4. Writing assignment: “Cirque du Soleil”

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2. In the “Writing Assignment” thread of the week 3 discussion area, respond to the following questions by midnight Sunday:

Closing Case

Cirque du Soleil

Cirque du Soleil (Circus of the Sun) was formed in 1984 by Guy Laliberté and a group of fellow street performers when they won a grant from the Canadian Arts Council to provide entertainment to mark the 450th anniversary of Cartier’s discovery of Canada. From its modest beginnings the company has grown into the world’s biggest theatrical performance company with over 5400 employees from 40 different counties; a corporate headquarters, training and development centre in Montreal; permanent companies in Las Vegas, Orlando and Riviera Maya, Mexico; and four separate touring companies. Cirque du Soleil’s success is all the more remarkable since it has been achieved within an industry that was believed to be in terminal decline.

A brief history of the circus

The invention of the circus is commonly attributed to an Englishman, Philip Astley, in 1768. The early circus comprised of four main elements – equestrian events, clowns, acrobats and jugglers – and circus companies toured the country moving from place to place. Circus arenas were circular to facilitate the spectacle and to accommodate popular acts, such as riders standing on the backs of galloping horses. Astley’s innovative form of entertainment was quickly copied and, over time, spread to many different countries, with showmen like P. T. Barnum and the Ringling Brothers becoming legendary names in the business. Promoters added human and animal curiosities and menageries to their repertoires to enhance the display, and during its heyday in the 19th century whole towns would turn out to see performances as the circus passed through.

The Depression of the 1920s and 1930s together with two world wars took its toll on the industry and by the 1950s audiences were beginning to decline. Other forms of popular entertainment like cinema, television and sporting events were beginning to come to the fore. Increasingly, the circus was seen as something for children rather than adults and as the decades progressed even children’s interest in this form of entertainment began to wane, displaced by video games and other forms of amusement. At the same time, campaigns by animal welfare groups created bad publicity for circus companies and reduced the public’s appetite for shows that used performing animals. By the 1980s, the main surviving circus companies were the state-owned circuses of the USSR, China and other communist countries.

The reinvention of the circus experience

In the West, the skills and traditions of the circus – acrobatics, juggling, clowning and the bohemian, carefree lifestyle of the performers – were kept alive mainly by street performers. Guy Laliberté’s vision was the reinvention of the circus experience by building his troupe of acrobats, stilt-walkers, jugglers and musicians into an integrated, multisensory experience that would appeal to new groups of customers, including adults and corporate clients, who were more used to trips to the ballet and the opera. Cirque du Soleil preserved key elements of the circus experience – the tent, the clowns and the acrobats – but set out to enhance and transform each of them. The tent, long the main symbol of the circus, was redesigned for audience comfort and a sophisticated external image; the clowns shifted from slapstick to a more urbane style; animals were eliminated and the primary focus was shifted towards acrobatic displays of unprecedented grace, daring and sophistication. Cirque borrowed heavily from the theatre and developed its acts into multimedia spectacles with original musical scores and stunning lighting effects. Whereas in the past circus shows had comprised a series of disconnected displays, Cirque built its performances around story lines and, while it emphasized exceptional performances, eschewed celebrity acts.

The evolution of Cirque du Soleil

Cirque du Soleil’s transformation from a group of street performers led by fire-breather and visionary Guy Laliberté and co-founder Daniel Gauthier, a computer programmer who became the company’s business manager, into an international entertainment company involved risk taking and attention to building the resources and capabilities needed to realize Laliberté’s vision. An invitation to perform at the Los Angeles Arts Festival in 1987 proved a turning point. The show received critical acclaim and allowed the company to display its work to a much wider audience. The North American tour that followed enabled the company to establish itself on a sound financial footing.

The next two decades saw almost continuous expansion of Cirque’s activities. In 1990, Cirque travelled to Europe and two years later to Asia. In 1992, Laliberté sought a resident venue for Cirque’s shows in Las Vegas. After having been turned down by the board of Caesar’s Palace, who deemed the venture too risky, Cirque entered into an agreement with Mirage Resorts, which resulted in Cirque creating a resident show at Mirage’s Las Vegas resorts. This was followed by a deal with Disney to produce a resident show for the Walt Disney Resort in Orlando, Florida. The quest for permanent venues encouraged Cirque to ally itself with property developers to create mixed-use complexes that would be based on Cirque-created environments. A plan to acquire and convert London’s derelict Battersea Power station into a venue eventually failed – as did several other planned ventures. However, in 2014, Cirque announced an agreement with Grupo Vidanta to create its first resident show outside of North America at Riviera Maya, Mexico.

Expansion created tension and disagreement between the two founders. In 2000, Gauthier sold his 50% shareholding back to Laliberté for an undisclosed amount. In 2004, Laliberté stepped down from his roles as President and Chief Operating Officer and handed over control for day-to-day operations while retaining the titles of Founder, Chief Executor and ‘Guide’. In 2008, he sold 20% of his shares to two Dubai-based investment groups for $600m but still retains 75% ownership.

By 2014, Cirque operated four touring companies and had three resident locations. At Las Vegas, Cirque had built a huge presence: in March 2014, it was offering eight different shows in eight separate MGM-owned resorts. Through partnerships with other organizations, it diversified into a number of activities beyond its core Cirque du Soleil shows. These included a tour based on the life and music of Elvis Presley and two on Michael Jackson. Cirque was involved in movie and TV productions; special events, which included corporate and private shows and entertainment for sporting events such as the Super Bowl and the opening ceremony for the 2015 Pan American Games; a range of fashion clothing designed in collaboration with Desigual and sold through Cirque’s online boutique; and the design of restaurants, hotel lounges and nightclubs.

Cirque du Soleil’s management combines anarchy and meticulous planning. Its creative, training and operational activities are concentrated at its international headquarters in Montreal, where almost 2000 of its employees are based. In addition, Cirque has regional offices in London, Las Vegas, Macau and Melbourne. Key headquarters functions include:

Product development: New shows take two to three years to develop. One or two new shows are produced each year; a show may run for over a decade (Alegría ran for 19 years with more than 5000 performances). Each new show is developed by a creative team headed by an artistic director. The starting point is identification of a theme for a new show – an interactive process in which CEO Daniel Lamarre and founder Guy Laliberté are actively involved. The initial broad vision is developed through a process of creative friction in which team members are encouraged to challenge and contribute, sometimes as a single word, rather than a confined mandate, to allow others to have the flexibility to contribute during the creative process. The inspiration and creativity of the development teams are supplemented by input from researchers who feed information of cultural and artistic trends, which allows the creative directors to access the appeal of the new show’s content and style. Lamarre and Laliberté review progress every six months and suggest changes to the creative director.

Human resource management: Recruitment involves a global search led by the casting department, an international team of talent scouts. The HR database includes 24 giants, 466 contortionists, 14 pickpockets, 35 skateboarders, 1278 clowns, eight dislocation artists and 73 people classified as ‘small’ – including a one-metre tall Brazilian acrobat. Training, however, is concentrated at the Creative Centre within the International Headquarters, which includes three acrobatic training rooms, a dance studio, a studio theatre and weight-training facilities.

Logistics: In March 2014, Cirque was performing in 11 different cities throughout the world and 10 of these were touring. Taking down, shipping and setting up a show typically requires between eight and 11 days and is an immensely complex process, especially when it involves moving the show across national borders. The process is managed by the tour planning team based in the Montreal headquarters and involves close collaboration with Cirque’s logistics partner, DHL through DHL’s Global Trade Fairs & Events unit.

Technology: The Creative Centre also includes a design studio and production facilities for costumes and engineering workshops for designing and manufacturing sets. Information Technology and Knowledge Management play a central role in all of Cirque’s development and operating activities from the development of initial storyboards for new shows, through set and costume design, to the management of logistics, artists’ training and fitness programmes, productions, marketing and sales. An IT team is an integral part of each touring show. Knowledge management is critical to the development of new shows. Every aspect of the development of a new show generates documents and images that are stored in an interactive database which can then support learning, stimulate creativity and short-circuit development processes for subsequent processes.

Addressing the future

During 2014, Cirque du Soleil was forced into a painful reappraisal of its strategy. Cirque’s reputation and finances had been dented by a series of setbacks. During 2012, it was forced to close four major touring shows incurring losses of around $250 million. During 2012 and 2013, Cirque launched only two new shows: Amaluna and Michael Jackson One. While the latter received critical and popular acclaim, many viewed Cirque’s series of shows based round the lives of former rock stars (Elvis, the Beatles and Michael Jackson) as symptomatic of the company’s abandoning creativity in favour of commercialism. Amaluna had received a lukewarm reception from reviewers. Other new productions were also disappointments – most notably Cirque’s 3D movie Worlds Away, which flopped at the box office. In January 2013, the company laid off 400 members of its head office staff to streamline its operations in the light of rising costs and slowing revenue growth. Finally, the death of a female acrobat from a fall during a production of Ka at the MGM Grand was a blow to Cirque’s morale and reputation.

Some observers viewed Cirque’s problems as a consequence of over-expansion: during 2008–2011, it had launched 10 new shows and had diversified into a range of new ventures outside of live entertainment. Underlying the issue of Cirque’s optimal size and diversity of activities was the underlying tension within Cirque between creative artistry and commercialism. Cirque’s website extols its ‘creative approach’:

Cirque du Soleil was built on values and deep convictions which rest on a foundation of audacity, creativity, imagination and our people: the backbone of our success.

Cirque du Soleil places creativity at the core of all its endeavours so as to ensure limitless possibilities. This is why the creative challenge is of the utmost importance with each new business opportunity, whether it is a show or any other creative activity.

Cirque du Soleil dream is also an integral part of its philosophy: To take the adventure further, step beyond its dreams and, above all, believe that our people are the engine of our enterprise. Cirque du Soleil offers its artists and creators the necessary freedom to imagine their most incredible dreams and bring them to life.

The International Head Office, located in Montreal, wishes to be an international laboratory of creativity, where our world’s best creative minds, craftsmen, experts on various domains and performers can collaborate on creative projects. By assuming the roles of catalyst and unifier, Cirque du Soleil is able to reinvent itself with each new chapter of its history.

However, the driving force behind Cirque’s creativity was its co-founder, Guy Laliberté. By 2014, Laliberté’s involvement in Cirque had been greatly reduced and his attention had shifted towards charity (notably the One Drop Foundations campaign to expand access to clean water in the developing world), spaceflight, and poker. At the same time, there was a question as to whether the excitement and wonder of Cirque performances had become diluted through overexposure. With 19 different shows simultaneously being performed throughout the globe together with Cirque du Soleil’s presence on TK and movie theatres, and the Cirque du Soleil’s brand appearing upon a widening variety of merchandise and entertainment experiences, was there a risk that that the brand would lose its cache?

Case Questions

-How would you account for Cirque du Soleil’s success in a declining market?

-How has Cirque du Soleil changed over time to meet the changing demands of consumers?

-What strategy alternatives are available to Cirque du Soleil; and which would you recommend to the CEO if you were the consultant

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