The Empire strikes back

The shockwaves from the Minneapolis Star Tribune article on Monday are still reverberating, judging by today’s response from the Minnesota Orchestra board leadership. It’s quite revealing, both of the board’s real position and of some of the thinking behind it. It’s also full of half-truths and rather creative constructions placed on their actions and those of the musicians:

On Oct. 11, our commentary on the Minnesota Orchestra’s financial position appeared in the Star Tribune (“Orchestra makes a stand: Even in the arts, we can spend only what we earn”).

We were then six months into contract negotiations. The orchestra’s musicians had not offered a single counterproposal. The orchestra board had planned for the possibility of a lockout in case the musicians decided to run out the clock on their contract.

At midnight on Oct. 1, we were obligated to make the decision to hold musicians accountable for a counterproposal rather than continuing to “pay and play” — an option that would incur losses to the orchestra of at least $500,000 per month. Since then, the musicians have been busy with publicity stunts and attempts to discredit their greatest supporters and most generous donors.

Presumably the concerts with two of their former music directors fall into the status of “publicity stunts.” If management had scheduled those concerts, of course, they would have been significant artistic events.

There’s an old aviation story about a pilot who became frustrated with an uncooperative air traffic controller, and finally radioed “Look: am I up here because you’re down there, or are you down there because I’m up here?” It’s not hard to predict how those “leading” the Minnesota Orchestra would answer that question.

And I loved the line how the board was “obligated to make the decision to hold musicians responsible for a counterproposal rather than continuing to ‘pay and play'”, as if the musicians not making a counter-proposal and the board’s decision to lock the musicians out had anything to do with each other. It’s pretty clear that no counter-proposal short of acceptance of the Board’s demands would have averted a lockout:

The musicians’ negotiating team appears to be avoiding at all costs our request to come back to the table with a substantive counterproposal. While we have been clear that we seek savings of $5 million annually, the approach we use to reduce these costs can be adjusted through the course of good-faith negotiations. But we need our musicians to participate for this to happen.

Read that paragraph very carefully. What it says is that the Board’s demand to reduce musicians’ compensation by $5 million annually is non-negotiable; the only thing the board is willing to discuss (or willing to entertain counter-proposals about) is just how that money gets chopped from musicians’ compensation (“the approach we use to reduce these costs can be adjusted through the course of good-faith negotiations.”) A counter-proposal that didn’t deliver that $5 million annually clearly would not have averted the lockout; the $5 million is the only answer the Board is willing to accept.

In no other context would this be described as a “negotiation.” It’s like saying that, because a restaurant is willing to take either cash or credit cards to pay for a meal, they’re “negotiating”with the customers.

Another choice morsel of misdirection was this:

Recently, orchestra musicians shared board meeting minutes with the Star Tribune in an effort to criticize financial decisions made by our board — decisions that had been made expressly to protect the Minnesota Orchestra.

We shared those board minutes, amid 1,200 pages of documents, with musicians in our negotiations last summer as part of the orchestra’s longstanding commitment to transparency with our players.

Whether or not there is a commitment to “transparency” (and a real commitment to transparency goes far beyond sharing a stack of documents), what is incontrovertibly true is that federal labor law requires that an employer making the kinds of proposals made by Minnesota Orchestra management produce pretty much whatever the union requests by way of supporting information. It’s called “pleading poverty,” and it’s the law.

 In 2010, we asked our musicians to help alleviate growing deficits by taking a 22 percent wage reduction. We told them that even this sizable reduction would not resolve our financial problems. It would, however, make the cliff less steep in 2012. The musicians chose not to participate in those reductions. That was their legal right, and so we must grapple with even bigger financial issues today.

Notice what wasn’t mentioned: the contract re-opener of 2009. And yet the minutes demonstrated pretty clearly that the Board was planning on running deficits even in advance of that re-opener. What did they ask for in that negotiation? If they needed “a 22 percent wage reduction” in 2010, why not in 2009? And why not mention that the musicians had already given back  wage increases in 2009? It’s not even clear why a 22% giveback in 2010 would have changed management’s demands this year. If the issue is really “sustainability,” whatever deficits were run in previous years were not going to have a big impact on what sustainable fundraising goals and endowment draws would be going forward.

In some ways, though, the most interesting paragraphs are these:

We understand that peering into one of this region’s most venerable arts organizations through excerpted meeting minutes might make for scintillating news coverage. That’s often part of the job when leaders must make tough calls. The leaders of the Minnesota Orchestra have nothing to hide.

Our minutes in their entirety reflect the deliberations of a board that takes its fiduciary responsibility very seriously. They reveal a methodical coming-to-terms with the structural deficits that threaten the stability of orchestras around the country.

“Structural deficits that threaten the stability of orchestras around the country” and making “tough calls” are buzzwords that are likely not familiar to most Star Tribune readers. But they are buzzwords  in our business nonetheless, and suggest a board in thrall to a view of the orchestra industry that says that orchestras nationwide are unsustainable because, and only because, they pay musicians too much and that “tough” leaders are needed to “re-set” the industry business model.

These are not notions that orchestra boards hold without considerable help from their executive directors. It is illustrative of the fundamental tension at the heart of the non-profit governance model; the CEO, as an industry professional, is supposed to know far more about how the institution should run than the people whose job it is to hold him/her accountable for running it. But how do they do that if what they know about the industry comes from the person who they are supposed to hold accountable, especially when they are volunteers with limited time, knowledge, and attention to spare?

Situations like Minnesota are exactly why those in the know in our business believe, and have always believed, that the key to institutional success is a good boards. Minnesota also suggests that one thing a good board needs is a functioning BS detector.