Statements, Part 2

Yesterday (in part 1 of this blog entry) I noted that the negotiations between the locked out musicians of the Atlanta Symphony Orchestra (ASO) and the management of the Woodruff Arts Center (WAC) hit a rough patch; shortly thereafter the two sides had begun making statements in the press. My main point was that the WAC’s statements were, to be honest, bizarre, and they did not inspire trust in the WAC’s ability to manage the situation.

Well… I’m disappointed to report that things only got worse. Continue reading

A Masterclass in Bad Optics

Something about the Atlanta Symphony Orchestra (ASO) labor dispute has struck me… and not in a good way. In the last few days the organization has been at the center of relentlessly bad news. That much is pretty obvious. But what is intriguing to me is how relentlessly bad its handling of the news has been. The ASO management knew what was coming, and presumably had time to prepare for the fallout.  One could assume that it would have assembled a media plan to deal with the obvious negative publicity that would inevitably occur once the labor dispute boiled over.

Instead, the ASO management has given us a masterclass in how to foul your press coverage, and create new bad press to boot. It is a prime example of what we call “bad optics.”

Let me explain. Continue reading

A Stunningly Bad Idea, Handled Badly

Well, there it is.  In a surprisingly mushy article in the Star Tribune, it was revealed that the board of the Minnesota Orchestra Association (MOA) has sort of expressed a strong but not yet definitive preference for keeping Michael Henson, the Orchestra’s controversial President and CEO, in his current position.  And at the same time, the board seems to be trying to keep Osmo Vänskä, the much-respected former music director, at arm’s length.  Or maybe closer, but probably not. Continue reading

So, About That New Business Plan…

For several days now, something has been bugging me.

Again and again, the Minnesota Orchestra’s leadership has indicated that it is trying to develop a new business model to successfully run an orchestra in today’s cut-throat world—apparently with the understanding that this model will be so successful that other orchestras around the country will adopt it as well.  There is true-believer zeal in their statements and actions, and I have no doubt that management truly believes this new model will solve the various ills currently plaguing the industry, and lay a solid foundation for future growth.

But the longer this dispute goes on, the more this new business model baffles me, leaving me with many questions for the Orchestra’s management.  On a basic level, what is this plan?  For something so central to the labor dispute, there has been precious little explanation of it or its particulars. If you feel this plan is so vital to the survival or the Minnesota Orchestra (and orchestras in general), then why aren’t you more actively discussing it, and promoting its various components?  And why are you so adamantly pushing it despite clear evidence that no one actually wants it?

The more I think about this new plan, the more questions I have for the Orchestra’s leadership.

An Unclear Business Model

To begin, I have to admit I’m surprised you’ve been so circumspect in the details of your new business model.  It’s odd… you have said repeatedly that it is the basis for your actions, and that its implementation is critical for the long-term health of the Orchestra.  If this is the case, if it is so rationale behind it is so self-evident that anyone can see its importance, then why aren’t you aggressively hawking the details at every opportunity?

Yes, you have a PDF of your “strategic plan” on the Orchestra’s website, but it lacks details and justifications of specific actions.  You don’t lay out your business model, you just provide boilerplate.

And even if the document on your website was thoroughly detailed, it exists in isolation.  There have been almost no other mentions of the plan, nor have there been public discussions about what you’re trying to achieve with it.  Over the course of the last year and a half, why haven’t the Orchestra’s leaders and board members been talking about it in community forums or in the many interviews they’ve given?  Where are the details? Why can’t every board member give an “elevator speech” that explains its key points and the justification for them?  Instead, you simply state there is a new business plan… and that it’s vitally important.

The problem with this is that this gives the appearance of arrogance… that you are so obviously correct in your beliefs that you don’t even need to explain them.  That your ideas must simply be acted upon without question.  This situation also gives the impression that you don’t want too much discussion of your new business model—that you recognize that it will be unpopular or raise opposition, and so you avoid talking about it to avoid any potential pushback until it’s too late.

“Align Supply with Demand”

Wading through your documents and statement, however, I can find two major components of your new business model.  The first is your stated goal to “align supply with demand” for your concerts.  As a result, you have reduced the number of seats in Orchestra Hall, and likewise reduced the number of classical concerts you are presenting, dropping from 85 in 2003 to proposed 55 in 2012.

With respect, this concept seems to fly in the face of basic business practice.  As I mentioned in my previous blog, I’ve been surprised that the management would so firmly commit to a plan that is so self-defeating.  Facing a difficult economic climate where you are struggling for audiences and donors, why would you throw your hands up and simply scale back your product?  Why would you not fight for market share?  What other business—anywhere—would respond in such a way?  By pulling away and further removing your product from the market, you are essentially beginning a suicidal death spiral leading to irrelevance.  By choice.

Let’s look at this from a different perspective—say, from that of a hypothetical soft drink company.  Let’s say that your flagship product, Sparkle Soda has been around for decades, but has been losing ground slowly and steadily to the industry leaders like Pepsi and Coke.  Faced with this deteriorating situation, why wouldn’t you grit your teeth and try to reverse the situation?  Why not re-brand and begin a massive public awareness campaign to make Sparkle Soda more visible again?  Why not strategize new, innovative partnerships to bring your product into new markets?  Why not fight aggressively for product placement?  For example, you could make sure that every major fast food chain or movie theater complex had at least one nozzle dedicated to Sparkle Soda on all of its fountain drink dispensers.

Following the Orchestra’s model, the company would instead cut production of Sparkle Soda and decrease distribution at the national level.  Instead of working diligently to make sure that every fast food chain had a nozzle dedicated to Sparkle Soda, it would sub-lease the nozzle spaces it currently has to a larger competitor like Coke or Pepsi.  Worse, the drink company wouldn’t even use the proceeds of its rented-out nozzle spaces to jump start product development or launch new initiatives… it would just hold onto the money and give out large bonuses to the CEO.

Maybe this is an appropriate action if you’re ultimately trying to pad your nest egg or sell off an under-performing company.  It is not, however, appropriate if you are the leader of a non-profit—and particularly not if you the guardian of a century-old cultural treasure.

“Dynamic Pricing”

The only other aspect of your model that’s been spelled out is the concept of “dynamic pricing” to increase ticket sales.  This concept is most familiar to the public through the airlines, which use it to constantly adjust seat prices based on a whole slew of external factors, such as demand, type of customer, time of day, and competitor’s activities.

With respect, I can’t imagine why you would adopt a marketing technique from this industry. Americans cordially despise the airlines, and dynamic pricing is one of the reasons for this animosity.

For one, regardless of what kind of deal they got, customers always have a gnawing feeling that you’ve paid too much.  Stories abound about those who waited just a few minutes too long before buying their tickets—only to find that the price had increased exponentially.  Or that someone using a different online platform or even a different browser scored a deal on tickets.  This creates a deep sense of frustration; plus, since ticket prices are based on a bewildering array of uncontrollable external factors, the customer has no sense of what the ticket is actually worth.

As a result, customers are forced to spend an inordinate amount of time checking and re-checking prices, trying to game the system and lower the price.  I personally hate this—jumping from website to website over several days simply trying to avoid getting fleeced.  I resent that airlines make me go through all these hassles—why would I want to see that happen with Orchestra tickets?

And let’s play this out to the logical conclusion.  Following the airline model, for example, would the Orchestra no longer offer a last-minute rush tickets at discounted prices, but instead force last minute purchasers to pay three times the face value of the ticket? Pay additional fees for an aisle seat?

There are larger issues to consider as well… issues like data management.  Dynamic pricing only works when there significant segmentation of the consumer base; ticket buyers have to be placed into discrete categories that range from age and income to geographical location.  The events themselves must be segmented as well, with price points based on factors like assumed popularity, day of the week, assumed clientele, and so forth.  This is a vast amount of data that has to sifted, collated, and manipulated to high levels in order to make dynamic pricing work.

So… do you have the technical and personnel resources to gather and manage all this data?

Can this data be handled through the database management system you have now?  Do you need to upgrade, or purchase a new system?  Databases are hugely expensive—what would it cost to ensure the system could implement dynamic pricing?  In addition to the technical needs, what are the staff needs required to gather and collate this data, and monitor it on a daily basis?

In short, do the high costs associated with implementing dynamic pricing justify the extra revenue such a system could theoretically produce?  Maybe you’ve figured this out, but I’d love to see evidence of it.

The problem is that dynamic pricing is a buzzword right now, and it’s not at all clear that it would work for an orchestra.  I recognize that some events have had luck in selling tickets using dynamic pricing, such as the 2012 London Olympics, but its overall record is still spotty.  Amazon tried dynamic pricing on DVD sales in the early 2000s leading to a furious response from consumers regarding the price differentials.  Ultimately, Amazon refunded their customers who had paid more.  Coke tried an experiment in dynamic pricing where vending machines charged different amounts based on location and the weather conditions outside.  Customer backlash forced it to abandon this approach.

My own perspective is that dynamic pricing only works in the following conditions:  customers have a difference in their willingness-to-pay, the market is segmentable, the is a limited potential for arbitrage, the cost of segmenting and policing does not exceed revenue increases due to customization, and it does not raise questions of perceived fairness.

Are these criteria true for the Orchestra?

Who is Embracing this Plan?

Finally, I think it’s particularly interesting to note that despite your great faith in your new model… no one else is rushing to embrace it.  Why would they?  Peer orchestras around the country have been enjoying great success in both the economic and artistic arenas.  Again and again there are news stories of orchestras in cities like Cleveland, San Diego, Kansas City, Los Angeles, Houston, Chicago and Pittsburgh that have been able to balance their books and flourish artistically without resorting to the sweeping changes demanded by your new business model.  The one group that followed the Minnesota Orchestra approach—our near neighbor the Saint Paul Chamber Orchestra—ended up losing a third of its ensemble and suffered dire organizational damage.

Say you were an arts administrator in a good sized orchestra… which model would you chose—the Minnesota Orchestra model, or the Cleveland Orchestra model?  Which model produces the best results and the fewest headaches?

So returning to my opening question— based on the fact that your new business model brings only questionable benefits, the fact that no one seems interested in adopting it, and so many other organizations are enjoying success through a different model… why do you continue to push for it?

When will you concede that this whole experiment has been a colossal failure?

 

Xochipilli

Stewards of the Endowment?

In today’s edition of the Star Tribune, Minnesota Orchestra board member Ken Cutler has a letter that is quite illuminating (letter can be found here).  In it, he expresses his views on the importance of the protecting the Orchestra’s endowment—making it clear that this is the primary concern of the Orchestra’s board.  He also makes clear that the reason the board cannot accept the musicians’ proposals to end the labor dispute is because these proposals are not financially sustainable over the long-term, and ultimately fail to adequately protect the endowment.  The result of accepting such a proposal, he warns, would be a slow death-spiral of financial troubles that would lead inexorably to bankruptcy.  He is firm in his determination to not let such a thing happen.

First, I am pleased to see the board acknowledging that the musicians have, in fact, made a counterproposal, as this has been a point of some contention.

More to the point.  Mr. Cutler, I respect your viewpoint, and readily concede that the safety of the endowment is a vital concern for the organization.  You are right to insist that it be protected.

But I profoundly disagree with your comments.

Let me back up a moment and point out for my readers that historically the Orchestra has had three major revenue streams:  earned revenue (primarily from ticket sales), donations and draws from the endowment.  For some time, these three areas have been roughly equal, each comprising a third of the organization’s total revenue.  If the total Orchestra budget is $27 million, this would consist of roughly $9 million—a substantial sum.  Obviously this number changes from year to year, but this should suffice for a rough estimate of the size of the draws.

But this brings up a critical point—two-thirds of the Orchestra’s income does not come from the endowment, but from ticket sales and donations.  And these two revenue streams, which again comprise the lion’s share of the budget, are closely tied to the performances that happen day-in, day-out on the stage of Orchestra Hall.  Forgive me for being obvious, but people buy tickets because they want to see that particular performance.  They donate because they were inspired by what they heard, and because they know the Orchestra makes a huge difference in the community.  It is the high quality of the artistic product that directly and indirectly generates most of the Orchestra’s income.

Put another way, 300,000 people pass through the doors of Orchestra Hall not to hear a weekly update on how the Orchestra’s investment portfolio is performing, but how the Orchestra is performing.

Therefore, Mr. Cutler, I’m surprised at how much emphasis you’re placing on the health of the endowment at the expense of all other issues.  Let me be clear:  you and your colleagues on the board are not there to support the Orchestra’s financial endowment, but the Minnesota Orchestra.  As a whole.

The musicians (and those who support them) make an important point that I have not seen the board address—that if you make substantial cuts, replace well-known musicians with cheap replacements, or remove a beloved, supernaturally-talented conductor, the Orchestra as a whole will suffer.  And it’s not just the artistry that will be impacted; people will be less inclined to buy tickets or to make a donation.  The Orchestra will become mediocre and ultimately irrelevant, beginning a death-spiral every bit as fatal as the financial one you envision.  I have argued before that Orchestra musicians aren’t simply staff members, they are your product… and companies that make substantial cuts to their product rarely fare well.

Do you disagree?  Do you believe that the same amount of people will be willing to pay the same amount of money on tickets if you make all these cuts?  Do you believe the community members will offer up an equal amount of contributions if they are uninspired by tepid playing and anemic outreach programs?  I’ve asked this question before but I’ll ask it again—do you have a plan for what success looks like?

Will your determination to protect one-third of your revenue hamper your efforts at raising the other two-thirds?

But let me also address how odd it is for the board make such a definitive stand on the issue of the endowment.

Mr. Cutler, for some time the public has had questions about how the board managed the endowment over the last five years or so.  Right from the start of the current labor dispute, people looking over the Orchestra’s financial statements noticed that while all non-profits—and arts organizations in particular—saw losses in their investments following the 2008 recession, the Minnesota Orchestra took a disproportionately large hit (see this article, for example).  In particular, it appears that $14 million in securities was lost in 2009.  Many have asked why this was the case… did the Orchestra engage in risky asset shifts that led to a huge loss?  To my knowledge this important question has never been answered.

This is important. It serves to undercut a major portion of your rationale—that the safety of the endowment is your paramount concern, and that you are working diligently and responsibly to protect it at all costs.

Well, apparently that wasn’t the case in 2009.   So you will forgive us if we’re skeptical now.

Another point.  The Orchestra’s leaders have repeatedly stated that the huge financial draws they’ve been forced to take from the endowment are unsustainable.  Fair enough.  But as others have pointed out repeatedly, the board chose to take these unsustainable draws in order to artificially balance the budget.  It was a public relations strategy—developed in consultation with a PR firm—for the stated objective of making the Orchestra appear financially sound so it could receive state bonding money.

Again, the huge draws were part of a freely-adopted public relations strategy, and not from financial need.

And the truth is, you’ve been manipulating totals for years, as indicated by your own board meeting minutes.  I’m not saying your actions were illegal or unwarranted; but for many of us, this fact undermines your whole case, and makes it difficult to believe your present-day concern with the state of the endowment.

In effect, your activities indicate that you think it is perfectly permissible to make extraordinary draws from the endowment so that the organization looks good in front of a legislative hearing.  It is not, however, permissible to make extraordinary draws to safeguard salaries, maintain standards, keep a concert season in place, or to generally help the Orchestra to survive.

I’m not sure this reflects well on board’s position as careful stewards of the organization… or its financial investments.

A final question:  what would have happened if instead of artificially balancing the Orchestra’s budget through unsustainable draws off your endowment, you had instead taken smaller draws and allowed the Orchestra to show a small, but perfectly understandable deficit—essentially to spread out the current $6 million deficit over the last four years?  Would that have been less damaging to the endowment?

Mr. Cutler, I thank you for sharing your views on this matter.  But I’m afraid I must profoundly disagree with your positions and priorities.

Xochipilli

Fighting a Good Fight?

Some years back, an article appeared in the Harvard Business Review that looked into how management teams could manage conflict within their companies.  “How Management Teams Can Have a Good Fight,” by Kathleen M. Eisenhardt, Jean L. Kahwajy and L. J. Bourgeois III,  made a powerful case that healthy conflict was necessary in an organization, and that its absence was not harmony… it was apathy.  The authors argue:

[T]eams whose members challenge one another’s thinking develop a more complete understanding of the choices, create a richer range of options, and ultimately make the kinds of effective decisions necessary in today’s competitive environments.

Sounds good, but this leads to an obvious follow-up question: what constitutes healthy conflict?

For the authors, the answer is clear:  good conflict is honest, direct, impersonal and issue-focused, while unhealthy conflict tends to be manipulative, driven by politics and directed towards individuals.  In an unhealthy system, discussions fragment into cliques where team members battle like characters in Game of Thrones for position rather than work toward resolving an issue.  Anger and frustration are out in the open.  On the other hand, in a good team, members are able to argue without destroying their ability to work together.  The ability to juggle differing viewpoints, agendas and goals allows successful management teams to make high-stakes decisions in the face of considerable uncertainty, while under pressure to move quickly.

In the end, the authors find several points that show whether or not an organization manages conflict effectively, including a willingness to work with more facts rather than less, develop multiple alternatives to enrich the level of debate, share commonly agreed-upon goals, and maintain a balanced power structure.  They conclude that these elements must be present for a group to manage stressful moments of transition.

This framework gives much food for thought about the Orchestra’s ongoing labor dispute, and how the long-foreseen contract negotiations could lead to an interminable lockout and the cancellation of an entire season.  For this analysis, it’s helpful to take a step back and not just focus on the inner workings of the leadership team, but to see a broader “team” made up of all the Orchestra’s principal shareholders.  This allows us to look more closely at how the MOA leadership has managed the conflict with the other major players in the dispute—particularly the musicians.

More Facts, Please

One of the most important points the authors make is that limiting access to data doesn’t reduce conflict… it inflames it.  Over the course of their study, the authors found that some managers believe that having too much data at hand, shared by too many people, will increase conflict by expanding the range of issues for debate.  This isn’t borne out in the real world, however.  Successful organizations feel that the more information is shared, the better—it encourages people to focus on issues and data, instead of personalities.  Without good data, groups waste time in pointless debates over opinions that by their nature can never be resolved.   Lacking good data invites some individuals to resort to self-aggrandizement and their own “gut feelings.”   As a result, disagreements begin to focus on the person making a decision—and his or her style of making them—rather than the data itself.

Sadly, I think the MOA management has engaged in a clear pattern of limiting access to data over the course of the Orchestra dispute.  Board documents going back to 2009 show the board has willfully engaged in a pattern of withholding data from key constituents, including the musicians, donors and the state legislature.  The board authorized excessive draws from the endowment to give the illusion that finances were in order, and President Henson gave several media interviews proclaiming the Orchestra was thriving with balanced budgets in a difficult economic environment.  The truth was quite different; the Orchestra was certainly not thriving, and management planned to use the excessive draws to force a business reset.  But this wasn’t the only instance of withholding information.  Repeatedly, outside observers including the musicians and the state government have demanded a through financial analysis… but the leadership refused.  When external pressure forced the board to agree to an independent analysis, it hand-picked its own firm, dictated the issues to be covered, and made vague promises to “share” findings with the musicians.  Certainly a Kafka-esque definition of “independent analysis.”

A far better solution, from my perspective, would have been to be brutally honest with the musicians upfront—tell them that the organization was nearing a tipping point and needed a new business model.  Then, prove it to them by showing elaborate projections, forecasts, analyses, multi-year trends and comparable data from peer orchestras.  At that point, start making the case to donors, the community, and the state government about the need for a business reset.  If leadership had an air-tight case that the lobby renovation was the only way the Orchestra could move toward profitability (as they currently list on their website)… why not make that case to the legislature, rather than the case it made, which was based on how financially stable and fiscally responsible the organization was?

Multiply the Alternatives

Another key argument from the Harvard article is that some managers believe they can reduce conflict by focusing on only one or two alternatives.  It’s a lot easier to convince people to chose A when the only alternative is its polar opposite, Z.  Research shows, however, that teams that manage conflict successfully often develop multiple alternatives, often considering four or five options at once.  Great managers also introduce choices they do not necessarily support, simply to spur discussion and tease out creative solutions.  Generating a range of options tends to concentrate energy on solving problems and increases the likelihood of integrative solutions.  It also diffuses conflict by allowing for multiple points of agreement, making it possible for team members to shift positions without losing face. Finally, it ensures buy-in from across the organization.

Unfortunately, they way the MOA leadership has managed the dispute, the number of options has been reduced, leading to higher levels of conflict and personal animosity.  The Orchestra’s leadership team bluntly stated that although they welcomed dialog with the musicians, their proposal was, in fact, their final offer:  the musicians had to accept $5 million in pay cuts along with hundreds of changes to the contract.  Obviously, all sides in a labor dispute have to make hard-nosed demands upfront so they have room to negotiate; but the non-negotiable demands, repeated frequently, have not engaged the musicians in the process.  The musicians weren’t approached to help solve the problem—they were treated as if they were the problem that needed to be solved.  Some might argue that the musicians followed the same pattern by not submitting a counterproposal, but this is a false equivalency.  I believe the musicians are right to point out that without solid financial data (see previous point) they can’t offer viable alternatives or understand the management’s long-range plans.  They are not even being given a choice between A or Z… they are being told to accept A on trust alone.

Again, if the intention had been to find a holistic solution and create buy-in among all constituents, a wiser move would have been to explore many options, to offset cuts in one area with new benefits elsewhere.  Instead, it feels like this entire situation was engineered as a win-lose situation from the beginning.

Creating Common Goals

Another effective tool for minimizing harmful conflict is to frame choices as collaborative instead of competitive.  This means that effective, successful groups frame their decisions as a true partnership in which it is in everyone’s interest to achieve the best possible solution for the entire team.  The Harvard Business Review article notes that such a solution does not imply homogenous thinking, but it does require a shared vision.  Steve Jobs famously stated, “It’s okay to spend a lot of time arguing about which route to take to San Francisco when everyone wants to end up there, but a lot of time gets wasted in such arguments if one person wants to go to San Francisco and another secretly wants to go to San Diego.”

The failure to follow this line of reasoning is clear in the battle over the Orchestra’s mission statement.    Musicians were infuriated when the leadership simply announced a new mission statement that removed mention of orchestral music altogether, and instead included language about financial sustainability.  This was a double blow.  For one, it removed what should be the core function of an orchestra—presenting orchestral music—and replaced it with a subjective metric.  What is “financially sustainable” and who gets to decide?  Is it hiring high school musicians because they’re cheap?  Performing popular works ad nauseum? Plus, this whole notion is redundant… is there an organization that aspires to financially unsustainable, thereby spending itself into bankruptcy?  The ultimate aspiration of the organization can’t be simply to be profitable, as that doesn’t say anything about what the organization does, who it does it for or how it’s different from competitors.  But what really stung for the musicians is the fact that they weren’t consulted on this critical matter.  They were told, essentially, that their top concern was no longer making music, it was making money.  This was, for many, a significant departure from their existing job description.

Balancing the Power Structure

The Harvard article demonstrates again and again that successful leaders have to balance a fine line between being too strong and too weak.  Autocratic leaders who mange though highly centralized power structures create waves of interpersonal friction, but so do weak leaders who allow team members to ruthlessly vie for power.  A successful team should have a clear leader and a clear power structure; that said, individual members should still wield substantial power, especially within clearly-defined areas of responsibility.   Multiple studies have shown that autocratic leadership tends to spawn aggression, hostility, and scapegoating.  Balanced power structures, on the other hand, tend to lead toward collaboration, praise, and mutual respect.

Part of the problem with this labor dispute has been the tremendously imbalanced power structure of the organization.  Without strong representation on the board, particularly on the executive committee, the musicians don’t have a strong voice in how the organization runs; nor have they been able to play an effective role in shaping the organization’s values and objectives.  Obviously, many musicians don’t have the formal training to engage in the day-to-day operations of the Orchestra, but they certainly have expertise in the area of the art itself.  Could they be given more power over artistic planning or the shaping of the artistic priorities of the organization?  Are there other areas they could take a leadership role?  Areas where perhaps the management has less expertise?  Can a balance be found?

* * *

Well, it is probably clear by now that I’m not a fan of how this situation has been handled.  In my own bit of editorializing, it seems that so many fundamental areas conflict resolution have been mismanaged that I can’t shake the notion that the whole labor dispute came about not from a quest to find a solution to the Orchestra’s financial situation, but simply from a desire to impose a pre-determined business model onto the organization.  Obviously, I could be wrong—I’m just an outsider making observations on what I see going on.  And if I am wrong, and if the leadership is indeed serious about resolving this situation, I would suggest that what truly needs a reset is not the Orchestra’s business model, but management’s conflict resolution model.  It’s not too late to revisit the dispute and attempt to resolve it utilizing the points I listed above.  I think that would go a long way toward achieving a fair, productive resolution that all sides can live with.

 

Xochipilli

A Response to Sandra Davis [repost]

[This is a repost of something I wrote on 5/29/13, which is slightly edited for clarity.]

Earlier in the week the Star Tribune posted a letter from Sandra Davis (http://www.startribune.com/opinion/letters/208890411.html?page=2&c=y) who writes in to voice support for the Orchestra’s board members during the labor dispute. Again, the Strib doesn’t welcome rebuttals on its letter page, so I’ll do it here:

Sandra, I appreciate your work on non-profit boards. I’ve been on both sides of the table and know the amount of heavy lifting that goes into such work. And I believe you have a deep love of classical music, and truly want to safeguard the Orchestra.

I’d also say right off the bat that you bring up a very good point—that boards have a very different view of the organization, and that perspective is worthy of respect. Board members are the long-range caretakers charged with ensuring the viability and sustainability of the organization, and by necessity take a much broader view. They at times have to make difficult decisions to ensure the well-being of the organization, and as such often get a bum rap. I would, in fact, expand your point even further and point out that the staff also has a different view of the organization than the artists or the board, and have their own set of challenges and demands. They, too, deserve our respect. You’re absolutely right: we do have to respect these different perspectives and recognize they each have value. In a healthy organization, these respective viewpoints should complement each other—not compete with each other.

But I don’t fully agree with your assessment, and have specific problems about how it applies to the specific example of the Minnesota Orchestra lockout.

For one, I think you give board members too much credit, and don’t give enough credit to other stakeholders. Yes, the board has extensive background in financial matters and are all successful businessmen/women; this obviously makes them qualified to take a leadership role in moving the organization forward. But they are not uniquely qualified. The musicians—and for that matter, the general staff members—also bring valuable insight, valid concerns, and experience to the table. For example, the musicians have correctly pointed out that they have a much more personal stake in the Orchestra’s survival than the board members… it represents their primary source of income, a surrogate family and professional satisfaction that endures long after individual board members rotate off the board. Of course it’s possible that some may play in the Orchestra just to collect a paycheck, and some may put their personal well-being above that of the group as a whole, but as general rule the musicians are highly motivated to make the organization succeed. They are a resource to be used, but throughout this dispute the board has treated them as the principal problem that must be solved.

Also, there’s a problem with focusing so much on the future that you neglect the here and now. It is obviously important to ensure the organization’s survival 50 years from now. But it feels like the board is following a short-sighted plan where they are willing to liquidate the most valued, recognizable musicians just to get a few more years out of the endowment. And they aren’t considering that this could create a death-spiral of presenting a mediocre ensemble that doesn’t inspire donations or ticket sales, forcing further damaging cuts that further cripple the institution. Everyone understands a rebuilding phase if it builds to a better future. But that’s not what the board is advocating—they’re very open about saving money by fielding a minor-league team from this day forward. Period. End of Story.

In reading the letter, I have a couple of additional thoughts.  And with due respect, I think the “successful businessman” angle has been overdone. Not every CEO is successful—just ask JC Penny. I fully agree that business savvy needs to work its way into the fabric of the organization. But which business? I’ve mentioned before that simply adopting a business model from the financial sector won’t necessarily help… would you bring in an industrial turnaround specialist to manage a failing hospital? The board seems happy to save expenses by cutting payroll, which is a time-honored business strategy. Unfortunately, in this case the musicians are their product. And I don’t know of many businesses that thrive by damaging their core product.

And a larger point—I don’t have to believe board members are morally evil to believe they are wrong. Depending on your political views, you may have no use for either, say, George Will or Paul Krugman. You may think they are mistaken, misinformed, or idiots without thinking they are evil. Similarly, I don’t have to believe that any of the board members are The Harlot of Babylon to believe their actions in the labor dispute are categorically, and catastrophically wrong.  I’ll certainly give them credit… I think they are acting as they do out of a genuine concern to save the Orchestra.  But again, I don’t buy this “ends justifying the means” approach and think their decisions and actions are leading to disaster.

And I have to say, the specific actions of the board and management make it hard to be charitable towards them. There have been highly misleading statements to the state legislature, false information on the website, damning meeting minutes, brutal strong-arm tactics, a lack of transparency, and a general air of contempt towards everyone on the outside. It’s hard to be very sympathetic.

And finally, while I fully acknowledge you have an important point, it is somewhat undermined by the fact that you personally are associated with the board of the Saint Paul Chamber Orchestra, which just went through a very similar labor dispute. This has the unfortunate side-effect of making your point feel somewhat self-serving, especially since you yourself don’t acknowledge it (and I do understand the word count quotas and other limitations of writing a letter to the Strib).

But again, I agree with your point on the unique and difficult position of board members, and despite my griping, I do appreciate your willingness to engage in this dialog.

 

Xochipilli