Cirque du Soleil’s Global Human Resource Management Practices

Identification of problem

Cirque du Soleil, the world’s most prominent entertainment firm, faced many problems, necessitating an in-depth strategic diagnosis. The artistry-performance combination brought great success to the company; however, as per analysis, it faced immense problems where strategic attention was needed. Cirque du Soleil’s most serious issues were recruiting and retaining highly talented artistic staff. Survival of the companies depended on performers’ creativity and excellence. High attrition of 20% per annum in 2011 indicated challenges in retaining artists despite highly competitive offers (Qumer & Purkayastha, 2015). Their high turnovers could be attributed to tormenting working conditions, particularly for touring artists. The constant relocations and rigorous performance schedules made an arduous environment that affected the company’s ability to sustain a long-term and stable team. Equally, the company also relied on unique talent, further complicating things. Cirque had invested valuable time and resources in searching for the artists and training them; then, they struggled to replace them in case of any unexpected. Cirque faces these challenges, which can be illustrated by the case of acrobat Alan J. Silva and his unique physical traits that are indispensable for that role in the show. The more than fifty nationalities and the twenty-five languages within Cirque du Soleil’s workforce demonstrate an outstanding communication challenge. Cultural diversity created a vibrant and varied environment. However, at the same time, cultural diversity was the source of a series of challenges for effective communication. Most significantly, the language barrier marred interaction between artists and technicians, affecting performances significantly. On the same note, different norms of interaction, like greetings, created misunderstandings among the members, thus calling for tolerance among the various cultures in attendance. Different communication styles due to the distinct cultural backgrounds of employees became a challenge, hence continuing to be an issue even after the establishment of communication initiatives. For the first time in its history, Cirque du Soleil experienced significant financial loss during 2012.

Although the company reported earnings totaling over C$1 billion in global revenues, financial challenges were recorded. Guy Laliberté, the founder of Cirque du Soleil, was forced to make the hard decision of laying off employees and reducing the number of newly touring shows. The financial issues were caused by high production costs and related expenses that called for substantial cuts from the company. In 2013, Cirque laid off 400 employees, which accounted for 8% of the total workforce around the globe, cutting the number of shows and various operational expenses (Qumer & Purkayastha, 2015). Cirque du Soleil started facing criticism of how similar the shows had become and how it had diluted the quality of its shows. Less distinguishable shows are said to have affected the overall awe-inspiring experience that in the past has been synonymous with the brand Cirque. Such issues call for a strategic rethink in its show of innovation and originality.

Analysis and Evaluation

Financial performance

Cirque du Soleil, well known for its acrobatic and inventorial performances, saw a significant inflection point in its financial performance in 2012 when it failed to generate any profit for the first despite reporting over C$1 billion in revenues globally from its shows. This financial setback forced the company’s founder, Guy Laliberté, to take remedial actions to the challenges faced. Reacting to the financial pressures, Cirque du Soleil, in 2012 and 2013, began a series of cost-cutting measures. They included layoffs of about 400 workers, roughly 8% of its global workforce, primarily from its Montreal headquarters. The layoffs aimed to achieve significant savings because the production costs and other expenses had hit an unsustainable trend. In addition, as it cost the company as much as US$25 million to develop each new show or roughly in the region of $13 billion for 600 shows in a year, the number of shows was reduced in 2013 to about 400 from approximately 600 the previous year (Qumer & Purkayastha, 2015). This is linked with criticisms of the perceived similarity and unoriginality that are now being reported in Cirque du Soleil shows. Former circus executive David Rosenwasser no longer appreciated Cirque du Soleil performances. He determined the performances to be alike, not that fantastic at all. In 2013, he stated that these programs failed to deliver the wow factor as they had lost touch with quality and originality. Since then, and in response to this critique and their financial strife, Cirque has been thinking of strategic changes that could put the firm back on its financial legs and artistic reputation. Of the many strategic moves they have considered, one was selling a portion of the company to outside investors with quantities starting from 20% to 30%. This marked a departure from the organization’s usual format and indicated a move towards diligently seeking external capital infusion.

The proposed sale was an effort to raise finances to manage the current issues and function as a supporting aid for the drives related to future growth initiatives. Also, Cirque entered new territories, primarily in China and India, to hint at the strategic move that the company had taken from only emphasizing its traditional circus shows to the diversification of its entertainment ventures. Despite revenues dropping to US$850 million in 2013 from $1 billion the year before, Cirque du Soleil’s response showed resilience and adaptiveness to financial adversity (Qumer & Purkayastha, 2015). Therefore, commitment to innovation, strategic adjustments such as stake sale considerations, and exploration to tap into unexplored markets have underscored the company’s determination to overcome challenges and remain steadfast as a global leader in the entertainment industry. Cirque’s journey mirrored the intricacies of balancing artistic creativity with financial sustainability. It reflected the dynamic nature of its strategic decision-making.

SWOT Analysis

The swot analysis will focus on the weaknesses and threats faced by the company.

Weaknesses: A significant weakness of Cirque du Soleil is the need to retain the artistic creators in the company. Working conditions for the company’s touring artists are so demanding that they will experience high attrition rates. Recruitment-wise, one flow-on effect of this continual turnover is that the company must continually replace skilled performers, with potentially far-reaching implications for its shows’ overall stability and continuity. The productions of Cirque du Soleil are known to be elaborate but at a cost. The elaborative shows do not cost alone; they add operational costs through touring and production development. Such high operating costs, especially during economic uncertainty and challenges that are not precisely anticipated, put the business’s profitability at stake. The shows by Cirque du Soleil are becoming similar to each other in a way that is never really a good thing on one hand because it can reduce interest and touch on the degree of uniqueness of one brand. From this understanding emanates the challenge to diversify its productions to appeal to changing audience likes while ensuring freshness and innovation.

Threats: Economic downturns and changing consumer preferences threaten discretionary spending on entertainment and, therefore, the ticket sales of Cirque du Soleil. In such uncertain economic climates, it becomes essential for companies like Cirque du Soleil to adapt to the challenges of the economy and put flexible pricing or promotional strategies in place to sustain revenue. The entertainment sector is highly dynamic and challenging. Some of the other emerging competition for Cirque du Soleil comes from various other entertainment providers, as well as some digital platforms. Staying ahead in the trends, continuous innovation, and maintaining brand presence must go hand-in-hand with retaining market share for Cirque du Soleil to remain relevant. The threat is that this could compromise their ability to maintain Cirque du Soleil’s reputation for excellence and innovation. The company must address working conditions, support with adequacy, and be effective at the strategies for retaining talent to ensure a pool of skilled writers.

Strategic performance of the company

One of the critical elements of the strategy for Cirque was a focus on health and safety because of the number of intrinsic dangers built into the circus performances. Cirque’s commitment to enhancing the well-being of the performers is reflected through maintaining rigorous safety comprising a dedicated health and safety team, stringent following of government regulations, and comprehensive training schedules. Despite the challenges and accusations related to safety violations, Cirque responded with management reviews, health and safety committees, and a health and well-being program that will systematically address risks. Therefore, another strategic thrust for Cirque was a cultural bridging focus since it comprehended the importance of effective communication and breaking down the cultural barrier. It thus offered language training programs to the performers and kept their employees informed on coping with cultural diversity. This strategic approach aimed to enhance cohesion and minimize conflicts arising from cultural differences. Cirque du Soleil’s commitment to such high-risk performing art forms extended beyond the stage into its strategic ‘Crossroads’ program in 2003. Recognizing that careers for performers are transitive, this became a cornerstone within which Cirque oriented its thinking around talent management. Despite the financial predicaments in 2012, the company demonstrated flexibility and adaptability since it began taking measures on cost-cutting along with adaptive strategies (Qumer & Purkayastha, 2015). Cirque also innovated another focus on a strategic response regarding concerns about showing originality. Selling a stake to external investors and looking out in untapped markets like China and India reflected a forward approach as the company bedecked itself for continued growth and success in the ever-evolving entertainment industry. This showed Cirque du Soleil’s efforts to maintain artistic superiority and the long life of the organization through strategic initiatives and adaptability.

Discussion of Alternatives

Comprehensive Talent Management Program:

Talent management across Cirque du Soleil represents a critical avenue of solution to the organization’s challenge. The phenomenon comprehensively addresses problems associated with recruiting and retaining talented performers, dependence on unique talent, and communication within its diversified workforce (Gallardo-Gallardo et al., 2020). The program has distinctive pillars, where the first focuses on the intentional attraction and retention of elite artists. Though competitive compensation would be an initial magnet, emphasis reaches beyond monetary perspectives. This is by introducing flexible working conditions that enable them to maintain a better work-life balance than those in private entities. Professional development programs are vital for successfully managing talent at Cirque du Soleil. These programs win the best performers and ensure their continued loyalty. When a company depends on unique talents, providing them with development opportunities assures job satisfaction and loyalty. Career transition programs, coaching, and skills development are some of the programs that assist artists in preparing for life after performance. In addition, the continuous learning programs and career development advisors enable artists to discover different roles, creating loyalty among them.

In this regard, cultural sensitivity training helps eliminate all communication barriers among artists from different cultures (Painter‐Morland et al., 2019). The program underscores teamwork and the sense of inclusivity at which organizational diversity is valued, building organizational interactions. The holistic talent management program comes as a remedy for various pressing challenges. Further satisfaction and loyalty among the artists can be realized by meeting some of their multiple needs. Pertinent planning in the continuity of talent through succession promotes stability in the long term. The provision for focusing on communication firmly allows an inclusive and cooperative working environment. The program has its benefits, notwithstanding the start-up implementation costs. The cultural sensitivity training might be expected to meet resistance and, hence, prior planning regarding handling the communication of this move. Since changes are expected in the workforce’s needs over time, a constant effort towards improving the program is needed.

Show Innovation and Portfolio Diversification:

Second in importance to Cirque du Soleil is the show’s innovation and diversifying the portfolio. This approach intends to lower the risk of being too dependent on unique talent, address financial challenges, and get better recruitment and retention. Innovation in show investment hence reduced dependency on individual stars. That is why the program introduces performances that do not rely upon specific performers. A diversified show portfolio, in which each program features a particular appeal and theme, will not subject the general showy appeal of the brand to the risk that an exit of a key performer would jeopardize it. As financial challenges loom, cost-effective ways to innovate shows must be sought out. This includes the use of technology, collaborations, and themed productions. In addition, it analyses strategic partnerships using co-productions or joining efforts in sharing costs and risks that guarantee financial stability. The portfolio of shows diversifies to become a competitive advantage in attracting and maintaining artists (Daykin et al., 2018). More career satisfaction comes when artists get opportunities to contribute to different performance types. This is in line with changes in preference from performers who are getting more and more versatile with their roles. The strength of this strategy in Cirque du Soleil’s strategy is that it will reduce risk and secure financial position. Diversity in show portfolio alongside innovativeness helps limit the effect of performers’ exit and solve financial constraints. Strategic partnerships and cost-efficient innovations to make the brand resilient. Nevertheless, a weakness may be reducing the distinctiveness of individual performers. The move to technology and collaboration could change the nature of art itself, making some people fall out with those artists.

Cultural Integration Initiatives:

Understanding the impact of cultural diversity on communication and collaboration, Cirque du Soleil includes provisions for cultural integration. This enhances communication, maintains the power in recruiting and retaining, and creates a long-term profit for the organization. To counter some of the challenges in communication that may arise due to diversity in the workplace, the company develops strategies that seek to enhance interaction among people from various cultures (Earley & Mosakowski, 2004). In this regard, it establishes multicultural teams, promotes cultural exchange programs, and organizes team-building activities to encourage internalization among workers. The idea is to create an environment whereby the several cultural backgrounds become positive and feed into the overall spirit of collaboration (Deresky, 2017). Cultural integration becomes a significant selling point for the company’s employer brand. The promoting emphasis of Cirque du Soleil has been the suitability of its environment for personal and professional growth to attract a wide array of talented performers. Focusing on the potential for cultural development in an individually and professionally rewarding atmosphere, it is easier for such a company to bring in and maintain good talent. Such a more inclusive and collaborative workplace culture is intended to establish positive benefits on operational efficiency. Cultural diversity enriches the firm’s productivity by nurturing various perspectives, ideas, and strategies. In a diversified workplace, employees have an arrangement that brings different experiences and insights, promoting creativity in thinking and innovativeness. This diversity brings along the ability to solve problems and adapt to changing markets effectively. Cultural integration brings about enhanced communication and teamwork. Higher employee morale makes the workplace more diversified and inclusive (Wild & Wild, 2019). There are impacts on operational efficiencies that bring about prospective cost savings. As can be seen, there can be resistance in the initial stages of cultural integration initiatives, and it requires much care planning for possible logistical challenges. Ongoing efforts are needed to maintain an inclusive culture as the organization evolves.

Recommendations

The high attrition rate can be handled by developing a better recruitment strategy that searches for talent and seeks an organization that supports them in their work environment. Efforts in this direction involve addressing the challenging touring environment and competitive reward arrangements. Setting up a robust professional development program would further develop the skills of the artists already within Cirque du Soleil, which would breed loyalty and motivation. These moves likely lead to a more contented and stable artist pool (Adler & Aycan, 2018). This will help in increasing the quality of the performances and, at the same time, increase the audience appreciation. Secondly, a deep review of the operational expenses is needed to find the areas through which significant cost reduction is possible without compromising artistic quality. The strategies compounding the resource deployment must be optimized to ensure sustainable profitability. Partnerships, merchandising sales, and digital content may help diversify revenue streams, which may help reduce the dependency on ticket sales. The measures mentioned above have been adapted to develop financial health. However, an advised phasing implementation plan should be employed to manage costs effectively. These initiatives may offer specialized training in cultural differences, communication dynamics, and sensitivity to create a more equitable workplace. By enabling employees to deal with cultural diversity, Cirque can improve collaboration, minimize misunderstanding, and build a more robust, cohesive global workforce (Harvard et al., 2016). Finally, feasibility is a critical consideration, and the company should emphasize a phased approach that will help in cost management effectively. For this aim to materialize, open and transparent communication will need to exist to gain management and employees’ acceptance. Keeping communication updated and working as a team can allow for the insulation of ownership and commitment. The approval by the customers is based on whether the company can be constant or improve its shows. Clear communication of the changes needed, including efforts at continual innovation, can positively change the customer’s perspective.

Implementation Plan

References

Adler, N. J., & Aycan, Z. (2018). Cross-cultural interaction: What we know and what we need to know. Annual Review of Organizational Psychology and Organizational Behavior, 5, 307-333.

Deresky, H. (2017) International management: Managing across borders and cultures: Text and cases (9th ed). Hoboken, NJ: Pearson Education, Inc.

Daykin, A., Clement, C., Gamble, C., Kearney, A., Blazeby, J., Clarke, M., … & Shaw, A. (2018). ‘Recruitment, recruitment, recruitment’–the need for more focus on retention: a qualitative study of five trials. Trials, 19, 1-11.

Earley, P. C., & Mosakowski, E. (2004). Cultural intelligence. Harvard business review, 82(10), 139-146.

Gallardo-Gallardo, E., Thunnissen, M., & Scullion, H. (2020). Talent management: context matters. The International Journal of Human Resource Management, 31(4), 457-473.

Harvard Business Review (2016). On managing across cultures. Boston: Harvard Business Review Press

Qumer , S., & Purkayastha, D. (2015). Cirque du Soleil’s Global Human Resource Management Practices.

Painter‐Morland, M., Kirk, S., Deslandes, G., & Tansley, C. (2019). Talent management: The good, the bad, and the possible. European Management Review, 16(1), 135-146.

Wild, J. J., & Wild, K. L. (2019). International business: The challenges of globalization. Pearson.