Authors: Reynold Levy
When business is distrusted, the demand for regulation escalates, and the expressed needs of corporations for lower taxation and trade liberalization fall on deaf ears.
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And when nonprofits falter, when confidence in them erodes, charitable contributions plummet, and faith in the voluntary sector diminishes.
The active consent of the governed, shareholder and customer satisfaction, and nonprofits that discharge their fiduciary responsibilities with care: these are the fundamental building blocks of a vibrant governmental sector; a healthy free enterprise economy; and an energetic, creative, and highly emulated nonprofit sector.
The disciplined reporting and commentary of journalists plays a critical role in holding all three sectors accountable. After all, they consist of institutions that are supported by the public. They are dependent on citizen, client, consumer, investor, and donor approval. The media are the independent source of information on which all of these constituencies depend to reach sound judgments.
Selected board chairs, trustees, and executives are criticized in these pages because those who enjoy a precious public trust should be called to account for acts of brazen omission or commission that occur on their watch. No one was held accountable by President George W. Bush for the intelligence failures that led to 9/11, or for the disaster that befell our country in Iraq, or for the utterly unnecessary damage to lives and property caused by the catastrophic failures to prepare for Hurricane Katrina and to deal with its consequences. Similarly, many at Lincoln Center who ran excessive operating deficits, deferred building maintenance inexcusably, allowed endowments to remain stagnant or deteriorate, or permitted artistic drift did so with impunity.
Not a single senior executive has been indicted for white-collar crimes associated with the disappearance of Lehman Brothers, Bear Stearns,
Countrywide, MF Global, or Arthur Andersen as independent entities. Nor have senior management or outside directors of the likes of Bank of America, Enron, WorldCom, Citibank, Merrill Lynch, Fannie Mae, and Freddie Mac been held accountable for stunning acts of omission and commission that betrayed the trust of shareholders and arguably violated the spirit, if not the letter, of dozens of laws and regulations.
Analogously, the CEOs and board chairs of some of the non-profits that comprise Lincoln Center were not held responsible for the weakened artistic and financial state of the organizations they were charged to protect. For this reason alone real-life situations are recounted in the pages ahead, no doubt to the embarrassment of some, but only with the intention of helping others cope with similar challenges.
This third sector of ours, nonprofit institutions, is hardly immune from the abuse and neglect of trustees and professionals. Lincoln Center’s constituents were governed by some trustee leaders who did not hold their CEOs accountable for performance and who violated the trust invested in them to manage risk. Tales of organizations losing their way do not go untold here.
However, many with whom I worked took their responsibilities very seriously. These men and women were devoted to the common welfare, their egos in check, their energies unleashed, their resources generously offered. They accomplished nothing short of an institutional transformation. Prominent among them were the trustees of Lincoln Center, the parent body and the campus landlord, together with most of their constituent counterparts.
They comprised in total some 525 of New York City’s most accomplished figures, drawn from all sectors of society. These trustees found in Lincoln Center and its resident organizations a cause worthy of their time and treasure. They, and the benefactors they helped attract, renewed Lincoln Center physically and programmatically for a new generation of artists and audiences. In the quest, they enjoyed the company of gifted and hardworking employees, driven to succeed.
This is their story, too.
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Y DAILY LIFE
at the Lincoln Center was filled with tension and beset by provocation.
The situation called to mind one of my favorite quotes from Machiavelli, who warned his Prince about the dangers of introducing change into an organization or a polity. His admonition, I discovered, was well worth heeding:
There is nothing more difficult to take in hand, more perilous to conduct, or more uncertain in its success, than to take the lead in the introduction of a new order of things.
For the reformer has enemies in all those who profit by the old order, and only lukewarm defenders in all those who would profit by the new order. The lukewarmness arising partly from fear of their adversaries . . . and partly from the incredulity of mankind, who do not truly believe in anything new until they have had actual experience of it.
Transforming Lincoln Center was not without blind alleys, strong-willed opponents, unexpected detours, speed bumps, and more than a few sleepless nights.
I was helped by more than my community center, Fortune 50, and refugee professional experience to put it all into proper perspective. I was also assisted by a sense of humor.
For example, when the members of the Lincoln Center search committee asked what I, as a candidate, would do to reduce embarrassing rivalries that ran rampant across campus, I replied that my prior position at the IRC and my friendship with Jean Marie Guéhenno, the undersecretary for UN peacekeeping, would enable me to borrow some of his troops to occupy Josie Robertson Plaza and separate the warring factions.
Or when Mayor Bloomberg asked me, “What’s the difference between your job, Reynold, and Kofi Annan’s, the Secretary-General of the United Nations?,” I replied, “I don’t know, Mr. Mayor.”
“Well, then, what’s the difference between the UN Security Council and Lincoln Center?”
I looked quizzical, and he continued: “The Secretary-General and the Security Council need only cope with five vetoes. You and Lincoln Center have twelve.”
The mayor was referring to a decision reached before my arrival that all material actions about the physical redevelopment of Lincoln
Center had to be unanimously approved by every resident artistic organization.
The unintended consequence of such a rule is that it strongly predisposed the sixteen-acre campus and its artistic facilities to neglect and inattention. To be charitable, it promoted the perpetuation of the status quo. To be accurate, it caused the decay of many of the Center’s buildings, its public spaces, and its physical infrastructure.
Allowing each constituent to wield a veto on virtually any and all matters, while self-destructive if pushed to its logical conclusion, was also consistent with the legal and governance framework of the Center. Each of the twelve constituents comprising Lincoln Center was its own independent 501(c)3 organization, fully equipped with a board of directors, an operating budget, a balance sheet, and a mission statement.
Lincoln Center, the organization I ran, sometimes referred to as “Linc. Inc.,” performed important common functions. It operated one of the largest underground garages in New York City. It maintained all of the public spaces surrounding the artistic facilities: cleaning and repairing them; protecting them from inclement weather; policing them with a private security force; and offering contemplative, social, and performing arts activities throughout the Lincoln Center complex, along with extensive food and beverage service.
Lincoln Center was authorized to rent the public spaces to outside parties under a renewable five-year license from the Parks Department. It created the Lincoln Center Corporate Fund, raising from $4 to $6 million annually as general operating support for constituent use. It successfully sought funds for Live from Lincoln Center, a forty-year tradition of airing constituent performances across the syndicated stations of the public broadcasting network throughout the nation. And to round out the artistic diet offered to the public and use the constituent venues and ensembles when they were otherwise empty or idle, Lincoln Center offered what has become the most extensive arts presentation program in the world.
In addition to these regular activities, the services performed by Lincoln Center during the course of its mammoth physical redevelopment placed a premium on cooperation between and among constituents
and reliance on a set of unprecedented Lincoln Center offers of service and revenue.
Beyond the formalities, the chair of Lincoln Center regularly held meetings with her counterparts at the twelve resident artistic organizations, as I did with mine. Likewise, my staff regularly convened meetings of professional communities across constituent boundaries in finance, public relations, marketing, fund-raising, and the like.
Such meetings conveyed information, shared best practices, and allowed colleagues to help one another. They built trust. Ultimately, my ability to get consequential things done depended on the exercise of leadership, devising solutions to problems, creating ways to seize major challenges, and convincing others of their wisdom. It was also immensely assisted by mobilizing the goodwill of influential trustees who wished to leave Lincoln Center stronger than they found it, who yearned to see it flourish. My calendar was filled with trustee meetings. One-on-one conversations not only with members of Lincoln Center’s board, but also with constituent trustees, were frequent.
Gathering important figures, board members, and hired hands behind a common plan was essential. The diffusion of power at Lincoln Center, its factionalism, and its bias toward inaction, not to mention its flamboyant personalities, had to be overcome. Those powerful forces revealed in no small measure why friends and colleagues of mine told me not to take that job.
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HIS BOOK EXPLAINS
how transformational change, even in the face of such seemingly intractable obstacles, was realized. Architecturally. Artistically. Civically. Economically.
Such change is all about finding common ground, summoning the energy to propel Lincoln Center and its constituents forward, modernizing and enlivening the governing structure while almost nobody noticed, and leading by example. Exercising the power to persuade can regularly prevail over antiquated rules and regulations and over members of the “division of second guessing,” Lincoln Center’s largest department.
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For me, Lincoln Center’s future was too important to ignore in favor of other pursuits, and too critical to the nation’s cultural life to take lightly. So I immersed myself in the undertaking. But because of
my full occupational history, I was able to maintain a critical distance, to be totally in, but never fully of, the place.
Totally in, but not entirely of, had been a recurring theme in my professional life.
From 1975 to 1977 I was the staff director of the Task Force on the New York City Fiscal Crisis, proposing revenue enhancements and budget cuts that would do far less damage to poor and working-class New Yorkers than those advanced by Mayor Beame and Governor Hugh Carey. But I had never worked for the City or State of New York. Who was I to offer sound public policy options?
I was the executive director of the 92nd Street Y, where being a Jewish civil servant and being a certified social worker were at that time regarded as necessary. I was neither.
I moved to AT&T with no experience in business whatsoever, save for a few solo practitioner consulting stints, speaking fees, and writing for publication. “You hired someone who ran a community center to help meet the challenges of divestiture and AT&T’s entry into a competitive world?” my boss was often asked.
Of course, at the International Rescue Committee I was widely viewed as an interloper, a “corporate suit,” devoid of the lifelong refugee experience seen as a prerequisite for its president.
And my situation was roughly the same at Lincoln Center. Sure, I had some legitimate connections to the arts, but none compared with the likes of Joseph Polisi, Joseph Volpe, Bernard Gersten, and Peter Martins, each of whom had spent more than two decades with The Juilliard School, the Metropolitan Opera, Lincoln Center Theater, and the New York City Ballet, respectively.
It has been observed that if you are swimming inside a bottle of fluid, you are likely to become familiar with its properties, but you are totally unable to detect, let alone describe, the shape of the bottle. Knowing the contours of the flask that holds the liquid, the institution that animates art, comes naturally to me.
Being totally in, but not entirely of, one’s setting affords a measure of detachment and perspective often lacking in a professional too immersed in the details, too habituated to organizational routine, or simply too bored to break the mold, to engage in self-criticism, and to embrace change.
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NSURPRISINGLY, MY ADJUSTMENT
to Lincoln Center was not entirely smooth, and my presence raised questions, gave rise to curiosity, and met with some resistance. These realities may have been exacerbated by my choice of automobile.
My father, a man of sweet temperament, solidly rooted values, and strong convictions, died in our home in Riverdale, a portion of which my wife, Liz, and I converted into a hospice after he endured a series of what were very tough bouts with cancer.
Dad didn’t ask for much as mortal weakness set in and death approached. He was courageous and stoic. But of all things, he fervently requested that I drive his 1993 Mercury Marquis for as long as it would last. It was a giant of a car: four-door, maroon in color, light gray leather interior, fully air-conditioned, with terrific speakers and power everything (windows, seats). For him, its purchase was a point of pride and accomplishment, a step up in luxury and price, and I know he imagined driving it forever.