Lecture 5. From projects to products
Cultural organisations and creative enterprises quite often face a problem to find which operational models they are operating in. We can talk about three different models.

The first one is the one which is based on projects. These are so-called project-based organisations. Quite often, especially small organisations, cultural organisations, they are working with a number of projects. So, they seek funding from the grant givers or sponsors, and then they run the project, deliver the project, and then they look for another one. Or they may have several such projects running often in parallel, simultaneously. So, this is a typical mode of project-based organisations.

Then there is a second type. Those who are more product-based organisations, products or services. That’s would be your advertisement agencies or your cinema production companies, or they can be theatre production companiesthose who are delivering the product. They are filming one film after another, they’re providing service for producing advertisement. Or, let’s say, even the fashion designers. They do the collections, and this is like a product that every half a year you would expect a new collection coming on the market. And they have some products to sell. Or services to sell. And they are operating on the market, they have business processes which are arranged and created for delivering of these products and services.

And then there is a third type of operations that cultural organisations and creative enterprises might use. This is a mixed-use, which is when you have better products to sell on the market, and services, and then you also run some projects. In fact, you might think about the same theatre production companies. They might have regular shows that they are putting on for customers, for clients in the theatre in the city but then they have a project to design and to develop a new production. So, for them it’s a project that they are running.

So, what is a project? Let’s reiterate or remind ourselves. Project is a set of activities which are limited in time, limited in recourses and have clear outputs. And they are not repeatable, so this set of activities is ones-off in a way. Projects might be similar, they might resemble each other but usually each project is unique.

On the other hand, service and product is something which is pretty much the same or slightly adjusted, and you can buy again and again. Or you can sell over and over.

And so what are the challenges that organisations are facing between this three different modes? Organisations which are project-based quite often face the challenge of how to move into products and services. So you used to run after money in order to deliver projects: one project, another, next one... But then you don’t have a service or product that you can sell over and over.

On the other hand, if we look at the organisations or, especially, companies, creative enterprises which are selling products and projects, they quite often neglect this element that they need projects. Because they, for instance, need to prove their internal processes, let’s say they need to revamp their websiteit’s a one-off project for them to do. So, they have another, slightly different challenge.

How to deal with these challenges? What could be advised here? That’s what we’ll look now into.

So, the first challenge that organisations quite often are facing with their products and projects is distinguishing between the two. Make sure that you understand that definition of project that has been mentioned above. That it’s set of activities limited in time, with limited in recourses and with clear outputs. So, map what you have that could be understood as project, what you’re currently running. Again, if you have a product and service, you probably know what your product and service is. But for some organisations, especially project-based, you might not understand but in fact you are delivering a service.

Let’s say, several sponsors approached you to help them curate a programme for their cultural events. And you might think that this is a project, but in fact, what you’re doing is you’re delivering a service for your clients, sponsors who want curation services for music activities or events from them. So make sure you understand what products and services you’re already delivering or what projects you have in-house, what projects you’re already running and managing. So, map products and services, map projects.

The second challenge that cultural organisations and creative enterprises are facing is when there are too many projects. You run around, and here’s a project, there’s a project, here’s a small one, here’s a big one... then at some stage, it can become slightly overwhelming and messy because you don’t know who is responsible for which project even though all of your colleagues are project managers at the same time.

So how to deal with this mess? There is a great conceptit’s a project portfolio. You map all your projects and then you arrange them in the portfolio. You look which projects are internal onesso, projects which you are doing with your own resources to improve your institutional capacityin simple terms, in order to make your operations better. So, you do your website or you do reorganisation of your office because it can take three months and lots of recourses to do that.

And then you also have external projects, those who are receiving funding from external sources, either from grants, or from sponsors, or maybe you’re even charging audiences for that, or mix of the above, so they might have different financial models by themselves.

So, what are these projects? Are they big or are they small? But if you map that, you can actually then benchmark it with your organisational strategy. For that, there is another online course for strategic management. Then you might see that in your portfolio you have too many internal projects, and not enough external projects. Or, in fact, all your external projects are somehow outside your link in the value chain that you define in your strategy and you occupy. You might suddenly see that you have too many irrelevant projects or, in fact, too few of the projects that you need, let’s say, for internal development. Too many externally funded projects, not enough internal projects. And ‘enough’ is subjective, of course but applying this project portfolio management technique is a good way to manage your organisation.

Then there’s a third challenge. It’s how to move from projects to products and services. We’re talking about the situation where project-based organisations have many projects but, in fact, they are quite... they don’t know how to start putting on the market, selling on the market new products or services where they, in fact, have competences to deliver. Maybe they’ve already had some examples when potential customers approached them.

Think about cultural organisation... Let’s take an example. It’s a festival organiser in Ukraine; we’ve been running great festival, outdoor festival with ethnomusic spin for five years. It’s a well-known brand, and there are multiple of those in Ukraine, in fact. So, they’ve been approaching sponsors and getting grants, and every year it’s an exercise in order to get the funding, in order to have this festival going. And in fact, when this organisation is preparing sponsor proposals or writing grant applications, they might include a certain element, reserve the budget for people, time, in order to develop service, curation service for music industry. What I’m talking about is like… They know all the great musicians with an ethno spin. They have all the contacts, they know how to arrange a great show. And they can sell it as a service. They can offer it to companies who have their corporate events or even to other festival organisers who would have this block, maybe a bigger festival who would need this block. And they can offer curation services but they need to put the number (what is the price for this service?), they need to actually describe this service, how it would work operationally, or they can actually look about different model, when they would offer a service as agents or producers of new, up-and-coming musicians, when they would represent them vis-à-vis the distributors, vis-à-vis studios, arrange for music… And maybe there is a gap in this value chain, and they want to move there, but again, it takes time to figure out what does it mean to be an agent, how much should you charge bands for being their agent, which studio should you work [with]… It’s quite a work.

So, when you… this festival organiser runs a festival, why not to include in the budget a certain amount to work out, develop this service, run a pilot, and then actually, say, after the end of the festival you would have a service that you can offer to potential customers.

In fact, grant organisations and programmes and even sponsors do like to see that, because they see it as an element of sustainability, financial sustainability of project-based organisations. Because running from project to project... You can do that; multiple organisations working dozens of years like that but in fact at some stage it’s good to move to this mixed model, when you have certain products and services that people can just buy off the shelfcome and ask you, and you can name the price, we can negotiate and I can buy your services or products, and continue operating with projects in your projects mode.

So, we’ve just looked through these challenges that organisationscultural organisations, creative enterprisesare facing when dealing with projects and products, and we’ve got some advice and some ways how to look at the project portfolio, how to distinguish your products and services from projects, and actually how to convert your projects into products and services.

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