Museums, Boards & Governments Part 1
In planning major initiatives, executives often exaggerate the benefits and discount the costs, setting themselves up for failure. A high number of business failures are the consequence of flawed decision making. When forecasting the outcomes of risky projects, executives fall victim to the planning fallacy. Managers make decisions based on delusional optimism rather than on a rational weighting of gains, losses and probabilities. They overestimate benefits and underestimate costs.
Dan Lavallo & Daniel Kahneman 2003
Lets Get Rid of Boards and Get the Government out of our Lives
Paper presented at the Annual Conference of Museums Australia, Adelaide, 20 March 2002
Des Griffin, Gerard Krefft Memorial Fellow, Australian Museum, Sydney
St Pere de Rodes Monastery, Catalunya (More)
We live in dangerous times. We face not only overt attacks but subtle changes to our social environment. Governments in many western countries are withdrawing support even for infrastructure with benefits passing to the wealthier; the competence of some of those individuals and the morals of others are questionable [1]. Enterprises are being asked, no required, to be more accountable but the behaviour of both private and quasi-public bodies shows no sign of that. Members of nonprofit boards might assert that they can contribute the benefits of business but those benefits are ephemeral [2].
Most problems with nonprofits arise from their low risk capital; an emphasis by granting agencies and governments on “proper reporting procedures” has diverted them from a creative focus. Problems in organisations come from a lack of understanding of the business, not whether profit can be measured. Anyway, nonprofits often have plenty to teach the forprofit sector.
This paper is a genuine attempt to advance the issues: governments and boards are here to stay so the focus must be on how they will work better [3].
Recent research shows governments seldom contribute positively to improving performance. Government reform in the last thirty years has mostly sought compliance across all sectors and used restructuring as a device for change. Obsession with financial matters, sometimes including hiring freezes and “taxing” surpluses, continues. Across the board reductions have impacted smaller organisations – most museums – more. Attempts to introduce performance indicators have mostly failed for a variety of reasons. Formative evaluation, which is effective and forms part of performance appraisal, is seldom used.
In adopting uniform accounting standards governments have told collecting institutions to financially value their collections: in at least one museum this silly notion has resulted in no increase in effectiveness and higher insurance premiums! Funding for advertising has been reduced: the popularity of the arts in the face of their relatively modest advertising and promotion outlays is surprising. Think of how much sport spends and gets.
Effectiveness has been conflated with efficiency and there is a never ending search for other sources of funds. Directors are fundraisers instead of leaders and too much attention is given to “promotion” instead of understanding the visitor or audience experience and genuine marketing. Short-term contracts for CEOs have increased uncertainty and stress. More frighteningly, many in government seem unable to grasp the possibility that museums might have made progress in considering how they conduct themselves from what they say to understanding their audience and from how they collect to what they present and with whose authority. Instead they have imposed requirements like accountability and equity in employment without realising that some of those issues have already been dealt with and the museum has moved on. Governments often intervene because they supply substantial subsidy, not because they contribute uniquely valuable solutions.
In Britain (previous) Culture Secretary Chris Smith gave the new V&A director Mark Jones six months to “fix up” the Museum. The British Museum’s “Great Court” has been completed but funding has not been provided for its operations. Last year’s Cultural Trends study in Britain showed museums need an additional £29 million each year to pay for increased running costs of lottery-funded new buildings and extensions [4]. In Paris, the Louvre’s funding has reduced the job of newly appointed director Henri Loyrette to “administering penury”; a recent report found numerous serious problems in government administration of the museum but culture minister Catherine Tasca accused Loyrette of “a lack of discipline, grandstanding and even of flirting with the idea of privatizing the museum” [5].
The US Office of Management and Budget has proposed drastic cuts to the funding of Smithsonian museums in the wake of September 11 and Secretary Laurence Small’s overtures to the rich seem to have made little difference to that [6]; OMB proposed that research be funded by the National Science Foundation who in fact “don’t do museums”. In stark contrast, the New Zealand Prime Minister in May 2000 provided significant additional funds to museums and other arts organizations as part of a one off grant to help them focus on the creative process instead of the financial bottom line.
Unfortunately boards often have hardly been engaged; instead they have imposed solutions or sat and done nothing. And critics and “activists” – there are such things in the museum world – have generally criticised museums for failing to support research or dumbing down or charging general admission but seldom asked governments or boards themselves what they think they are doing. Board members are still generally appointed on rather tenuous grounds and seldom informed as to their precise role. Far too much time is spent examining financial matters and too little considering quality. This last is my main point: if time is spent understanding the quality issue then the results of each project will feed into subsequent projects to further improve performance.
Right now quality is left in most museums to experts like curators and designers and marketing people who often argue amongst themselves over relative power and influence rather than content and meaning to the detriment of the outcome. The Cuban Missile Crisis, as revealed in “Thirteen Days” [7], emphasises starkly how major decisions cannot be left to experts! We mightn’t agree on what quality is but if we spend time talking about it at least we will understand the range of opinions and eventually we may come to agree on some of what it is and how it is achieved. In some places staff talk positively of the contribution of colleagues and their contributions to shared goals.
In 1995 the board of the Canadian Museum of Nature fired director Alan Emery after (false) allegations that the new building to house collections would damage valuable wetlands and that his policies were undermining research and collection management. The Victoria and Albert Museum in London underwent radical restructuring in 1989 by sudden decision of the board after senior keepers were given 12 months to suggest changes but made no progress; director Elizabeth Esteve-Coll was later described as a passive instrument of an ignorant Board of Trustees and encouraged to resign [8]. In 1988 the board of the Corcoran Museum in Washington, DC was asked for their view on whether to show the exhibition of Mapplethorpe photographs; they agreed to leave the decision to the Director who, after wide consultation, decided in the negative. The board agreed but when the staff complained, asked the Director to resign [9].
Although these behaviours are not uniform they are sufficiently common to cause great concern. There are some stunning exceptions such as the Nederlands Dans Theatre, (seemingly) the Australian Chamber Orchestra and many others, the Monterey Bay Aquarium, COSI in Columbus and yes, the Natural History Museum in London. Who is paying attention to them? Unfortunately, too many in the museum community are prepared to accept that governments and boards are “in charge” and therefore “they must follow along”.
I now examine three questions:
- What are effective organizations like?
- What is the role of leadership?
- Are effective museums like other effective organisations?
Effective organizations
Effectiveness means “meeting the constraints and meeting or exceeding the goals specified by the dominant coalition [of constituencies]”; the outcomes will relate to the policy framework in which the organisation works and the objectives it seeks to achieve. [10] Effective enterprises are characterised by high performance work practices: contingent compensation, highly selective recruitment, substantial investment in training, employee participation, higher wages and reduced status differences. [11]
Successful organisations recruit leaders for their ability to lead: they don’t hand the whole task over to consultants [12]. A variety of strategies and approaches are used such as generating a strong culture, setting big hairy audacious goals (BHAGS) and focussing on their people and their development. They foster environments of innovation.
In the end what distinguishes the best organizations is how people work together, how decisions get made and how leadership is practiced. [13]
Leadership
One of the larger streams of recent research on leadership, sometimes called “new leadership theory”, has involved more than 100 projects in a variety of organizational settings – manufacturing, the military, educational and religious institutions – and at various levels from first line supervisors to senior managers. Four particular factors characterise leaders who engender positive employee attitudes and higher performance:
- building trust and respect by doing the right thing and by role modelling (referred to as idealized influence);
- encouraging achievement beyond one’s own expectations (inspirational motivation);
- engaging the rationality of followers and challenging assumptions (intellectual stimulation); and
- treating staff as individuals, recognising achievement and working continuously to get them to develop to their full potential (individualized consideration).
Together these factors are referred to as transformational or charismatic leadership. [14]
Quite different studies in all kinds of domains confirm similar findings. The effective leader is not the principal strategist, designer of the re-engineered corporation or the person who makes the hard decisions to sack significant parts of the workforce in order to save money. [15] The latest research shows that recruitment is central to success and attitude of staff a more important consideration in the first instance than skill: for leaders, passion, competence and a sense of economy are critical. [16]
As to the “market” I will leave it to ABC Chairman Donald McDonald: “there is so much less to the market than meets the eye”. [17] McDonald continued, “Anyone who’s been pitching to the general public has been doomed to failure for at least two decades. There is no general public… ratings provide a familiar and convenient measuring stick, but are not the best measure of our success. Not a measure of excellence or usefulness. They can be part of the vocabulary in the continual assessment of our work, but never the final sentence.”
Effective Museums
The best museums around the world are characterised by cohesive leadership and visitor focussed public programming. [18] Developing a vision, working effectively as a top management team and modelling appropriate behaviour constitutes leadership. So does carefully explaining reasons for changes and providing support and resources in times of change. Board members are active in fund-raising. Staff understand and support the museum’s goals and objectives. There is a focus on quality as well as quantifiable outcomes. Public programming means providing a variety of interpretive mechanisms and development among staff of a shared understanding of the criteria for public program choice and senior managers are frequently seen on the ‘floor’.
Effective museums are like other effective organizations!
It is not productive to dismiss management and leadership as some nasty commercial undertaking and irrelevant because nonprofits don’t have profits: all reform is helped by understanding why some do better than others and importing those aspects of those practices which are right for our organisation.
Remedies (mine)
The remedies are difficult, demand intelligence and take time to achieve.
First groups are groups. Unless it is cohesive, has a clear idea of both why it is there and what it supposed to achieve, a group is unlikely to succeed. Unfortunately, many people appointed to boards, like those promoted to senior positions, have their own agendas and tend to be loners, not people who value the contributions of others. [19] Many dysfunctions of boards are due to people remaining silent or going along with, even presenting views they believe will be welcomed by, those in charge; this is as common in the most powerful political bodies as in small bureaucracies. The Cuban Missile Crisis showed that honesty is essential, disagreement must be sought and examined for productive solutions and the past understood.
The Chair plays a pivotal role. Members have to be trusting of each other and focus on agreed and shared goals. Boards are there to see things get done, not do them. [20] Nonprofits are effective when executives work through their board [21]: the board chair is there to actively encourage that!
We need people appointed to boards who are prepared to work to achieve a genuine understanding of the business and support the enterprise from attending openings to discussing important issues in detail. In the very best organizations people with the greatest responsibility might make less than 10 decisions a year. We don’t need reform driven by decisions based only on belief, supported by consultants given the solution at the outset and imposed on the organisation.
Next, if governments want best practice then they should adopt what we know empirically works but recognise there will still be problems. They should seek agreement on the way forward through discussion that demonstrates respect for museum executives, instead of trying to impose solutions; current awareness and information exchange is vital. They should encourage a genuine learning organization. If executives can’t recognise from their exposure to other domains and practices what works and what doesn’t then perhaps they need further training.
Above all governments and boards must understand what they want, not simply put problems together with whatever solutions are around. And they must also recognise that infrastructure and risk capital are fundamentally important considerations.
Organisations, like individuals, progress when they have a significant degree of control over their own future: there are examples in the current political, economic, business and education environments which show this dramatically. The notion that entities can be “controlled” to produce certain desired outcomes has no support in personal, organisational or political life. Governments must think about what they want and how to encourage achievement rather than imposing solutions in the naïve belief that centralized power is enough.
Leadership requires encouragement and support which doesn’t mean agreement with everything. But support means better resources for better performance and that isn’t performance pay which has achieved only corruption and amounts to transactional leadership – the belief that performance responds to tangible rewards – rather than transformational leadership which consistently produces superior results through respect for the leader. In any event, leadership is the principal task of the museum director: fundraising and technical issues are best assigned to experts who develop goals and strategies for consideration and in consultation with the CEO for endorsement by the Board.
Museums Australia should be pursuing discussion of this and encouraging whatever group succeeds the Heritage Collections Council, an initiative of Museums Australia, to advance general discussion of it at a senior level.
Footnotes
- Of government, management expert Henry Mintzberg said, “attacks on government are attacks on the fabric of society. We have individual needs, to be sure, but a society which allows them to undermine collective needs will soon destroy itself. We all value private goods, but they are worthless without public goods such as policing and economic policies to protect them.”
- American economist and social critic Thorstein Veblen (1857-1929) said of boards, “except for a stubborn prejudice to the contrary, the fact should readily be seen that boards are of no material use whatsoever; their sole effective function being to interfere with the management in matters that are not of the nature of business and lie outside their competence and outside the range of their habitual interests.” And Robert Townsend, once of Avis (in Up the Organisation (Michael Joseph, London, 1970)), asserted, “Boards are supposed to hoot when the organisation heads into the wrong part of the forest. Unfortunately many boards don’t even know where the forest is”.
- Nothing in this paper is to suggest that all boards and governments behave badly. Nor is it meant to imply that there are not problems with executives and staff. For some histories of museums see Merchants and Masterpieces The History of the Metropolitan Museum of Art by Calvin Tomkins (Longman, London, 1970) and The Roy Strong Diaries 1967-1987 (Phoenix, London, 1998).
- “Millions needed to avoid museum closures”, Dalya Alberge in The Times, March 19, 2001
- Riding, Alan (2002), French Government and the Louvre in a War of Words. New York Times, January 30, 2002
- The “gift” $38 millions by Catherine B. Reynolds to the Museum of American History for a “Hall of Fame” at the museum has been cancelled because “the philosophy of the scholars at the institution turned out to be so at odds” with hers; the Museum has said that they must have final say in the operations of the exhibit. (Rosenbaum, David E. (2002), Museum Insisted on Control of $38 Million Gift. New York Times, February 6, 2002; an excellent account of these gifts and the recent history of the National Museum of American History is given by Bob Thompson in “History for $ale”, The Washington Post Magazine January 20, 2002:14-29.)
- Kennedy, Robert F. (1999), Thirteen Days. A Memoir of the Cuban Missile Crisis. (W. W. Norton, New York); May, Ernest R. & Philip D. Zelikov, editors (1997), The Kennedy Tapes… (Belknapp Press/Harvard University Press, Cambridge, MA).
- Nicky Bird (1989), Climb-down at the V & A. The Spectator, November 18, 1989: 44-45
- Kaster, Elizabeth & Jo Ann Lewis (1989), Corcoran Board circles Wagons. San Francisco Chronicle, September 27, 1989.
- Kahn, Robert L in Paul S. Goodman et al. (1981), New Perspectives on Organizational Effectiveness. (Jossey Bass, San Francisco); Osborne, Stephen P. et al (1995), Performance Management and Accountability in complex Public Programs. Financial Accountability and Management 11 (1): 19-37.
- Pfeffer, Jeffrey (1996), When it comes to “Best Practices” – Why Do Smart Organisations Occasionally Do Dumb Things? Organisational Dynamics 25/1: 33-44.
- Bennis, Warren and James O’Toole (2000), Don’t hire the wrong CEO. Harvard Business Review, May-Jun 2000: 170-176; Fernandez-Araoz, Claudio 1999. Hiring without firing. Harvard Business Review, Jul-Aug 1999: 108-120; Kelloway, E Kevin, Julian Barling and Jane Helleur (2000), Enhancing transformational leadership: the role of training and feedback. Leadership and Organization Development Journal 21 (5): 145-149.
- Hout, Thomas M. and Carter, John C. (1995), Getting It Done: New Roles for Senior Executives. Harvard Business Review Nov-Dec 1995: 133-146.
- Avolio, Bruce J. and Bernard M. Bass (1999), Re-Examining The Components Of Transformational And Transactional Leadership Using The Multifactor Leadership Questionnaire. Journal of Occupational and Organizational Psychology 72 (4): 441-463.
- The latest study by Hewitt Associates (in conjunction with the Australian Graduate School of Management and John Fairfax Lt through the Australian Financial Review) supports these conclusions. (The report of this project for 2001 is available.)
- Collins, J. (2001), Good to Great: Why Some Companies Make the Leap… And Others Don’t (Harper Collins, New York)
- “Unique Culture, Unique Value“, National Press Club Australia Day Address, 30 January 2002.
- Griffin, DJG & M Abraham (2001), The Effective Management of Museums: Cohesive Leadership and Visitor-focused Public Programming. Museum Management and Curatorship 18 (4): 335-368 (2000).
- Senge, Peter M. (1996), The Ecology of Leadership. Leader to Leader, No. 2 (Fall 1996)
- Carver, John (1990), Boards that Make a Difference. (Jossey Bass, San Francisco); Hilmer, Frederick G. (1993), Strictly Boardroom. Improving Governance to Enhance Company Performance. (Information Australia, Sydney).
- Herman, Robert D. and Heimovics, Richard D. (1990), An Investigation of Leadership Skill Differences in Chief Executives of Nonprofit Organisations. American Review of Public Administration 20/2: 107-124.