I n mid-September 2008, the British artist Damien Hirst broke all rules of the art market. He bypassed conventional distribution channels – dealers and gallery owners – by directly partnering with Sotheby’s auction house, which successfully sold more than 200 pieces of his work. For the first time, Sotheby’s auctioned artworks that were less than two years old, another break from tradition. Hirst earned more than £110 million from the auction, in the midst of a global economic crisis and on the
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  I n mid-September 2008, the British artistDamien Hirst broke all rules of the art market.He bypassed conventional distribution channels– dealers and gallery owners – by directly partneringwith Sotheby’s auction house, which successfullysold more than 200 pieces of his work. For the firsttime, Sotheby’s auctioned artworks that were lessthan two years old, another break from tradition.Hirst earned more than £110 million from theauction, in the midst of a global economic crisisand on the same day that Lehman Brothersinvestment house collapsed.In the two decades leading to the auction, Hirst’swork focused on the processes of life and death. Hiswork was grouped into three broad areas –sculptures, paintings and glass tank pieces. Hissculptures were most strongly represented by hiscabinet series; he displayed collections of surgicaltools or hundreds of pill bottles on shelves or evenin a life-size recreation of a chemist’s shop. Thepaintings were divided into spot and spin paintings– spot paintings being randomly organized, colour-spotted saucer-sized discs, and the spin paintingsproduced on a spinning table, so that each workwas created through centrifugal force. The tankpieces typically incorporated dead and sometimesdissected animals (cows, sheep or sharks) preservedin formaldehyde. More recently, Hirst diversifiedinto modern interpretations of memento moriartworks, art that was first created centuries ago.Hirst is an artist, entrepreneur, and strategicinnovator; here, we reflect upon the lessons Hirst’swork and life offer for organizations and managers.We suggest that Hirst’s rise to prominence shouldbe understood in terms of his ability to break fromestablished and preconceived norms of the artworld. Hirst felt that, by the end of the 20thCentury, the established art world had becomevictim to a phenomenon that psychologists term“inattentional blindness”, meaning that when © 2009 The Author | Journal compilation © 2009 London Business SchoolBusiness Strategy Review Winter 2009 40  THE SHARK IS DEAD: HOW TO BUILD YOURSELF A NEW MARKET British artist Damien Hirst is both controversial and successful.  JörgReckhenrich, Jamie Anderson and Martin Kupp suggest that his innovativeapproach to life and work demonstrate strategies useful to organizations.         T        h         i       n        k         i       n       g  attention is very focused on specific tasks orapproaches, humans often fail to perceivesignificant events, threats or opportunities that areoutside their focus. Hirst was able to smash thethick and opaque lenses of tradition in theestablished art world; by doing so, the innovativeartist strategically innovated. In turn, Hirst’sinnovative approach saw the emergence of a newmarket space, a space in which he was theundisputed first mover and dominant player. Hirst became his own brand. Bad boy of contemporary art Hirst was born in Bristol in 1965. His father workedas a motor mechanic, his mother for the CitizensAdvice Bureau. As a young man, he applied foradmission to Leeds College of Art and Design butwas rejected. He then worked for two years onLondon building sites before studying at GoldsmithsCollege, University of London, between 1986 and1989. After two years at Goldsmiths, Hirst didcurate an independent student exhibition called“Freeze”. From the beginning, he understood thatin the abundant number of artworks, which wereoffered to visitors through countless exhibitions, thecurator set the rules. Hirst’s own contribution wasnot very spectacular. It was a sculpture consisting ofsimple cardboard boxes painted with householdpaint. Charles Saatchi, one of the UK’s leading artcollectors and the co-founder of the globaladvertising agency Saatchi & Saatchi, visited theshow. He and Hirst established a professionalrelationship, a relationship that became acornerstone of Hirst’s career. After graduation, againHirst acted as curator of two warehouse shows withhis friends, Carl Freedman and Billee Sellman.Once more Saatchi visited the shows and isreported to have stood open-mouthed when helooked at Hirst’s first major animal installation, “A Thousand Years”. This work was composed of alarge glass case containing maggots and fliesfeeding off a rotting cow’s head. Maggots hatchedinside a transparent box, turned into flies, then fedon the cow’s head before breeding and repeatingthe cycle. The Saatchi years (1991–2003) From that moment Saatchi gave Hirst carte blanche and offered to fund whatever he couldproduce. The result was presented in 1992 in thefirst Young British Artists show at the SaatchiGallery. Hirst’s first Saatchi-funded work was titled“The Physical Impossibility of Death in the Mind ofSomeone Living” and was a large shark informaldehyde in a transparent vitrine. Hirst’s firstmajor international presentation was at the 1993Venice Biennale with the work, “Mother and ChildDivided”, a cow and a calf sliced in halves andexhibited in separate glass tanks of formaldehyde.With the full backing of Saatchi, Hirst’s showsturned into ongoing successes; in 1995, he won thefamous Turner Prize. This was the same year thatNew York public health officials banned an artworkfeaturing a rotting cow and bull, because of fears of“vomiting among the visitors”. That ban resulted ina storm of media coverage for Hirst’s show in theUnited States.The professional relationship between Saatchiand Hirst began to unravel in 2003 when Saatchi’snew gallery opened in London with a show thatincluded a Hirst retrospective. Hirst disassociatedhimself from the retrospective to the extent of notincluding it in his CV. He was angry that a mini-carhe had decorated for charity with his trademarkspots was being exhibited as a serious artwork. Thisspat eventually led to a professional split, and Hirstembarked on a mission to become moreindependent from Saatchi, who still held a third ofhis earlier works. In September 2003, he had anexhibition, “Romance in the Age of Uncertainty”, atthe London gallery of his friend Jay Joplin andearned £11 million, bringing his estimated wealthto over £35 million. The years after Saatchi Following his split from Saatchi, Hirst seemedacutely aware of the need to anchor his reputation.In June 2006, Hirst exhibited his work alongsidethat of Francis Bacon at the Gagosian Gallery,London. Hirst showed, among other works, a newformaldehyde work titled “The Tranquillity ofSolitude” that was influenced by Bacon. By doing © 2009 The Author | Journal compilation © 2009 London Business SchoolBusiness Strategy Review Winter 2009 42 What is inattentionalblindness? Imagine the following experience: you aresearching for a free parking space on a busySaturday morning. After driving around for 10or 15 minutes, you eventually find a place topark the car. At work on Monday, your colleagueasks why you snubbed her. She was waving atyou from the pavement, but you seemed to lookright through her. This is a phenomenonpsychologists term “inattentional blindness” –when attention is diverted to a specific task,approach or process, humans often fail toperceive new stimuli. And it is thisphenomenon of inattentional blindness thatcan lead even the most experienced managersto ignore opportunities to innovate – to identifynew customer segments, to discover newproducts or services, or to invent new ways ofdelivering value.          T        h         i       n        k         i       n       g  so, Hirst achieved an important step towards theestablished side of the market – customers couldbuy a piece of his artwork that combined both newand traditional themes. In May 2007, Hirst made anew statement through his exhibition at the WhiteCube gallery in London. The centrepiece of theshow was “For the Love of God”, a platinum cast ofa human skull adorned with 8,601 diamonds worthsome £15 million, a cost that stretched theboundaries of contemporary art production. Theasking price for the skull was £50 million. It didn’tsell outright but was sold a few months later to aconsortium that included the White Cube Galleryand Hirst himself. Hirst’s skull project allowed himto innovate along two dimensions. First, he relatedhis work to one of the most popular subjects of arthistory, the memento mori, but he went far beyondobjects previously created in terms of expense andextravagance. Second, after its sale, it was exhibitedin one of the most well-established homes oftraditional art, the Rijksmuseum in Amsterdam. Theexhibition seemed a win-win situation for the artistand the museum. Hirst received the honour andaffirmation of having exhibited in the Rijksmuseum,while the museum attracted thousands of visitors. The dance around a golden calf In 2008, Hirst announced his next unusual move,bypassing his long-term galleries to hold his nextshow at Sotheby’s auction house. The star itemswere “The Golden Calf”, an animal with 18-caratgold horns and hooves preserved in formaldehyde,and “The Kingdom”, a preserved tiger shark. Otherpreserved animals included a zebra and a“unicorn”. The sale included spot and butterflypaintings, many incorporating gold and diamonds;these had begun to attract some attention fromcritics, who questioned the degree to which thesepieces were really Hirst’s own work, given hisincreasing use of production assistants. Some 21,000 visitors viewed the items on offerat Sotheby’s, while the auction itself was open tojust 656 ticketed clients. All lots on offer on thefirst night were sold for a combined sum of £70.5million, exceeding Sotheby’s estimate of £65million. The £10.3 million sale of “The GoldenCalf” beat Hirst’s previous auction record. “TheKingdom” sold for £9.6 million, more than £3million above its estimate. The second day of thesale raised £41 million, making a sale total of £111million for 218 items. The auction was successfulbeyond any expectations, setting a world record forsales by a single artist and countering claims thatHirst’s mass production of certain pieces mightnegatively impact prices for his work. Creating new market space Hirst has clearly broken the rules of the establishedart industry, and his success provides a number oflessons for organizations. Much of the establishedtheory and approaches to competitive strategy focuson how a firm can analyse the dynamics within anestablished industry and then develop an approachto position itself within that industry. There is asignificant focus upon understanding establishedcompetitors and developing approaches to beatincumbent firms along dimensions such as lowercost or product differentiation. Equally, firms areencouraged to identify existing customer demandand then to serve that demand faster or better thanother firms. While these approaches are important,they can result in inattentional blindness – notbeing able to see something that is really there.Humans have a limited capacity for attention, so when their attention is focused on a task,established process or learned behaviour, they often fail to perceive significant events or stimuli. It is a phenomenon that can lead even the mostexperienced managers to ignore opportunities, fail to create new market space or strategicallyinnovate. To overcome this blindness, a managerneeds to ask three questions: Who  are the customers that our organization doesnot see? What  are the products and services that we areblocking from our consciousness?Are we blind to new ways of how  we might operateour business?But asking these questions is not enough – theorganization must develop people and processesthat can interpret and respond to the answers. Just as a blind person who regains sight cancontinue to be perceptually blind, so theorganization can reject discoveries that do not fitwith its own preferred reality. One of Hirst’s andSaatchi’s earliest breakthroughs was the Business Strategy Review Winter 2009© 2009 The Author | Journal compilation © 2009 London Business School 43  Hirst earned more than £110 million from the auction, inthe midst of a global economic crisis and on the same daythat Lehman Brothers collapsed.         T        h         i       n        k         i       n       g

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