Business Boomers Penetrate Arts Leadership — Part Four

When They Make the Move, What Do They Find?

Boards of Directors
Almost everyone interviewed for this Monograph indicated that reporting to a board of directors was the single most difficult part of their new work in the nonprofit arts field. “Working with a board is hard,” said one former corporate executive. “Very few people in the corporate world ever have to work directly with a board. Even if they have, it’s not the same kind of board. Working with a board in a nonprofit organization is especially hard if you have a strong sense of independence.”

One former business owner said, “I hadn’t been accountable to anyone but myself, and working with a board was extremely difficult. Boards do what is comfortable, and business folks want to run a business so they micromanage before they can stop themselves. Some of them may also feel insecure because they don’t know much about the field, so they deal with that by micromanaging even more.”

A former lawyer now working in theater said, “I experienced a shock when I made the shift from law to the nonprofit arts. The shock is that board members—the same people I had seen make sharp, clear, definitive decisions in business—those same people, upon entering their role as a nonprofit board member, would suddenly attempt to micromanage everything to a truly frightening degree and in ways that they would never have tolerated in their own organizations.”

Another interviewee who left the business world to work with nonprofit arts organizations had this advice, “My biggest surprise was the board members who are retired or semiretired. They are the most difficult. They have time on their hands and they miss running a business…so they’ll just run yours.”

“It’s hard for a CEO to tell a board member that they need some board training,“ said one new CEO. “The board is the hardest thing about my job now. Maybe it’s especially tough because I used to serve on the board that has now hired me. I wonder if I was ever that bad!”

Fundraising
The challenge of fundraising was one of the biggest surprises that many people found as they moved from the corporate world into the nonprofit arts. All were aware before taking the job that it would be part of their responsibilities, but most were surprised by the amount of time that fundraising required.

Most nonprofit arts organizations must raise a substantial sum over and above the costs of their tickets, subscriptions, admissions, and memberships. The average ticket at a theater in the United States, for example, covers about half the cost of sitting in that seat. Additional funds must be raised through an array of different sources, including individuals, corporations, foundations, and public agencies. In addition to their annual fundraising events, some organizations also have shops and restaurants, and may rent their venues for income.

A former businessman said, “Stress in nonprofits is higher because there are never enough resources. It’s a different kind of stress but it’s more stress than I was accustomed to, not less. And you always have to fundraise. It’s constant. I’m not sure it’s possible to earn what we need and still meet our mission and the needs of the community.”

“My new job is more complex than I thought it would be,” said one former businessman. “Some of the business functions are the same, like the discipline of the budget for example, but the income generation is much harder. It comes from so many different sources, and it’s not just about customers anymore. The income is also dependent on public opinion…donors, elected officials, audiences, and funders. Part of our income is dependent on artistic decisions, and I have to completely rely on others for that.”

Working with Staff
Most interviewees were enthusiastic about the staff they found at the arts organizations. “I was impressed by how hard they worked and how smart they were. I expected that they would be good, but I was amazed at their level of professionalism.”

One former corporate leader said that at first he was concerned that “the scholarly staff and curators wouldn’t accept me. Then I realized that the best thing I could do was to be a good leader. I told them ‘there’s a lot I don’t know and I will rely on you as professional staff to tell me.’” Another said that he felt accepted by most staff members from the beginning, “But I worked really hard to show them that I cared about the organization and about them.”

One boomer who has alternated between the corporate world and the nonprofit world throughout his 30-year working life said, “Folks in the nonprofit arts community are the hardest working, smartest and most mission-driven people I have ever know. They are mission-driven rather than wallet-driven. Sometimes it’s hard for folks in corporate to understand why someone who’s really smart would work for less money than they could make in the business world.”

Consensus Based Decision-Making
Nonprofit organizations have to build consensus. They must make decisions that frequently pass through a process that involves staff and/or board members, and sometimes board and community committees. Several people mentioned that one of their few disappointments in moving from business to nonprofits was how slowly the decisions were made. Some commented on how much patience and tongue-biting this required on their part. A former corporate executive said, “Slower decision-making in the nonprofits can test your patience, and be really frustrating. But, I am also impressed with their due diligence.”

“There are so many constituents,” said one new leader. “And after you have the input you think you need, it takes time to balance everything with what the board, the staff, the donors, and other constituents might think of the decisions.” A former businessman who is now CEO of a museum said, “In business, when you have an 80 percent confidence level in something, you make a decision and you move on. With the structure of the nonprofit organization, decision-making is different and much slower.”

Perhaps because of this focus on consensus, nonprofits are generally more accustomed to democratic governance than the business world. It may also be the result of the fact that in most nonprofits, people wear many hats. Several people indicated surprise at the extent to which their new staff members in nonprofit arts organizations wanted to weigh in, express their opinions, and participate in decision-making. One new CEO from the corporate world described his shock when his senior staff, during their first official meeting together, offered to help him resolve a situation with a group vote. This difference in style was noticeable to most, but the degree to which it bothered new leaders varied.

Mission, Purpose, and Diplomacy
Almost all interviewees spoke of the importance of mission and passion. According to one person who made the transition from business to his current job as CEO of a national cultural organization, “At the center of nonprofit management is a cause…and that’s the big difference. I like nonprofit work because I thought the corporate world lacked heart and soul. I didn’t like the financial focus that drove everything.”

One former business executive turned theater executive said, “I loved my work in retail…it was a great industry and a great job, and I learned a lot, but I just couldn’t always get excited about the bottom line. Now I believe in what I am doing and it has meaning for me.”

A former banker said, “A lot of the things I had learned in business were transferable, such as working with staff. The biggest difference is that within a nonprofit arts organization, you are dealing with people who are motivated by mission. They are much more emotional than people who are motivated by money. I wasn’t used to working with such emotional people, but on the other hand, I am in awe of their passion.”

Many new leaders mentioned the importance of diplomacy. After four months in his new job as CEO of a nonprofit arts organization, one said, “I thought I understood diplomacy…but this requires a new level of diplomacy. This takes serious skill.” Another said, “You have to be willing to sell the mission of the organization all the time and do it in a friendly, community way. You have to constantly sell it to the staff, the board, the donors, the elected officials, everybody. It’s a challenge to your sales and diplomacy skills. Business relies on sales, but in business, you only have to do it while you are actually selling! As the CEO of a nonprofit, you have to be in your sales mode all of the time. It’s like a constant political campaign.”