November 2011 - "Just in
Time Comes to Nonprofits"
Remember back in the 1980s when “just-in-time” inventory control first came to America’s retailers? This key feature of “lean manufacturing” meant that retailers could squeeze
out costs by reducing inventory. “Inventory is waste” is just-in-time’s
In our times of sluggish recovery, the shoppers themselves are applying a “just-in-time” strategy. Consider these developments: Wal-Mart
reported that 2011 second quarter U.S. sales were flat, but the dollar stores reported higher sales. You might guess that shoppers would stick with the store that offers the lowest unit price, but that’s
not the case. Instead, more shoppers are buying smaller amounts on a just-in-time
basis, because they have less money in their pockets to spend. Rather than buy
a big box of detergent at a rock-bottom price per ounce, they buy a box that’s big enough to get them through the next
few days, but at a higher price per ounce. Wal-Mart itself is responding to this
new world by opening up Walmart Express stores that offer a fraction of the products than its super-sized stores offer.
Americans are applying the lesson that inventory is waste, and that’s changing their shopping habits.
It seems to me that the same effect is also is taking hold in the nonprofit world.
Nonprofits don’t report their earnings the way public companies do, so what follows is based on anecdotal evidence. Here’s what I see.
Friends in nonprofit theaters report three trends in our tough economy: subscriptions
are down and audience is down, but at some of the theaters, revenue from ticket sales actually is up. I notice a parallel trend at some museums. Membership is down
and attendance is down, but in some cases – including our own – revenue from ticket sales is up.
What may explain these trends is the public’s new just-in-time way of thinking.
People today are less willing to tie up their money with an advance commitment to theater subscriptions or museum memberships
– that’s bad “inventory” management. Because of tough
times, many people aren’t attending theaters or visiting museums as often as they used to, but when they make a decision
on short notice, they may be willing to pay full freight for a ticket. That helps
the bottom line, even if some of the tickets are unsold.
Will old habits return when the economy recovers? No. The just-in-time way of thinking is a social trend, as well as an economic strategy. It is often said of the Millennial Generation – those born between the late 1970’s and 2000
– that they are unwilling to make social commitments in advance. Museums
are discovering that new kinds of programs work best for that group, events that appear to spring up without much warning
and allow people to drop in and out. If the evening is going well, they will
invite their friends to join them by using social media. The Millennials are
as interested in great content as everyone else, but they won’t sit still for a long talk. Think of how foreign this new kind of format is to the world of advance theater ticket sales.
And have you noticed that discounts today also are shaped by just-in-time thinking?
Groupon offers the reigning discount concept for the Millennial Generation. It
is based on daily offers and immediate use. Since theater subscriptions and museum
memberships are discounts stockpiled in inventory, they just won’t work the same way anymore.
Do subscriptions and memberships have a future? Yes, but they need to
change. One of the nine goals of the Chicago History Museum’s strategic
plan is membership. Membership will thrive if it sheds its old skin and takes
on the coloration of the friend-and-fan world of social media. We have taken
a first step in a bold experiment with our neighbor, DePaul University. All of
DePaul undergraduates are scheduled to become members of our museum for free. We
will communicate with them exclusively by email and social media. They will enjoy
full member discounts and will become involved in our programs as they choose. In
other words, they will have the run of the museum on the kind of drop-in basis that their generation favors. We hope to build loyalty by friending Chicago’s future leaders.
Gary T. Johnson,
President, Chicago History Museum
October 2011 - "Museums and Shelf Space"
Consider this observation by Kenneth Hoffman,
the Education Director of the National World War II Museum in New Orleans. "Students
learn about World War II maybe four days in middle school and four days in high school.
Eight days is not enough for a world event of such importance."
That's a classic statement of a "shelf space
problem," a very useful business concept for nonprofits. Everyone can visualize
what happens on store shelves:
· Which product categories get a shelf?
· On each shelf, which particular items get displayed?
· How does the store decide which products go on the best shelves?
Let's consider different types of responses
by museums to shelf space problems, starting with the National World War II Museum.
There, one strategy is to offer new products as a way to get placed on more shelves.
Here's the thinking. Because of urgent national needs, our society places a high value on STEM education: science, technology, engineering, and math. In effect, our
schools are building new shelves for those subjects. The museum is looking for
ways to tell the story of the war using those disciplines. It wants a place on
shelves other than the history shelf. The war brought about new technology innovations,
such as radar; that would make the war a great field of study for technological innovation.
The nuclear age that we live in today began with the development of the atom bomb; there are lessons for physics and
engineering. Why not offer insights about how the war affected the environment? Other new fields of study are possible, too.
But it's not enough for a museum simply to
create a new product line. Holding a place on a new shelf means that the product
offered must meet a genuine need. The new product can't just be a "come-on" for
the existing product. Making good on that promise will determine whether the
initiative succeeds or fails.
Our own Chicago History Museum is considering
a new exhibition for family audiences, "Chicago by the Numbers." However engaging
the exhibition might be to history lovers, it won't win over math teachers unless it helps their classes to meet the state's
goals for math achievement. That's a brutally honest fact, but winning and holding
shelf space is never easy.
There are no shortcuts to getting new shelf
space, as the mixed experience with state education mandates illustrates. In
Illinois, Holocaust education is mandated, but it seems that the mandate is followed only when local schools develop a genuine
interest in this important subject. The Illinois Holocaust Museum & Education
Center offers a valuable service by offering a very moving museum experience and by developing curriculum. Another example of a mandate in Illinois is the school holiday in honor of Casimir Pulaski. This potential teaching moment generally is ignored because interest among educators is weak. Even with a mandate, it takes a battle to win shelf space.
Is having a very broad mission a disadvantage
when it comes to winning shelf space? Yes.
Natural history museums definitely have that very problem in today's brand-focused culture. If a museum seems to belong on many shelves, then it may wind up on no shelf. Even an encyclopedic museum must offer "products" that correspond with familiar branded categories.
An important but narrowly-focused mission
also runs into a shelf space problem. In that case, one very useful strategy
is to understand that the museum’s subject matter is part of a wider story.
Consider the National Underground Freedom
Center. This museum opened in 2004 in Cincinnati, an important stop on the Underground
Railroad's route for escaping slaves. The museum’s website tells how the
story of the Underground Railroad is used to draw far-reaching lessons. The underlying
theme is that the path to freedom – historically and in contemporary times – is a constant struggle requiring
courage, perseverance and cooperation among people of diverse backgrounds willing to help one another. The mission is to inspire everyone to take courageous steps for freedom today. The Center also presents the world's first museum-quality, permanent exhibition on the subjects of modern-day
slavery and human trafficking. Visitors are also asked to make a personal commitment
to be 21st-century abolitionists in the cause of freedom.
The Andersonville National Historic Site
in Georgia takes a similar approach and uses one important story to tell a bigger and continuing story. As stated in their website, From the Revolutionary War to Operation Iraqi Freedom, American prisoners of
war have endured untold hardships, and shown tremendous courage. Andersonville NHS commemorates the sacrifices of these brave
Americans through exhibits in the National Prisoner of War Museum; preserves the site of Camp Sumter (Andersonville
prison); and manages Andersonville National Cemetery.
But once again, there are no shortcuts to
getting the new "shelf space" that ought to come from broader appeal. You may
have noticed that both museums just discussed have the word "national" in their title.
This is a trend for museums that want to spread their wings, such as Chicago's Mexican Fine Arts Center Museum, which
in 2006 became the National Museum of Mexican Art. In order to win shelf space
battles, however, "national" museums need to make good on the promise conveyed by the name with broad, not local, offerings. In particular, they need to find ways to reach a national and international audience,
which takes us to another important shelf space battleground: product placement
in the internet age.
There are two ways to get the best displays
for a product in a local supermarket: Offer a product so compelling that the
retailer feels compelled to give it prominence or pay for product placement. The
same is true for the web.
The way to have a compelling product that
rises to the top in internet searches is to "own your brand." Consider the Chicago History Museum once again. By changing the name in 2006 from the Chicago Historical Society to the Chicago History Museum, we left
a name behind that did not correspond with our function and acquired a name that says who we are. The term "Chicago History" also functions well for web searches.
Of course, Chicago history is too big a brand for any single institution to monopolize, but that's not a problem. Because of the strength of our collection and the service orientation of our staff,
we like to think we are the go-to source for Chicago history and a trusted guide for the crowds of organizations, communities,
and individuals that are doing their own Chicago history.
If you don't have a site so popular that
it rises to the top of search results, then you may want to pay for web ads or search engine optimization. In any event, remember that it is not enough to post good content and hope for the best. There are lots of "shelves" out there in web searches, and you easily can be demoted to the wrong one. Is search optimization worth the trouble? You
bet it is, because your mission is worth fighting for.
Time will tell whether the choices made by
the museums in these examples will succeed. In any event, visualizing a nonprofit's
"shelf space" reveals key dynamics that affect operations and also points the way to strategic responses.
Gary T. Johnson,
President, Chicago History Museum