London Museums Group Team
London Museums | World Class Business Models
Originally posted on 19 July 2012 #LMGBlogArchive #LMGBlogArchiveProject
I specialise in sustainable business models and practices and in this guise I was asked by The Cinema Museum in Lambeth to help them review their business model and buy their current home from the South London & Maudsley NHS Trust. I`d been prepared to have to win hearts and minds on the wider sustainability agenda but was stunned how much sustainability was already reflected in The Cinema Museum’s aspirations and actions. At the time I wondered if this was rare museum practice but increasingly I am seeing that it is not!
Let’s consider financial sustainability. A topical issue in these dire times, where competition for limited resources is high and trying to find innovative ways of working better than ever and at a fraction of the cost is nearly everyone’s focus. One of the solutions offered to this problem is to `become a social enterprise’ but I get annoyed when museums are invited to think about this because most of them are already operating a social enterprise business model. And really well. Let’s look at how and why.
Firstly, what is ‘social enterprise’?
The old definition of social enterprise was created in early 2001 by the Department of Trade & Industry and was based on the notion that a social enterprise was a socially beneficial organisation that derived in excess of 70% of its income from trading. The charitable/voluntary sector lobbied against this definition because it excluded and denied many organisations access to the large funding pools and support available to ‘social enterprises’ at the time. This lobbying heralded a decade of ongoing renegotiation of the definition of ‘social enterprise’. The lobbying organisation’s purpose was to gain access to funding that was ring fenced for social enterprises and the politician’s purpose was to extricate themselves from the hot water their ever changing definitions kept dipping them into. However, the leaders of the social enterprise movement’s purpose was to direct all parties towards consensus around an accurate definition that worked in practice and was not ‘ever-changing’. It was and still is a political minefield and the debate trundles along albeit around a much looser definition.
There is nothing new about social enterprise. Essentially social enterprises are organisations that engage in some commercial activity in the way in which they deliver social, environmental, educational or cultural benefit. The profits of which are used to increase the level of benefit the organisation delivers rather than retained for personal gain.
So, how is a museum a ‘social enterprise’?
Clearly the museum complies with the above definition. The evidence on the ground is powerful; museums demonstrate an impressive array of profitable income streams and cost saving measures that most ‘non-for-profit organisations’ can only dream of. Museumsdeliver on government contracts and generate income from shops, cafes, educational programmes, image loans, membership, hire of facilities and film shoots as well as being expert fundraisers.Museums are also expert in running on a shoe-string, working with volunteers, and collaborative working; they understand the environmental impacts of their activities and have done pioneering work on energy saving.
Museums have a strong sense of why they exist. They adapt to create activities and income streams that match their aims and comply with the core values of their public mission statement. The social capital that emerges from their work and the social benefit that they deliver epitomises financial, social and environmental sustainability. Many museums embrace sustainability in its wider context by working with local supply chains and developing environmental practices that parallel their strong ethical culture Museums engage warmly and well with the human spirit and deliver a finely balanced combination of financial, social, educational and cultural profits. This is complex product development and social enterprise brand management at its best. Indeed, it is clear that museums’ business models are characterised by the type of innovation, diversity and robustness that ensures financial sustainability and effective ‘social responsibility’.
Museums as a business model of well-being and sustainability
At a time when people no longer trust high street banks, have lost faith with hollow commercial brands and are tiring of thin, poor quality public services a transactional gap is opening up between people`s time and money and what they reasonably and rightly want in return. People don`t have this consumer frustration with the museum sector. Museums are places where people find quality and a depth of experience where they are encouraged, respected and challenged. The museum experience is one of well-being and calm enrichment. It is unique, improving and heart warming. It offers value for money. Because of these factors the sector is trusted and its consumers confer respectability around its products, services and wider offerings. The public’s affection towards museums is an extraordinary business phenomenon and one that few sectors enjoy with their customers.
The museum’s business model is based on sustainability and is a classic example of the successful early adoption of the ‘social enterprise model’. So, my protective hackles rise when I hear people asking a museum if they have ‘thought about becoming a social enterprise’. Museums are amongst the earliest pioneers! Indeed, if I were advising the museums sector at the moment I might be suggesting that they add ‘social enterprise business advice’ to their range of products and services.
Tips and hints
Learn the language of social enterprise so that you can enter the debate, access support offered to social enterprises and address business-planning questions. You will get more value from advisors, consultants and board members if you can clearly articulate your business model and its relationship with sustainability and social enterprise.
Don’t be alarmed by terms that you may be unfamiliar with; they are often names for activities or models that you are already implementing.
Are you the CEO of a museum? Do you have any questions on the social enterprise business model and how it links to sustainability and museums? Please see my offer on Share London and I will be happy to answer any of your questions.
Author | LMG Member Katharine Ford, GK Partners and consultant to The Cinema Museum, Lambeth.
With thanks to the Cinema Museum and Katharine Ford for in kind support by hosting LMG events.