). But really, one has to keep a sense of perspective. You have to sell a lot of membership cards to make up the revenue from the lost flagship store. More focus on leases, less focus on membership cards, please.

For those of you who want to improve their salesmanship skills, here is an overview of the sales spiel of today. The checkout clerk was particularly savvy because she asked me straight out for my B&N membership card number, not even asking if I had one, giving the feeling that of course I should have one, and then she opened her eyes wide and looked enormously surprised that I didn't have one and insisted in knowing why with shock still plain to see on her face. And I dodged because I wanted to give a truthful answer (I think B&N membership card practices are shameless and it is an outrage how they push the membership card when a customer is trying to pay for her purchase - do you prefer that I read the magazine in your store and leave it there?) but the day I do it I'll make sure there are a lot of other people in line so I have an audience while I give B&N a piece of my mind. I'm serious. So I dodged and the funny part was, the saleswoman had a high-pitched voice when she was asking for my B&N card number and then acting the surprise bit, but when she saw she wouldn't sway me her voice returned to a slightly lower register. I'm not sure if she realized that the change in voice gave away that she had been playing a role, but I felt sorry for her so I made a point of being extra polite and she was a whole lot less friendly when she handed me my purchase.  I suppose being a B&N clerk is no fun. 

Besides, I think the B&N membership card setup is profoundly flawed. Upfront membership fees for loyalty programs are outdated. Think of loyalty programs at fast-food chains like Cosi or Panera: the cards are free, when you visit enough you get a reward. This setup has been successfully applied by indie bookstores like Harvard Bookstore: once you have purchased $100 worth of books, you get a 20% discount on your next purchase. There is no expiration date for the dollars purchased. B&N should do something like that. Because customers would come out ahead (there is no downside for them because no upfront payment), it would show it is putting customers first, something that seems to be profoundly lacking from its current strategy. It would also give it an advantage over because the discount once you have reached the milestone dollar amount could be applied to any books of your choice (in that one purchase after you hit the dollar threshold), and doesn't give big discounts on all the books, so certain books could become noticeably cheaper at B&N when using the discounts.

Finally, let me end this post by suggesting ideas for what B&N should do regarding its brick-and-mortar stores. Since is opening physical bookstores, surely there is a future for brick-and-mortar bookstores. The problem with B&N is that people do a lot of browsing without buying and the inventory doesn't move much. So the big store with the big lease payments ends up being a book show room while the customer takes notes of what he will order on Amazon, now that he has seen what the book is like (and is further motivated by the desire to avoid interacting with the rude B&N cashiers.)

Maybe it's time to try something different - get a smaller store near one of the B&N warehouses and have it serve as a show room for the online store but rotate the inventory very frequently and have only a few copies at most of each book, so that people can't count on having a lot of time for making their mind. If the book really sells well, then fresh copies can come in with the next rotation from the warehouse the following week. For instance, the online best-sellers of that week could come into the store, people would discover books they may not realize are popular otherwise (if you've ever tried to find new ideas for book purchases by wading through Amazon's bestselling lists you know what a great help this would be) and they would use their free membership cards to accumulate points and later save money on a discounted purchase.

It would help, though, if more B&N clerks actually seemed to care about books. I've had a few rare good surprises but mostly the clerks don't seem to know anything about the books they sell. (This is also detrimental to the growth of programs like storewide bookclubs that could help position B&N as a pillar of the local community.) On the other hand, most of the clerks have tried hard to help me find a book when I asked them to, which is better than nothing. In my ideal B&N, there would be more self-service computers to find where a book has been shelved, self-service checkout stations like in the supermarket to avoid interacting with the cashiers who push the membership cards and some sort of tele-clerk you can call up or chat with on the computer if you need recommendations or don't exactly remember the title of the book you're looking for. At a broader level, I think brick-and-mortar bookstores should try to reinvent themselves instead of hobbling along and that doesn't necessarily mean putting more games and toys in the stores, the way B&N is doing.

Joint and dual programs

This post is about the rise of joint or dual degree programs as a strategy to get graduates an edge by equipping with a unique breadth (rather than depth) of skills in the workforce.

The first joint/dual program I ever heard about when I first moved to the U.S. many years ago was the Leaders for Manufacturing Program at M.I.T. (now retitled MIT Leaders for Global Operations or LGO), so I’ll start with that. Technically, this one is a dual program, not a joint one. (Although the distinction between joint and dual programs blurs easily, joint programs tend to have courses specifically designed for the purpose of the program, while dual programs involve pre-existing courses from each participating department.)

The MIT LFM now LGO program was launched in 1998 to “develop technically oriented leaders who would help strengthen the U.S. manufacturing industry in the face of emerging global competition” (quoted from the website) and was expanded to “reflect the rise of service-based companies as well as the increasingly global orientation of operations and manufacturing.” It provides students with a MBA from the Sloan School of Management along with a Master of Science in an engineering discipline and is “the nation’s leading graduate, dual-degree program in engineering and management innovation.” Because each facet of the program leads to a degree, whether MBA or MS, with its own requirements, neither the business or the engineering education gets diluted or shortchanged.

The program relies on a strong connection with partner companies, which provide students with a six-month on-site internship - the cornerstone of the program, in the summer and fall semesters of their second year, following initial site visits in the spring. The students subsequently write Master’s theses (not simple reports) on their projects. Examples of theses include:

  • Development of a risk management system for consumables used in biopharmaceutical manufacturing,
  • Forward thinking in reverse: Design, implementation and continuous monitoring of a closed-loop supply chain using optimization, simulation and dashboard systems to maximize net recovery,
  • Simulation modeling to predict drug pipeline throughput in early pharmaceutical R&D.

Nowadays it has become common practice to talk about design thinking as a key tool in fostering innovation, a trend that emerged from Stanford’s pioneering (design school). It actually doesn’t grant degrees, let alone joint ones, so falls outside the scope of this post (however, a Master program in design is part of the Mechanical Engineering department), but joint programs with a design flavor include a M.B.A./M.A. program in Design Leadership, run jointly between the Johns Hopkins Carey Business School and the Maryland Institute of Art, as well as a Master’s in Strategic Design and Management by Parsons the New School for Design. This is in addition to M.B.A. electives on design thinking taught at institutions such as the University of Toronto’s Rotman School of Management for years.

The dual Johns Hopkins/MICA program is touted as “the MBA for both sides of your brain,” the result of a partnership to “link business management fundamentals with the creative approach to thinking and problem solving used by the world’s top designers.” The JHU/MICA program creators make the argument that “new approaches are needed to solve today’s complex global business challenges, and traditional MBA programs only offer traditional instruction.” It is not a bad argument - does the old MBA degree need a rethink?

The 20-month, 66-credit joint MBA/MA program in design leadership seeks to “make innovation [the] standard mode of operation” of students in the program and “enrolls students who want to be transformative business leaders at the highest levels by developing a next-generation approach to management and problem solving." While the Johns Hopkins part of the curriculum provides the usual courses in corporate finance and marketing, staples of MBA programs everywhere, MICA educates students in the foundation of design leadership (the very first course the cohort takes when entering the program), collaboration and multidisciplinarity, creativity and innovation, visualization and prototyping, sustainability and social responsibility, as well as competitive advantage.

An 2012 article in Ad Age about the JHU/MICA program provides glimpses in design thinking -- for instance, the day the reporter visited, students picked “personas” for an assignment, “fictional characters used by designers to represent different demographics that are created by consulting ethnographic research and people watching.” How they chose to present these personas to the class ranged from a Facebook profile to the content of someone’s handbag. They then discussed and demonstrated the problems their persona faced at the two places they were tasked with transforming: the gas station and the post office. The program is structured so that the students take courses as a cohort at MICA, but are spread among various sections at the JHU business school, thus sharing design concepts with their business peers more easily.

Parsons the New School of Design offers its Master of Science in Strategic Design and Management, to “prepar[e] students to confidently create, manage and lead design process-driven organizations.” Its goal is to incorporate design thinking, service design and sustainability through 36 credits of coursework in business and design-centered studio work. 

This growing trend in joint or dual programs aims at providing students with a structured dual education for greater competitive advantage. This is in sharp contrast with the traditional educational model relying on majors and minors, with independent course sequences that give students complementary skills but may not lead to a cohesive whole combining major and minor. The increase of joint or dual programs suggests that a key value of traditional higher education is becoming the creation of high-impact cross-disciplinary partnerships, opening doors and spurring collaborations. 

But even in the realm of joint/dual programs, the question of which programs should be “joined” remains open to debate. Should design thinking be combined with the business approach of MBAs? or the technological skills of Master’s students in engineering? What about doctoral students? What if design thinking turns out to have been a fad, and next decade's fad is instead to, say, combine management and history?