Not All Innovation Sparks Growth

Arts organizations are working harder than ever—and falling further behind. They’re experimenting with nontraditional formats. Redesigning subscription models. Piloting pay-what-you-can pricing.

And still, the numbers don’t budge. Audiences dwindle. Loyalty erodes. Financial pressure mounts.

Ask any arts leader how to fix it, and you’ll hear a familiar answer: "We need to innovate."

They’re not wrong. But they're innovating in the wrong places.

The late Clayton Christensen, innovation legend, tells us why:

Not all innovation leads to growth. In fact, there are three types of innovation—and only one of them actually creates new demand.

Three types of innovation

Most of what the arts sector calls innovation falls into the first two categories.

Sustaining innovation focuses on increasing revenue. It squeezes more from current customers by tweaking existing offerings:

• Multimedia concert enhancements

• Wine allowed in the concert hall

• Reimagined stagings of classic works

These efforts often succeed in delighting loyal patrons and garnering media buzz. But sustaining innovations rarely attract new audiences in any significant way.

Efficiency innovation aims to reduce costs or streamline operations. It squeezes more from an already burned-out, demoralized staff:

• Trimming production budgets

• Producing fewer events

• Restructuring staff to do more with less

These moves can ease short-term budget pressure, but they don’t expand the audience, boost morale, or increase impact.

This leaves the third—and most transformative—category: market-creating innovation.

Market-creating innovation doesn’t improve what already exists. It builds new doorways. It creates new markets by solving unmet needs. And in doing so, it makes a product more accessible to more people.

Not offering more discounts, chasing the newest technology, or sending more direct mail. You're meeting the consumer in a moment that matters to them.

It’s not about the price

We talk a lot about access—often assuming people stay away from arts experiences because of cost. That’s true for some (and targeted initiatives can help.)

But there’s a much deeper barrier that’s making the arts inaccessible for wide swaths of the population:

Perceived relevance.

When a consumer doesn’t see how an arts experience connects to their life, they won’t show up. No matter how discounted the ticket.

Researcher Colleen Dilenschneider found that “Expensive experiences can still very much be ‘worth it.’ And inexpensive experiences can still be unworthy of a person’s time. What matters is the perceived quality of the experience relative to the admission cost.”^

This is the heart of the market-creating growth opportunity. Those who don’t attend your events—the nonconsumers—aren’t lost causes. They’re potential participants who’ve never seen the point. The arts don’t align with their perception of value.

Here’s what I mean:

Traditional arts marketing pushes the product (“Come see this world-class violinist”). It leaves the outcome implicit (“You’ll leave feeling emotionally recharged”).

But people don’t buy products. They buy outcomes.

And they ignore the products that don’t promise the outcomes that are relevant to them.

Driving growth through market creation

This is where market-creating innovation begins. Not by focusing on the product, but on the outcomes people are already seeking. From tweaking what already exists to creating new demand.

Clayton Christensen identified five key elements that enable this kind of growth:

1. A business model that actively targets nonconsumption

To convert consumers who have never engaged before, reimagine your business model. And start with the foundation—your value proposition.

Anchor your value proposition in real-world outcomes—like stress relief, connection, or wellness. That's how you create something newly relevant for people who’ve never seen the arts as “for them.”

That single shift reorients the entire model. It reshapes resource allocation and which processes get prioritized. It realigns your profit formula with relevance. It shifts the underlying incentives that drive everyday decisions.

2. An enabling technology

You'll also need an enabling technology. For Christensen, a technology is this:

“any process within an organization that converts inputs of lower value into outputs of greater value.”*

How do we achieve this impossible alchemy in the arts?

The enabling innovation in this case isn’t a gadget. It’s a repeatable system that lowers the threshold for participation by:

• Detecting hidden demand (via surveys, interviews, consumer research)

• Connecting programming to real-life needs

• Aligning marketing channels and messaging to these needs

It’s a customer insight engine. A relevance-matching system. Pairing people with the offerings that will help them achieve the outcomes they seek. In short, customer-first marketing—if it's truly outcome-aligned and systematized.

This is what makes the arts accessible to people who have never seen their value before. Not because the art has changed, but because the pathway to participation has.

3. A new value network

Your value network your the ecosystem of stakeholders. Their expectations shape what you prioritize. They dictate what gets funded, celebrated, measured, and protected.

In the old model, this network rewards internal goals. Goals like artistic complexity, traditional formats, and long-standing donor preferences. That may serve current patrons well—but it raises the price of relevance for everyone else.

Outsiders often face hidden costs: cultural codes they don’t understand, experiences that don’t reflect their needs, and signals that the arts aren’t for them.

Creating new demand means building a new value network—one that rewards relevance, welcomes experimentation, and supports different definitions of success.

When your network shifts, your model can too—allowing you to design experiences that are truly accessible and resonant to new audiences.

4. An emergent strategy

You won’t have all the answers upfront. And the new market may seem counterintuitive at first. Market-creating innovation requires real-time learning to align with real consumer needs.

Start with the macro—gather data on what matters to consumers from national studies.

Next, pivot to the micro. Use that macro data to confirm what patrons, lapsed patrons, and nonconsumers prioritize.

Finally, round out your understanding with qualitative research. One-on-one conversations illuminate the customer journey and uncover powerful language for marketing.

5. Executive support

This work is impossible without a leader who's on board. Someone who can:

• Challenge assumptions

• Reallocate resources

• Stay focused on the long game

• Shield the change effort from short-term pressure

• Champion relevance as a strategic priority

• Create space for experimentation and iteration.

Without a strong change leader, even the best ideas stall before they have a chance to spark growth.

Together, these five elements turn good intentions into actual transformation. They make it possible to engage and convert those who’ve never seen the point of the arts before.

When relevance IS inclusion

Relevance isn’t a brand refresh. It’s a reorientation around what people value today. The explosion of interest in mental health, digital detox, and belonging—these aren't fads, but signals. People are actively seeking connection, calm, purpose, and growth. And the arts are uniquely positioned to meet those needs—if we have the courage to reframe what we offer.

• Arts + Wellness = Mental health, calm, joy

• Arts + Social Connection = Belonging, community, shared meaning

• Arts + Screen-Free Experiences = Presence, immersion, digital detox

These aren’t marketing angles. They’re new categories of value. That’s what growth-driving innovation looks like.

Here’s the not-so-impossible alchemy:

You are now “converting inputs of lower value into outputs of greater value." And you’re accomplishing what's eluded arts organizations for so long. You're making diversity, inclusion, and access inseparable from your core value creation.

By anchoring your work in customer outcomes, you open access and illuminate value for those who previously saw none.

You don’t just reach more people. You create relevance across ages, ethnicities, income brackets. And in doing so, you make inclusion not a parallel initiative, but the engine of your growth.

That’s how you build diversity, inclusion, and access into the fabric of your business model.

And that’s how the arts become essential again.

______________

* Clayton M. Christensen, Efosa Ojomo, and Karen Dillon. The Prosperity Paradox: How Innovation Can Lift Nations Out of Poverty. Harper Business, 2019.

^ Colleen Dilenschneider, “Expense vs. Value: Are Museum and Performing Arts Tickets Worth the Cost? (DATA),” Know Your Own Bone (blog), July 3, 2024, https://www.colleendilen.com/2024/07/03/expense-vs-value-are-museum-performing-arts-tickets-worth-the-cost-data/.