The Economic Challenge: Responding with Administrative Strength

The question I am now hearing more than any other from people associated with orchestras goes something like this: "What effect is the current economic crisis going to have on orchestras?"  If I could answer that accurately, I would be a rich man--probably even maintaining my riches through the current recession (or "probable recession," or "almost-recession," or "maybe it will become a recession"). Why economists think we should have faith in them, by the way, when they cannot even agree on what to call whatever we are experiencing, is a question I cannot answer.
People whose lives are affected by the health of orchestras--musicians, management staff, volunteers, trustees, and those who love the music--all feel a sense of insecurity, one that's intensified by the inability of anyone to provide really useful answers.  I certainly don't claim to have that ability, but I do have some thoughts.

The volatility of this economic environment points up the need for orchestras of all sizes to invest in the kind of organizational infrastructure that will allow them to analyze what is happening to them quickly and correctly. This may sound simple, but in fact orchestras have traditionally underfunded infrastructure, from adequate staffing to adequate informational systems and record keeping. In order to understand what is happening to your organization you need complete, up-to-date information, and the equipment and people with the ability to analyze that information in different ways. That at least gives you the option of trying to respond to the environment.

Historically there has been an understandable emphasis on investing in the artistic component to the detriment of the administrative side. I yield to no one in my passion for the music, and my belief that the music is what we're all about; I did not get into orchestra administration because I loved meetings, and I am well aware that no one will ever buy a ticket to see me manage. But the pressure from many quarters, including boards, to keep our organizations "lean and mean" has, in many cases, kept them administratively undernourished.

I'm well aware that the current economic climate is not the time for new investments--but I will observe that those who will best survive it are those who are administratively equipped to understand and respond to conditions. And when we are in better times, as we surely will be at some point, those kinds of investments are likely to pay dividends that will, in fact, help in the production of the best music possible.

I will also observe that as times get tough, the first instinct of many boards is "we must cut expenses." And that often leads to thinking that ignores one unchanging reality: In an operating budget, the revenue and expense sides of the ledger are inextricably intertwined. Wishful thinking will not change that fact. This does not mean that expenses cannot be cut. But it does mean that the exercise of reducing expenses must be engaged in with real analysis, and real understanding of the likely impact on revenue. Cutting 20 percent out of the marketing budget with no concomitant reduction in projected ticket income is nothing more than a statement of belief that 20 percent of your marketing budget was a complete waste in the first place. Reducing guest artist expenses with no adjustment to ticket revenues ignores the reality that more expensive guest artists sell more tickets.

I was very fortunate when I managed the Chicago Symphony Orchestra: I had a very smart board with some of Chicago's most important corporate leaders on it. When the economy turned south in 2001 and it was clearly going to result in annual operating deficits for the first time in over a decade, the board made it clear that budget adjustments were necessary. But we put together a special task force that included the CSO's senior management team plus the board chair, finance committee chair, and three vice chairs--all of them either corporate CEOs or professionals from the finance world. That group of people, who were dealing with the same economic climate in their own corporate worlds, gave us two half-days, about four hours each, of meeting time, where we went over the budget line by line and discussed varying views of what impact different expense reductions might have on either the financial bottom line or the artistic level of the CSO. Reductions were made--significant ones--but they were intelligently done because of the joint participation of CSO management and board leadership.  This is the right approach, one that brings a breadth of wisdom and the value of different perspectives into the process together.  As we go through the coming storm, I hope that this is the approach that orchestral organizations will take in tackling these tough problems. I'll have more to say about the economy next week.

October 31, 2008 2:36 PM | | Comments (1)



I sent this article to our Executive Team with the comment, "as we discuss how we can be proactive rather than reactive, I hope each of us has Henry's article in front of us as our guide." Thanks, Henry!

If my comments will be helpful to any specific orchestra, that is very gratifying. I can tell you that the League of American Orchestras is planning to offer a variety of tools to help orchestras through this. Check the League website for details. (

Leave a comment


About this Entry

This page contains a single entry by on the record published on October 31, 2008 2:36 PM.

Midori and the Orchestra Residency: Unique Commitment from a Star Soloist was the previous entry in this blog.

The Economic Challenge: Emotional Reactions Will Not Help Us is the next entry in this blog.

Find recent content on the main index or look in the archives to find all content.

AJ Ads

AJ Blogs

AJBlogCentral | rss

About Last Night
Terry Teachout on the arts in New York City
Artful Manager
Andrew Taylor on the business of arts & culture
blog riley
rock culture approximately
critical difference
Laura Collins-Hughes on arts, culture and coverage
Richard Kessler on arts education
Douglas McLennan's blog
Dog Days
Dalouge Smith advocates for the Arts
Art from the American Outback
Life's a Pitch
For immediate release: the arts are marketable
Mind the Gap
No genre is the new genre
Performance Monkey
David Jays on theatre and dance
Plain English
Paul Levy measures the Angles
Real Clear Arts
Judith H. Dobrzynski on Culture
Rockwell Matters
John Rockwell on the arts
Straight Up |
Jan Herman - arts, media & culture with 'tude

Foot in Mouth
Apollinaire Scherr talks about dance
Seeing Things
Tobi Tobias on dance et al...

Jazz Beyond Jazz
Howard Mandel's freelance Urban Improvisation
Focus on New Orleans. Jazz and Other Sounds
Doug Ramsey on Jazz and other matters...

Out There
Jeff Weinstein's Cultural Mixology
Serious Popcorn
Martha Bayles on Film...

classical music
Creative Destruction
Fresh ideas on building arts communities
The Future of Classical Music?
Greg Sandow performs a book-in-progress
On the Record
Exploring Orchestras w/ Henry Fogel
Harvey Sachs on music, and various digressions
Bruce Brubaker on all things Piano
Kyle Gann on music after the fact
Greg Sandow on the future of Classical Music
Slipped Disc
Norman Lebrecht on Shifting Sound Worlds

Jerome Weeks on Books
Quick Study
Scott McLemee on books, ideas & trash-culture ephemera

Drama Queen
Wendy Rosenfield: covering drama, onstage and off
lies like truth
Chloe Veltman on how culture will save the world

Aesthetic Grounds
Public Art, Public Space
Another Bouncing Ball
Regina Hackett takes her Art To Go
John Perreault's art diary
Lee Rosenbaum's Cultural Commentary
Modern Art Notes
Tyler Green's modern & contemporary art blog
Creative Commons License
This weblog is licensed under a Creative Commons License.