An Un-Strategic Plan Part 1: Beginnings

In honor of Labor Day, I’m delighted to take part in The Minnesota Orchestra Cross-Blog Event.  It’s a collection of more than a dozen bloggers, musicians, patrons, and administrators writing about the Orchestra’s devastating work stoppage. You can find all of the contributions in the following list and the authors encourage everyone to participate by sharing, commenting, or publishing something at your own culture blog. 

Thanks to all the writers for taking part—there’s some very good reading to be had!

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As of Labor Day 2013, the Minnesota Orchestra labor dispute has been going on for 11 months—and an ultimate resolution seems as far away as ever.  One of the reasons this labor dispute has been so difficult to resolve is that more than a simple dispute about pay, contractual duties and such, it represents a clash between two fundamentally different view of what the organization should look like.

What should it do?  Who should it serve? How can it be supported?

It has been clear for some time that the MOA (Minnesota Orchestra Association) leadership wants to move the organization into a new, and some say radically different direction.  What do they collectively want?  What’s their overall plan?

Fortunately, we don’t have to guess.  The MOA leaders have given a clear indication of their intentions—a multi-year strategic plan listed on the front page of the Orchestra’s website.  It spans 33 pages and lays out their vision in several key areas, including the organization’s finances and the art itself.

I have to say, I’m not entirely impressed.

I’ve worked at several non-profits in my time, including many years at the Orchestra itself, and I’ve done my fair share of strategic planning.  Based on my experiences and background, I’m beginning a multi-part analysis of the document, looking both at its stated intentions and its unspoken undercurrents. As the document is reasonably long, my analysis requires more space than I can provide in a single blog.  Subsequent parts will appear throughout the week.

Some basic thoughts.  From my perspective, the plan presents several problems—many of which recur throughout the document.  In particular, I see five general weaknesses:

1. Too Generic.  Your strategic plan should be so closely associated with your organization, that if someone saw it without the coverpage or any identifiable markings, they could still tell it was yours simply by reading the text.  That’s not the case with this plan; too often it feels like the goals and tactics could be cut and pasted into the strategic plan of any other arts organization in the state.

2. Too vague and… well, obvious.  Too often, your big ideas are ones that every arts organization should be—and is—doing.  “Increase Board giving.” “Expand corporate sponsorship.” “Conduct market research.”  How are these different now from what you used to do?  What will change?  How is this different from, say, the Minnesota Opera?  I recognize that you’re trying to be concise in this document, but you need to give some sort of details.  This is the battle plan of your entire organization for the next few years.

3. Buzzwords rather than substance.  Repeatedly this document relies on strong action words we’ve all been taught to use on our resumes:  create, implement, initiate, maximize, etc. Worse is when these words are strung into catch phrases—you know, those business jargon phrases that everyone uses in pretty much the same way, without giving much thought to what they truly mean.  “Initiate national touring strategies” is one that comes to mind.  “Initiate” is a strong word, but it could mean anything from making a few calls to drawing up a budget or bringing in a focus group.  Also, what does “vital summer and holiday concerts” mean, especially since this phrase lacks a verb?  Will the Orchestra perform them?  Present other groups?  What makes them “vital?”

4. Too backwards looking.  Despite liberally adding such terms as “innovation” and “new,” there isn’t much here that’s different or points to a truly new direction.  Not that a strategic plan has to, heaven knows, but you’ve positioned this particular plan as a roadmap to future greatness—a roadmap that is necessary because the old way of doing things was unsustainable.  But nothing is new, nothing is fresh… it feels like you’re going to do the same things. With more feeling.  Worse, you never articulate any future goal that you’re striving for, let alone give any indication of how you will know once you’ve achieved it.  It feels more like a simple justification for making budget cuts in the present rather than reaching for the future.

5. There’s no art.  It is astonishing how tangential art is to your strategic plan—you are, after all, an arts organization.  It’s not just that it gets shunted to the end of the plan, it isn’t woven into the plan.  Why are you going to all this trouble, if not to make music?  How do issues of governance, marketing, fundraising intersect with the music? Why isn’t your art evaluated in the same way the finances are?  You should have a plan for creating great art, with objectives and benchmarks to know you’re succeeding… what you measure is what you are likely to pay attention to.

With those broad comments in place, let me turn to the strategic plan itself and discuss some of the particulars, beginning with the preliminary materials:  the mission statement and the executive summary.

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THE MISSION STATEMENT

This is been the source of much controversy, and in some way there seems little to be left to say.  I am pleased that you have changed the statement since this document was produced.  For reference:

As listed in your strategic plan:  “The Minnesota Orchestra Association inspires, educates and serves our community through internationally recognized performances of exceptional music delivered within in a financially sustainable structure.”

Now: “Our mission is to enrich, inspire and serve our community as a symphony orchestra internationally recognized for its artistic excellence.”

I appreciate the changes, but for me, they hardly end the controversy.  And I am not sure you understand why this is such a big concern, so let me explain.

For those who are upset with the removal of the terms “orchestral music,” and its replacement with the phrase, “financially sustainable structure,” the change isn’t just a tiff regarding semantics.  Rather, this gets to the heart of the labor dispute and vividly reveals the clash of competing visions.  Read literally, there is nothing to indicate that the Orchestra should perform, or will perform, classical music—the form of music for which it was created and is best able to supply.  The Orchestra, in fact, wouldn’t need to perform at all, or at least to perform live.  This mission statement could equally serve an organization that provides music archiving services—one that provides access to historic CDs.  Or it could serve a house radio band playing somewhere in a basement studio, or a pop band. Or a jazz trio.

And what on earth is meant by “financially sustainable?”  That is a sliding metric that can be achieved in any of a bewildering number of ways, from filling the stage with cheap high school performers to quadrupling the ticket prices.  Every business and organization has to stay financially solvent in order to exist, so this point is both obvious and redundant; it is roughly the equivalent of replacing those words with the phrase, “within legally acceptable bounds.”  Let us also note that if you really wanted to save money, you could do so by eliminating rehearsals, selling the Hall and performing concerts in some public space, with only one volunteer musician playing a song that is in the public domain.  According to this document, such a performance would still be in line with the mission of the Minnesota Orchestra.  Would it qualify as an orchestral concert?

In general, a mission statement should cover the following questions: Who are you?  What do you do?  Who do you do it for? What sets you apart from others… what is your competitive advantage?

Do you think your statement does so?

By your own account, the mission statement was re-worded as a goodwill gesture to bring musicians back to the table.  I’m sure you mean well, but that in and of itself raises red flags.  This is your mission statement—the clearest expression of what you do and what you hope to achieve.  Isn’t it slightly disconcerting that you agreed to change it as part of a negotiation tactic? Are you going to re-reword it next week?  Does it have any deeper meaning for your organization?  What about those employees who had already begun to shape their job-related duties based on that earlier mission statement?

With respect, this small change telling it suggests a lackadaisical approach to thinking about your organization right from the beginning.

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THE EXECUTIVE SUMMARY

From your document:

The Minnesota Orchestral Association has many assets:

     •rich history of artistic excellence

     •strongly supportive local community, Board and management

     •established local, national & international artistic reputation

Our organization faces economic barriers that prevent us from taking full advantage of  these assets.

  Current opportunities to create a sustainable model include:

     •focus on artistic excellence and community service

     •renovation of Orchestra Hall, to be completed in 2013

     •new agreement with musicians in 2012

     •opportunities for growth in income streams

The overall goal of this plan is to create a business model that supports exceptional artistic quality with financial viability.

A plan that got off to a questionable start really runs aground here.  Let’s start with the list of assets you provide, particularly the first and third bullet points:

*rich history of artistic excellence

*established local, national & international artistic reputation

One thing that immediately jumps out about these that they are looking backwards.  Yes, the history of excellence is important, but when did this excellence occur?  Was it in the early 2000s?  During the tenure of Eiji Oue?  Dimitri Mitropoulos?  Has it continued up until now and you hope to prolong it?  Do you see the organization entering rebuilding phase now?  Or will it do so soon?  You are careful wordsmiths, so I’m surprised this point is so vague… it feels like boilerplate, or a marketing tagline.  This may seem like a petty semantic detail, but I fear it’s symptomatic of a larger problem of vision.

Likewise for the last bulleted asset; an established reputation is a good thing, but it isn’t enough.  Not for any company.  Brand loyalty can help you weather transitions, but there are certainly limitations—especially when your present-day product is lacking.  In an earlier blog I wrote about how Howard Johnson’s serves as a cautionary tale of a company that assumed that customer loyalty and patience were infinite. As a result, this once-mighty business behemoth is no longer with us.   Need a more current example?  The New York Times just ran a series of articles about Steve Ballmer’s tenure at Microsoft, noting that it so jealously held on to its past successes that it refused to face the future.  A line from the story tells it all:  “Past success can obscure new opportunities when emerging markets or technologies don’t operate by the same rules as a company’s tried-and-true products. And Microsoft has suffered from that kind of corporate myopia.”

These two assets listed here, however, imply that you are perfectly content to rest on your laurels, and are not overly concerned about maintaining standards.  They also imply you are not afraid of getting rid of the expensive things that make up today’s excellence, because people just trust your brand and won’t notice a difference.

Let’s also look at that middle asset you mention—the support of the community, board and management.  These areas of support are critical for success, to be sure.  But I can’t help but notice glaring omissions:  the musicians, the music director, and the staff.  You have assembled a world-class collection of musicians playing at the top of their game.  That is an asset.  They are involved in community outreach, fundraising events, teaching and other activities that keep audiences engaged.  That is an asset. Osmo has brought international acclaim and world-wide attention to the Orchestra.  That is an asset.  Osmo has brought BIS to record CDs at Orchestra Hall, greatly expanding the reach of its music.  That is an asset.  The Orchestra Hall staff, mirroring the on-stage accomplishments of the musicians, is one of the greatest groups of arts administrators in the state.  That is an asset.

The fact that your list only includes the community, the board, and the management is shockingly short-sighted, and telegraphs your intentions vividly.  It is no surprise you have shown such indifference to the musicians, Music Director and staff during the dispute—they are obviously incidental to your plan.

Before moving on, I want to point out something obvious seems to be missing in your list of assets—the present-day artistry of the ensemble.

Right now, in the words of Alex Ross this orchestra is one of the finest anywhere, playing at the highest level.  Right now, it is in a golden age of artistic excellence.

That is an asset.

As an aside, you famously own your own hall.  The problems with the Atlanta Symphony Orchestra should convince you that having your own space can be a huge asset.  You acknowledge this by your efforts to refurbish the facility… so why isn’t this listed as an asset?

After the list of assets, you list your current opportunities.  The items you mention are good, if straightforward, but there is one more issue I take with your plan at this point.  In the very last line, you mention you want to achieve exceptional artistic quality along with financial viability.

“The overall goal of this plan is to create a business model that supports exceptional artistic quality with financial viability.”

I’m pleased that artistic excellence gets a shout out here, but up to this point—both in this specific document and in your public statements as a whole—there is nothing to indicate what you think artistic excellence looks like, how it is defined, or how it will be achieved.  Do you even need the Orchestra, or any orchestra, to deliver it?  I recognize this is the executive summary of a summary document, but the term is so briefly and carelessly tossed out it seems like an afterthought.  Or, again, as marketing boilerplate that is devoid of meaning.

* * *

Thanks for reading—Happy Labor Day!

Next up:  Assumptions that Assume Quite a Bit

 

Xochipilli

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One of the Finest Staffs Assembled

For some time, I’ve been writing about the Minnesota Orchestra’s labor dispute with its musicians.  Over that time I think I’ve made my views clear on many things, and have covered a number of angles and issues.  I’d like to take a moment to consider something different—the role of the Minnesota Orchestra staff.

I know why they haven’t received much attention thus far… they are not at the core of the dispute. But that does not mean they are peripheral to it, or don’t have a stake in it.

On the contrary, I feel that the staff members have a unique perspective on events, and are a valuable resource for both sides.  Plus, they are collectively an extraordinary group of professionals who deserve greater recognition for their accomplishments.  Day in and day out, they manage all the myriad details of making great music happen.  I was privileged to work at Orchestra Hall for 20 years in many different capacities, in many different departments; I count many of staffers there as mentors and friends.

So let me introduce them to you.

To begin, let me say The Minnesota Orchestra has received praise from all quarters about the excellence of its artistry… but I want to take a minute look beyond that. Let’s take a look at its incredible feats as an organization. Every year it sells between 250,000 and 300,000 tickets to concerts and other events; earned income brings in about $10 million. Every year. Most arts organizations in town—many in the entire country—cannot begin to fathom those numbers, or the work necessary to achieve them. For the past decade, the Orchestra has brought in about $10 million a year in contributions. Every year. Again, this is incomprehensible to most arts organizations, whose entire annual revenue is probably less than $500,000 (or realistically, less than $200,000). When up and running, the organization not only employs nearly a hundred musicians, but nearly as many full-time staff members and an army of part-time workers to ensure everything goes smoothly. For comparison, the Minnesota Chorale, one of the state’s largest choral groups, employs nine artistic and administrative staff members. The Orchestra is nowhere near the size of Target, its near-neighbor on Nicollet Mall downtown, but it stands as a decent-sized business with all the attendant responsibilities for human resources, facilities management, and more.

I don’t want to take away anything from the musicians, but in a very real way, the work of the Orchestra only gets accomplished through the brilliant efforts of its first-rate staff. A comparison to the musicians is useful here—in the same way that the organization is a destination orchestra for musicians, one that attracts the top talents at the top of their game who are building their repertoire and honing their skills for a chance to play with a world-class ensemble, the organization is a similar destination organization for the people who make up the staff. People recognize that working for the Orchestra is a rare and precious opportunity. If you want to do arts management at the highest level, to work with the greatest colleagues at the top of their game, you want to work for the Minnesota Orchestra. It is, for example, home to one of the finest fundraising operations in the state. Its marketing materials set standards for the industry. Its education programs are legendary. I cannot tell you how many times I’ve been referred, when discussing some important issue of arts management, to an Orchestra Hall staff member as an excellent resource. They have the highest reputation, and people interested in arts management dream of having a job in an organization where they practice their craft in a way others can only envy.

I also suspect the staff is in a unique, and unstable, position in this labor dispute. It can see both sides of the fight… because it lives both sides of the fight. Daily. Let me explain.

There is no group of people that has a more up-close-and-personal view of the organization’s precarious financial situation, and some of the root causes. It’s one thing for board members to review this month’s audience stats, but the ushers see—vividly—the empty chairs around the Hall, and can feel the lack of crowding in the lobby the same way a sailor can feel the ocean’s current. The bartenders know the lines are shorter than before, and perhaps, that tips will be down as well. Box office workers know fewer calls are coming in.  The marketing staff is looking at at ticket counts every day of the week, and wondering if resources earmarked for a different event need to be switched to a last minute ad buy might to help a struggling concert, or if a promotion is needed to get people in the door. Fundraisers can see that giving is down, and contemplate another round of personal calls to supporters. The HR department has to consider contingency plans to reduce payroll… at the expense of workers they’ve interacted with daily for years.

Moreover, they have been hit hard by belt-tightening in the past. As in most businesses, payroll is an area where the organization has maximum control; it is therefore one of the first areas budget cutters go after. There has been more than one round of layoffs in recent years, and several colleagues who have worked for the Orchestra for decades have had to be let go. Part-timers know that if business is down, or concerts are undersold, their hours might be cut.  Everyone knows the pain of wage freezes, rising healthcare premiums, and reductions in other benefits, too. These hit hard, because wages in the non-profit world are not high to begin with (certainly many of these people could be making considerably more in the for-profit world).

Again, they don’t need to sit through a PowerPoint presentation about the state of the Orchestra’s financial troubles—they are living with them, and the ramifications of them, on a daily basis. I have no doubt that many on the staff instinctively agree with management’s arguments, and recognize that something has to give.

That said, they are not just living with daily reminders of the financial issues, but also its artistic mission, too. Many staff members have some sort of musical connection that instinctively binds them to the plight of the musicians. Several, in fact, are musicians themselves in other ensembles across the Minneapolis-St. Paul area. Additionally, many of the front of house staff members are music students, actively preparing for a musical career of their own, and finding the perfect part-time job to help support them while they do. These folks flock to the usher, box office, or similar positions not just for the money, but because it allows them to see—in some small way—the business end of a music career, giving them valuable insights as they move ahead. Plus, with many chances for back stage interactions, outreach events, and job-related or social functions, many staffers know the musicians personally and have a up-close-and-personal view of what life is like for a professional musician.

They fear what will happen if the artistic mission is watered down, or how the reputation of the Orchestra will suffer if the musicians leave.  Or if Osmo does.

All told, this close familiarity with both sides in the dispute can put the staff in a difficult position. In my own mind, I can’t shake the analogy of children watching their parents’ marriage unraveling and spiraling towards divorce—seeing both sides but desperately trying not to take sides. For all the good and obvious reasons, they can’t take a public position.  I can’t imagine how frustrating that is.

But worse than that, these people with a rich pool of talent and profound professional expertise are not just being overlooked, they are being underutilized. The Orchestra has assembled a great group of workers… who right now have nothing to do.

While the musicians are being locked out, they are being locked in.

My solution?  End the lockout.  Let them do their jobs… the ones that years of experience and training have made them so well-qualified to do.  Don’t have them go through the motions of setting up a hypothetical season that few hope to implement. Give them a real one to manage and watch them go.  Moreover, since they exist in both worlds, they can help make a natural bridge to working with the musicians on a permanent solution to settle the contract and rebuild the organization.  End the lockout, and stop wasting this resource.  Don’t risk losing these folks to other arts organizations that will snap them up.

I think that when you do end the lockout, they will prove their worth in another way, too.  The staff members are also a great resource to rethink how the organization should be run, and will be even more valuable in the difficult reconciliation phase once the labor dispute is over. They are arts management professionals—if you were going to ask anyone for advice on how to problem solve on how to build a better arts organization, they should be the very first people you consult. Plus, their many connections with music and the musicians make them a valuable buffer as everyone begins the collective effort of getting the Orchestra back into top condition.

Put them back to work.

 

Xochipilli Mask from Teotihuacan

Alan Fletcher’s Powerful Speech

[On August 20, Alan Fletcher gave a thought-provoking speech aimed at ending the Minnesota Orchestra’s lockout of the musicians, as well as laying the foundation for discussions on how to resolve the overall labor dispute.  To share his ideas as widely as possible, I’m posting the text in its entirety below.]

Everyone in the world of music cares very deeply about what is happening, and will happen, here in Minneapolis. Our profession is knitted together in profound ways, and no one can be indifferent to the problems faced by musicians, by management, by philanthropists, and by this whole community, that has such historic importance in supporting music.

There’s an important particular connection between Minneapolis and my place in Aspen: the first summer of music in Aspen was 1949, when Dmitri Mitropoulos and the Minneapolis Symphony came to the mountains for a landmark residency. They came back the following year, and helped establish a tradition of music that has been unbroken for 65 summers. Now we depend on our school and our faculty rather than on a visiting orchestra, but we wouldn’t have gotten where we are without your city’s great orchestra.

The United States is a beacon to the world for its unique forms of philanthropy, and Minneapolis has long been a beacon to America for its own commitment to the arts: to world-class theater, to the cutting edge in the visual arts, and, always, to an unparalleled variety of great music making. Choral music, chamber music, new music, and symphonic music have long enjoyed the Twin Cities as a place of world-wide significance.

Thus there is a special pain for us all in these past many months of conflict and struggle. If bad things can happen here, they can happen anywhere. As a citizen of the world of music and a teacher of future musicians, I have found it impossible to be silent.

But I would not presume to come here as a visitor and tell you what you can, or perhaps must do. I can only offer observations that I hope might be part of a conversation in which you affirm for each other what is to be done.

Because the only solution that will stick will be one you have found for and with each other.

A fundamental question is: what do you, the citizens of Minnesota, want?

What will you support?

Do you believe the orchestra is important? Are you confident the orchestra can survive?

All other decisions will flow from your answers to these questions.

If it is no longer important that you have a world-class orchestra, then so be it. Other cities in other times have made this decision, or allowed this to happen.

But if it is part of the DNA of this great community that it should be the home of an equally great orchestra, then there is work to do.

I will go so far as to be definite about one thing: the current lock-out of musicians should end, and end unconditionally.

I have recently read the point of view that the lock-out can only end as part of a larger bargain, because the Association must have the leverage of this tactic. Even the word “leverage” in this context signals that the plan has failed. That plan should now be abandoned.

Because one of the things that must happen is that all sides speak to each other. I know that an important point of view is that the musicians refused to make a counter-offer and thus, in effect, refused to talk. But the lock-out, if it is seen as a resulting fact, is not symmetrical. Only the musicians are living without salaries, without a means of supporting their families, without access to the hall that is their home.

To sit around a table arguing, negotiating, searching for viable solutions is to be, potentially, partners in creating a future. To be locked out is not.

But then, the musicians must also come to the table in earnest, and deal with who is at the table. Another side to the much poisonous rhetoric we’ve experienced is the view that the management, or board leadership, or both, must go, before the discussions can begin for real.

A rhetoric of exclusion is a rhetoric of failure.

The hall is not only the musicians’ home: it is equally the home of the management and of the board. Real estate can be owned, but the spirit of music cannot be owned, and to make music requires the collaboration of many, not a few; all sides, not just one side.

In my time as a chief executive in Aspen, mistrust and fear led to a conviction that someone had to go—for many, that person was to be me.

It doesn’t matter now how it happened, but it happened that I stayed. There was still confusion and unhappiness about how to move forward. A turning point was when a leading musician said in a faculty meeting that, as it was clear I would be staying, it was necessary to find a way for us to talk together.

And, from that moment, we began to talk together.

We did lose donors, both because some disliked the specific steps we were taking towards financial stability, and because many donors just hate conflict. But we are now ahead of where we were, and a great many of those who stepped aside have stepped back in. We agreed—among musicians, our board, our administration, and our community—to operate with a deficit for a brief time, while challenging ourselves to emerge from it. We agreed to cuts in our compensation but no cuts in our expectations of ourselves. We did not reduce our artistic aspirations.

Istvan Szabo has a great film about a labor dispute in the musical world—maybe this doesn’t sound like a wonderful idea for a film, but take my word for it: his movie Meeting Venus is wonderful. As a recurring theme—a leitmotif—in this story, everyone—a great diva, the conductor, the impresario, members of the stagehands’ union, orchestra players—at some point says to someone else, “You don’t love music!”

In our music world, that really is the ultimate disparagement. And, as is so clear in the movie’s parable, it isn’t true. Anyone involved with an orchestra must love music, or they wouldn’t, or shouldn’t, be involved.

So what about a central element of the dispute here: that the business plan of the orchestra will not allow things to continue as they have been?

It is a plain fact that an organization can’t exist indefinitely on a horizon-less deficit. Financial planning requires a viable connection among annual costs, annual fundraising, management of an endowment, and true forecasting. It’s not enough to wish that salaries that once seemed to make sense can continue rising, or even staying the same—forever—if sources of income aren’t adequate.

From my outside viewpoint, there has been much unreality in the discussions about the orchestra’s finances.

For instance, a key argument is over the past use of transfers from the endowment to cover deficits. This practice is completely usual (my own organization had recourse to it in two years of the recession). Furthermore, it isn’t and cannot be secret, as all these numbers are reported in a public way. I understand if many people didn’t know how this works, but the way it works is reasonable and normal. One has a good reason to close a fiscal year showing no deficit, perhaps in order to qualify for essential grants. But this can’t go on forever, so in another year it is necessary to show the extent to which expenses outstrip income. This has been viewed as an underhanded negotiating tactic, but it’s not a mystery at all, and any reader of IRS forms can understand it.

Capital fundraising is also clearly different from both annual fundraising and endowment fundraising. This difference is not a contrivance or mystification. Philanthropy is not a faucet that is turned on and off to varying degrees. (In my organization, during a difficult time, one faction suggested that I had neglected to raise enough money, as if it were simply a matter of willing it to be so.) Raising money is instead a complex web of relationships, all based on belief and confidence.

A major point of contention is the lobby project, which has come to assume the aspect of a boondoggle or at least a colossal misstep. But what if it will later be understood as a benefit to the very community that is crucial to the future support of the orchestra? Not everyone responsible for music-making is on the stage. Indeed, one of the pillars of the organization is to be found precisely in that lobby, before and at the intermissions of every concert: the audience.

If a plan is to emerge that solves the persistent deficits, it will be based on increased fundraising, and the community itself—the audience—is going to be responsible for it.

The idea that philanthropists have an obligation to give, and to give to any particular thing, is mistaken. An organization must make the case that it has a worthy, indeed a crucial mission, and make the case that it can deliver on that mission in a superior way. This is the belief and confidence I mentioned. The Minnesota Orchestra, for generations, has accomplished this. Will it, can it, continue to do so?

Speaking of philanthropy, we must recognize that the solutions have to happen within our existing system. Perhaps the United States should abandon its philanthropic traditions, abandon the charitable deduction that has so dramatically contributed to our national well-being, and adopt a government-centered model of funding. I don’t think so, myself, but it’s part of our current political debate.

But it’s not a discussion relevant to this crisis, because we have to work with the rules we now have, and they are rules governing the functioning of non-profits.

A successful bank is a crucial part of the social fabric, and so is a successful orchestra. They are not the same thing, and, while some business aspects of any organization are similar, some aspects of for-profit and not-for-profit business are different. Perhaps a better term is social-profit. The fundamental aim is not to make money, it is to make music.

Once again: if the aim of the Minnesota Orchestra is to make music worthy of any stage in the world, then every step now taken, every statement made from here on out, should conduce to a process of talking together.

I know from intense personal experience how hard that will be. I had to sit at a table, over and over again, with people who had wanted me to be fired. But the people I was talking to felt the same way. In my executive capacity, I had ended the Aspen careers of some of their colleagues. There’s no soft way of putting that. We had profound disagreements.

I believe things began to be viable again in Aspen when we all realized how deeply we mutually cared about great music in Aspen—that was something we shared, and we started by acknowledging that it was possible to see different ways forward, or criticize different things from the past, without negating each other’s sincerity.

I cannot tell you that every action that brought you to this pass was right, or rightly-motivated, but I can predict that you won’t make it over this difficult pass if you go it alone.

I have real hope for the Minnesota Orchestra because I believe that the generous people and the devoted audience who have sustained it for generations still want it to be great. I believe that the administration entrusted with it wants the orchestra to succeed. I know that its musicians have given their whole lives to be prepared to make great music on its stage. How this impasse can be left behind, an impasse which many have created, not only some, despite their essential love of the orchestra, is something I cannot predict. I can tell you from personal experience that seemingly impossible problems can be solved, and I can hope, with you, that great music will again flourish in this great city.

 * * *

Xochipilli

A Joyous Recording Session

The news has come out today that the BIS, the Swedish-based label that has been making sensational recordings featuring Osmo Vänskä and the Minnesota Orchestra, has canceled the upcoming recording session with the Orchestra.  In a message that is both painful (and to be honest, embarrassing) to read, the company stated that it felt the Orchestra would not be “in good enough shape” to complete the recording in line with BIS’s standards of excellence.

This has me thinking back to happier days, and a joyous recording I was privileged to make with them in 2006—Beethoven’s 9th Symphony. The Ode to Joy.  I took part as a singer of the Minnesota Chorale.

I was also the Public Relations Writer for the Orchestra at the time, and my boss asked me to write about my experiences for the Orchestra’s newsletter, Orchestra Times. I happily obliged with the following piece. Shortly after it appeared, Osmo himself told me how much he enjoyed it, and suggested with a wink that BIS producer Rob Suff would appreciate how I portrayed him (I hope so!).  Enjoy!

 * * *

Monday, Jan. 16, 6:50 p.m.: We Chorale members are whisked onstage with great speed—we’re on a timetable and every moment is valuable. It’s amazing how different the auditorium feels. The regular lights make a low hum which would be picked up on the tape, so temporary ones have been set up. Their light is harsh and focused, etching shadows into the walls and making the Hall seem more angular than usual.

7:00: As we bustle into our spaces, a booming, God-like voice comes over the PA system (with a suitably God-like British accent). It’s producer Rob Suff relaying which sections we’re covering and the time allotment for the rest of the night. The directions are all straightforward, but since they are delivered from multiple speakers designed to carry over an orchestra at full volume, it’s like being spoken to by He Who Must Be Obeyed.

7:06: In that moment which occurs between Osmo raising his hands and music blasting forth, something strikes me… the Hall is unearthly quiet, even more so than at a regular rehearsal in front of an empty house. The ventilation, lights and anything else that might make a sound is off. They usually produce a gentle white noise that is shocking in its absence.

7:45: This is totally unlike a concert. After a fast run through of a section, we go back and fix things, sometimes singing the same measure 8-10 times to get it perfect. It’s somewhat disorienting singing random phrases of music out of sequence. We also quickly realize how important it is to pace ourselves in a recording session.

8:32: I think things are going well. Osmo keeps cracking jokes—good ones. And for a Finn to let loose like that….

8:51: He Who Must Be Obeyed stops us mid-take to clarify the text. The booming voice points out, “Chorus, the diction is fantastic! [“fantastic” means we’ll only need 2-3 more takes.] But it’s coming across as ‘geh-geh-ben.’ Could you make it sound more like ‘geh-geh-ben’?” Not entirely sure what the difference is, we try again. Another stop. “Still too much ‘geh-geh-ben.’ Just a little more like ‘geh-geh-ben’ please.” Perplexed, but nervous about screwing it up, we sing it again. “Sorry, no. Now you’ve gone too much the other way, and it sounds like ‘geh-geh-ben.’ Not ‘geh-geh-ben’ or ‘geh-geh-ben,’ but could you try ‘geh-geh-ben’?” Three takes later, we get the pronunciation right, although I swear I have no idea how.

9:10: We’re tired. Beethoven wrote the vocal part to meet the demands of the music, not the singers. But the levity of the recording session has made it easier easy to keep the Freude in our voices. We’re all so excited to be part of the project, and hope that our passion carries into the recording. Of course, the most vocally athletic sections are due up tomorrow….

Tuesday, Jan. 17, 7:34 p.m.: We’ve spent the first part of the session cleaning up minor problems from last night. Not for the first time, I wonder if BIS will add a bonus track of outtakes… maybe in a forthcoming “Very Special Collector’s Edition?” We finish all the sections with the soloists, and as they leave, the Orchestra and Chorale give them a huge, warm round of applause. Visibly touched and appreciative, they return the favor, giving us a standing ovation of our own. He Who Must Be Obeyed brings us back to earth with a pleasant, but firm reminder that we’re 2 minutes into our 10 minute break….

9:28 No time to write! We’ve been hammering away at the most vocally demanding section of the work, right up to the moment the producers legally need to get us off the stage. Even with proper breathing, pacing and fluids, I feel like I’ve been shouting for the past hour. But as tired as I am, I’m in the zone. I’m not at all ready to quit. Regardless of what the critics might say about the CD, this has been a wonderful project, and I’ve been thrilled to take part in it. But I’ve got to run—He Who Must Be Obeyed is telling us in his thunderous (yet unfailingly polite) voice that the chorus needs to clear the stage in 2 minutes so the Orchestra can run another section.

9:39 A last thought as I start my car: I hope the CD gets released in time for Christmas. I think my mom is planning to use them as stocking stuffers for everyone she knows….

* * *

I note with pride—and now, sadness—that this recording was nominated for a Grammy, and stands as a great testament to what an amazing partnership we had.

Xochipilli

What Does Victory Look Like?

“Now this is not the end. It is not even the beginning of the end. But it is, perhaps, the end of the beginning.”

–Winston Churchill

 

Now in its tenth month, the Minnesota Orchestra labor dispute feels like it’s entering into a new phase.  On the one hand, the grind continues as both sides can’t agree on a solution, and an initial attempt to jump start negotiations with noted mediator George Mitchell has stalled.  At the same time, it seems clear that things will start to change quickly—the remodeling of Orchestra Hall will soon be complete, and the new season should be starting soon.  Plus, Music Director Osmo Vänskä announced he would be forced to resign the first week of September if there was no resolution.  All this suggests that the dispute will take on a new character, and greater urgency, in the next few weeks.

This has me wondering about what will happen next.   Where is this going?

I am particularly curious as to what the MOA leadership team’s strategy is for the future.

I wonder because the events of the last few weeks have solidified my sense that the management’s strategy to date has been less about reshaping the Orchestra’s business plan or creating long-term sustainability, but simply to win the labor dispute.

I don’t say this lightly—I have no doubt that many of the board members believe in their heart of hearts that their actions, however painful, are absolutely necessary to save the organization from catastrophe.  I’m sure many are genuinely inspired by their new business plan, and are excited to implement it as soon as the contract with the musicians can be settled.

But again and again, the management’s actions and statements have looked like nothing more than a desire to play hardball, to win for the sake of winning.  They say as much themselves—they rebuffed Mitchell’s attempts to enter mediation and to end the lockout because they would lose “leverage” if they did so (as covered in the Star Tribune, here) .

These are not the actions of a group of people trying to come up with an equitable model for future, or considering the larger impact the lockout is having on the community.  It is a group of people fighting to win.

But I think their goal of winning the labor dispute has blinded them to a powerful truth.  By remaining resolute and playing hardball, it is possible for them to win this battle.  I grant that it’s even possible for them to win the war.  But I’ve seen no indication that they can win the subsequent peace.  If the musicians were to capitulate tomorrow, take the $5 million in pay cuts and accept the management’s contract as-is…

…what then?

I ask this without snark, judgment or vindictiveness. I really want to understand what your ultimate victory looks like—what do you value, what you hope to achieve by engaging in this dispute.

I’ve worked in non-profits for a long time; my sense is looking at the long-term, what you would consider a “victory” will have devastating consequences, and I fear there is no strategy for dealing with them.  Below, let me outline some looming problems that the board could be left trying to solve—even if they “win” the labor dispute and get their preferred contract with the musicians.  And let me say that my ideas are based entirely on my own personal reading of the situation.

1.  Osmo.  My sense is that he will leave, and this will be a devastating blow to the organization.  I don’t want him to leave (have you read how I “met” him?  I posted that here).  I can also think of many reasons why he might want to stay on… and could be just the leader we would want at the helm for the rebuilding phase.  But based on public statements from the board leadership, I think key people in management are more than a little irritated that Osmo has spoken out about the dispute.   This suggests that there is not going to be a real push to keep in on in the short-term, and that there will be little enthusiasm for renewing his contract.  Plus, he is one of the highest paid people in the organization—if the organization’s top priority is budget cuts, many would no doubt love to bring in a cheaper replacement.  How long would any employee stay around in such as scenario, particularly if that person were a hot commodity with many options?  Osmo’s loyalty to the Lahti Symphony is legendary and perhaps sets a precedent, and his personality could very well urge him to stay, but….

What does this mean?  I suspect a mountain of trouble.  Osmo has been a hugely popular figure, and is for many the face of the organization.  There would be a great deal of negative publicity and public anger that he left, which would impact ticket sales, donations and the organization’s reputation.  The process of replacing him would become a huge drain on institutional time, money and spirit (replacing a Music Director is tough in even the most positive climates).  Many candidates would be scared away.  And the job search itself would be distorted… the organization would be forced to prioritize a new Music Director skilled at damage control and rebuilding, rather than musical excellence. I also believe that this will lead to factions arising on the board, which will be a huge drain on resources and limit effective governance.

2.  Michael Henson.  I have to believe that his tenure with the Orchestra will likely come to an end, and soon.  I say this with no personal animosity, and certainly not with any inside knowledge.  But I believe it is a well-established business principle that a leader who shepherds an organization through a wrenching change is seldom the one needed to lead the aftermath—the skills and the personality needed  are simply too different.  Even if he emerges as the victor from this labor dispute, earning the gratitude and praise of the board for his steady leadership in a time of crisis, it will be next to impossible to come off impartial or as a team-builder.   And since he will have earned the unrelenting hostility of the musicians, his presence would likely lead to a toxic environment for everyone.

What does this mean?  I find it impossible to imagine Mr. Henson will stay over the long-term, meaning that on top of everything else, the organization will have to embark on another hiring campaign.  Obviously, this will suck up a great deal of institutional time and energy—it would in the best of times.  But I imagine both the musicians and the leadership will both be fighting hard for a leader that is sympathetic to them.  How is that resolved?  Will the new leader ratify the policies of the old, or find ways to mitigate them?  This could also divide the board—what qualifications should they emphasize in the job search?  I don’t want to be entirely negative here; it is possible with the “reset” achieved the victors will move towards conciliation and work to defuse the situation as rapidly as possible.  The board might quickly find the ideal leader to do just this.  But it again means that priority will be given to that kind of leader, and not, say, a forward-looking visionary or proven fundraiser.

3. The Musicians.  None of the musicians have told me their plans, so again this is speculation on my part.  But based on the examples of Detroit and the SPCO, I feel safe in saying that musicians will continue exercising their exit strategy long after the dispute is over.  They will continue to audition for other gigs, plan retirements, or take on new careers such as teaching.  Already there are some 28 open positions in the 97-member group.  Leadership has said publicly that those who can leave, will.  Sadly, they are doing so… a trend that will no doubt continue.  As a point of comparison, in the wake of the SPCO’s settlement, a third of the ensemble left, leaving it with more bassoons than cellos and string basses combined.

What does this mean?  This exodus is a huge artistic blow to the ensemble, obviously.  The balance, precision and flexibility of the group—built over many years of hard work—is essentially gone and has to be rebuilt from scratch.  It doesn’t matter that the players themselves are all wonderfully talented; the orchestra survives on collective precision with all the parts working together.  Similarly, a baseball team can’t rely on players’ individual skills to turn a double play or execute a suicide squeeze—they have to work together.  But more than artistic quality, the loss of so many players will be a huge drain on the institution’s resources, as round after round of expensive auditions take place, while simultaneously looking for a new Music Director and President.  And who is going to audition for the group in such an environment?  The job market might be tight, but people aren’t stupid.   Finally, as I’ve argued before, the musicians are the best ambassadors for the organization.  They teach across the area, they do outreach, they are advocates… the public loves them.  It is this love that causes many people to buy a ticket or make a donation.

4. Donors.  This is obviously a diverse group with a wide range of priorities, politics and backgrounds, so it is hard to lump them into one group.  Clearly, some supported the lock out and will support you in the aftermath.  But I think it’s clear there is a great deal of donor unrest.  Some donors, including major ones, have expressed their displeasure publicly. There might be a rush of money from people glad to have the musicians back, but many, many donors feel they’re victims of a bait and switch.  Numbers of them have stated publicly they would never have given to the rebuilding fund if they knew what was coming.  Many feel your handling and reporting of finances is shady, making you an unwise investment.  Many are furious about your treatment of the musicians.

What does this mean?  Year in year out, approximately a third of the Orchestra’s income comes from fundraising.  My sense is that although you will still get donations, this area is going to take a big hit.  It is a long-standing truism that donors don’t make contributions simply because you need money (there are thousands of worthy charities out there), but because you inspire them.  They feel a connection, and are passionate advocates about you and your work.  I fear the lockout has strained theses feelings thoroughly.  What is your plan to re-engage them?  How will you prove your transparency?  Will donors ever again believe you when you claim you’ve solved the budget crisis?  Or when you claim poverty?  When scores of people mock your fundraising letter on social media, as many have done regarding your end of the fiscal year appeal, you have a problem.

The problem compounds over time; the basic law of fundraising is that you don’t get major donors ex nihilo, but cultivate them from smaller donors.  Most non-profits utilize some type of “moves management” approach, which specifically outlines the steps you need to take in order to move donors from one giving level to another.  Breaking this chain of events early on leaves you with dramatically fewer donors to develop.

5.  Audiences.  Like donors, there is a wide-spread feeling of betrayal in this group.  Audience members are furious that their beloved orchestra has been taken from them—no matter what the reason.  Sure, some may blame the musicians for their intransigence.  But the fact remains that you locked out the musicians out and did so willingly.  Plus, you chose to keep the musicians locked out specifically to increase your leverage. How do you spin that?  Even if half the number of potential audience blames you, that’s a lot of empty seats at Orchestra Hall. And worse than anger is apathy.  After a year of finding other things to do, other ways to spend money, other outlets to enjoy classical music, people will have started to move on.

What does this mean?  Your new business model depends on steady—if not increasing—ticket sales.  Like donations, earned income amounts to roughly a third of the total revenue of the organization.   These goals will be difficult to meet with potential ticket buyers who are still seething about the lockout, or have drifted away from the organization.  This means more discounted tickets to attract patrons.  Also, a new, much more aggressive marketing program is required… and that will be expensive.  I’d imagine you’d need a whole slew of events to build good publicity, which will again take time and money—and depend on buy-in of disgruntled musicians for success.  That could be… awkward (and brings to mind the opening scene of Boris Godunov where the Kremlin guards force the peasants to sing a hymn of praise for the newly crowned Czar). Again, I don’t doubt that the first few concerts could be well attended, because people missed the Orchestra.  But do you remember how difficult it was for Major League Baseball to bring back the fans after the 1990s strike?  It didn’t matter who the fans blamed; they didn’t buy tickets.

6. The Board.  Knowing the resources of the current board members, it is entirely possible that they realize that the first year after the lockout will be rough and have vowed to make up the difference from their own pocketbooks.  They might be doing so out of real concern for the stability of the organization, or simply to “prove” that their business reset was a success.  But that isn’t a long-term strategy… they’ve in fact stated that the new business model is being implemented so they don’t have to keep bailing out the Orchestra.

I also note that by their statements, it’s clear many board members feel disrespected, unappreciated and bullied.  These feelings are not going to go away, and will likely burn like slow acid.  The situation seems to have instilled a siege mentality that has created a greater uniformity of purpose for the present, but that could change over time.  If the other dangers I’ve outlined here come to pass, how long will it take before people start breaking ranks and start to blame each other?  If the artistry and reputation of the group suffers, I suspect some longstanding board members will grow resentful of the changes.  If the finances don’t improve and the board is asked to supply more and more emergency funds, there will be some who openly wonder if the headache of the last year was worth it.  Each board member has his or her own reasons for being involved—their own priorities, goals and expectations.  In times of trouble, these differences of opinion will multiply, and recriminations will begin to fly.

What does this mean?    The “us vs. them” mentality is dangerous, meaning that they are going to rely more and more on their own views and be less open to others.  Their resistance to outside ideas has already cost them support, and makes it less and less likely that outsiders with useful ideas will come forward in the future.  It will be increasingly difficult to recruit new members for the board, which again speaks to long-range problems.  Even among the board members who stay on, there is an increasing possibility of factionalism that will dilute the board’s ability to govern the organization effectively.  With all these pressures, there is a significant chance that the board members will suffer organizational fatigue and leave as soon as they can; in doing so they will take their talents and their checkbooks with them, further harming the Orchestra.

Let me again be clear that I have no inside knowledge of anything regarding this dispute.  I also have no crystal ball—these “predictions” are not certain, but rather based on my reading of events, observations and a study of similar labor disputes elsewhere.  I could be over-dramatic in my interpretation of these flash points, and certainly welcome discussion of any of them.

But my point is, the management has gone into this dispute saying it has a new plan, a new business model for the Orchestra and this lockout, while unfortunate, is a critical first step in implementing this new model.  They also state that this business reset is the only thing that can stave off disaster for the Orchestra.  Well, the events of the last 10 months have spiraled out of control; I believe they have radically altered the situation and shattered all your assumptions.  What’s your plan?  How will you address these looming problems?  When all is said and done, what does your ultimate vision of victory look like?

 

Xochipilli Mask from Teotihuacan

Arts and Public Funding

Recently a news article in the St. Paul Pioneer Press (linked here) sparked a great deal of discussion about art and public financing.  Other hatchet jobs appeared (like this one) and soon there was a growing cry railing against “wasting” taxpayer money on these frivolous projects.  I ended up involved in some of these discussions personally. Coming in the midst of the Minnesota Orchestra’s ongoing labor dispute, these stories and the response truly grated me—for my own sanity, let me respond to some perennial questions about whether or not we should pay for all these artistic extravagances. It is an important discussion to have, and to revisit often.

What’s wrong with these stories?

One of my big problems is the reporting is it is so… lazy.  It is the same formula used to attack any public expenditure, from arts to education or defense spending. You comb through a huge budget to find one particular item, hold it up as ridiculous and worthy of scorn through snarky comments (if not outright mischaracterizations) without once asking for a justification of it. Then you quote someone from an organization that exists solely to attack items of this kind, and throw in a canned quote from a politician from the opposite party that is trying to generate some news coverage. It’s like finding an expensive hammer in the army’s budget, quoting someone from Women Against Military Madness about the “out of control military-industrial complex” and throwing in a quote from a liberal Democrat. So predictable it’s worthless.

This just seems like such a huge waste of money when budgets are so tight.  Can’t we spend that on roads?

I agree that for many taxpayers, $10,000 sounds like a huge sum.  Heck, I’d love a check for $10,000.  And I’m sure many see that as a particularly huge sum to spend on art.  I’d counter that in the scope of the state’s budget, and even for the State Arts Board, $10,000 is a pittance.  The state’s budget is $34 billion.  That $10,000 wouldn’t buy a road… it would barely pay for a driveway.  Even if it were given to an artist in cash no strings attached, it certainly wouldn’t be enough for him or her to live the high life for a year.  And most grants given out require some sort of a cash match, so this grant is little more than seed money, or start up money, that makes it possible for an artistic endeavor to happen.  So this amount is tiny to the point of insignificance to the overall budget, but hugely important for allowing an artist to make art.

Shouldn’t the public have an opinion in the art that’s being made?  We paid for it, after all.

Yes, I absolutely think the public should have an opinion—and that isn’t just a grudging admission, I truly want the public more involved at all levels of the art.  Art needs an audience to really live.  But that brings up practical questions… who should be involved, at what level and in what capacity? How to you give the public a voice without forcing art to happen by committee? How can the public protect its investment without stifling the creativity needed to produce it in the first place? Someone will always have a problem with this or that line item from any budget… that’s just human nature. And if we try to force universal consensus, we’re going to fail miserably. Let’s look at the new light rail line going through the southwest suburbs. On the eve of going forward with the project, someone raised an objection, and then others (many of whom didn’t want publicly funded mass transit to begin with, especially in their neighborhood) argued that since not all questions were answered the project was too controversial to continue.  Soon the whole thing devolves into a shouting match, and we’re in a heated argument that most considered closed.

Well, shouldn’t there at least be greater oversight in the decision-making process?

I personally think the State Arts Board and the regional arts councils do a tremendous job at oversight, and try to be as transparent and apolitical as they can. They make sure all grant applications are evaluated by a panel of knowledgeable community members and arts administrators; these panels look for great art projects that also speak to the community. There are many different viewpoints involved, different backgrounds, preconceptions and values to ensure a diversity of opinions. I’ve been both a panelist and an applicant, so I know of what I speak. Grant cycles are always very competitive and discussions about merit and impact are generally quite lively. These are always open to the public and they are as transparent as can be.  Nearly everything is accessible to the public on demand.

So I’m surprised that the author makes no mention of how and why this applicant got her grant, under what program, or for what purpose. No chance for the artist to explain, justify or elaborate… her project is just held up as ridiculous with no explanation. Is this a misuse of funds? Or an inadequately explained project?

Isn’t the Arts Board worried about misused or mismanaged funds?  Shouldn’t there be controls after a grant is made?

Yes, there should be a way to weed out wasteful spending and misused funds. And there is… artists who receive grants have to do regular reporting and submit budgets with line item reporting, that shows the proposed numbers and how they compared to the actuals. Significant differences need to be explained.  Plus, artists have to submit a narrative report along with the budget, with documentation showing how money was used to fulfill the intended outcomes.  If the money can’t or won’t be used as it was originally intended, the funder can demand its return—as the State Arts Board when the Minnesota Orchestra canceled its season.

Many of us think the Arts Board is so terrified about negative publicity that their reporting mechanisms are demanding to the point of being oppressive, forcing endless justifications that try to pre-empt political controversy instead of being genuinely useful at seeing how impactful the art was. And even then, it’s easy to drum up controversy and force an artist onto the defense… like the “controversy” over nudity in a recent Fringe Festival show (story can be found here). Never mind that the show provided multiple warnings about the content.  Never mind that it was part of a famously experimental theater festival, one that featured hundred shows.  Never mind that nudity was integral to the story and non-titillating, or that the show was a commercial and critical success. One person gasped about nudity and public art… and suddenly the Arts Board has to do a apologetic media tour trying to “prove” that public money isn’t funding sin. Or in another case, someone with an axe to grind did an “exposé” on how money was being wasted by artists who simply were funding expensive vacations for themselves.  Panicked, the Arts Board announced that no money could be used for any activity taking place out of state—no research, interviews, advanced training, nothing.

Who gets to decide whether the funds are being misused? How many safeguards must be in place? I don’t mean this in a snarky way, or in an exasperated throw-up-my-hands-in-despair kind of way. Public art has to have public support, but where can we draw the line so that we don’t make it impossible for legitimate artists to work their magic, but at the same time don’t wantonly waste public money? As an analogy, at what point do we essentially make child-proof caps and tamper-resistant packaging so strong that we can’t get at the good stuff inside?

If we’re being asked to pay for art, I wish the artists would communicate better and not come off as condescending or write us off as if we don’t get it. 

I fully agree that artists need to be able to communicate with the public, and to explain it to people outside their bubble. And I readily concede that some artists can be insular and come off as condescending. My objection with this article is that the artists are forced to try to explain their art to people who have made a political career of attacking the arts as wasteful. Phil Krinkie (with or without the Taxpayers’ League) has made it his life’s work to attack public spending on any project, and he worked diligently to defeat the arts amendment. I think convincing him of the value of public art is too tall an order for any artist.

Let me conclude by saying that I understand some people don’t think arts should get public funding.  A few years back, however, the state taxpayers passed the Legacy Amendment to our state constitution—we freely chose to create a new, special tax that would fund arts and other cultural projects.  This debate is over.  With public funding comes responsibility; arts supporters have a real obligation to ensure the taxpayers money isn’t spent on frivolous projects, and have to recognize that simply because someone dreamed up an art project doesn’t mean it has to get funded.  But please, in return can we put an end to the baseless attacks that suggest—uncritically—that arts are inherently frivolous and unworthy of support?  And if it turns out that a project was questionable… do we have to throw the baby out with the bathwater?

Xochipilli

The Triple Bottom Line—A New Business Model for the Orchestra

For some time, my wife has been talking about a business concept she has used with great success at her job—the triple bottom line.  I have to say, the more I’ve learned about it, the more impressed I’ve become… and since leaders at the Minnesota Orchestra have clearly indicated the need for a new business model, I’d like to suggest they take a closer look at this one.  Done right, this new strategy could benefit everyone and greatly strengthen the organization.  Some readers may not be familiar with the concept, so let me explain.

The triple bottom line (TBL) was first introduced by John Elkington back in 1994 as a way to look more holistically the true cost of doing business.  Elkington’s idea was that businesses have tended to focus exclusively on the profit and loss sheet, which has unduly narrowed their thinking and kept them so focused on short-term gains that they were crippling long-term success.

Elkington proposed a new way of thinking that measured three indicators to advance the goal of sustainability in business practices. The three measures are: profit (the economic value created by the company, or the economic benefit to the surrounding community and society), people (the fair and favorable business practices regarding labor and the community in which the company conducts its business) and planet (the use of sustainable environmental practices and the reduction of environment impact).  The “3Ps” became the cornerstone of his argument. (The Economist has good intro to the concept here.)

Shortly thereafter, Andrew Savitz and Karl Weber came out with a book, The Triple Bottom Line, that expanded Elkington’s idea by representing the three “bottom lines” as intersecting circles. The areas of intersection are termed “sweet spots,” meaning synergetic opportunities. For example, when power efficiency is improved, profits are improved due to lower power cost, while the environment benefits through reduced carbon dioxide emissions. So, improvements in the planet and people “bottom lines” are not necessarily at the expense of the profit “bottom line”.

triple-bottom-line1

There are two primary features of the TBL.  First, the emphasis is on broad-based sustainability, which forces a business to look beyond a quarterly report and to think of the real-world costs of doing business over a much longer period of time.

Second, it is predicated on the idea that what you measure is what you get, because what you measure is what you are likely to pay attention to.

This new balanced scorecard approach has been adopted by many businesses, including FedEx-Kinkos, Nike and Tesco; it has also been adopted by non-profits and governments across the country.

Let’s look at the 3Ps more closely.  Most companies instinctively understand the idea of profits.  But the Profit bottom line is more than that.  Profit is seen in terms of total value, with all input costs deducted, including tied-up capital; it also factors in risk management, capital efficiency, margin improvement, growth enhancement and return on investment. Further, profit in this case is seen as what economically benefits not just the individual company, but the society at large.

The second pillar is the People bottom line, which examines labor, the community and the region in which a corporation does business. In this mode of thinking, all workers are seen as company’s asset, but so are the community members at large; therefore, in addition to keeping its own labor force engaged, healthy, happy and productive, the business ensures its policies do the same for the entire community.  This makes it easier to recruit workers, cultivate customers, encourage advocates, forge greater bonds with vendors/suppliers, build networks and improve the workers’ quality of life when they are outside the office.  Businesses that incorporate this bottom line into their business plans seek to increase benefits for all stakeholders in an equitable way, without prioritizing one group (i.e. upper management) or marginalizing another.

Planet is the bottom concerned with environmentally sustainable business practices, achieved by maximizing benefits while minimizing detriments. This can range from electronics recycling to business plans that discourage the use of dangerous chemicals or destructive practices. Triple bottom line companies look at the entire life cycle of their actions and try to determine the true cost of what they’re doing in regards to the environment. They take pains to reduce their energy usage, dispose of any toxic waste in a safe way, try to use renewable energy sources and avoid producing products that are unsafe or unhealthy for people and the planet (no… another production of The Nutcracker around the holidays does not qualify as unsafe or unhealthy, regardless of what you may think).

An ethic of corporate social responsibility is a powerful reason to develop a new business plan focused on the triple bottom line.  It’s not, however, the only one. Many studies, including this one by MIT  show how corporate sustainability leads to greater profits.  But there is more.  The TBL has been shown to improve employee retention and employee engagement.  Interestingly, it’s also clear that more engaged employees create a more effective culture of social responsibility; thus, there is a feedback loop between the right employees and the right corporate culture that benefits everyone.

The Orchestra would benefit greatly from the adoption of the triple bottom line as a guiding force.  I leave it to more informed minds to discuss how the Planet bottom line would work in practice (I assume the Orchestra hasn’t made it a habit of dumping mercury into the pond on Peavey Plaza), but let me speak to the other two areas.

In terms of profit, I recognize that the Great Recession has been hard on the Orchestra, with all its revenue streams getting clobbered at once.  But rather than to simply cut $5 million from the musicians’ salaries, look at the whole picture over time.  Consider that the musicians are not just personnel; they are also your product.  What would happen if another company made a similar divestment, like a taxi company instantaneously eliminating 20% of its fleet of cabs?  When you consider the long-range, you have to take into account that such cuts could seriously hamper the quality of your product, which over time could lead to serious declines in ticket sales.  Will you, then, have to spend greater and greater sums of money on marketing to attract audiences while simultaneously dropping ticket prices? Will a loss of quality make it similarly difficult to fundraise, as donor apathy sets in?  Will such steep cuts also make recruitment and retention proportionately more difficult, and therefore more costly?  For example, you’ve also stated that each year you tend to lose three musicians to attrition.  What happens if that rate doubles, and stays at a higher rate for several years as disgruntled musicians leave?  Also consider that the people leaving will most likely be your brightest stars, because they’ll have the most options.  Will this compound the problem?  Auditions are a lengthy, costly process—what kind of a drag will this be on productivity?

Factoring the people side of the equation, the current trajectory is grim as well.  Without assigning blame, it must be clear that this dispute has created an angry, divided workplace for everyone.  This can have all kinds of ramifications.  At this point, I suspect even innocuous requests made to the musicians will fall on deaf ears—they probably have no interest in doing any sort of helpful outreach, offering advice, or entering into discussions unless they are contractually obligated to do so.  This is a huge loss of wisdom, institutional knowledge, fresh perspectives and talent.  And it is particularly alarming for an organization that requires communal precision—on and off the stage—to survive.  Again, how will this impact productivity and product quality?

But this will have other implications, too.  I’ve argued here  that personal connections are critical to an organization’s success, and the musicians are your best ambassadors to the broader community.  These connections are critical because the outside community is the key to most of your sources of revenue.  Besides the endowment, which is clearly outside your hands, your business depends on community members buying tickets and contributing money.  Community support leads to government and corporate contributions as well.

I’ll say this too—when you look at the broad picture, you have a duty to build an appetite for classical music as an art form, too.  And I don’t mean this in a floofy, artsy-fartsy kind of way, but as a real business obligation.  I cringe at those who call classical music a dying art form, but I also recognize that classical music’s market and audience share is limited.  It has to be grown for your long-term survival as an organization; no business can survive without R&D, and this is your version of it.  With long-term sustainability as your mantra, you have to engage in school concerts, educational programs and community outreach as a long-term business investment.  This will obviously build your audience base, but it will also help create a pool of potential musicians, staff members and donors as well.  How many members of your board of directors are there because they had experience with hearing a great concert live? Or playing an instrument, no matter how briefly?

The Minnesota Orchestra has stated repeatedly that it needs a new business model to survive.  In that spirit, I urge you to take a long look at the triple bottom line as a way to more holistically measure success.  It’s a change in mentality, but it is critical to look beyond short-term profits—you must include people, the planet, and profits as part of your model.  It is not enough to recognize these things as being important; you must assign them real-world values, and monitor how you deliver them with an eye to long-term sustainability.

Because—in case I haven’t made myself clear—I really do want you to be here for the long-term.

Xochipilli