Museums, marketing and money: the fine art of empire-building

Visit the Guggenheim Museum in Manhattan today and you will see that it is still a place where things happen. Construction tools bang and clatter behind a scaffolding curtain that heralds a $29m (£15m) renovation that will be completed this summer while inside a startling new exhibition by the Chinese artist Cai Guo-Qiang fills the spiralling rotunda with cars suspended in mid-air like flies in a web.

The venerable Frank Lloyd Wright building on 5th Avenue, with its circular ramps, looks like – and indeed is – a hive of energy and curatorial scholarship. But as the flagship museum of the Solomon R Guggenheim Foundation, it is only part of the story. For over a decade now, the Guggenheim has been expanding its reach far beyond New York, most famously opening the Guggenheim Bilbao in 1997.

For this reinvigoration of the Guggenheim mission, the board surely has just one man to thank. He is Thomas Krens, who in his nearly 20 years as director of the foundation has been solely responsible for forging it into an institution of truly global scope. Funny then that they should want to fire him.

All right, we should be more careful with our choice of words. But this week, the Guggenheim stunned the world's arts community by announcing that they are seeking a replacement for Krens. The man some have come to call Mister Guggenheim is gone. Or he will be once a successor is found.

The demise of the Man with the Titanium Touch (apologies to the actual architect of curvaceous Bilbao wonder, Frank Gehry) has nothing to with diminishing energy or commitment. Indeed, Krens is now overseeing the Guggenheim's most ambitious overseas project yet, the building of a vast museum, also designed by Gehry, to anchor a much-heralded new cultural complex in Abu Dhabi.

Krens's removal is, of course, being presented in the politest terms possible. Not booted entirely, he is to be kept on as an adviser for overseas expansion. "This is something that Tom and the board decided together," the board president, Jennifer Stockman, told The New York Times, which first broke the story. His new, severely shrunken, position is part of a "natural transition".

Yet the gossip in the art world will tell you that it is a "transition" that may have been a long time coming. For Krens, for all his charm and inspiration – at 6ft 4 in, with a white mane of hair, he is also an imposing physical presence – has been in peril for some time now, precisely because of his focus on globalising the Guggenheim. Critics of the strategy mutter variously that he is turning the Guggenheim into a brand or, more insulting still, a franchise. The cruellest have called it the McDonald's of museums.

It probably hasn't helped that he has also attracted a reputation for arrogance and heavy-handedness. "My personality tends to create this wedge," he openly acknowledged during 10th anniversary celebrations at the Bilbao outpost last year. "Some people think I'm the second coming of the devil. Others think I'm the wave of the future. But I prefer to focus on actions, not words."

Ironically, perhaps, some of the strongest opposition to his methods has come from within the Guggenheim. Many will trace the events of this week back to a titanic clash that was widely reported three years ago between himself and the then chairman of the Guggenheim board, Peter Lewis. A car insurance tycoon from Cleveland, Mr Lewis was demanding that Krens begin spending less money on foreign adventures and refocus on developing the core collections here in New York.

It was a battle that Krens eventually won, with Lewis departing the institution in a huff. But by then the machinations inside the Guggenheim leadership had taken on the dimensions of a soap opera. The next instalment involved the promotion of Lisa Dennison to the post of director of the main museum in Manhattan, which was followed, less than two years later, by her quitting and joining Sotheby's. It was an open secret that the difficulty of working side by side with Krens had played a large part in her departure.

The Dennison debacle has still not been healed, because in the months since she left, in the summer, the board has not been able to find asuccessor. The reason, it would seem, is that no one had an appetite for trying to run the 5th Avenue flagship with the indominatable Krens breathing down their neck.

Ms Dennison did the opposite of crow yesterday, however, issuing a statement supportive of her old boss. "It's the end of an era," she told the Bloomberg news wire. "Tom is a visionary and had powerful ideas early on which he enacted over his 20-year tenure. He had a profound influence on how people think about the Guggenheim and about museums in general."

Indeed, it is hard to over-estimate the impact of Krens on the entire industry. His talents included charming new donors into significantly swelling the Guggenheim endowment, now standing at $118m, notwithstanding the break-up with Lewis, who had been its most generous benefactor. He also inspired other museums with mould-breaking exhibitions that generated huge ticket sales, including shows, both in New York, devoted to Armani-designed suits and motorcycles.

His model for exporting the Guggenheim to other climes has been copied by museum directors around the world. Consider the Tate and its expanding roster of satellite galleries throughout Britain, for example. Even the Louvre is now in on the act, opening its own outpost in the Abu Dhabi complex. The Krens Empire is the most extensive, however. He, of course, inherited, but has since doubled in size the Peggy Guggenheim Collection in Venice, established by the niece of Solomon.

There have, however, been hiccups. The planting of a Guggenheim inside a Las Vegas casino – The Venetian – was simply the last straw for some of Krens' detractors. It represented a brush with tackiness they simply could not swallow. The art critic Chuck Twardy described it as "flashy, voguish, mile-wide and skin-deep".

Meanwhile, blueprints drawn over the years for several other Guggenheim satellites – Rio de Janeiro and Guadalajara, Mexico – have been scrapped, sometimes at the last minute. Krens opened a SoHo, New York, outpost only to close it again in the wake of the terror attacks of 11 September 2001. There used to be two museums, albeit compact, in Las Vegas, but one of those fizzled too. Nothing, indeed, has worked quite as well as the Bilbao, which draws more than a million visitors each year. "He kept trying to replicate that success, but he couldn't," commented the arts writer Linda Rosenbaum yesterday. The departure of Krens, she predicted, will herald a major rethinking of strategy at the foundation and probably – just as Lewis wanted – a return to focusing on New York. "We haven't actually been told why he left, but maybe the board may have gotten a little tired of his high-wire act," she told National Public Radio. The search will now begin in earnest for a successor and names already being mentioned include Michael Govan, a founder of the DIA Beacon art museum one hour north of New York, as well as Joseph Thompson, chief at the Massachusetts Museum of Contemporary Art.

Krens, meanwhile, has the huge Abu Dhabi project to attend to. "The Guggenheim was first in understanding the globalisation of the art world," Ms Stockman explained. "We credit Tom for that."