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Announcer: This podcast is a project of the Massachusetts Cultural Council, a state agency committed to building creative communities and inspiring creative minds.
James Donahue: If you’re on the senior management team of the Village, my goal is to ready you to be a CEO somewhere. Whether here at the museum or somewhere else. And so I’ve been very happy that some of my colleagues have been finalists, as they’ve looked to take on their own directorship.
Anita Walker: Hi, I’m Anita Walker, executive director of the Massachusetts Cultural Council, and welcome to Creative Minds Out Loud. Our guest today is Jim Donahue, president and CEO of Old Sturbridge Village. And I think there probably is not a person who has gone to elementary school in Massachusetts, who has not had an experience at Old Sturbridge Village.
James Donahue: Probably not.
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Anita Walker: You are the history door-opener for kids, aren’t you really?
James Donahue: We like to think so, And we sit among some other fabulous institutions in the Commonwealth who do the same thing. But yes, we see roughly 60 to 65 thousand schoolkids every year. So it all starts with the history, right? We interpret a period in the country’s historic journey, where lots of change was happening. You know, the 1790s to the 1830s, 1840s, were a very busy time in the country. Our economy was transitioning from an agrarian economy to a manufacturing and an industrial economy, and the Village tells that story very well. So I think that for teachers, a trip to the Village is a great way for their students to kind of step into the painting, right? And put their hands on the actual buildings that stood during that period, talk to costumed historians who are interpreting what everyday life would have looked like. So we like to think of it as the context for the classroom learning. And then we’ve built on that foundation Anita, to.. do deeper, more immersive programs for children. So yes, 65 thousand kids will come, and they’ll spend three or four hours at the museum as part of a class fieldtrip. But we’ve also expanded to include programs for interns, who are there with us for the summer. We have some amazing partnerships with some vocational high schools in Massachusetts and in Connecticut, where students are reproducing pieces from our collection as part of their coursework. We have a group of students from Tantasqua High School, right in the town, that spend an entire semester coming out once or twice a week, working on a building refab or renovation. So the opportunities for kids and teachers, I think are endless.
Anita Walker: We want to talk today about something kind of nerdy. We say..
James Donahue: <laughs>
Anita Walker: …this podcast, a large part of our audience is culture nerds <laughs>. And it’s really people who run nonprofit organizations, who want to do it better. And we’re so fortunate to have so many partners across the Commonwealth, who are doing exemplary work. And one of the areas that we at the Mass Cultural Council have been interested in, is this idea of leadership transition. There’s an enormous amount of generational leadership change that’s happening in our organizations. We’ve seen in communities where four or five or six of the anchor cultural organizations, in a given year are seeing leaders move on to other things, or retire, and a whole new batch of leaders coming in. And we’d like to think that this process of leadership change within an organization is not accidental, not serendipitous, but actually rather a thoughtful, intentional process. And you and I have talked about this in the past, and I’ve been really impressed by the way your board and your organization thinks about leadership change. And to start with, what brought you on board?
James Donahue: So first of all I think it’s a great question. And I do think that organizations, we generally should spend more time talking about it. And even though at the Village we do have some significant conversations about it, it’s probably not enough, and not deep enough into the organization. I was very lucky, I came to the museum after an extensive search process, and I was completely unlicensed to drive the bus.
Anita Walker: <laughs>
James Donahue: I had never run a museum before. We have a restaurant division, a hotel division, I had never been in that business. My academic background was economics, my initial professional experience was in banking. And then I left banking to work in urban education, and wound up starting a public charter school in Providence, which I was leading when the Village– the search consultant came calling. And what I’ll say about that process Anita, which I thought was really great, is that it was extraordinarily thorough. And the Village at that time was facing, as you know, some pretty significant challenges. There had been massive layoffs, huge annual deficits, business elements had been shut down, attendance was at an all-time low. So the museum was in trouble, and the next president, that was probably the most risky decision that the board was going to make, right?
Anita Walker: And the person who came.
James Donahue: And the person who came.
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James Donahue: But the process, I thought was just amazing. I mean the board was transparent about all of the issues, they spent time with me in Providence, in my then organization. Spent the day talking with people who reported into me, getting a feel for what my leadership style was like, confirming some of the things that I talked about. So I thought that they did a great job, and they took a risk, right? That it was someone who had no curatorial background, coming into the museum at that time.
Anita Walker: I just want to pause, because one of the things that you just said was the amount of time the board put into the search. We spend a lot of time, as you know, visiting with organizations. And occasionally, or more frequently than I’d like to think, I’ll ask the board about succession planning. And I get the impression that, “Well when it happens, then we’ll just hire somebody new.” As if it’s something that can turn around on a dime. To do it well, it does take time.
James Donahue: Mm-hmm. It takes a lot of time. And the right kind of time. So one of the exercises that the board asked me to do near the end of the process, when there were just two of us left in the game..
Anita Walker: And how long was the process?
James Donahue: Oh my goodness, it started beginning of October and it ended January 31st. So it was a good four-month process. And busy, it wasn’t like there were long gaps of time. But the final exercise was to write a 100-day plan, how I would spend the first three months on the job. And when I talk to trustees who were involved in the process now, they say, “That was the– it was very clear at the end when we looked at the two plans, who was the person that we wanted.” And so I would urge all organizations that are looking at bringing in a new CEO, to ask for that. Because it really gives you a window, right? Into how someone’s going to be thinking about their first 90 days, and what their priorities will be, and how they’ll approach that. So at the Village, we think a lot about succession planning. Not that I have any intention of going anywhere, but the reality is that things can change, and the organization has to be ready for that. So one of the first things that I did, was to make sure that anyone who reported to me understood the financials of the Village. I was shocked actually when I got there, that members of the management team, the senior management team, had never seen the internal financial statements for the museum. They knew what their own departmental budgets were, but they didn’t see how those budgets fit into the bigger picture of the Village. And because we were going to be faced with making some pretty significant decisions, right, based on finances. I felt the management team really had to have an understanding of that. And in fact we started a practice of putting the monthly financial statements up for the entire staff. So all 200 employees can sit in a staff meeting, and they’ll literally walk through the financials. So that they see what’s happening to revenue, what’s happening with expenses. Where are there variances that are expected? Where are there surprises? So I think it’s given people more confidence in some of the decisions we’ve made, because they understand the financial rationale. But as I’ll say to the people who report to me, you can’t run the museum if you don’t have an understanding for how to read a balance sheet, or how to project cashflow. So that I think has been an important step.
Anita Walker: So you’re sort of.. probably saying “building a bench” may or may not be the right word. But you are building a capacity within the organization, so that, you know, I hate to use the hit by a bus example, but that should a sudden calamity occur..
James Donahue: Absolutely. And we do that not just with the financials, but any major initiative. So for instance right now, we are working on a public charter school application, to open a charter school at the museum in 2017. I have that experience, and so there’s a myth, right, that without Jim there would be no charter school. So we’ve worked really hard to make sure that every member of the senior management team is playing a role, right, in helping to bring this school to life. And that everyone understands how these things work, what the priorities are, how they’re held accountable. So that the institution really can sustain that if there is the bus that drives through.
Anita Walker: <laughs>
James Donahue: Peter Pan bus probably, right?
Anita Walker: <laughs> With a whole bunch of visitors.
James Donahue: With a whole bunch of visitors on it. So we do that, and then I think, you know, every year when I do the evaluation– so there are two themes in my mind. If you’re on the senior management team of the Village, my goal is to ready you to be a CEO somewhere. Whether here at the museum or somewhere else. And so I’ve been very happy that some of my colleagues have been finalists, as they’ve looked to take on their own directorship.
Anita Walker: So you’re giving a career path, while you’re at the same time building capacity.
James Donahue: Absolutely. Because..
Anita Walker: Two good things.
James Donahue: …what’s better, right, than to send very talented leaders out to other organizations? And better for them too, you know. And what we’ve tried to do at the Village, is to build a culture of succession planning. So an annual review will not happen at the museum with me, without me asking you, “Okay, if you were to be gone tomorrow, or if I were to pluck you and put you into another capacity, who on your team would replace you?”
Anita Walker: So it’s not just the CEO..
James Donahue: No.
Anita Walker: …that you’re thinking about.
James Donahue: No. And in fact we’re trying really to weave it Anita, all the way down, and through the entire organization. That everyone is thinking, you know, “Who’s your successor if for some reason you’re no longer doing this job?” And because some of the work at the museum is so unique, particularly in the craft space, that can be a scary conversation. When people say, “Well I don’t know. There’s no one who can take over from me as the lead tinsmith.”
Anita Walker: Well people do like to feel indispensable.
James Donahue: Yes..
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James Donahue: …they do like to feel indispensable. But, you know, and you can push people to really kind of force an answer. But I think that those conversations have resulted in a culture where people feel more comfortable, right? Having those discussions, and envisioning someone coming in and succeeding them. And what I’ve tried to do at the Village, to create leadership opportunities and moments where people can develop their leadership skills, is to recast positions. So I have colleagues on the senior management team who were doing one thing eight years ago, five years ago were doing something completely different, and now are doing a third completely different job. Still on the senior management team, but not doing the same thing. And that’s created openings for others, but it’s also helped those colleagues broaden their skillset. I have a senior VP right now, who’s really the leader on the charter school project. And when she’s done with this, I mean she’ll know how to open a public charter school in Massachusetts. And can share that with others, or possibly do that on her own if she wants to someday. So..
Anita Walker: The epiphany I’m having right now as I listen to you talk about this, is we generally think about succession planning as some like, disaster preparedness <laughs> sort of scenario.
James Donahue: Exactly.
Anita Walker: Where you’re having to refill the top guy, because something happened, they got another job or something happened. But what you’re really doing, is really building a stronger organization if nobody leaves at all.
James Donahue: Correct, correct. And that’s really, you know, ultimately I would be thrilled to continue to work with all the same people I’m working with now. Because they’ve been huge assets to the museum, and they’re just a great team. So you’re right, it strengthens us, it provides them with skills and experiences that make them more marketable, should they want to be a CEO if they can’t be one at the Village. And it allows for if something happens to me, internal capacity, right, to do that on a long-term or a short-term interim basis.
Anita Walker: One of the other things that came up when I was visiting, and had a conversation with your board. Your board has some savvy business people on it..
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Anita Walker: …and they were very, very cognizant of the cost of replacing a CEO.
James Donahue: Mm-hmm.
Anita Walker: The cost, time, we’ve talked a little bit– it could take four months, it could take six months or longer to find the right person. And there’s also an expense, hiring a search firm..
James Donahue: Mm-hmm.
Anita Walker: …maybe hiring an interim, or paying somebody a bonus to serve in that capacity while you’re looking for a CEO. And that’s not something that is always accommodated in organizational budgets.
James Donahue: Correct. Especially if it’s an unexpected transition, right? So that’s another reason why we spend a lot of time thinking through, if there was a six-month gap. So just two weeks ago at the senior manager meeting, we’re at the middle of our fiscal year. I listed on a piece of newsprint, the eight things that we have to get done by January 31st to call the year a win. And then we went around the table and I said, “Okay, who owns a– if I get hit by a bus tomorrow, who’s taking number one across the finish line? Who’s taking number two?” So now we have the list, and the names of the people who own those goals. So that if something happens, the organization knows that in six months these things will get done, because these people own them.
Anita Walker: Leadership transition is strategic, should be part of a strategic planning.. thoughtful process. And it’s not just about the end of a person’s tenure, it’s about sustaining a strong organization.
James Donahue: Correct. Even if that organization moves in a different direction under new leadership. And so, you know, I’m a big believer in very good beginnings and very good endings. And so the board and I have agreed that if it is possible to do this, that we would give each other a year’s notice before any transition. So my current contract ends some time in 2017, so we’ll start having conversations now about an extension to that. If that’s something they want. My sense is it is, but we’ll see. So we’re trying to make sure that when there is a transition, whenever possible, everybody comes out the other side feeling better, right, about the experience together.
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Anita Walker: Jim Donahue, president and CEO or Old Sturbridge Village. Another of our Creative Minds Out Loud.
James Donahue: Thank you Anita, thank you for having me today.
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