MUSEUM OPERATIONAL MODELS

"Musei Wormiani Historia", depicting Ole Worm's cabinet of curiosities.

To be relevant and valued modern museums and art galleries need to be governed effectively and managed efficiently and especially if they operate under 'public patronage'. It is no longer acceptable for modern institutions such as public museums and art galleries to allow the distinction between governance and management  to become blurred as can happen with smaller and non-metropolitan institutions. Nonetheless, effective governance depends upon there being a clear distinction between the roles of governance and management.

A simple way of understanding the distinctions is: Governance is the act of governing, determining policy – collection priorities, funds allocation, performance benchmarks, standards, etc. Governance defines expectations, grants power, or verifies performance and good governance connects wider communities with their museums and art galleries to assure community support for them. In museums and art galleries it is typically a separate process entrusted to a Board of Trustees/Governors with an appointed membership with relevant domain knowledge and experiences. These Boards are entrusted to maintain a standard of good governance, and plan strategically, on behalf of a constituency and/or a Community of Ownership & Interest. 

• Governance is the means by which rules are set and implemented. The more democratic and inclusive a governance mechanism is, the easier it is to win wide support for projects and programs. Likewise, it becomes easier to focus on what constituencies really want and actually value. Governance is always accountable to its constituency – shareholders, members, funding agencies, sponsors, et al. However, there are multiple types of governance ranging from  versions of autocracy to various manifestations of democracy that depend upon who is understood to own the collections in law and/or lore – the cultural property and intellectual property – invested in the collections. Governance's role is unambiguously to do with ensuring 'quality control' and that its role is distinct from management's.

• Management is distinct from governance and is tasked with carrying out the directions of governance. In all organisational activities ‘management’ involves coordinating the work of people employed to accomplish the goals and objectives determined by the governors/trustees. Moreover, it does so using the resources provided by the governors/trustees in efficient and effective ways. Management involves planning to realise objectives, organising, staffing, leading or directing, and controlling the museum/art gallery operation for the purpose of accomplishing goals. Management encompasses the deployment of and the manipulation of human, financial, technological and natural resources. Management is always unambiguously accountable to an operation's governing body for its performance.

Museums and art galleries have their foundation in Europe’s Wunderkammers – wonder rooms – and Kunstkammers – art rooms – of the late 16th C and 17th C. In a historic context, the keepers of Wunderkammers' collect objects belonging to natural history – sometimes fakes – geology, ethnography, archaeology, religious objects, antiquities, etc. The Kunstkammer was imagined as a kind of microcosm – a theatre of the world. It conveyed, symbolically, the patron’s control of the world, his – typically ’his’ – power and as often as not it functioned as a form of propaganda. Wunderkammers and Kunskammers are the precursors of the modern museum and their modern manifestations carry much of the cultural cargo they carried in the 17th C.

21st Century museums have often evolved out of much older institutions and institutions that have seen dynamic changes in the ways they are understood in the communities within which they are located. Some are public institutions evolving out of community initiatives over time, others the direct initiative of a governing body/entity and others as a component of an institution or organisation such as universities, societies, religious orders, etc.

The financial management of museums tends to fall within one or other of two models – cost centres and cultural enterprises. Nonetheless, in one way or another 'accountability' is an issue that will always arise albeit in different guises, at different times and in differing contexts.

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COST CENTRES: A cost centre is a division within a standalone entity – government (Local, State, Federal), business, institution – which is financed from the generated or devolved income of the entity and consequently adding to the cost of the organisation, but contributing to, enhancing, its reason d’être. 

Typical examples include research and development units, marketing and customer service divisions and museums. The following are indicative to cost centre arrangements:

• There are significant advantages to imaging simple, straightforward divisions as cost centres, since cost is easy to measure. 
• Nonetheless, cost centres create opportunities for managers to underfund activities in order to benefit themselves. Typically this underfunding results in adverse outcomes.
• As a cost centre has a superficially negative impact on profit it is likely to be a target for rationalisation and redundancies. 
• Operational decisions in a cost centre are typically driven by cost considerations. Investments in new equipment, technology and staff are often difficult to justify because indirect and intangible outcomes are hard to translate to outcome sought by the government, business, institution. 
• Typically cost centres are managed in an operational cultural mindset of hesitant activity defined by budgetary constraints. 

COMMUNITY CULTURAL ENTERPRISES: An enterprise is typically a project or undertaking, and one that requires boldness, proactive effort and an element of risk taking. ‘Enterprise’ requires a readiness to energetically embark on new ventures.

A Community Cultural Enterprise (CCE) is an organisation that applies commercial strategies to maximise an operation’s ability to improve relative to cultural and social well-being, rather than delivering maximum profits to shareholders. Community Cultural Enterprises can be set up either as: 

• A commercial for-profit operation delivering cash dividends and other tangible benefits to investors; or 

• A not-for-profit operation that uses surplus revenues to achieve its goals and grow the operation rather than distributing them as cash dividends to members, associates and sponsors. 

• Typically a CCE will take the form of a mutual organisation, a social enterprise set up to address a social problem, or a charity, or in the case of a musingplace, tell the culturally significant stories that spawned its existence. 

• Many commercial enterprises would consider themselves to have social objectives, but commitment to these objectives is motivated by the perception that such commitments will ultimately make the enterprise more financially valuable. 

• A CCE differs in that, inversely, they typically do not aim to offer any cash benefit to their investors, members, associates et al. 

• With museums and art galleries operating as a CCE there is a much stronger emphasis on community organising, democratic control of capital and mutual principles – and moreover rather than relying upon philanthropy. 

• Some entrepreneurs, whilst running a profit focused enterprise that they own, will make charitable gestures through the enterprise, expecting to make a loss in the process. 

However, a CCE is differentiated through: 

1. Its transparency and openness to public scrutiny; 
2. The evidence that its social objectives are elemental; and 
3. Its cultural objectives fundamentally underpin its operation.

For a CCE profit generation is a secondary despite the need to generate sufficient income/funds to sustain the operation.