Friday, May 27, 2011

27 May 2011

Dateline: 27 May 2011

AxSA Factoid of the Week
During the first dot-com boom, 308 tech companies went public. In 1999, twenty-four of those companies made up a total market capitalization of $70.9 billion. In contrast, many of the tech companies of today's Web 2.0 era are not going public, but the top five of them make up a total valuation of $71.3 billion. That new batch of companies include, by highest valuation, Facebook, Zynga, Groupon, Twitter, and Linkedin.

News & Commentary
What Loyalty? High-end Customers Are First to Flee
Harvard Business Review
If you think that market dominance is a saving grace, you had better think again...Read More

Sixteen Grade School Entrepreneurs
If they can do it, you can, as well. A look at several children who are defying convention and defining success in business...Read More

Finders, Keepers
The Deal
More than 100 search funds are on the move to identify and buy out prospering small businesses...Read More

Are Restaurants Really Risky Businesses?
Wall Street Journal
Banks do not seem to think so. In fact, they are consistently lending to the sector...Read More

Girls Just Want to Have Funds
Wall Street Journal
Female investors don't seem to trust their own intuitive prowess when it comes to letting their money work for them...Read More


Women's Business Resource Center
New Orleans, Louisiana
June 2, 2011, 6PM to 9PM

Houston, Texas
June 1, 2011 to June 2, 2011

Perspectives from the Corner Office

Tray Bailey
CEO, The Music Factory NYC, Inc.

AxSA: You have led orchestral groups as a conductor, and now you are training your
hand as the leader of a new business. Do you find the two roles to be similar, or is one more challenging than the other? And is there anything that has surprised you about entrepreneurial leadership that you had not experienced, or expected, coming from orchestral leadership?

Bailey: There are several similarities between conducting and management in other industries.

First, conductors are managers. Conductors manage groups of performers -- anywhere from 5 (rare) to 120 (more common), and reaching as high as 1000 or more for certain performances -- in the preparation and production of live performances, broadcasts, and recordings. Conductors exercise decision-making authority and command and control on repetoire (music selection), performer selection (hiring and firing), and venue selection. In addition, conductors who are founders of orchestra or opera companies will usually exercise significant, if not final, budget control, and music directors, artistic directors, or principal conductors who are not founders will be de facto, if not de jure, senior executives of their companies with significant responsibilities and authorities in board, management, performer (orchestra and solo artist), community, and strategic partner relations, fundraising and budgeting, and strategic planning. As a reflection of this senior status, conductors are, as a rule, the highest compensated personnel in orchestra and opera companies.

Second, conducting and management are both highly labor intensive and time consuming. Like senior managers in other industries, conductors are almost always 'on the clock,' and time off the podium (or, 'away from the office') is rarely time away from work. When a conductor stops working, it is quickly reflected in the quality of work produced by his or her company, as is true for owners and senior executives in other industries. Also, conducting, like management, requires a multiplicity of skills that's unasked of other team members, and gear shifting from one area of focus to another imposes a large stress load.

Because of the work, risk, and stress demands, conducting is more different from management in other fields rather than more or less challenging. The preponderant and easy availability of data for conductors, and quick turn-around time on feedback loops and decision-making outcomes are the major differences between conducting and management in other industries. Moving to non-music management from a music-making perspective, management's disadvantages in these areas have been the most striking point of difference for me. I constantly work to bridge the gulf between these differences -- that is, I work to manage non-music making operations as much as possible like I manage an orchestra. Understanding these differences may add value for managers in other fields, so I'll discuss them quickly here.

Data Availability
Having the right data is the bedrock of quality decision-making, and quality decision-making is the basis of managers' authority and reputations amongst team members, stakeholders (owners and strategic partners), customers, and the public. Conductors enjoy a preponderance of core business-related data, both on the new operation or new project side, and on the decision-making and operational outcomes side.

When a conductor sits down to prepare a new program (the equivalent of a new project or operation in other industries), the conductor works from and learns a score (sheet music) which contains nearly all the operational concerns under management. Comparatively, an executive or entrepreneur embarking on a new venture or new operation will spend weeks first designing the new operation, then many more weeks learning and mastering the industry by digesting available data and through first hand operational experience. The manager's strategic challenge in this context is to balance the imperative of knowing the business against the need to seize the opportunity: too much study for too long might leave value wide open for pouncing competitors, but too little study could see a new operation fall apart just as it's getting off the ground.

On the data collection front, conductors enjoy a large advantage. While an executive in a large company will often have entire departments devoted solely to planning to aid decision making, and even founders of startups delivering a single product and operating in a single market or industry often gather teams of stakeholders and/or consultants to aid in designing and planning a venture and researching the market, conductors have no planning departments or teams, and a relatively marginal planning load, and are able to embark on their data work immediately at the start of a new program with minimal outside assistance or input. This freedom from extensive planning gives the conductor more time to learn his or her operation from top to bottom, inch-by-inch, note-by-note.

When a competent, conscientious conductor steps on the podium to begin work, performers ('staff' in this context) give the conductor instant deference and immediately acknowledge the conductor's authority. This speedy acclimation to new projects and new management (orchestra and opera companies often perform with a different conductor for each new program) is helped by the performance team's acknowledgment that, while each performer knows their own parts very well, the conductor knows each of their parts just as well as they do, and knows them from memory*. This gross difference in data availability prepares conductors for decision-making well beyond other performance team members. Specifically, the conductor is able to define and direct in exhaustive detail not only how a component should be executed by a single performance team member in isolation, but how each component fits into the larger performance project. What this management ability provides a performance company in efficiency, trust, morale, and quality production and outcomes cannot be overstated.

For managers in other industries, conversely, such total information awareness is usually not possible, and sometimes even undesirable: the introduction of new data, while illuminating, may serve to stall or short-circuit the decision-making process, leaving valuable opportunities untapped in the interim. In practice, the manager's tactic and even responsibility is to muscle through these 'known unknowns' -- that is, to take a firm and hard decision about ending study and deliberation, and proceed to decision-making and implementation on the strength of past operational and management experience, intuition, and instinct alone. However, in my experience both exercising management and observing other managers, this paucity of data exacts a unique stress load for managers despite efforts to bridge the information gap through hard-nosed, muscled-through decision making. More specifically, the under-supply of data -- not only data on the marketplace, but on staff adherence and performance, and operational outcomes more broadly -- creates nagging uncertainties for actors in markets, and breeds often gross irrationality. This is a particular concern for managers because the manager is often acutely aware of and sensitive to the need to project certainty in order to maintain team morale, ensure timely implementation and operational turnarounds, and seize opportunities, even when the data that would support and should under-gird such certainty remains too thin and insufficient, or unavailable entirely.

So this is one important area where conductors enjoy a significant advantage, and again, I work to bridge the gap between the disciplines by creating and adjusting workplace environments and processes so that they favor music-making environments and processes as much as is useful.

*(Importantly, while conductors are freed of almost all planning concerns on a day-to-day basis, they more than fill that time with data collection and data and operational mastery. For a conscientious conductor, mastery means memorizing every note of every performer's part. To give some context, a standard two-hour performance program includes about 300 pages of music. For comparison, most editions of the King James Version of the bible average between 1500 and 1800 pages. So, working conductors commit to memory material equal to one-fifth the size of the bible every week, covering and memorizing the space of the bible 8-9 times in a 300 working-day year.)

Decision Making Outcomes

This difference between conductors and managers in other industries is quickly apparent to anyone who's ever seen or attended an orchestra, opera, or other large musical ensemble performance. Unlike managers in other industries, conductors exercise operations-phase management responsibilities directly and immediately...[W]hereas a newspaper publishing executive, for instance, exercises control through a multi-layer chain of command, from publisher to managing editor and senior editors, down to beat reporters, printers, and sales and subscription fulfillment personnel, an orchestra or opera company's core business operations chain of command is significantly flatter, with the conductor not only giving immediate, real-time direction to any personnel from senior to junior, but going further to oversee and directly implement (again: immediately, and in real-time) communicated policy and direction. All this translates to quicker feedback loops and immediately-available decision-making outcomes, and allows the conductor to exercise firmer, more consistent authority, and unambiguously places responsibility squarely on the conductor in case of sub-par operational outcomes.

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