There’s nothing quite like looking at the business from a different perspective. Even more stimulating is when those perspectives come to you from unexpected sources. Such was the case with the mock orchestra collective bargaining agreement negotiations I conducted with the MBA students from the University of Wisconsin-Madison’s Bolz Center for Arts Administration program…
Regular Adaptistration readers might remember that I conducted a similar exercise with students from Eastman School of Music’s Institute for Music Leadership in September, 2004. I couldn’t help but compare the two events but before I get ahead of myself, I’ll report on the events from last Wednesday’s mock negotiation Madison.
As mentioned, the UM-Madison students are enrolled in a program designed to help them become the most effective arts managers they can one day become. In addition to the full battery of MBA courses you would usually find in such a program, every student accepted to the program participates in an internship position for a dozen or so hours per week among one of Madison’s cultural organizations. Furthermore, a number of students enter the program already having a year or two of experience in a coordinator level position within an arts organization.
As such, I though most of the students I encountered were well prepared and thoughtful. If you haven’t been following the initial articles about this visit, let me take a moment to set the session up. If you’re not interested in the back story, just skip to the second headline, entitled “The Negotiations Begin”, and resume reading the article from that point:
The Back Story
Before arriving, I provided the students with a healthy reading list from a variety of online and in-print resources on orchestra negotiations and more as well as a back story for the fictional ensemble, named SimOrchestra. In a nutshell, here’s what you need to know about SimOrchestra:
- Over the past several years, the annual budget has grown from $3.3 million up to $5.6 million.
- During the same time period, salary musicians have seen their annual base salary rise from $14,588 to $22,895 and the number of salaried musicians increase from 25 to 48.
- The institution negotiated the first multi year collective bargaining agreement between the board and the musicians beginning in the 01-02 season.
- Out of the 73 contracted musicians, 48 are “A contract” (salary) players and 25 are “B contract” (per service) players.
Out of the 12 members from the UM-Madison class, five were selected to serve as the negotiation committee members, each with their own personalized back story. The remaining seven students were assigned back stories to encompass the remaining 68 contracted musicians (meaning they represented a contingency of either “A contract” or “B contract” players).
The five member negotiation committee was provided with the following back stories:
- Member #1: “A contract” (salary musician) – 2nd trumpet, 6 years service, and first time on the negotiation committee
- Member #2: “A contract” (salary musician) – section viola, 18 years service, and second time on the negotiation committee
- Member #3: “A contract” (salary musician) – section violin, 11 years service and second time on the negotiation committee
- Member #4: “B” contract (per service musician) – bass trombone, 21 years service, fifth time on the negotiation committee
- Member #5: “B” contract (per service musician) – section percussion, 2 years service, first time on the negotiation committee
The Negotiations Begin
The session started off by establishing the two types of “reality” we would be working with. First, there was “Mock Reality” where all communication is conducted under the assumption that both sides are actively engaged in a bargaining session. Second, there was “Academic Reality”, where we would symbolically return to the classroom to discuss issues from Mock Realty and allow some of the students to ask questions, etc.
Mock Reality began by having the management review the basic expense and income reports for SimOrchestra from the past several years. In general, the organization had grown steadily during that period. Unfortunately, the organization recently, and unexpectedly, suffered a significant financial blow due to the loss of their largest single private donor; the only individual who annually contributed seven figure gifts that allowed SimOrchestra to operate with a balanced budget.
As such, SimOrchestra’s board of directors determined that they would not be able to replace this level of contributed income on an ongoing basis. That combined with sagging ticket sales and increased operational expenses led the board to determine that the best course of action to ensure organizational stability would be to right-size the ensemble in the absence of this donor.
In general, the board determined that organizational expenditures would need to be reduced by approximately 35%. In order to offer the musicians a variety of options which could lead SimOrchestra down a path which would produce the highest quality artistic product, the board instructed the executive management to craft three separate proposals which the musicians could select from in order to begin designing a collective bargaining agreement which acknowledged the economic realities the organization faced.
This is the point where Mock Reality took a sharp left turn for the students. Almost immediately, calculators and laptops materialized and the air was filled with the sounds of furious tapping and typing. And, as a testament to their academic number crunching skills, the students began asking all of the questions I hoped they would ask. For example, the spreadsheets provided to the students were littered with errors; from accounting irregularities in the multi-year figures, the worst of which pointed to the anticipated $957,399 deficit for the bargaining session concert season.
The negotiation committee’s response to these numbers was, to put it mildly, shock and disgust; they were appalled that SimOrchestra’s management would supply them with such sloppy numbers. Furthermore, their hot blooded response didn’t even include the proposals, all of which were designed to reduce the organization’s expenditures by approximately 35%.
At this point in the session we had to slip back and forth between Mock Reality and Academic Reality fairly often as the students seemed to expect that this was all some mistake and they would receive the “correct” figures at some point. In several cases, students claimed that an organization’s figures simply couldn’t be this messed up but I helped them along with relating a number of real life examples so they could begin to establish a useable frame of reference.
Nevertheless, we made our way back to a prolonged stretch of Mock Reality after taking a short break to allow the negotiation committee an opportunity to caucus with the rest of the orchestra members (the remaining students) in order to craft their response to management’s initial proposals. Upon returning to the bargaining table, one of the negotiation committee members launched a verbal assault toward the management accusing them of misconduct and incompetence.
The negotiation committee was especially appalled to see the organization doing so badly considering that over the past several years operational expenditures increased 59% while artistic expenses only grew 20% during the same time period. The frustration and seething anger in two of the negotiation committee representative’s voice was almost palpable.
Unfortunately, here’s where the session began to break down. Due to level of disgust among certain members of the negotiation committee over the condition of SimOrchestra as well as what they perceived (rightfully) as begin presented with a series of no-win proposals, they began to allow their administrative instincts and training to kick in. The result was to craft an unrealistic response instead of perceiving the reality that orchestras sometimes find themselves in seemingly impossible situations not entirely unlike the one begin presented to them in the mock exercise.
The Non-Offer Counter-Offer
Typically, when orchestra musicians find themselves in seemingly impossible “take it, or leave it” situations like the one presented to the students, they have to work hard to marginalize the damage coming their way and find some sort of solution that allows the organization to continue at an acceptable level by their standards. Meaning, we leave the realm of number crunching and enter discussions surrounded on the political and mission-oriented philosophical. Regardless of the final outcome, the process begins with a counter-offer.
The counter-offer, and subsequent exchanges, is the process where both sides begin to outline their viewpoints and talk about the larger issues surrounding the organization and to sway the other side toward their point of view. Furthermore, the bargaining process allows time for ongoing discussion and to search for solutions that was perhaps eluding both sides. Presenting hard offers helps both sides in illustrating their larger, conceptual, points.
The mock negotiation committee went in an entirely different direction by coming back to the bargaining table without a counter-offer. With a certain sense of smug satisfaction, they informed management that they believe the organization is being mismanaged and unless they were presented with a better offer, they were going to break away from SimOrchestra and form their own, musician run, ensemble. In a sense, they were going to take their ball and go home.
As the management, I brushed aside their complaints of misconduct and reminded them that only the board of directors is empowered with the authority to oversee the organization and make institutional decisions. I then inquired if they put together a counter-offer that would provide the board with a better idea of what the musicians found acceptable. They informed me that they did not have such an offer and, furthermore, they refused to craft a counter-offer and reiterated that they felt confident that they could create an organization that had an annual budget equal in size, compared to what the board was currently offering them all while creating a better artistic product than is currently produced.
And that was that. They simply refused to continue.
The Plot Thickens
For a second, don’t worry about the fact that by presenting the board with an option like they did, the musicians (meaning, their Local AFM chapter) would be slapped with an unfair labor practice due to their failure to negotiate in good faith (or one or more of a host of other unfair labor practice complaints – take your pick). I didn’t bring this issue up as I felt a debate over legal points wouldn’t really provide the students with as useful of a learning experience as examining some of the larger issues at hand.
Tomorrow, I’ll continue by relating what happened after the negotiations broke down but in the meantime, I invite you to submit your own impressions of what’s transpired to this point. There are a few surprises in store tomorrow but I’m anxious to know what readers perceive based on the information provided to this point.
At the end of tomorrow’s article, I’ll also compare the responses from the UW-Madison students with the responses from the Eastman School of Music students from when I conducted a very similar mock negotiation in 2004 with a group of mostly graduate level music performance students.