Getting the Best Leaders
It is essential to understand just how important the leadership of an organisation is and the influence that a good leader can have and the damage a bad one can wreak. It is reasonable to say that a museum (or any organisation for that matter) can survive with a good executive leader even if the board is weak or inactive but a museum with a poor director cannot long survive, no matter how good the board is. Unless they recognise the mistake and rehire the director. Lend Lease did this some years back and paid out $16 millions to two people who the board considered were, after all, not the right choices for the positions. They recognised the cost of keeping on inappropriate people. Museums, especially those strapped for cash, are unlikely to take this sufficiently seriously.
Consider these two statements in the pages of the New York Times “Wanted: charming erudite executive with the diplomatic skills of a foreign service officer, the financial skills of an investment banker and the social skills of a 1950s wife. Position requires the academic background of a serious scholar, with the willingness to allow most of this to go unused in favour of poring over budgets and staffing issues. Long hours, low pay and the chance to see your name in the papers everytime you make even the slightest wrong move … “. That was written 13 years ago by Paul Goldberger in April 1994 in an article entitled, “Doesn’t Anybody Want this Job?” (New York Times 26 April 1994).
Thirteen years later, Jori Finkel in the New York Times July 29 article mentioned already, observed that directors are “ultimately responsible for covering the costs of acquisitions, operations and the flashy new buildings that the public has come to expect. Of course they do so with the help of the museum’s trustees, who often have hiring and firing, as well as check-writing, powers. They can thus be the director’s most powerful allies or, in extreme cases, worst adversaries”… And one thing many trustees have in common is that they are businessmen themselves, who expect sharp fiscal skills of their new directors.”
Problems at museums concerning executive leaders/directors concern not just the usual suspects of money and space and collections (and themselves) but boards and governments. (One example cited by Finkel was the Solomon R. Guggenheim Foundation where Peter B. Lewis, then chairman, “vehemently squared off with Thomas Krens, the director, over Mr. Krens’s plans for worldwide expansion”, but ultimately resigned, in 2005″.) There are other examples such as the National Gallery in London where the resignation of Director Charles Saumarez Smith (previously at the National Portrait Gallery) to join the Royal Academy has been alleged to result from conflict with Board Chair Peter Scott. Scott is said to have been critical of Saumarez Smith’s “populism”. The board however, supported Saumarez Smith and called for Scott’s resignation.
“Jonathan Jones in his online Guardian blog made a scathing comment that during his time as director ‘Saumarez Smith did what he does best – he opened much better restaurants and cafes’ – he was responsible for increasing visitor numbers with a run of ‘blockbuster’ shows, including the recent Velasquez exhibition.” Journalist and art historian Tom Flynn asked whether the behaviour of the board chair amounted to a failure under the Departure of the Culture, Media and Sport’s remit to the Trustees which identified as a major risk in the achievement of the Gallery’s aims, “failure to recruit or retain appropriate staff.”
As to government, we can note that the Powerhouse Museum had its operations budget reduced by 9 per cent for the 2007-2008 year. This comes after a failed and clumsy effort to amalgamate the museum with the Australian Museum. The Powerhouse has lost over 100 staff positions over the last several years; other museums have also lost many staff. In almost all government agencies at both State and Commonwealth level, annual appropriations are reduced, after providing for inflation, by a mandatory 1.25 per cent and salary and wage rises (of perhaps 3.5 per cent pa) have consistently been required to be funded from existing operational funds.
(At the end of 10 years an enterprise with an initial budget of $10 millions pa, to which is applied every year a 1.25 per cent reduction to the budget after adjustment for inflation at 3.5 per cent, and a further impost of 3.5 per cent then applied for salary costs (estimated at 75 per cent of the total operational budget), has only 64 per cent of what it then would really cost to achieve the same service level; inflation has added $4.1 millions to the costs and $1.35 millions has been lost in “efficiency dividends” of 1.25 per cent each year.
The review of Australian symphony orchestras, by the way, had this to say:
“… Government funding for the orchestras is indexed in accordance with a formula set by the Australian Government. The formula is the same as that applied to the funding of other public bodies, such as government departments and agencies and government-owned companies, whereby base funding is increased annually at a pre-determined rate (currently 2.27 per cent). This base rate of indexation is then reduced by an efficiency dividend of 1 percentage point as a means of ensuring that bodies drawing public funding can demonstrate ongoing efficiencies in their operations. In the case of the orchestras (and the other major performing arts companies), state governments index their own funding contributions at the same rate as the Australian Government.
“The efficiency dividend will increase from 1 per cent to 1.25 per cent from 1 July 2005, with the result that the nominal rate of funding adjustment each year will fall to little more than 1 per cent at the current rate of indexation. This implies an annual decline of between 2 and 3 per cent in the purchasing power of government funding, compounding over time.“)
By and large, governments in Australia have allocated little to special programs for training and development at executive level; such programs are to be funded from the institutions themselves. This would be fine were budgets adequate. (Yes, one can say that it is a matter of priorities.)
The Museum Association of New York (MANY) recently reviewed the future of Museum Leadership in New York State. The board and staff of MANY consulted widely. They found there were “no foolproof remedies or easy answers” but a “variety of actions needed” to “focus attention on the collective care and feeding of the profession for the next generation”. Part of the problem is the bulge – age-wise – in the present group of museum directors. MANY estimates a loss of one-quarter of the work force at that level in the next 14 years. That is more than 3,000 people “with a good part of the intangible knowledge they possess”.
In an article in Museum Management and Curatorship (Vol 21(4), 349-352, December 2006) MANY Director Anne W. Ackerson and Program Co-ordinator Joan H. Baldwin wrote, “While having a succession plan appeared to have all the allure of a home fire drill, there was no shortage of people willing to talk about leadership. It felt as though we had stumbled on a hot-button topic. Although few organizations were actually prepared to lose a leader-either through illness, accident, retirement or resignation-everybody seemed to have a stake in the topic of leadership. This eagerness for discussion made staying on topic difficult and sometimes impossible. It is difficult to ask who the next generation of leaders will be without also touching on questions of recruitment, retention and professional development, not to mention the merits of graduate versus on-the-job training.”
MANY focused their discussions on mid-career training, internships, mentoring, partnerships, recognising a shift to teamwork, changes in the role and the absence of transition arrangements. They noted that few people in mid-career seem interested in the job of director, a 24/7 job with inadequate compensation. They noted that requirements are for someone with five years’ experience and that emphasis was shifting from object care to administration and leadership. Though many people interviewed remarked that money was not the reason for entering the field, there was uncertainty about board attitudes to taking risks with younger people, many boards wanting experience over promise. Succession planning was found to be near absent.
MANY ended up with a big agenda involving not just museums but similar organisations which involved accumulating trends in leadership, promoting internships and mentoring, insisting on competitive pay. Of particular interest, I believe, was the recommendation that the museum community “develop boards that support leadership at all levels, understand the particular professional development needs .. and encourage use of existing tools to educate boards and/or senior staff about leadership trends and leadership development”.
MANY is addressing further issues flowing from the report. MANY tells me that the American Association of Museums has launched an Emerging Museum Professionals program, which is attempting to form networking groups around the country. MANY is developing further its understanding of succession planning and has so far sponsored an online survey and held four focus groups around the state to help get a better sense of what people think it is and why their institutions haven’t addressed it. “Many folks think of succession planning as simply moving personnel around, not about long-term organizational health and stability.”
The fundamental issues concern the processes which encourage development of appropriate skills and understandings amongst future museum leaders and the way boards and governments understand their role vis-a-vis that of museum executives, in other words the distinction between executive leadership and governance, and where governments are principal funders of the museum, the specific role of governments. On both points the evidence is disappointing.
I have previously drawn attention to the importance of recruitment to the future of the organisation as shown particularly by James Collins and as well the ways in which many organisations simply do not follow procedures and processes likely to lead to the best outcomes.
A more detailed summary of the paper by Claudio Fernández-Aráoz (“Hiring without firing”, Harvard Business Review 77(4), 108-120, Jul/Aug 1999), in which he elaborates what he calls the “Ten Deadly Traps” of recruitment, follows. Fernández-Aráoz is a partner at Egon Zehnder International, a global executive search firm, and a member of its executive committee; an article by Fernández-Aráoz on emotional intelligence and leadership can be found here.
Hiring without Firing
Fernández-Aráoz begins with this statement: “Successful hiring is difficult- but not impossible. The right executives do sometimes end up in the right jobs.. It has been clear to outside observers that a systematic approach to key appointments has had a quantifiable effect on the successful expansion of those companies”.
Fernández-Aráoz’s ten deadly traps are as follows:
1, The reactive approach. There is a tendency to focus on the familiar personality and effective competencies of the predecessor rather than on the job’s requirements.
2, Unrealistic specifications. Long and detailed job descriptions “that could be filled only by Superman, Batman, and Spiderman-combined and usually filled with contradictions: the candidate should be a forceful leader and a team player, a high energy “doer” and a thoughtful analyst.” The specifications are usually compiled without considering the few critical priorities that the new manager should accomplish. Nor do they take into account which skills already exist in the organization. As a result the best candidates who might have the essential mix of competencies needed for success even if they don’t meet some of the specifications, get left out.
3, Evaluating people in absolute terms. During the interview process, executives often have a favorite set of questions that they ask regardless of the particulars of the situation, such as “What are your strengths and weaknesses?” and “Where do you want to be five years from now?” The answers to absolute questions are opinions rendered in a vacuum and should be understood as such, not as fact.
4, Accepting people at face value. Many candidates don’t tell the full truth, or at least they often finesse it: they aren’t thinking about long-term fit with a company, they’re thinking about escaping a bad situation, or making more money, or hitching up with what appears to be a better organization. Resumes are edited to highlight successful experiences or to remove other experiences entirely. The hiring process isn’t in fact very conducive to complete candor.
5, Believing references. Just as people tend to accept candidates at their word, so do they with references. Former (or current) bosses and colleagues are usually generous with their praise (they care far more about their relationship with the candidate than about helping a person they have never met make a good hiring decision) and executives usually believe what they hear from a reference even when they don’t know if that person is credible. Often, they feel as if they have no choice. Time is short.
6, The “Just Like Me” bias. The full gamut of judgment errors comes into play in the hiring process. For instance, there’s stereotyping- assuming that certain traits are associated with race, gender, or nationality. And there’s the halo effect-letting one positive characteristic outshine all others. But the most pervasive bias of all is the tendency to highly rate people who are just like you..
7, Delegation gaffes. Most executives want to make hiring decisions personally, and rightly so. They take it upon themselves to interview finalists and pick “the winner.” However, many executives delegate the critical steps leading up to that point and don’t properly brief the delegate because they feel they are too busy. Even imagining that the first round of interviews doesn’t really matter is wrong. (There is one point made here that I disagree with. Fernández-Aráoz reports a situation where a prospective executive was interviewed by people who would be subordinates were they appointed, a process they found downright insulting. If people have to work with others, who will end up evaluating that person, even if informally, then there surely can be good reason to have them involved in interviewing that person in the first place. Often they are better judges that the more senior people anyway!)
8, Unstructured interviews. Extensive research has been conducted on the efficacy of various evaluation methods, including different forms of interviews, reference checks, personality tests, and even graphology and astrology: it shows unequivocally that structured interviews are the most reliable of all popular techniques for predicting performance.
Fernández-Aráoz says, “The key word here is structured, meaning that the interviewer has a list of well-prepared questions designed to reveal the candidate’s competencies relevant knowledge, skills, and general abilities. Such interviews, which often include difficult or uncomfortable questions, must be carefully planned and executed. In reality, most interviews are anything but. They are loose conversations that cover a raft of subjects. The most damaging cost of this is invisible: rejecting a highly qualified candidate who simply didn’t excel at chitchat.”
9, Ignoring emotional intelligence. Most companies look primarily, and even exclusively, at a candidate’s hard data: education, IQ, job history, and the like. They rarely look at the soft data: the candidate’s emotional intelligence including self-awareness, self-regulation, motivation, empathy, and social skills. Research by Daniel Goleman (“Working with Emotional Intelligence”) shows the components of emotional intelligence are twice as important for excellent performance as pure intellect and expertise. Other research found that unsuccessful managers had by far their largest deficiencies in emotional intelligence competencies. Their failure came despite significant strength in IQ and relevant experiences.
10, Political pressures. The last hiring trap is the most pervasive and daunting of them all. It includes wanting to hire friends or people who will not diminish their own chances of future promotion. Or people can consider recruitment an opportunity for returning favours!
Here is a story told by Fernández-Aráoz which is incredibly relevant to museums as boards and governments demand the seemingly impossible in one person. The key point is the hiring or promotion of people who brought key competencies to the unit, not the position but the unit. And the value which co-workers place on competencies and traits.
“In I990, a French executive was appointed to turn around a European conglomerate that had a bleeding bottom line and nine large business units that lacked competitive strategies. The CEO decided to replace every business unit head and very quickly. In each case, he pinpointed the requirements of the open job and then looked for those competencies within the organization. When they were present in one person, he promoted that person to the top job. In other cases, he moved people with some of the necessary competencies to a lieutenant’s position and hired an outsider with the “rest of the pieces” to the chief’s job. With each hire, the CEO appointed unexpected individuals. None were champions in their industries, yet they brought the precise skills that were needed. The strategy has paid off; the conglomerate has created enormous shareholder value, uninterruptedly, for the last decade.”
Fernández-Aráoz concludes, “The problem-definition stage should also include a process to identify the job’s requirements from a lateral point of view, or from the point of view of the new executive’s would-be colleagues. Most job searches focus upward, on the boss’s requirements, and downward, on the interests of the new person’s direct reports. But in this day of teamwork it is essential to bring to the surface the competencies, and even the personal traits, valued most by coworkers.”
Warren Bennis and James O’Toole ( “Don’t hire the wrong CEO”, Harvard Business Review May/Jun 2000, 78(3), 170-176) have comments remarkably similar to those of Fernández-Aráoz. But they conclude with this advice:
“Ultimately, the best way for boards to pick a CEO is to cultivate and nurture talent in the making. In calmer eras, a manager would stay in slot A long enough to be prepared for slot B, and organizations were training grounds for people who gradually worked up the ladder, one rung at a time. But in today’s rapid-paced knowledge economy, the most promising people head for greener pastures the moment they get a whiff of having been passed over for the next promotion.
“Boards have no one to blame but themselves if their CEOs disappoint them. And it’s clear to us why that happens so often today: fox all the lip service afforded the subject of leadership, we can’t identify a single search for a corporate CEO – or nonprofit president, for that matter- that focused clearly on selecting a leader. At the end of the day, if you want to find a leader, you must look for one. Otherwise, what you’ll get is something else, and probably something far less.”
There are those who say that if a board cannot set out precisely what it expects the CEO to achieve then it is the board that is to be held accountable in the event of failure (providing of course that one can identify failure in the absence of precise goals). Training and development, succession planning, making the tasks manageable by one person and so on, are all nearly irrelevant if the board does not attend to its unique responsibilities!
If museum boards and those responsible for them do not take seriously this most important of issues, then museums will be in a mess!