Autor: tatba26 • April 1, 2013 • 3,253 Words (14 Pages) • 491 Views
In order to develop an action plan for Anne Ewers we need to analyze and understand the financial and leadership strengths and weaknesses of the Utah Symphony Organization (USO) and the Utah Opera Company (UOC). In order for the merger to be successful, Anne will need to create some successful strategies for managing each of these concepts.
Utah Symphony Strengths
The most impressive financial strength that USO has is their endowment. By the end of 2002, their endowment was considered higher than average and they were considered at the top end of a Group II Symphony when compared to other symphonies nationally. The Utah Symphony endowment was $10 million. Another financial strength was the projected growth in contributions and revenues. Their performance revenues, contributions, investment income, guild income and other income is all projected to increase. The total contributions received by the end of 2001 were $12,398,548 while the projected contributions for 2002 is $13,763,674. This is a difference of $1,365,126. This is a good indication of their financial future. They also received $3,124,999 in Government grants in 2001.
The USO had a strong Music Director in Maurice Abravanel. His strong leadership skills took the USO to a renowned world-class organization that toured internationally. He secured recording contracts with many different recording labels. His leadership also secured the orchestra employees full-time professional status. They continue to have strong leadership strength in Keith Lockhart as he has led them in prominent concerts such as the 2002 Winter Olympic Games. They also perform over 200 concerts per year, which generates a significant amount of income. Keith also has directed over 600 concerts and created 50 television programs. This will help in marketing the USO.
Utah Symphony Weaknesses
One financial weakness for the USO is that there is approximately $100,000 bad-debt expenses which was due to pledges that weren't actually paid. Also, the expenses of running the organization is projected to increase by $1,479,391 within the next year (2002). The majority of this ($1,404,159) is going to orchestra salaries, benefits and payroll taxes.
A leadership and financial weakness is the administrations inability to negotiate with union. An increase of 12.9% for the musicians from 2002 to 2003 could cause serious risk to the overall financial health of the symphony. Additionally, due to the union contract, the Symphony is under obligation to pay musicians salaries despite whether there are good or bad ticket sales.
A leadership weakness for the USO is that they currently lack a President and CEO. This could negatively impact the merger as the symphony's key concerns, or their vision, may not be voiced or heard successfully during the implementation of the merger. Additionally, Keith Lockhart seems a little resistant to change and would prefer to use the current organizational model.
Key Steps for Utah Symphony
Anne Ewers will need to address the issues that pertain to the USO to ensure a successful merger. The most difficult issue will be the union contract. She should become intimately familiar with the current contract. It may even be wise to interview union representatives who are familiar with the previous "negotiations" so she can become familiar with the "lessons learned". To address any of the issues, she will need to gain their trust. This could possibly be developed by interviewing several of the key players of the Symphony to ensure their concerns and opinions are heard and valued. This will also help with transparency when the merger takes place. Unfortunately, she may also need to consider a continuity plan in case the musicians go on strike. This would involve the potential of hiring temporary musicians.
Obviously Anne will need to analyze the budget and expense reports to see where she can cut expenses or increase profits. She needs to look into how the fundraising dollars are spent to ensure she is getting a better return on her investment. She should continue to and increase the applications for public subsidies, even if they get declined. Since I don't advertising as an expense, she needs to definitely look into an effective advertising campaign to increase awareness of the concerts, which should increase profits.
The new business model and scorecard needs to be presented to the Symphony board members and all Symphony leadership personnel. This will help alleviate some questions and concerns because it lets everyone know it what direction and goals the merger will take them. Additional questions or concerns need to be addressed in a very direct way to relieve any fear or change that may be misunderstood. By presenting this to just the Symphony members they are allowed to voice concerns, ask questions and will not feel they are being pressured from Opera personnel. They will gain Anne's trust by getting her undivided attention without any influence from Opera members as well. It would also be wise to involve Keith Lockhart as much as possible. If she can get his "buy-in" then half of the battle is won. This will help with the leadership issues that the company has. She can also delegate some CEO responsibilities to Keith on the Symphony side of things to help them move forward without a current CEO being present.
Utah Opera Strengths
By January 2002, the UOC endowment fund had grown to $5 million. They also have costume assets valued at 4.8 million and a production studio on 2.9 acres of land. This decreases the cost of program expenses. The UOC has seen continued growth in productions and fundraising. They get a good return on their fundraising investment, as their costs are relatively low ($210,031 compared to the USO at $1,164,026). They also have support from local and national organizations.
As far as leadership goes, Anne has a lot of experience with the Opera. She has helped reduce their debt while increasing the budget. She grew it from $1.5 million to $5 million during her 11-year tenure. She has been responsible and very successful at increasing the fundraising income (including donations from outside the state. Even the projected contributions is expected to increase by $653,954). She has a reputation of being loyal, enthusiastic and very well capable. For example, she inherited a debt of $450,000 from her predecessor while in Boston. Not only did she retire that debt, but she also created an endowment fund and increased the number of productions from one to three. Overall projections are expected to increase by $374,843.