Creativity and Commerce

Valerie | 12 Oct 2009, 16:10

C&binet ambassador comment: Patrick McKenna, Chief Executive of Ingenious Media, a leading investor in the creative industries.

Creativity and commerce often make uneasy bedfellows.  Here, in an interview first published in HOUSE magazine, Patrick McKenna talks about how we need to get entrepreneurial business talent and creative talent working better together.

“Creative talent is highly mobile and UK creative talent is particularly attractive to global companies. Whilst this isn’t a bad thing in itself, we must build greater business capacity within our own creative industries so that the UK can benefit from the commercial opportunities generated by our writers, producers, musicians and other artists”.

The relationship between art and commerce has always been fraught.  Business and creative people are often motivated by quite different impulses. There doesn’t have to be conflict of course.  Having worked with some of the biggest names in the creative world – from rock stars to theatre directors – I know from long personal experience just how rewarding, enjoyable and productive good partnerships can be when you get the essentials of the relationship right.

The UK has always had a strong entrepreneurial culture to complement the strength of its artistic culture.  This combination of attributes reflecting two different forms of creativity has often proved beneficial in helping to fuse the needs of art and commerce. 

In small businesses the benefits of matching such different skill-sets are usually obvious.  However it’s often not so obvious when it comes to bigger businesses.  Here there is frequently a gulf of understanding and trust to bridge - between finance and investment on one side, and creativity on the other. 

As a young partner in one of the major accounting firms I could see the growing importance of talent to business and therefore took a very conscious decision to learn everything possible about the entertainment world - how the relevant bits of the legal system worked, how the commercial side of things worked, and most importantly how the creative process itself worked. I read up on all the technical stuff and but also spent time with some very talented individuals from film, theatre, music and television learning about their aspirations and concerns.  After that it was much easier for me to talk business with artists, managers and entertainment entrepreneurs so as to understand what was important to them and so help them to attain their commercial objectives.

Partnership is the key, particularly in an ever more competitive and complex media environment.  First there is the initial partnership between the creative artist and the entrepreneur.  Later on, when the entrepreneur wants to grow the business, another kind of partnership is called for – a partnership between the entrepreneur and a more experienced businessman or woman, someone for example who has a mastery of the financial markets.

The most successful partnerships are the ones that link a truly creative person – whether artistically or entrepreneurially creative - with a strong business person. It’s a waste of time, frankly, to expect a creative genius to become a skilled business type as well.  And conversely, a businessman or woman can never really become a truly creative person in the fullest sense, meaning someone with exceptional flair and originality. Of course we can all learn more about each other’s strengths and skill-sets, and it’s important to make this effort to get mutual recognition and respect.  But there are clear limitations on both sides. 
Entrepreneurs are visionaries who generally thrive in relationships with experienced business talent.  They tend to have very similar characteristics to creative and artistic people.  But it is a mistake to assume that all entrepreneurs are necessarily good at business. 

At the Really Useful Group my relationship with Andrew Lloyd Webber was essentially a marriage of creative and business skills – a kind of model partnership.  As long as there is clear empathy, real understanding and mutual respect for each other’s talents and abilities, then there’s no limit to what can be achieved.  This arrangement allows the individual with extraordinary creative talent to be able to concentrate completely on being creative, knowing that the money and business side of things is being taken care of.

This is not to say that creative people shouldn’t be interested in commerce – far from it.  What it means is that creative individuals in such partnerships are freer to focus on what they are best at and most interested in.

Everything we do at Ingenious is fundamentally based on this idea of partnership – it’s all about acting as a bridge between media and creativity on one side, and business and finance on the other.  We try to be sympathetic to the insights and needs of both parties.  Much of it is to do with that word experience. You need to have an exceptionally deep knowledge and understanding of progressive media and the creative economy to understand its particular “box-office” risk characteristics, to be able to execute this bridge-building function successfully.

Partnership is a two way street of course.  Sometimes creative people are not necessarily keen on full collaboration, influenced perhaps by their earlier choices of business or investment partner.  But for things to work to mutual advantage, partners on the creative side do need to be engaged with the commercial process, which means understanding the requirements of financiers as well as managing the expectations of the other partners.

People with creative talent are often shielded from the expectations of business by their relationships with managers or entrepreneurial partners, and this is no bad thing.  In such cases it is absolutely necessary for the entrepreneur to be able to balance the needs and expectations of all the interested parties.  This in turn means that they have to be more sophisticated in their interactions with the world of finance.

Building strong partnerships between business and creativity ultimately provides artists and their managers with more options. It helps them build better and bigger platforms on which to show off their talent, allows them to retain greater control over their “IP” and thereby hold onto a bigger slice of the commercial pie.
One common ingredient to success in the games, publishing, television, music and film industries, is of course great people. This may sound obvious but believe me spotting talent, whether creative or entrepreneurial talent, is by no means easy.  You can become a business hero in the entertainment world almost overnight if you can successfully identify and align yourself with an extraordinary new talent. But it’s easy to get it wrong.

All countries have their own distinctive cultures.  We are awash with creative talent in the UK, but we don’t have a culture of taking the creative industries seriously as businesses, unlike the USA.  This goes back to the education system.  There’s a lot of emphasis these days in our great art colleges on getting creative people to learn about the basics of business and entrepreneurship.  What I don’t see much of is evidence of students in business schools and on finance courses at universities being taught about the distinctive characteristics of the media and cultural industries and of the creative process.

It’s not surprising therefore that top quality business talent is rarely attracted to the creative economy sector.  There are business graduates out there who are well educated, have a choice about what kind of business to go into but generally don’t choose the creative industries because they see them as being uncertain, more about luck than judgment, or generally “flaky”, with the rewards going predominantly to “the creatives”. 

In the UK we need more investors, financiers and business folk to understand the creative process.  There is still a big gulf, generally speaking, between the worlds of creativity on the one hand, and finance and business on the other.  This is damaging to the overall prospects of the creative economy.  From an investor point of view, it is clear to me that if business people were more engaged in the creative process, understood it better and could see it working up close and personal early on, they would stand a better chance of recognising good business and investment opportunities.
 
Creative talent is highly mobile and UK creative talent is particularly attractive to global companies. Whilst this isn’t a bad thing in itself, we must build greater business capacity within our own creative industries so that the UK can benefit from the commercial opportunities generated by our writers, producers, musicians and other artists.  We should aim to retain more of the economic ownership of UK creativity, rather than seeing so much of the commercial upside disappearing to the USA and elsewhere.

To do that we need to build creative industry business capacity in the UK. The way to do that is by starting with small and medium-sized businesses, helping them with business and management expertise, helping them to grow sustainably and persuading them not to sell out to the first trade buyer who comes along. 

We also need to educate the financial and wider business communities to have a better understanding of the business opportunities being generated by the exciting new world of digital media.  There’s been a lot of talk about value destruction and collapsing business models, but there are also some fantastic opportunities out there if you know how to recognize them.

If we can make progress on these fronts we have the possibility of establishing a virtuous circle, where great creativity is matched by great business talent, which is matched by sustainable investment, which in turn helps generate profits and attracts better people and yet more investment, and so on.  This is a prize worth aiming for!