Staring At The Crossroads In Salt Lake

Executive oversight is an issue which is high on the minds of the Utah Symphony & Opera (US&O) stakeholders.

The two Salt Lake organizations officially merged at the beginning of this decade with the promise from their now CEO, Anne Ewers, that the new organization would be greater then the sum of its parts.  Prior the merger, Ms. Ewers served as the Utah Opera General Director and had built a positive reputation as an individual who had successfully managed the Opera into a period of artistic growth and financial success.

She was viewed by many as the singular driving force behind the concept to merge the two leading performing arts organizations.  During the merger’s feasibility studies, Ms. Ewers emerged as the only candidate to lead the newly proposed organization, which is where she remains today.

More often than not, mergers create more baggage than they reduce.
More often than not, mergers create more baggage than they reduce.

Unfortunately, things haven’t worked out as well as Ms. Ewer’s original projections anticipated.  At the time of the merger, the financial plan for the US&O predicted a surplus of $430,011 in FY03 and $57,482 in FY04.  The reality is that the organization ended up running deficits of $1.7 million in FY03 and $1.6 million in FY04.

Those figures prompted the hiring of an independent consultant retained at the joint suggestion of the musicians and the US&O board.  The examination was conducted by retired orchestra executive, Tom Morris.  Mr. Morris’ past executive positions include serving as the CEO of the Boston Symphony and the Cleveland Orchestra, so to say he has a comprehensive knowledge and understanding of how this business works is an understatement.

The Morris report (available in its entirety from the US&O musician website) outlines a series of sober observations regarding the organization’s current status.  The report’s recommendations include establishing a formal task force to oversee elements of a new financial recovery plan.  The report goes on to comment that the recovery plan will not be successful if left entirely to the auspices of the current executive committee and board, instead, there needs to be an independent task force to oversee the process in addition to attending to issues of governance and executive review.

On March 2nd, 2005, ten days after the Morris Report was presented, Ms. Ewers composed a letter addressed to “friends of the US&O” reassuring them that recent negative news in the media about the report and the organization’s current financial condition were flawed.  The letter went on to reassure the reader that under her leadership the organization was enacting a financial recovery plan which would alleviate the current problems.

Two days later Ms. Ewers, along with the assistance of Sean Toomey, US&O Director of Marketing and P.R., composed another letter; this one was addressed to her colleagues in the orchestra and opera management field.  The letter went on state much of the same information as the previous letter, however, it also went on to explain that the organization plans to run deficits for FY05 and FY06 in the amounts of $571,000 and $415,000 respectively, and a surplus in FY07 of $358,000.

After that, the letter takes a very curious turn and goes on to denigrate the consulting work performed by Tom Morris by stating,

“Morris delivered a verbal report with overhead slides to both negotiating teams and a sub-set of our board.  The following day, at an executive committee meeting, the musicians on the committee were assured that the report, when received (Morris still needed to make some corrections to his slides), would be presented to the board.

We received the corrected report from Morris in time to make it public on the following day at our full board meeting, and it created much confusion because the report consisted of copies of the overhead slides, which were incomplete without the verbal component.

Note to future consultants: only stand-alone, complete reports, please!

No one better than you understands what it’s like on the front lines.”

After reading the letter I sincerely wondered if Ms. Ewers was aware of Tom Morris’ professional history.  I could not understand what this “Dear Colleagues” letter attempted to accomplish.  Shortly after the letter was sent out, I received multiple copies of the letter from several orchestra managers with accompanying statements of bewilderment similar to my own.

Fool me once, shame on you, fool me twice…
Both of Ms. Ewers’ letters claim that there are plans in motion to reverse the precipitous financial freefall the US&O is heading into.  Unfortunately, the related details for the financial recovery plan rely on some exceedingly optimistic assumptions and have no margin for error.

The last time such optimistic projections came from Ms. Ewers was during the symphony and opera merger feasibility study.  That study projected a surplus in FY03 of $430,011 when in reality there was a $1.7 million deficit, and it also projected a surplus in FY04 of $57,482 but they ended up with a $1.6 million deficit instead.  That’s an average difference of approximately -$1.875 million per year over that time span.

Let’s assume that if Ms. Ewers is given the opportunity to implement her plan and her performance as CEO improves by twofold compared to her recent track record. In that case, it would indicate the organization would still end up running a deficits for three consecutive years; $1.5 million in FY05, $1.35 million in FY06, and $580,000 in FY07.

Given that Ms. Ewers claims that the deficits in FY03 and FY04 were erased due to a cash reserve establish at the time of the merger (which is now depleted) that would mean the US&O will face an accumulated deficit of $3.43 million by FY07.  Remember, that projection assumes her performance will improve twofold during those years.  If it doesn’t, the organization would be staring at an accumulated deficit of $6.86 million at the end of that period.

The Morris report recommends that having one individual serving as the US&O CEO, Opera Director, and Executive Director of their summer festival is something which is not possible.  Right now, Ms. Ewers is serving in all three of those capacities.

Clearly, the merger of the symphony and opera produced complications well beyond Ms. Ewers’ ability to adapt and manage them.  It’s equally clear that the US&O needs a new influx of executive leadership on multiple levels as identified by the Morris Report.  Given Ms. Ewers’ previous success with managing the Utah Opera and fundraising, perhaps it is best that she steps down from her multiple executive administrative roles and focus exclusively on artistic issues restricted to Opera functions or overall development efforts.

Unfortunately, it appears that Ms. Ewers believes that she and not the US&O board will be responsible for deciding what her role is within the institution.  An excellent article by Celia Baker appearing in the March 10th, 2005 edition of the Salt Lake Tribune reports,

Ewers said the restructuring of her duties is progressing, her way.
“The decision and direction of that needs to be mine,” Ewers said. “It was important for me to think it through and come up with my recommendations. I am the one who needs to make that determination.”

In addition to apparently being unfamiliar with the reputation of one of the industry’s biggest managers, perhaps Ms. Ewers is also unaware that the CEO of any orchestra serves at the pleasure of the board and not the other way around.

Allowing the current CEO to guide the restructuring efforts of the task force would be a serious breech of public trust and constitute a grave conflict of interest.  It would also serve to deny any resulting institutional changes any source of legitimacy.  Naturally, the ultimate decisions rest with the board, but in order to make the best decisions possible they need to receive counsel from qualified individuals who do not have a connection to current executive administrators.

According to Sean Toomey, the Morris Report Review and Recommendation Task Force is chaired by a current member of the board.  The nine person committee only includes two individuals who represent community interests which could be considered independent from traditional orchestra stakeholders. Although the inclusion of those two individuals is a good step, it still falls short of creating a truly legitimate process.

This course of action draws parallels to the problems which erupted during the merger process, additionally; it raises questions of just how much influence Anne Ewers is applying on the decisions which directly impact her position within the organization.  It would have been better to insulate this take force by bringing in a person who is independent from the US&O board to serve as the chair.

Unless the US&O board snaps into action, and quickly, the organization may endure all of the negative aspects of Founder’s Syndrome first hand; and given their recent history, that may be an error the organization can’t afford to make.

About Drew McManus

"I hear that every time you show up to work with an orchestra, people get fired." Those were the first words out of an executive's mouth after her board chair introduced us. That executive is now a dear colleague and friend but the day that consulting contract began with her orchestra, she was convinced I was a hatchet-man brought in by the board to clean house.

I understand where the trepidation comes from as a great deal of my consulting and technology provider work for arts organizations involves due diligence, separating fact from fiction, interpreting spin, as well as performance review and oversight. So yes, sometimes that work results in one or two individuals "aggressively embracing career change" but far more often than not, it reinforces and clarifies exactly what works and why.

In short, it doesn't matter if you know where all the bodies are buried if you can't keep your own clients out of the ground, and I'm fortunate enough to say that for more than 15 years, I've done exactly that for groups of all budget size from Qatar to Kathmandu.

For fun, I write a daily blog about the orchestra business, provide a platform for arts insiders to speak their mind, keep track of what people in this business get paid, help write a satirical cartoon about orchestra life, hack the arts, and love a good coffee drink.

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