Musician Involvement in the Governance of Symphony Orchestras: Will it Increase Organizational Effectiveness? Part III

The concept of worker involvement in governance is not a new managerial concept, although its implementation has been sporadic throughout the 20th century. In the early 1900s, Mary Parker Follett (1868-1933) was a proponent of collective action in society, and through democratic governance, she believed that individuals can find fulfillment. Follett was born in Quincy MA and educated at Radcliffe College. Her expertise was in political science, human relations and management, and democracy; she was a speaker on labor- management relations. She influenced the development of organizational studies with her concepts of power, negotiation, and employee participation.

As outlined in a book review by Babcock (1), three of her most influential beliefs are:

1. Cooperation and “cooperative competition” yield better results than cut-throat competition.
2. Democratic procedures are the best means to achieve individual fulfillment within groups because only then will all participants feel both involved and responsible.
3. Concept of “power-with rather than power-over”— belief that an organization accomplishes its tasks more effectively by creating more power throughout the organization, not by limiting it to those who have nominal authority within a hierarchical structure.

After her death, Mary Parker Follett’s philosophies were basically forgotten in America, but her concepts retained popularity in Great Britain, and the Japanese established the Follett Association in the 1950s. It is interesting to note that it is uncertain whether her ideas were rejected in America because she was ahead of her time or because she was a woman.

Situations exist in the for-profit business sector that exemplify the idea that employee participation can work. A prominent example of a company that has practiced a variation of employee participation throughout most of its corporate life is Lincoln Electric, a non-union company based in Cleveland, OH and founded in 1895. Lincoln Electric,a global leader in the production of welding equipment, is known for its innovative employee incentive programs and advisory boards, which were established in the early 20th century. James F. Lincoln implemented the Incentive Performance System that resulted in a “pay-for-performance” system, one of the first such incentive programs in the country.

In 1914 the Employee Advisory Board was established – it includes elected representatives from every department and has been meeting every 2 weeks for nearly the last century. The goal of the Advisory Board is for direct and open communication between employees and senior management. Other landmark incentive initiatives that benefit the employee include the implementation of group life insurance in 1915, employee paid vacation in 1923, a stock ownership plan in 1925, and an Incentive Bonus Program in 1934. In addition, after 3 years all employees have guaranteed employment. (2)

The Lincoln Electric website states the following employee incentive goal: “Through this well-defined group of incentives, Lincoln encourages and compensates individual initiative and responsibility. Employees work together to reduce costs and improve quality. These individual and cooperative efforts create a more profitable company, the success of which each person shares according to his own contribution.”

Another example of successful employee involvement is Cadbury, a world-wide leader in the confectionary business based in the United Kingdom. The company has a long history of employee involvement. The business was first started as a grocery store in 1824. In 1831 John Cadbury established a chocolate manufacturing business. In the beginning of Cadbury’s history, trade unions were encouraged among the employees, but they were not prominent in the Cadbury Company because of the excellent working conditions. Instead, as a formal management structure was evolving, a Works Committee was established to discuss all issues of importance. In 1918, two democratically elected Works Councils were established—one for men and one for women. The goal of the Works Councils was to discuss issues involving working conditions, health, safety, education, training, and the social life of the factory. The elections for the Works Councils were held by secret ballot and were composed of an equal number of management and worker representatives. There were no changes in the structure of the Works Councils until 1965 when the men’s and women’s councils were merged.

In 1969 the company was 100% unionized, which included the Works Council, and the union leaders played a major role in the work of the Council through the late 1970s. At this time there is still full union and worker participation in the field of labor relations and negotiations. (3)

These examples of successful for-profit corporations benefiting from employee participation exemplify the positive results possible when employee participation is part of the organization’s culture. Though the concept of employee participation has been around for the last 100 years, the latest evolution started in the 1980s when there was a great deal of flux in labor-management relations. A distinct separation between union and non-union workplaces evolved during the ‘80s. Corporate America was evolving; it demanded greater efficiency and productivity to remain competitive. While many corporations actively fought against unionization, others fought labor at the negotiation table by demanding give-backs or concessions. As a response to this concessionary bargaining, unions demanded they be given a voice and greater influence in the decision-making of the company. The concessionary bargaining of the 1980s was the impetus for worker participation in America.

The positive and negative effect of union participation in corporate governance has been in recent newspaper headlines, including the DaimlerChrysler/United Auto Workers (UAW) partnership. Since the Daimler merger with Chrysler in 1998, the UAW has held a seat on Daimler’s 20-member board (German law requires 10 employee representatives on corporate boards). At that same time, the Local Employee Participation Council (LEPC) was created. The LEPC is the umbrella organization for all joint American activities of DaimlerChrysler and the UAW. According to the UAW-Daimler Chrysler website, “It provides the leadership for planning and implementing joint activities to improve your location’s safety, quality, delivery, cost and morale.” The two entities agreed “that the success of each depends on involving employees and working together to jointly make the best-quality vehicles in the world.” However, the employee participation councils were not enough to override the challenges being faced in today’s auto industry. In May 2007, DaimlerChrysler announced that a capital management firm would take over majority interest in the Chrysler division. (4)

Employee participation cannot ensure success, but it can be a contributing factor in the success of an organization.

The goal of greater musician involvement in governance is to achieve organizational effectiveness. In for-profit organizations, organizational effectiveness is measured by financial profit and product output. A non-profit organization, such as an orchestra, is unable to make a profit and therefore must raise funds to achieve a balanced budget.

Author and Professor of Business Jim Collins has researched social sector organizations and the challenges of measuring success in non-profit organizations. In 2005 he states that, “For a social sector organization, however, performance must be assessed relative to mission, not financial returns,” and, “In the social sectors, money is only an input, and not a measure of greatness.” (5)

Since finances are not an accurate measurement, an orchestra board needs to determine what benchmarks for their organization indicate non-profit success within the mission of the organization. It is worth noting that many orchestras have extremely generic mission statements that are limited in scope; therefore, to measure success, the goals of the orchestra must be appropriate and achievable for the local community. It is the responsibility of the leadership to 1) establish the goals of the organization, 2) identify the indicators that will measure if these goals are being met, and 3) identify a timeline for both short term and long term goals. Real and sustainable success needs to be measured over the long term.

Collins further states that “what matters is not finding the perfect indicator, but settling upon a consistent and intelligent method of assessing your output results, and then tracking your trajectory with rigor.” It is his belief that “a great organization is one that delivers superior performance and makes a distinctive impact over a long period of time.”

In the monograph “Good to Great and the Social Sector,” he presents the following example of an orchestra that established goals of success and how their success was measured.

The Cleveland Orchestra, under the leadership of former Executive Director Thomas Morris, set goals of excellence for itself as well as superior performance and measured the organization’s success in achieving these goals. The following three goals were identified as measurements of success: 1) superior performance, 2) distinctive impact, and 3) lasting endurance.

The Cleveland Orchestra succeeded in accomplishing their goals of success, using the following indicators to measure their success:

1. Superior performance

• Emotional response of audience; number of standing ovations increased.

•  Wide technical range: can play any piece with excellence, no matter how difficult – from soothing and familiar classical pieces to difficult and unfamiliar modern pieces.

•  Increased demand for tickets – even for more complex, imaginative programs – not just in Cleveland, but also when visiting New York and Europe.

• Invited (and then reinvited again) to Salzburg Festival – for the first time in 25 years – signifying elite status with the top European orchestras.

2. Distinctive impact

• The Cleveland style of programming increasingly copied and becoming more influential.

• A key point of civic pride; cab drivers say, “We’re really proud of our orchestra.”

• Severance Hall filled to capacity two nights after September 11, 2001, as a place for the community to grieve together through the transformative power of great music.

• Orchestra leaders increasingly sought for leadership roles and perspectives in elite industry groups/gatherings.

3. Lasting endurance

• Excellence sustained across generations of conductors – from George Szell, through Pierre Boulez, Christoph von Dohnányi, and through Franz Welser-Möst.

• Supporters donate time and money, investing in the long term success of the orchestra; endowment tripled.

• Strong organization before, during and after Tom Morris’s tenure.

The leadership of the Cleveland Orchestra understood the importance of identifying their goals and measuring their success in achieving those goals. An effective, and successful, organization is one that achieves its goals.

Does worker involvement in governance and decision-making make a difference in the organizational effectiveness and success of an organization? For-profit corporations have had mixed success with employee participation, as shown with the Lincoln Electric and DaimlerChrysler examples.

It is not possible to provide a quantifiable response as to the organizational effectiveness of symphony orchestras because of the participation of musicians in the governance structure. The following information, necessary for making an accurate assessment, is lacking:

There are no agreed-upon parameters for defining organizational success within the industry. The industry has no established baseline to benchmark success. The leadership of individual orchestras often do not have a clear understanding of what constitutes organizational success for their specific orchestra. Orchestras have not been defining success in measurable terms.

Musicians have a history of being proactive in their professional lives. They fought to unionize and ensured that their union leadership would adequately represent their needs. Though boards and managements initially resisted any form of musician input or power, the tide has slowly changed over the last 20 years. The most recent and far-reaching example is that of the St. Paul Chamber Orchestra, which voluntarily initiated the restructuring of the group’s governance structure with a dramatically increased role for the musicians. It will be several years before the changes in SPCO governance can be accurately assessed.

Cooperative orchestras are proving that musicians can govern an orchestra and thrive. Orpheus Chamber Orchestra is thriving with an international reputation for artistic excellence. The Louisiana Philharmonic survived the devastation of Hurricane Katrina; after losing its concert hall, offices and part of its audience, it is continuing to provide orchestral performances for its community.

The strongest indicator of potential success for worker/musician involvement is when employee participation is part of the culture of the organization, not only a response to concessionary bargaining. Examples of success in long-lived institutions include Lincoln Electric, Vienna Philharmonic, Berlin Philharmonic, London Symphony Orchestra, and Orpheus Chamber Orchestra. When worker involvement is part of the group’s culture, the adversarial relationship does not exist, and there is one unified voice and set of goals for the organization.

Over the years, the continual reports of the impending death of classical music have been greatly exaggerated. The most important first step will be for whomever serves in the leadership role of orchestras in the 21st century to focus on achieving the mission of the organization, which is the primary definition of success.

Notes

1. Babcock, M. (1998). Book review, Mary Parker Follett—Prophet of Management: A Celebration of Writings from the 1920s. Harmony, 6, 111-115.
2. Lincoln Electric. (2007). “Working at Lincoln.” Retrieved August 3, 2007, from Lincoln Electric website.
3. Cadbury. “About chocolate. “Retrieved August 1, 2007, from Cadbury website.
4. UAW-Daimler Chrysler National Training Center. Local employee participation council. Retrieved August 4, 2007, from UAW-DaimlerChrysler website.
5. Collins, J. (2005). Good to Great and the Social Sectors. Boulder: Collins, Jim, pages 5-8.