What would you do?

[Stu]

This is just getting weird.

The process of using a hypothetical may be something different; but the content in this tread certainly is germane to the idea of us taking a small interactive peak into seeing why many corps go-under. But if you find this thread that weird then fine; you have many other threads to read and do not have to click through this thread; so go engage in them.

[garfield]

(from now on I think that the 'Dear...' will suffice as the hypothetical Confidential preface)

Dear Garfield,

Thank you for the kind words. I commend you and the rest of the Board because you have also worked hard at making this organization solid. I appreciate working with such knowledgeable and wise people; not only those who are my superiors, but also all of the wonderful people under my charge.

I am confident that for this fiscal year, unless a dire emergency arises, we will end in the black; maybe not by much, but we will end in the black. However, if the ever increasing time-commitment issues and separation of duties with the creation of a new DD position are not addressed in, say, the next two years, or we decide to be content at the competitive plateau where we are currently at for an indefinite number of seasons, organizational implosion is a likely scenario as we move forward into the future. That is why, as a preventative measure, I am asking the Board to begin 'investigating' the feasibility of a future CD/DD option at this juncture.

Respectfully,

Stu

Stu,

We have informally discussed the situation and your request to hire a development director, and several thoughts come to mind that we'd like to share. Please keep in mind that these are points of discussion and don't necessarily represent our opinion of your hiring plan.

First, we'd like some clarification on the current situation. At your last update you indicated that you foresaw the potential to be as much as 25% in the red for the season, based on current commitments of funding. Now it appears your confidence level has increased that you'll end the year at break-even or slightly higher. Have you secured the 25% current shortfall that prompted your initial concern?

We'd also remind you that "breaking even" is not the financial goal for corps management. Recall that you are driven to spend just 80% of the 5-year average program expense; that would suggest you operate with a margin of 20% of annual funding. "Breaking even", as you describe, does not reach that goal. Would you specify that you mean "breaking even" at the 80% threshold, or "breaking even" at 100% of revenues.

Related, we'd suggest you modify your goals to include a margin-of-safety in your planning. It's disconcerting to us that there doesn't seem to be a plan in place to deal with a black-swan event that may spring up at a most inopportune time. While we have the cushion to get the kids home safely tucked away, it is bothersome that an unexpected event (which always seem to crop up despite best planning) presents the risk that the corps could, once again, expend all revenue for the year, and more, and delay the implementation of the growth plan we've discussed. A "margin-of-safety" account is fungible because a black swan event, by definition, cannot be planned for. Yet, we'd like to see some consistent accumulation of funds, earmarked separately, for an emergency event that may, otherwise, knock the wind out of the corps' finances. While not part of our formalized growth plan, we highly encourage you to begin to think in terms of building such a safety net for corps operations.

Lastly, while our positions as board members focuses us on legal oversight and member-safety issues along with holding to the growth plan, and specifically not daily executive decision-making, creative involvement, or fundraising we offer a few thoughts regarding your desire to hire another to split your role as CEO. Specifically, are you fully utilizing existing staff and might there be slack in productivity that may allow you to assign additional duties without disrupting other business staff responsibilities? To the point, is every member of your staff now working as hard as you are? If not, why not? Is each person on staff working within their sphere of qualifications? That is, do you have the right people in the right positions doing the right duties to maximize productivity? Might a "we've always done it this way" mentality have crept into your thinking? We'd encourage a fresh look at staffing with no preconceived notions.

Your description of the development issue does not suggest to us that it is a current problem; you said yourself that the current system could stay in place for a couple of seasons before it become significant. We wonder if beginning to think now about solving a potential problem in the future may be distracting your efforts to increase current funding productivity. In a word, shouldn't hitting your targets described above be your immediate goal before beginning to consider how to pay for another staff member? (We remind you that we appreciate incentive-based pay packages that relieve you of having to fund the new position prior to that person even starting his job.)

We don't believe that the corps' business position is anywhere close to a plateau until the above funding, growth, and safety-net goals are reached and held for several years. To our eye, the corps is still struggling to get to a consistent financial plan. It would be prudent to be cautious of growing too quickly so that the actions that get the corps to financial stability can be proven effective over several years. As such, we're not concerned about finding ourselves on a financial plateau even as you may be concerned about being on a creative plateau. Several years of maintaining creative placement and hitting the financial goals outlined above would go a long way to prove the management concepts and effectiveness. We caution about letting the cart overtake the horse, and encourage you to focus on stability and consistency of income before increasing it to meet creative expectations. You can be confident that we will remind you of that concern.

Lastly, every member of our staff has volunteered to make Fictitious a viable entity, and each has agreed to "do what it takes" to make that so. We wonder: Is every member of your staff working 60 to 70 hours a week as you are? Shouldn't they be if that's what it takes? We recognize what that commitment means to staff's personal lives but, surely, the creative goal that you laid out for this year was reasonably expected to take Herculean effort even before considering the funding difficulties you are experiencing to get there. Are you confident that your team is giving all they can, and then some?

We apologize for the length of this reply, hope you find it insightful, and look forward to your responses.

Best,

Garfield for The Board of Fictitious

Edited April 15, 2014 by garfield

[Eleran]

I actually think having one person whose main job is fundraising is important. When you simply ask the other members of staff to add it to their main duties, you will always get the "we've always done it this way" mentality, because (a) that's not their expertise to begin with, and (b) their mental focus will be on their main duty, and they will not have the available mental energy to explore creative and new avenues.

The tax-exempt world is full of people who specialize in revenue generation, and tapping that experience, rather than asking the rest of the staff (probably musicians?) to also figure out the revenue problem, is probably a good idea for any corp.

[garfield]

This is just getting weird.

Waffles with Nutella. Now that's weird.

But apparently people love it.

[garfield]

I actually think having one person whose main job is fundraising is important. When you simply ask the other members of staff to add it to their main duties, you will always get the "we've always done it this way" mentality, because (a) that's not their expertise to begin with, and (b) their mental focus will be on their main duty, and they will not have the available mental energy to explore creative and new avenues.

The tax-exempt world is full of people who specialize in revenue generation, and tapping that experience, rather than asking the rest of the staff (probably musicians?) to also figure out the revenue problem, is probably a good idea for any corp.

It's important, IMO, to separate business staff from creative staff.

Many corps CEO's don't tour with their corps.

[Eleran]

It's important, IMO, to separate business staff from creative staff.

Many corps CEO's don't tour with their corps.

I agree - but when you asked Stu about whether there was more productivity he could get out of his staff, to whom were you referring? I'm actually curious, because I'm not as knowledgeable about how World Class corps are staffed (on the business side) - are the business staff professionals in that field or volunteers pitching in? How many are there usually, and what are their duties?

[CCorps]

Stu's getting schooled consistently. This is actually interesting to see unfold; as weird as it is, there's a lot of value to it, I think. Plus watching Stu go further and further out of his league is fun.

[perc2100]

I actually think having one person whose main job is fundraising is important. When you simply ask the other members of staff to add it to their main duties, you will always get the "we've always done it this way" mentality, because (a) that's not their expertise to begin with, and (b) their mental focus will be on their main duty, and they will not have the available mental energy to explore creative and new avenues.

The tax-exempt world is full of people who specialize in revenue generation, and tapping that experience, rather than asking the rest of the staff (probably musicians?) to also figure out the revenue problem, is probably a good idea for any corp.

TOTALLY agree with this. Have one person just in charge of fundraising, and another who specializes in grant writing

[garfield]

TOTALLY agree with this. Have one person just in charge of fundraising, and another who specializes in grant writing

I might agree that this is a worthy long-term goal once it can be justified. But both grant-writing and fundraising have the same goal of bringing dollars over the threshold, and to pay two people to accomplish one task seems well in the future of Fictitious.

[Stu]

Dear Garfield,

Note: All specific documents related to our communication are located in our corporate virtual Dropbox account.

I have great respect for the Board, and yes there is always room for improvement, and yes we should always make sure the right people are in the right places. So here is a point by point response:

The break-even point considered at this juncture for this season is the zero balance 100% mark not the 80%/20%. I do take full responsibility for that decision; the only other option I see for this season would be going into the red and that is something I will not let happen even if I have to sacrifice some my disposable income for a few months. There are varied reasons why we have ended up here; we can discuss them at length face to face but request not to discuss them in written communication. But no matter what, I am the one who should ultimately be held responsible for steering the ship into this storm; and there will be no justification or excuses from me for where we are at now but only seeking ways to keep the ship afloat through these rough waters and move us back into calmer waters.

Using the cart/horse analogy. When gaining ever increasing speed within the competitive realm and the cart (the performing ensemble) jumps out to pass the horse (the financial aspects of the corporation), the immediate and correct course of action is to slow down the cart not to speed up the horse. if one tries to rectify the situation by speeding up the horse to catch the cart you most always either crash the cart or run the horse so ragged and kill the horse. Once the cart is back behind the horse only then can the rate of acceleration of horse and cart once again be increased in a controlled manner. While our cart is not out ahead of us yet, it is attempting to get beside the horse to make the pass. That is where we have found ourselves; and again I shall offer no excuse for this; I take full responsibility for the situation; and I take full responsibility to remedy the situation. The upshot I can offer is that I will never place the safety and welfare of the corporation, and especially the safety and welfare of anyone engaging with our programs, in danger due to my decision making.

We have in place immediate goals, six month goals, one year goals, and long-term goals. (again all of which are on file in the Corporate Virtual Dropbox along with required up to date business reports directly relating to these communications.) As CEO my specific focus is currently on securing the immediate goal and six month goal of staying in the black, with an eye on the one year goal to get us back into the 80%/20% standard. What I am asking the Board to do is take the information provided to you via the Dropbox and begin investigating ways to revamp the corporate structure within the framework of long-term goals while I investigate various new revenue sources and investigate revamping the implementation of our programs. Otherwise we are going to stall out then begin to fall like an aircraft going past its limit. The last thing I want this corps to be seen as is being a real story of Icarus!

Currently there is only one full-time salaried staff member, me; and as CEO it has been my contracted duty up to this point to engage in the entire organization both on the corporate business side as well as the competitive performance side. If the Board does not want me as CEO to engage with the performance side but stay only within the realm of the business side that is fine; but that is not the system you as the Board currently have in place nor is within my contracted duties. You have a system where one salaried person is required to engage in all aspects. And in fact if you want to explore a long-term split of duties between a salaried CEO (Business Director) and a Salaried COO (Corps Director) as opposed to a CEO/DD I will be more than happy to discuss that type of structural split with the Board.

Yet within this current structure I have been able to split the two sides with staff; albeit I have still had to increase my own time commitment year after year to engage in both sides. On the performance side we have our Program Director, performance staff, and transportation staff; all of which either seasonal contracted employees or independent contractors with many of the logistics staff volunteering. All of them are the best we can procure and they are well vetted prior to being secured. On the business side we have a paid para legal maintaining all corporate documents as well as a paid administrative assistant/professional bookkeeper maintaining our ledgers; we have a professional Development person offering pro bono council, not physical work, but pro bono council along with a grad student majoring in Non-Profit Development as an intern and many volunteers helping the intern with research, grant writing, and implementing our funding proposals. And all of them are the best we can procure and they are well vetted prior to being secured. As for our bingo staff they are all volunteers and that program is channeled through the alumni association. This has served us well until a few years ago when the corps began making completive jumps in rankings bordering on WC top 12 status. And this does lead me to a 'slight' contention I have with your last communication:

The staff of Fictitious, all of them, every last one of them are already devoting, nay, sacrificing much of their lives for this organization mostly out of love. They are, as stated, well vetted; well skilled; competent; and trustworthy. And while we may need to occasionally make adjustments here and there, they are for the most part the right people in the right places. You asked if everyone on staff is working the close to 70 hours per week that I am. No, absolutely not! And I will not require them to do so because I am the only full-time salaried employee of the corporation. And if you as the Board expect me to require these contract workers, seasonal workers, and especially our volunteers, to devote anywhere close to the hours I am putting as a salaried employee without proper compensation going to them, then I will defened them to the hilt or if the Board sees fit respectfully tender my resignation.

I am not a whiner; and yes I need to get the perfoming cart back behind the financial horse and I shall do so with much effort. On the other hand if we are going to provide for an ever increasing higher performing and ranking corps engaging in DCI, we also need a corporation overhaul plan in our long-term goals spearheaded by the Board revamping items ranging from splitting duties and powers of salaried employees to revamping the policies and procedures of corporate day to day operations especially with respect to compensation; or we need to stifle our competitive growth due not being able to facilitate that competitive growth with the current corporate structure now in place. We cannot keep this system of only one salaried person engaging in everything and expect greater results in the future in both revenue and competitive ranking. So with respect, I currently do need to get the performance cart back to being behind the corporate horse; and I do need to figure out better ways to achieve the 80%20% financial structure in the near future. But please do not ask me again as the only full-time salaried director if I am going to require my contracted, part-time, seasonal, and volunteer staff to put in anywhere close to 70 hours a week that I am required to do, who all engage in this organizational structure out of love in a structural manner created by a Board long before you and I ever arrived. This is why if we are going to continue to be involved at the WC DCI level our corporate structure, which certainly is is the responsibility of the Board to revamp, needs to also be WC.

Respectfully,

Stu

Edited April 15, 2014 by Stu