Archive for September, 2008
Decay in a Time of Penury
Sunday, September 28th, 2008
Recently, I wrote in On Line Opinion of 19 September 2008 about the controversy swirling around the budget situation in New South Wales which contributed to the resignation of the Premier the Hon Morris Iemma who later resigned from Parliament. A new government was formed by the Hon Nathan Rees as Premier and he appointed a cabinet which did not include the former Treasurer, the Hon Michael Costa, who also later resigned from the Parliament, but not before an extraordinary media conference.
The summary of my article follows: “New South Wales is asserted to be facing a financial crisis necessitating a mini-budget. In fact the revised estimate of NSW State debt, at just under $8 billion, is miniscule and the overrun of $900 million in the recurrent budget – anticipated as a result of the shortfall in stamp duty on property – is near inconsequential. Cutbacks will drive the State further into real crisis in transport, schools and hospitals. The assertion that the State’s credit rating is threatened is mere intimidation.”
This article is not simply another venture in political controversy. There are substantial implications for museums and other cultural activities in the actions which might flow from the view which the former Treasurer and Treasury spokespersons have taken. A mini-budget which would substantially reduce recurrent and capital funding could see further reductions of staff at museums and other negative impacts. It is imperative that museum people and those interested in and supportive of museums understand that the statements on government budgeting by economically conservative politicians and media commentators fail to give an accurate picture of the situation.
As I say in the article, “Since the adoption by governments of the market or business model – in New South Wales by Harvard MBA graduate Premier Nick Greiner – there have been ongoing reductions in the operating budgets of government agencies through across-the-board cuts, non-funding of awarded salary increases and the notorious “efficiency dividendsâ€.
I also say, “While over the longer term, sustained imbalances in recurrent expenditure are clearly unsatisfactory, there surely can be no risk assumed for occasional deficits. Indeed they are appropriate occasionally to even out overall performance. After all, reacting suddenly to declines in the budget position leads to retrenchment of staff who take with them skills and corporate knowledge which have cost a great deal to acquire. It is likely that the reductions have already gone too far in some areas.”
The details of any mini-budget to be presented in November 2008 are yet to become apparent.
Across the continent, it is possible that the new Western Australian Museum development on the site of the former East Perth Power Station, announced18 February this year by the then Premier Alan Carpenter, could be deferred. In his announcement Premier Carpenter said, ” the massive, half-a-billion dollar infrastructure project would be a stunning cultural and social institution for WA, which would tell the amazing stories of the State and its people in a building that would bring new life to a major heritage site.”
On the ABC Radio National Program, “The National Interest” of 26 September, new Western Australian Premier Colin Barnett mentioned that some capital projects – and he specifically mentioned proposed new museum, approved by the former government, would have to be reviewed. As the program’s presenter Peter Mares says, “And he’ll need all of the mining tax revenue he can get his hands on, if he’s to live up to his promise to up spending in regional WA – a non-negotiable commitment in his bid to keep his minority government in office.”
The Western Australian economy is booming because of the substantial resource projects; one could suggest that this is an appropriate time to invest in things like museums. It would be odd if Australia defers and downsizes its cultural projects when cities such as MedellÃn in Colombia are building libraries and art galleries in order to address poor education, poverty and crime amongst young people. Last year a number of media reports described these strategies by which mathematician and city mayor Sergio Fajardo was “turning blight to beauty“.
Learning to do it right
Friday, September 19th, 2008
“There are in essence, only two main reasons why people are fallible, why we have failure. One reason is ignorance … a general lack of knowledge about the particulars of how the world really works. But a second source of failure is ineptitude … the knowledge is there, but an individual fails to apply it correctly.” So goes one of the favourite stories of Atul Gawande, surgeon, New Yorker magazine writer and Professor at Harvard. This is an aphorism just as applicable to the museum executive and staff member as it is to a doctor in a hospital or the financial executive in a bank!
Gawende has won heaps of awards including the Macarthur Fellowship, popularly known as ‘the genius prize’ for the fresh and unique perspective, clarity and intuition in his written work and his energetic and imaginative approach to finding practical ways to improve surgical practice. And he has written books now published in more than 100 countries.
In an episode in January 2008 of that wonderful ABC Radio National program “Background Briefing†(which by the way has been going about as long as “Four Cornersâ€) Gawende told of his experiences in a talk to the Commonwealth Club in San Francisco.
Gawende shows just how being diligent, being persistent, questioning when things don’t seem to add up and feel right makes such a difference (remember Ralph Siu and Chinese Baseball?). That this behaviour is significantly less common than it should be is because we are all supposed to be efficient, which means taking less time to do things. So many things seem to go wrong, from inadequate buildings to inadequate attention to financial problems in companies to radiocative waste leaking from pipes at Nuclear power stations in Provence, just because of this.
Contrary to that stupid headline I once saw, Gawende’s stories show that we do not need to make decisions faster because change is happening so fast, we need to make decisions more slowly, we need to understand what is going on. Gawende’s stories are wonderful examples of the difference that approach makes!
I have tried to summarise the presentation but you can always go to the full transcript on the ABC website.
Read more
The Met Gets It Right: A scholar for Director!
Sunday, September 14th, 2008
Thomas P. Campbell was named 9 September to succeed Philippe de Montebello as Director and Chief Executive of the Metropolitan Museum of Art in New York. The Met is considered by most people to be the most prestigious art museum in the USA and by some as the most prestigious in the World. Campbell, 46, was born in England and holds a doctorate in art history from the Courtauld Institute in London. He is currently a curator in the Department of European Sculpture and Decorative Arts and has worked at the Met since 1995. A specialist in European tapestry, Thomas Campbell organized “Tapestry in the Renaissance: Art and Magnificence” in 2002 and a sequel last year, “Tapestry in the Baroque: Threads of Splendor.” Campbell will be the ninth director in the Museum’s 138 year history. (Some museums I know have had as many directors in the last 40 years!)
De Montebello announced this last January his intention to retire at the end of 2008.
The numerous reports on this important appointment are of considerable significance in several respects.
Campbell is a distinguished scholar noted for his outstanding exhibitions and wonderful accompanying catalogues, not because he has demonstrated a capacity to raise funds, appoint celebrated architects or because he has a business or management degree.
Campbell was already on the staff of the Museum, as were two of the other contenders for the position. He is relatively young which is also significant: he was appointed because the board wanted someone who would serve for “an extended periodâ€.
Campbell represents a field of art scholarship in which the Museum is a world leader, not a field such as modern art which some claim is needed to make the Met ‘more relevant’.
One report said, “The Met’s trustees clearly see the art museum as an institution that society relies on to preserve, present and interpret its cultural patrimony…â€
Reporting on the appointment, New York Times reporter Carol Vogel (“Curator at Met Named Director of the Museumâ€, September 9, 2008), says, “For years the museum has been faulted for its spotty 20th- and 21st-century holdings and its halfhearted presentation of younger, contemporary artists. While supporting important acquisitions over the years like Jasper Johns’s 1955 “White Flag,†Mr. de Montebello made no secret of his lack of interest in cutting-edge art.
“In a phone interview, Mr. de Montebello praised Mr. Campbell’s appointment. ‘He’s the most modern of us all,’ he said, invoking Met directors. ‘We’ve had a Romanist, a medievalist, but he goes up through the Baroque. This is the right choice’ he added. ‘Tom is a very distinguished scholar. I would have been surprised had they brought in someone from the outside.’ â€
Boards and governments take note!
For further extracts from the reports on Campbell’s appointment in the Wall Street Journal and the New York Times go here.
I have to say I found the photos accompanying several of these articles to speak volumes about this decision and its reception.
Here are two further articles on this important announcement:
Heir Looms by Jed Perl The New Republic September 10, 2008: “The Met’s fresh, daring, and unconventional choice for a new director this week demonstrates that the old guard can still be the avant-garde.”
This article concludes, “I believe there is a real possibility that September 9, 2008, when the Board of Trustees of the Metropolitan Museum of Art chose Thomas Campbell as its next director, will turn out to have been a great day in the history of American museums.”
From Tapestries to Top Job, Ready for Met’s Challenges by Carol Vogel, New York Times September 11, 2008: “For most of his career Thomas P. Campbell has presided over a tiny corner of art history that few people know or care much about: those grand European tapestries that were the obsession of kings and queens, popes and noblemen.”
You can watch a three part curatorial talk “Tapestry in the Baroque: A Curatorial Talk” by Thomas Campbell (on youtube) commencing here.
Why do organisations succeed? Lessons from Southwest Airlines
Monday, September 1st, 2008
Successful organisations support and develop their staff. That is one of the principal roles of executive leadership. Museum executives contemplating reorganisations might contemplate this seriously. So might media companies such as Fairfax (in Australia) and governments offering small wage increases to which the response is negative industrial action.
In much of what I have written over the last several years – indeed since 1986 – I have banged on about how important it is that leaders at executive level focus on developing staff. I have promoted this as one of the principal requirements for success. Many others do the same. But many executives in their day to day work do not! Of course being clear about the goals and rationale of the organisation is another of the half dozen most significant contributors to success. Not efficiency though inefficiency is not appropriate, not rules and regulations though some rules are essential or we would end up in chaos. Not technology though technology allows considerable advances in many areas.
Numerous examples of success flowing from attention to staff are given in the pages of this web site, examples from hospitals to airlines to grocery stores to public broadcasters. And yes, there are examples from museums, though few museum executives or board members pay attention to them. Like other organisations many firms have become besotted with the mantra of market economics and its attendant managerialism.
Many organisations respond to perceived bad times by pulling back, by reducing staff numbers, by looking for ways to trim costs. Instead they should never let up on the important work of creating a climate for innovation and making a difference. One of the fundamentals of managing any entity, from nation states to the local grocery store or local museum is that in bad times some of the money saved during the good times should be used to reduce fluctuations in basic practices like marketing, training and development, product improvement and research and development. Once staff are let go in bad times, rehiring and retraining staff when good times return costs so much that making gains becomes much harder. Most of all, large scale layoffs means loss of corporate memory, of how things get done in the organisation.
The fact is that executives seldom look at other organisations to see why they are succeeding; they seldom accept that it is the way staff are treated that makes a great difference, that gives a competitive advantage. With the increasing number of museum and arts organisations putting people from the business world on their boards, the tendency to cut back in times of financial stress would seem to be increasing.
One of the things that worries me about the financial stresses of the last 12 months is that many firms, including nonprofits, are simply applying blanket approaches to problems, adopting blunt instruments. These don’t just include cutting back on staff numbers, often through natural attrition or voluntary redundancies. Some banks are simply cutting back on lending generally, as if they still have not worked out how to evaluate the credit worthiness of clients seeking loans. The result is likely to be that more powerful clients will continue whilst less powerful but perhaps more worthy clients will not. Some governments approach prospective budget overruns in the same way: cancel the contracts for indoor plants, delay filling of vacancies, and restrict travel. It all ends up causing more problems than it is worth. It is disruptive and, in the long term, destructive of managers’ credibility!
To return to the main focus of this intervention. The latest story I have read which shows how good staff policies are linked to high firm performance is a story about Southwest Airlines in the USA. In a report by Joe Nocera entitled “A chat with Herb Kelleher†(International Herald Tribune May 24, 2008) we witness the differences in the annual meetings of two of America’s major airlines. (I have previously reviewed a paper on Southwest and American Airlines by Judy Hoffer Gitell (in California Management Review in 2000 ) which compares the different approaches to management structure and behaviour in the two companies. (Southwest is a point to point operator whilst American Airlines is a spoke (or hub) operator and this does influence their approach, a point brought up in commentary on Southwest’s success.)
Nocera begins by telling us “The Dallas-Fort Worth area is home to two of the country’s biggest airlines, American and Southwest, and for years they’ve both held their annual meetings on the same day. This year was no exception: Wednesday was the big day. He goes on to outline the different responses of staff to the event.
Nocera concludes his article comparing the two airlines by quoting the opinions of some consultants to the reasons for Southwest’s success. One of them pointed out “every time the legacy airlines have run into trouble in the last two decades, Southwest has used the opportunity to steal away market share. Even though its own profits are down this year, it still has plenty of financial powder to make investments its competitors won’t be able to match. And as the old-line airlines try to raise prices to keep pace with fuel price increases, Southwest, with its fuel hedges and productivity advantages, will squeeze them all that much harder. One analyst, Ray Neidl of Calyon Securities, has gone so far as to predict in a report that after the dust settles, Southwest will be, as he put it, “the last man standing.”
Nocera observes, “That may be an overstatement, but it’s not much of one.â€
Read more.