Examining The Events In Louisville Part 3

Continuing from Part 2, this installment will resume examining the events which contributed to the Louisville Orchestra’s contentious Collective Bargaining Agreement negotiations.

Part 2 began to demonstrate through reverse engineering that the real damage of contentious negotiations isn’t the result of the issues being contested; rather, it comes from the process they used to determine their positions, how they communicated, and the related public statements. Today’s article will examine the final component which set the stage for tragedy that followed.

Flawed Planning Process: Garbage In = Garbage Out

Louisville’s current negotiation problems can be directly tied back to a strategic planning process the organization initiated in September, 2004. At that time, the organization launched a comprehensive strategic planning process which included musicians, managers, board members, and members from the community. They also contracted financial whiz Steven Bronfenbrenner to coordinate the process and help them craft a plan that all parties felt comfortable with artistically and financially.

The process was so successful that the 2/20/2005 edition of the Courier-Journal reported that the orchestra was well on the road to recovery and included numerous glowing remarks from managers and board members involved in the planning process. During a telephone interview on 1/22/06 I asked Louisville Orchestra executive director, Scott Provancher, about that plan and he said the organization abandoned the plan at the end of the season and crafted a new one.

“[Steven Bronfenbrenner] came in to help us develop initiatives as part of the first business plan,” said Scott. “A year later we did a standard deviation and decided that the original revenue projections, which included a 20% increase in earned income, were too aggressive. When we passed our budget that year we expected to receive $850,000 from the Cultural Blueprint (a local cultural initiative), but we only received $300,000.

As such, we reevaluated our plan and came up with a new $3.5 million recapitalization plan. During those strategic planning sessions the senior management along with the finance committee and the executive committee examined the variables and came up with a new strategy. We took our results to the full board and they approved the recapitalization strategy.”

I asked Scott when they conducted the strategic planning process for the new, recapitalization plan, and if there were any musicians participating.

“The process took place over the summer of 2005,” said Scott. “Yes, there were two musicians involved, both members of the finance committee, and they agreed with the recapitalization solution. They said it all makes perfect sense but they were concerned that it was not investing enough in the artistic product. However, the remaining members felt that we were sufficiently investing in the artistic product by eliminating the annual deficits. The musicians also expressed concerns that this campaign would be linked to the upcoming collective bargaining negotiations.”

When asked about the musician involvement in the recapitalization planning process during a telephone interview on 1/23/06 chair of the musicians’ negotiation committee, Tim Zavadil, said,

“Yes, there were musicians present but we did not have nearly the amount of input or influence as we did during the Bronfenbrenner [coordinated] process. Our musician representatives abstained from any vote regarding the recapitalization plan [which occurred] over the summer and they did express concern that the plan wasn’t investing enough into our artistic product.”

The result was that both sides used different reference points when proposing their initial negotiation offers. The management used the newly formed Recapitalization Plan and the musicians used the Bronfenbrenner Plan.

Here’s where you can begin to tie all of the loose ends together. Remember, the executive management and board leadership had never been involved in a collective bargaining process before, the musicians were not notified of any plans for bankruptcy until after they presented their initial negotiation offer to management, and both sides were basing their negotiating positions from completely different strategic plans.

Is it any wonder that things deteriorated so quickly with one side threw fits while the other looked on with a deer-in-the-headlights attitude?

The really detrimental aspects of this process are the assertions from Louisville board president, Joe Pusateri, and Scott Provancher that the musicians are refusing to cooperate in a collective process and that they are inflexible. Joe Pusateri felt so strongly about the issues that he made the following comment to the Louisville Courier-Journal about the matter,

“I got emotional and said, ‘Let’s surprise everybody — let’s sit down and do this constructively and cooperatively, (because) that’s what this orchestra needs at this point in its history.’ … And I really felt foolish when I saw their offer. I asked if I could speak to all 71 of the musicians, and never was allowed that opportunity.”

Apparently, Joe Pusateri doesn’t have a very broad grasp of this business’ history. If so, he would have realized that the musicians past involvement participating and supporting a comprehensive strategic planning process such as the one conducted by Steven Bronfenbrenner is breaking with tradition. If Joe Pusateri had received better advice he also would have realized that scrapping that plan in favor of conducting a subsequent strategic planning session during the summer months (when musicians aren’t in session) and not allowing them as much input as the previous process is an old-school attitude from orchestra boards most musicians know all too well.

Furthermore, it should come as no surprise to Joe that the musicians wouldn’t be influenced by his intent to file bankruptcy unless the musicians acquiesced to their demands when that’s a negotiation tactic as old as negotiations. Because of pure ignorance, Joe Pusateri has unwittingly been attributing his own “old-school” behaviors and attitudes to the musicians. Psychiatrists call that transference.

It’s also clear that Joe Pusateri doesn’t fully understand the legal parameters which direct a collective bargaining process. He chastises the negotiation committee musicians for not allowing him to speak to the entire rank-and-file but he doesn’t realize that’s simply not allowed by way of the National Labor Relations Act.

The result is that there’s nothing to indicate that management has been behaving in a constructive or cooperative fashion during this entire negotiation process they initiated in June, 2005: they only wish to negotiate based on parameters they establish and anything outside of those parameters is off limits. When the musicians stepped outside of those parameters, such as asking for health care benefits for their dependants, the result was emotionally driven indignation from Joe Pusateri and Scott Provancher.

The Bankruptcy Quagmire

The final problem with the events in Louisville is associated with the self fulfilling prophecy of Joe Pusateri’s desire to use bankruptcy as a levering point to get what he wants. On several separate occasions, Joe Pusateri has been quoted in the traditional media saying he wants to use bankruptcy as a solution to the organization’s current financial problems, even though he’s declared that he and his fellow board members could generate enough money through personal donations and fundraising efforts to avert financial impasse.

The 1/21/06 edition of the Courier-Journal reports Joe Pusateri as saying,

“It doesn’t appear, based on negotiations, that we would be able to achieve the kinds of changes we would need without some protection from a court.”

And in the 1/20/06 edition of the Louisville Business Journal Joe Pusateri said,

“I will not give, so I wouldn’t expect anyone else to either. We don’t expect to be in business in July at this point.”

Nevertheless, Joe Pusateri intends to build an orchestra in his image regardless of what the musicians think. In the same article of the Louisville Business Journal Joe indicated that he intends to use the orchestra’s endowment to fund any future organization which might emerge from bankruptcy. The article reports,

“Even if the orchestra does resort to bankruptcy, its endowment will continue to exist for a future orchestral organization in the community, Pusateri noted. ‘In almost every city where an orchestra has gone bankrupt, other people have come forward and started a new one,’ said Pusateri.”

In a demonstration of old-school prowess, Joe Pusateri flexed his muscles by publicly stating he and the orchestra board were unwilling to raise any money whatsoever to avoid bankruptcy unless the musicians capitulated to their negotiation demands, even though such efforts were entirely within their means. In his special to the Courier-Journal, Joe Pusateri wrote,

“The Orchestra board is not prepared to take on the difficult task of raising this money (and giving themselves) if the musicians are not willing to abandon the failed ways of the past.”

Even if you set aside the fact that those statements are likely to be interpreted as violating a host of NLRA laws, it demonstrates that Joe Pusateri is willing to allow his ignorance of this business and of labor law to destroy the Louisville Orchestra as it is today.

Joe’s callous comment about how simple it is for orchestras to emerge from bankruptcy is an ideal example. This is precisely the sort of damage that grows from the seeds of spin statistics distributed by the American Symphony Orchestra League (ASOL). I sincerely trust that Joe Pusateri believes in his heart that building up an orchestra from bankruptcy is not such a big deal, especially when multiple leaders at the ASOL regularly make such claims.

At the same time I don’t believe for a second that’s what the purveyors of those injurious statistics intended. Sadly, good intentions don’t always have the desired impact and Joe Pusateri’s casual acceptance of bankruptcy as a statistically proven tool to build the orchestra into an image he find acceptable is a perfect, albeit dark, example.

Unfortunately, the only lesson the Louisville Orchestra would learn by filling for bankruptcy is that an orchestra is a Fragile Powerhouse: a stunning piece of art that takes an enormous amount of time and energy to cultivate but can shatter beyond repair with one wrong move.

Perhaps that’s what Diane Merrill, President, Pikes Peak Musicians Association, thought when she composed the following letter to the editor for the Louisville Courier-Journal:

Having learned of the suggestion of bankruptcy as a possible “solution” to the Louisville Orchestra’s financial difficulties, I shudder to think of the consequences of such a dire action. The Colorado Springs Symphony Orchestra declared chapter 7 bankruptcy in 2003 and the effects on the orchestra were devastating. A new orchestra was immediately formed, but starting from scratch is a far more difficult, if not impossible, endeavor than making a sincere, dedicated effort to solve the problems and to keep the existing artistic organization and its long history intact.

Solving those problems should not include gutting the orchestra and trying to re-invent what a symphony orchestra should be. Whatever efforts may have been made by the board of directors up to this point appear to have been misguided. This includes the decision to halt fundraising until musicians acquiesce to their demands, effectively hastening the demise of the organization. The questions that need to be raised concern the operation of the LO, not the “demands” of the musicians, who came to the table in good faith, only to have the rug pulled out from under them.

Fortunately, things aren’t all that bad in Louisville. I know that might seem hard to believe given the above information, but tomorrow’s article will consider those points in greater detail by examining some of the specific issues which plague negotiations. We’ll see how both sides can learn from their recent mistakes, improve how they communicate, and work with sincere cooperation toward unified artistic goals and financial stability.

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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3 thoughts on “Examining The Events In Louisville Part 3”

  1. Orchestras are NON-profit entities. They don’t exist because of huge pent-up demand for their services. In other words, they’re not a necessity, they’re a luxury.

    If the people involved with such organizations don’t realize that, and if they instead want to treat matters like their annual salaries and pensions with a bit of Fortune-500 greed, then they deserve to flounder and sink.

  2. This series of articles is a coincidence for me. I was listening the other night to an LO First Edition record (LS-763, “the 139th release”) of Welcher’s Dervishes, etc. Good album! And I thought, wonder what’s up with the LO these days. Oh, dear.

    I hope the parties – managment particularly – would keep in mind that if they do their jobs, the institution will live on, long after the facilitators are remembered only as ’emerituses’ in the back of the programs. As it should be. They are to serve, not rule. Leave the ego trips to the artists, who are trained to put them to good use.

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