Hi, I’m Aaron, the latest blogger to join the Backstage flock.

A Midwestern boy all my life, I came to Chicago after college to be an actor. But less than two months after my arrival, I was working full time as a company manager. I refused to take the hint, and weakly pursued my acting career, until I realized that I shouldn’t. In the years that followed, I spent some time in the corporate world, started business school, and found my way back to the arts, on the finance side. I’ve been called both a “cold-souled bean counter” and a “budget god” by artists who don’t know me.  I’m also Backstage Theatre Company’s Treasurer and a Board member. So it may not be a total shock that I will be writing about the business of the art on this blog.

Fortunately for me, the business of the arts is on everybody’s mind, now, because of the R-word. Recessions wake everybody up, even nonprofits. But the dramatic stock market drops last fall brought it home like a staplegun to the trachea. Well-endowed nonprofits shivered as their assets shrank by 30% in two months. This counts for foundations, too. Foundations exist to give away the earnings on a pot of invested money, and collectively are a major supporter of arts. If that pot shrinks by 30%, you’ve got less to give away. So even organizations without an endowment, but with major foundation support, like Backstage, feel the pain.

But truthfully, the pain has barely begun. Most endowed organizations smooth out spikes or drops in invested asset values when they draw off earnings. So a sudden drop can cause an organization’s cash flow to decline more in the second year than the first, and even more in the third year…

Why am I telling you all of this?  If you wanted a tranquilizer you wouldn’t be reading this blog, now, would you?  The thing is, this magnitude of loss is not something we can reasonably expect to bounce back quickly. It will take years. This leads to a lot of conversation around “the New Normal.” It means “Oh shit, what now?” For some, the new normal is wherever we hit bottom. Other glass-is-half-full-types prefer to think of the new normal as the amount of business we will be able to sustain after the recession. Bold visionaries like to think they they will establish the new normal, and others will rally and resources will flow.

I suggest the new normal is not a point on a Dow Jones chart, nor a different theatre revenue structure (though it could include the latter). The new normal is simply a heightened level of experimentation and adaptation. Darwin’s 200th birthday combined with the onset of a recession led to an overuse of the famous maxim that evolution favors not the strong, but the most adaptable. Overused, but true.

How do we adapt? Not by crystal ball gazing to miraculously know what donor development strategy is going to work, or which untapped market of potential subscribers will suddenly be interested. If you’re planning to hire a consultant to give you the silver bullet, call me instead. I’ll work for half the price and give you the same results, and I won’t even waste your time by showing up. No magic formula. Instead, we’re going to have to try a lot of stuff, and probably fail at a lot of stuff. It’s going to be work, and there will be frustration. If it helps, we can think of it like auditioning, and stop expecting that every idea to attract donors or develop audiences will be a hit.

What else does adaptation not mean? It does not mean that we should try to be all things to all people. Read Cody Brown’s remarkable analysis of the parallels between Twitter and MySpace to get a clear sense of the danger to a company that doesn’t know its own identity. Adaptation and experimentation may require that we dig in to a little self-discovery to get a better sense of our identies, but it is no excuse for fragmenting ourselves.

We need to experiment with new ways to communicate the value that we offer to our audiences. It may be a game of “justify our existence” in the community live and online. It may be a blitz of promotional novelty or creative fundraising efforts. It may be cooperative cross-promotion with our competitors. It will probably be all of the above. Best of all, this is an opportunity for a growth spurt of innovation. Check out what Collaboraction and the Driehaus Foundation have been up to (scroll to the bottom of this page and look for the Driehaus Foundation Money Back Guarantee). Box office heresy, and a fantastic idea! More innovations like this are sure to emerge in the next year.

We should never let a good recession go to waste. We must use it to justify some sacred-cow-tipping on the business side, and we must use it to motivate structural creativity as if our survival depends upon it. Because, of course, it does.

So, what is your New Normal? Despair? Innovation?

In what ways should Backstage adapt and develop our New Normal? Any tactics that we really should have tried already?  Let us know below.