Authors: Reynold Levy
They Told Me Not to Take that Job: Tumult, Betrayal, Heroics, and the Transformation of Lincoln Center (40 page)
Would all of this not be reason enough to expect the resignations of Paul Guenther and Zarin Mehta?
In the face of a declining audience and a deteriorating balance sheet, the Metropolitan Opera remains a troubled institution. Evidence abounds that Peter Gelb’s management and artistic responsibilities are simply too much for any one executive to shoulder, no matter how creative and hardworking.
Why didn’t the Met’s board of trustees demand early on the development of an economic model that held promise of a viable financial future?
In meeting privately with Gelb, I was struck by his response when I asked what would happen if his effort to hike ticket prices and raise unprecedented amounts of funding for ambitious programs, infrastructure improvements, and working capital were not successful. What if seeking surpluses from operas in movie theaters did not work according to plan? What if price increases met with significant resistance?
Peter’s response was surprising.
“It has to work. There is no Plan B.”
I know of no successful CEO without a backup plan in the event of failures or shortfalls. Gelb’s insistence that he had charted a course and was going to pursue it no matter what obstacles he faced, foreseen or otherwise, struck me as bordering on dangerous. The Met’s board of directors should have seen to it that considered alternatives were seriously entertained.
If the New York Philharmonic faced chronic operating deficits, and the Metropolitan Opera’s economic model seemed seriously flawed, the New York City Opera’s devolution also occurred not suddenly, but over at least a decade.
Ten years or more of spending well in excess of annual income and of drawing down on an endowment until there was hardly any left would surely weaken any artistic organization. What Paul Kellogg, Gerard Mortier, and George Steel had in common as successive CEOs was a board of directors and a chair who simply refused to call a halt to irresponsible management. One wonders whether they even recognized the harsh realities. Sometimes in human affairs, the capacity for self-delusion knows no limits.
Even worse, recall that board members indulged Paul Kellogg by traipsing around the island of Manhattan, looking to build a new opera
house with no prospect whatsoever of being able to raise the funds to build or sustain it.
The famous sociologist Albert Hirschman wrote a treatise on what to do when you disagree in principle with an institution’s policy. He referred to the choice as voice or exit.
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Either protest the organization’s direction inside its corridors with a view toward change, or leave it entirely, in the hope that others will follow or that leadership, stunned by defection(s), will change course or resign.
Clearly, every difference of opinion is not a difference of principle. One should not take lightly offering a strong dissenting view or a resignation in protest.
In my general experience at Lincoln Center, very few trustees or staff exercised either option: voice or exit. Those who choose either course of action deserve a special place on any trustee honor roll.
The failure to engage in “voice or exit” is hardly confined to Lincoln Center’s constituent artistic organizations or to nonprofit institutions more generally. Consider contemporary American foreign and domestic policy.
The Iraq conflict led by President Bush has been called a war of choice.
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That choice and the way the war was conducted became publicly controversial. But who raised a contrary voice in the Bush administration during the course of a conflict that was costly in lives and treasure and was unjustified by the rationale of weapons of mass destruction readily available for use by Saddam Hussein? As to exit, one can search in vain for any high-ranking official who even threatened to resign on principle.
Instead, it seems to be a rule of human behavior that to get along, you must go along. One can count on fewer than two hands those in significant positions who expressed strong dissenting views inside almost any post–World War II administration or those who resigned on principle over policy differences.
Secretary of State Cyrus Vance in the Carter administration did so over the Iranian hostage crisis policy. Attorney General Elliot Richardson did so rather than carry out President Richard Nixon’s orders during the notorious Watergate affair. FBI Director Robert Mueller and Deputy Attorney General James Comey threatened to resign if President Bush compelled Attorney General John Ashcroft to authorize
the illegal surveillance of American citizens. Before his untimely and premature death, Ambassador Richard Holbrooke spoke forcefully about President Obama’s “mistaken” policy toward Afghanistan and Pakistan. Christina Romer, President Obama’s chair of economic advisors, argued that the economic stimulus package of the administration was too small to promote a rebound sufficient to overcome the most drastic downturn in America’s financial history since the Great Depression. These are notable exceptions to the general rule of passivity in the face of important policies or practices with which one strongly disagrees.
Notwithstanding his reputed differences with President Bush, Secretary of State Colin Powell never gave voice loudly or clearly enough to be heard inside or outside the administration. The director of the Central Intelligence Agency, George Tenet, who called finding weapons of mass destruction and victory in Iraq a “slam dunk,” and General Tommy Franks, largely responsible for a failed occupation policy, were not held accountable for deficient performance. Instead, each was granted the highest award our nation can bestow, the Presidential Medal of Freedom.
What is it about speaking truth to power, or about holding authorities accountable for their acts, that is so difficult?
As I write, no one, not a single senior executive of Bear Stearns, Countrywide, Lehman Brothers, Merrill Lynch, Goldman Sachs, Fannie Mae, Freddie Mac, the Bank of America, or Credit Suisse, has been found guilty of a felony. Indeed, no official from these firms has even been indicted for gross failures of omission and commission that brought our country to the “brink of economic Armageddon” in 2008 and 2009. That is the phrase used by none other than the former chairman of the Federal Reserve Bank, Ben Bernanke.
This pronounced tendency to avoid both conflict and the risk of alienating friends and colleagues runs rampant in all sectors of our society. It is no small part of the reason that our major institutions are far less trusted by citizens than they were decades ago.
The failure to exercise the option of voice or exit can badly maim an organization, even bring it to the brink of dissolution. Acknowledging grave mistakes and resigning, or being asked to take one’s leave, may be difficult, uncomfortable, and painful for those directly involved. But
it is sometimes the only honorable course of action and best for the institution or country.
D
URING THE LAST
two years of my tenure as the president of Lincoln Center, Katherine Farley, my chair, whom I had known for two decades, did not hesitate to give strong voice to her opinion if she felt that management, sometimes a euphemism for me, needed clear criticism.
For example, Farley argued for reducing the cost base of Lincoln Center’s artistic programs. She felt that too many were too expensive and were attracting too small an audience. She examined the deficit of various program series—expenses minus ticket income—and expressed concern that the gap to be bridged by contributed funds was growing too large.
She credited management with first-rate cost controls, particularly over administrative expenses. They rose on average only 3 percent per year, including escalating health-care costs and collectively bargained salary and fringe benefit increases. She also acknowledged that on more than one occasion, program expenses had already been reduced to lower levels.
Still, since program cost commitments often extended several years ahead of the next budget cycle, Katherine felt that “out year” expenses needed to be reduced and contained even further.
We joined issue.
I argued that Lincoln Center was operating within the context of more than a decade of balanced and surplus budgets during my tenure. I advanced the view that daring, unusual, and challenging programs are precisely the kind that attract donors and that bring needed subsidies. The Andrew W. Mellon Foundation was not about to offer a major grant to support the presentation of mere entertainment. Besides, surely the only measure of Lincoln Center’s artistic success could not be the size of a paid audience attracted to a given set of programs.
What about our obligation to commission new work, world and American premieres? What about our dedication to promoting new and exciting artists, ensembles, choreographers, and composers? What about the important positive recognition accorded our senior artistic curators, Nigel Redden and Jane Moss, by audiences and critics for their adventurous programming? What about the fact that very often
what is produced and presented first at Lincoln Center is then performed elsewhere, nationwide and worldwide?
Didn’t such considerations deserve a place in Lincoln Center’s performance box score? Weren’t these salutary consequences of our programming central to Lincoln Center’s mission? Not everything that counts can be measured. Not everything that can be measured counts. We should not run the risk of weighing the costs but ignoring value that doesn’t fit so neatly on a spreadsheet. Like the power of Lincoln Center’s brand and the trust it enjoyed among artists, patrons, and critics for high quality. Like the audience its programs attracted outside of our campus venues, through tours, run-out performances, and digital media.
Farley pushed back. She acknowledged these other Lincoln Center roles and recognized that management enjoyed a praiseworthy track record of balanced and surplus budgets.
But Lincoln Center should climb a wall of worry when it comes to its financial condition. Economic times change. The fund-raising climate can become more forbidding. Box office business can disappoint. And my successor should be given an easier budget to balance, the best possible flight path to a smooth landing.
To pull Katherine’s leg at one finance committee meeting, I played a song from Steven Sondheim’s musical
Merrily We Roll Along
, falsely suggesting that my chair preferred the easy and the popular over the challenging and the worthy.
Farley grimaced at the mere suggestion that she failed to appreciate Lincoln Center as the progenitor of high art. And she was right to do so. I had overstepped my bounds.
It was tough for me to debate a friend whom I respected enormously. But our differences were about matters of degree, and the contention between us was creative and constructive. Fortunately, good humor prevailed, compromise was struck, the cost basis of programming was reduced (yet) again, and budget guidelines for the “out years” were established. But the board allowed for exceptions if artistic opportunities warranted and if financial planning for larger budgets proved sound.
Good for Farley. She is a rare board chair, and I tip my hat to her. Hold management accountable even if it comes at the cost of more than a little discomfort. After all, one definition of leadership is speaking
uncomfortable truths. Lincoln Center is too important a place to smother genuine differences rather than to air them. Our friendship was too precious to be based on false pretenses. In the end, I learned a few lessons. I may have disagreed with the board’s judgment, but ultimately, I served at the pleasure of its members, not the other way around. Given Farley’s responsibilities, her cautiousness was entirely merited. Holding management accountable for sound performance is precisely what an excellent chair should be about.
Would that all of my CEO colleagues experienced similar debates and were compelled to respond to trustee pressure to perform better or differently. Lincoln Center would be far stronger if the options of voice or exit were exercised more frequently. As would our country’s corporations, not least its financial institutions. And so, for that matter, would the management of our nation, the United States of America.
What is needed to close the deficit of trust that Americans harbor toward virtually all institutions is responsible, accountable leadership. And one of the most important responsibilities is knowing when to walk away. Nothing less will do.
One must wait until the evening to see how splendid the day has been.
—SOPHOCLES