Before I begin, I should point out that in his introduction, Ben failed to mention that, with a little luck and a successful search, I’m about to become a “recovering managing director.” So quite frankly, I had every intention of being a civilian at this moment in time with absolutely no responsibility or interest in determining what constitutes effective governance, or for that matter, changing times.

To preface my comments further and to put them into better perspective, you should know that I will be leaving the Old Globe in a matter of months after serving there as managing director for nearly twenty years. I made the decision to leave after working seemingly endless months, actually years, with my partner, the Globe’s artistic director, Jack O’Brien, and our board of directors contemplating the issues of transition, institutional oversight and the theatre’s continuing evolution into increasing stages of institutionalization.

It was an extremely difficult, often frustrating, but ultimately enlightening process that clarified a number of issues concerning the Globe’s future and my place in that future. But more importantly, it resulted, I believe for the first time, in a broad and fully articulated consensus as to the appropriate core values that the theatre’s constituents want to embrace as they move into the next phase of the Globe’s development. And predictably, with that consensus came the clear need to revamp our governance structure. As a matter of fact, the outcome of the process has been so sweeping that it has generated top to bottom changes in the Globe’s future plans. Changes which include a newly articulated vision and a substantially modified mission. In turn, those changes have led to extensive financial restructuring, plans for a significantly augmented staff, and a reaffirmation by board and company of the goals and values which we believe will bring the finest possible theatre to our community for years to come.

So, given all this positive change at the Globe, one rightfully might ask, “What’s the problem and why have I now suddenly decided to leave?” After all, the Globe is a theatre that has been in existence and been quite successful for nearly sixty-five years. During the last twenty years or so, our operating budget has grown from about $1 million dollars to its current $11 million. We have developed our facilities into a state-of-the-art performing arts center encompassing three theatres, twenty thousand square feet of rehearsal space, modern shop facilities, and beautifully appointed administrative offices. We produce thirteen productions a year, playing to nearly three hundred thousand patrons and students per season. We’ve produced dozens of plays that have gone on to stages on and off-Broadway, and to any number of cities including Rochester, Stamford, Cleveland, San Francisco, and Boston, among others. We received the Tony Award in 1984 and our audiences, peers and funding sources consistently name us to be in the top echelon of our sister institutions. And to cap it off, we’ve managed to do all that without ever creating an annual operating deficit. So, again you might ask, “What’s the problem?” And I guess my answer to this question, along with some rather impassioned, if not eloquently reasoned statements I made at recent TCG gatherings is the reason I’m speaking to you tonight.

The problem, or perhaps more appropriately, the issue is one of governance. That is, how should we reformulate our governance practices in order to more successfully meet the challenges of the future. Additionally, and specifically in my case, it is also a question of how I have seen my role in that process of change and how I might choose to redefine that role in the future. It has always been a tough question for me, and sharing my concerns publicly certainly makes it that much more difficult. But the more I’ve thought about it and the more I’ve articulated my thoughts on the issue to others, the more clarity I’ve begun to gain. I believe that the Globe, like all theatres, is constantly ripe for a reconstituted governance structure. Successful leadership and oversight of any arts institution must be a dynamic process in order to engage the community and be responsive to changing times. With that in mind, we have reformulated our governance structure at various times and in various ways at the Globe. The current reformulation has been the most difficult by far because it has required that all of the theatre’s constituents support a radically expansionist posture for the art never before experienced at the Globe. We came to that conclusion on an institutional basis after long and careful consideration, looking both at our history and our present circumstances.
On a personal level, as I reflected on the Globe’s considerable success over the past twenty years, I could see the great potential and seductiveness that had existed to view our success in terms that were far removed from what I believe to be our core values and purpose…creating theatre. It is very tempting to focus almost exclusively upon that litany of institutional accomplishments I just rattled off in the interest of external validation and, in the process, weaken both the internal and external impact of the very art to which we all have devoted much of our lives. For me, the deeper we got into the question of governance, the more I began to see that we were using the wrong yardstick to measure our success. Don’t misunderstand, I am extremely proud of that litany of accomplishments, but they don’t begin to touch the soul of the work which I initially undertook more than twenty-five years ago. More importantly, they are certainly not a reflection of theatre as a form of living art. Rather, they are simply a reflection of elements of support, a foundation upon which successful art is created, but not that by which we measure its success.

So here I am I think like many managers, in some conflict over this tension between the needs of the institution and that of the art. I’ve managed well, helped build a very successful theatre, but to what end? Fortunately, in retrospect, we were never fully seduced into following the path that I had become so concerned about. However, there were a number of bad habits that existed in the implementation of daily management and oversight at the Globe which were either manifest from the beginning or crept into the theatre’s culture along the way. Whichever the case, in my opinion they certainly did not represent best practices in terms of governance. Many of them proved to be innocuous in their impact, but the mere fact that they existed speaks to the powerful pull that historical imperatives and external forces can have upon the structures and decision-making processes in practice at many of our theatres today. It is a constant struggle to stay focused upon the welfare of the art when endless institutional, some would say, corporate issues take up much of our daily energy. And what makes it even more difficult for those who have been around awhile is that we can remember a time when it when it was not that way.

When my tenure as managing director began at the Globe, a local critic asked the theatre’s founder and then artistic director, Craig Noel, just how the new “troika” of Jack O’Brien as artistic director, Craig as producing director, and myself as managing director would function. Initially, I thought Craig was rather glib with his answer, but in retrospect, he actually proved to be prophetic. His response was, “I’m going to give up eighty per cent of what I currently do, Jack will do half of what I’ve always done, and Tom will make it all possible.” Thus began my indentured servitude at the Globe and frankly, that’s pretty much how it’s worked for the past two decades. In many ways, it has been a partnership and formula for success that is unrivaled, and in other ways, its simplicity, if left unchanged, could have seriously weakened our potential for successful governance in today’s ever more complex world. By defining distinctly separate functions for the three of us and leaving the board’s involvement out of the response entirely, Craig unwittingly described a governance structure which was extremely efficient, but self limiting. In many respects, I became an “enabler” of sorts. My job was one of making resources available for Jack and Craig, and at the same time, making certain that we met our institutional goals for growth, while always achieving both tasks within a balanced budget, or preferably, by generating a surplus. Our initial model for governance grew out of an era of very little resources when most theatres were still headed by their founders and the need for a cohesive, integrated structure seemed less essential. Actually, back then, theatres’ governance structures were often ill-defined or non-existent, or if they did exist on a formal basis, most often they took the shape of an unholy trinity of sorts. The mantras of the day were fairly distinct and seldom overlapping or complementary. The artistic director usually chanting something along the lines of , “It’s art, you don’t have to like it to support it;” the manager typically cowering in the corner and praying that one day he would finally be given a season that would sell some tickets; and the poor beleaguered board members holding their breath each time they attended a performance–always with the hope they would get through it just once and not have to defend the work or apologize for the language to their friends, or worse, their boss. Whether this seems like an exaggeration or not, governance of most theaters in those early years was often disjointed and lacking in communal purpose. Those were the days in which the impetus for the work of artistic leaders stemmed from a rebellious need to demonstrate individualism in defiance of the norms of New York’s established theater culture. Very little thought was given to the concept of creating institutions, establishing principles of governance, or connecting to communities beyond the audience in the theatre on any given night. Rather, it was a time to move the art form in new directions, both figuratively and literally. And, I might add, it was a very heady and productive time.

And so it was for the Globe for many, many years. We achieved significant success both artistically and financially for a very long period of time without having to drastically alter our approach to governance. Our board and community were pleased with our success and they were dutifully kept informed as to the theatre’s status in every aspect of its operation. Over the years, the style and practice of institutional governance was more often a reflection of the leadership in office at any given time than a clearly designed, dynamic structure created to serve the current and long-term interests of the institution. As with most theaters twenty years ago, the Globe had all the textbook board committees and checks and balances, but there was not a systematic structure of governance in place that was pro-active or forward looking. Or, as it was described in a recent TCG centerpiece article: The oversight process often failed to “function as it should by harnessing the collective efforts of accomplished individuals to advance the institution’s mission and long-term welfare.” Without that defined structure, we, like many, were often ill-prepared to grapple with external pressures or the unexpected challenges that inevitably cropped up as the world of not-for-profit theater management became increasingly complex.

Predictably, it was just that very kind of external pressure and change that became the catalyst for our first serious re-evaluation of governance practices. Some years ago when southern California was plunged into one of its deeper and more protracted economic downturns, we had to make significant alterations in the way we produced plays and conducted our business or we would have failed to survive the economic pressures that we faced. With major businesses and financial institutions closing their doors on a seemingly daily basis, we weathered the storm with coordinated artistic and management decisions aimed again at strategic cost containment and reduced risk taking. On the positive side, and perhaps more importantly, we began to communicate in greater detail with our board and started to forge a new governance structure with trustees at the heart of it. Fortunately, we survived the downturn with little adverse impact upon the theatre, but as the economy began to recover and resources became more readily available, we realized something very sobering. That was the fact that our community, and for that matter, many of our trustees, had become accustomed once again to measuring our success as much, if not more, by the health of our balance sheet than by the quality of the work on stage. Success in many people’s minds became synonymous with balanced budgets, high rates of subscription renewals, and our ability to impose cost containment measures on the operation of the theatre. With other arts institutions in the community suffering terrible economic setbacks, accountability became the watchword. In short, the community had taken ownership of the institution but not the art that it created. At the same time, funders were no longer simply providing support for the work on stage they were now “contracting for services” and ensuring that appropriate social and political agendas were being met. Thus, there was strong and persistent pressure to define the theatre’s most valuable assets in terms of bricks, mortar, and community service rather than in the presentation of the works of Shakespeare, Shaw, or Mamet.

It was during this time of immense social and political change that we came to understand that simply changing the governance structure to be more inclusive of the board was only a quick fix. It got us through the crisis, but without tying that structural change to concomitant changes in substantive day-to-day interaction with our board and constituents, we were doomed to fail. The only way that we could assure long-term success was to truly share both our vision and the task of institutional governance with those constituents. It proved to be a tall order after such a long time working in the other mode.

As the process unfolded, we began to take a close look at all areas of the theatre’s operation and realized that the only way that we would survive the onslaught of the pressures to “grow the institution above all else,” was to vastly change and strengthen our oversight structure and many long-standing methods of governance. We set out to effect that change over an extended period of planning and development and to couple it with core artistic and institutional initiatives designed to move the theatre successfully into the future. The days of Jack and Craig creating plays while I made it possible were gone. We needed to create a stronger, more cohesive model for governance that not only drew upon our skills and passions, but which also drew upon those same attributes in our trustees, staff, and community. Day-to-day governance had to be guided by a clear, articulated, long-term vision for the theatre’s future and it had to be further supported by a strong, artistically-focused mission. We had to replace the practices of extreme “cost containment” with renewed and vigorous expansion of resources and we needed to engage our board and community in an aggressive dialogue centered upon the theatre’s artistic and educational value to the community. I remember the most daunting task that I had to undertake at the time was to stand before my board and, for the first time in my professional career, break the news to them that I was not going to balance their budget for them. For in fact, it had become their budget since it served the interest of conservative fiscal management far more than it served the interests of the art. This was me, the guy who would make it happen always with a balanced budget, explaining to my employer that we could no longer be governed principally, or for some, exclusively by sound financial practices when those practices came at the expense of human resources and the art. Instead, we had identified expanded core values which also needed to be emphasized in the mix, and we needed the board’s blessing and help to make that happen. We were moving from an institution that had always lived within its means to one that was about to radically redefine its means. It was the beginning of a long period of work to convince everyone involved that it was the appropriate course of action. Once the shock wore off…for all of us, we began that “difficult, often frustrating, but always exhilarating effort” that I mentioned earlier. The effort to build an oversight structure and process designed to support our collectively defined core values and principles. In essence, we made the collective decision to redefine the Globe’s future vision in greatly enhanced artistic terms, supported by an appropriate institutional foundation. We then designed a new form of governance based on a radically altered management philosophy. To support that vision and, in conjunction with the board, we created a future universe in which we planned to elevate the artistic profile of the theatre to levels never before imagined. We further imagined how we could best support that new profile and we set about defining strategic and tactical methods to achieve our goals.

Needless to say, the most salient and controversial issues that came up during that process centered around the vision that Craig, Jack, and I had for the Globe’s future. As we began the task of reorganization, the way in which we approached the work can be best described in the words of Max DePree, founder of the DePree Leadership Center, when he said, “The first responsibility of a leader is to define reality. The last is to say thank you. In between the two, the leader must become a servant.” Thus, we recreated our methodology for governance based upon strong pro-active leadership, a fresh and vigorous vision for the theatre’s future, and an operational approach which was distinctly differentiated from the institutional model most often considered the norm at the time. That work resulted in what was nearly an eight hundred per cent growth spurt for the period from the mid 1980’s through the early ‘90’s. And now, seemingly just a short time later, we are at it again.

Once again, we are aggressively looking to reshape the Globe’s mission and find a way to differentiate our place in the regional theatre universe to better serve our artists, staff, trustees, and patrons. In this last matter, I took a good deal of time to contemplate the field and look at our sister institutions across the country to determine what facets in any particular operation made for clear and distinctive success. We found time after time that our most successful theatres had differentiated themselves from the rest in original and unique ways while always serving their institution, their community , and most importantly, their art. One of the masters of such differentiation is with us tonight, Gordon Davidson. Some years back when the Ahmanson Theatre was going through a leadership transition, Bill Wingate, then Gordon’s managing director, contacted Jack and me to see if we would be interested in interviewing for the job. We met with a committee of the Center Theatre Group’s board and had a very productive and cordial talk. I must admit that the idea was intriguing to both Jack and me. After all, it’s such a big theatre with so much money!!! At any rate, at the time our focus and loyalties remained in San Diego and we still had much to accomplish at the Globe. More importantly, we left that interview knowing right then and there that the job should go to Gordon. He had earned it, he was best suited to it, and he wanted it. Clearly, the CTG board came to the same conclusion and re-framed their concept of governance to make it happen. In so doing, the Center Theatre Group became highly differentiated from the rest of us as the first regional theatre with a complementary commercial/non-profit operating structure. Similarly, Ed Martenson and Garland Wright, along with their board and the community of Minneapolis, differentiated the Guthrie Theater from all others by building an endowment for the theatre in excess of nineteen million dollars. This at a time when endowments of any substantial size for theatre were nearly non-existent. They then went a step further in differentiating themselves by hiring David Hawkanson to safeguard that money. David has done a wonderful job in not only providing safeguards for those funds; he has overseen their growth to an estimated forty-nine million dollars today.

Differentiation of purpose and process is also manifest in many of this country’s smaller companies. Companies such as Kentucky’s Roadside Theater, Junebug in New Orleans, and Theatre de la Jeune Lune are all great examples of companies that have found a unique and important place in the landscape of what we know to be the American theatre community. One of my favorite examples of a newly differentiated theatre is the Cornerstone Theater Company. Founded as a touring company which worked with various communities in telling their singular stories in dramatic form. Cornerstone quickly made a reputation as one of the country’s stellar new ensembles engaged in exciting community-based work. Then, just about the time that we all thought we had them pegged, Bill Rauch picked up the company and moved them to L.A. to serve an urban population in desperate need of their help. Talk about leadership, vision, and a willingness to be different? That’s superb governance.

The list goes on and on, but you get the point. In my view, successful governance for the Globe had to be inextricably tied to a new vision which would differentiate the theatre from the norm and for which we could provide appropriate and committed leadership. That’s where our need to re-create our governance model has taken us. The new structure is moving into place and the first steps taken, only time will tell us if the recent choices we have made are as valid as those made some years ago. One thing I can tell you for sure, it’s been both a harrowing and great experience.

And…so, back to the matter of my decision to leave after all this work. Actually, it’s not terribly mysterious. As we worked through the process I’ve just described, one of the clearest lessons I learned about successful governance and institutional change is that it requires an unwavering commitment from everyone involved. For me, even as the excitement of change was causing such great exhilaration, it became clear that I wouldn’t stay to see the outcome. The fact of the matter is that the Globe’s next executive director needs to be an individual who is one hundred per cent committed to leading the theatre in long-term institutional and financial growth. I realized along the way that, having done that work for nearly twenty years, I was desperate to get back to my true vocational calling…producing plays. I am no longer the one to help guide the Globe as an institution into the future, and so it became obvious to me that it was time to leave. And I must tell you, you should have been at the board meeting for that announcement!!!

Frankly, I’m usually not one for giving advice, however, in view of the fact that much of the balance of this weekend’s work will be focused on very specific, practical aspects of governance, I would ask that you not forget the singularly most important reason for attending this conference, the art. There are many important aspects of governance to be analyzed and discussed, but it all finally flows back to support for the work on stage. So, as you engage in various discussions over the next few days, let me urge you, particularly the trustees in attendance, to keep the welfare of the art central to your thoughts and deliberations. Invariably, that focus will help you when you return home to constructively partner with your staff and artists in governing ever more highly-differentiated institutions that possess clear and provocative visions and strong community-based missions.

In closing, let me leave you with one more thought from Max DePree. I think he managed to describe the essence of strong leadership and successful governance when he said, “The condition of our hearts, the openness of our attitudes, the quality of our competence, the fidelity of our experience–these give vitality to the work and meaning to life.” And I might add, meaning to theatre.