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THIS IS THE PLACE HERITAGE PARK
August 20, 2000 MEMORANDUM TO: Board of Trustees FROM: Stephen M. Studdert, Chairman SUBJECT: Chairman's Annual Report to the Board ____________________________________________________________ A Vision for Leading This is the Place Foundation and Heritage Park The Board of Trustees and management have together overseen and completed the surprisingly smooth transition from a state park to an increasingly alive park successfully operated by a nonprofit foundation. Together we have navigated well the uncharted waters of privatization. We have honored the trust of the Governor and the Legislature in expanding and improving the mission, scope, and presentation of this Utah treasure and I commend you. Yet so very much remains to be accomplished to ensure a "visitor focused", relevant, viable, and effective organization. With the transition and primary infrastructure complete, I feel that it is now appropriate for me, as chairman, to report to my fellow Trustees and to turn the chairmanship over to another Trustee. It is further my recommendation that the Chair report annually to the Board. It is the duty of a leader to articulate clear positions on issues affecting the organization, its values and principles, and I hope to do so herein. Last week I read an obituary of a Utah citizen whose grandfather crossed the plains as a Utah pioneer. Very few of that generation remain, and with their passing our special Utah heritage becomes a different and more distant story. Thus, the Park's significance will increase since it becomes a vital part of the pioneers' legacy to the future, assuming a very special role as repository of their memories and the voice of memory. This is the Place Heritage Park is uniquely compelling. For the visitor, history comes alive when they experience early Utah life as it really was. Our presentation is fundamentally an act of remembrance, each a memorial to pioneer life. We must ensure its vibrant continuance and expansion. To date, our performance as a Foundation has been one of transition. We now must move to the next chapter in our existence: to a mature nonprofit organization with an appropriate structure for the Board and management, with adequate human and financial resources wisely allocated, and with reordered Board involvement and increased oversight. Frances Hesselbein, editor-in-chief of Leader to Leader, president and CEO of the Drucker Foundation, and former chief executive of the Girl Scouts, wrote: "I hear managers everywhere discussing the same fundamental challenge -- the journey to transformation, moving from where we are to where we want to be in the tenuous future that lies before us. Around the world, in universities, the community of faith, corporations, government, and the burgeoning social sector, leaders are working to shape the transformation of their institutions." "Transformation requires moving people out of their organizational boxes into flexible, fluid management systems. We cannot continue to put people into little squares on a structure chart. Psychologically it boxes them in. I prefer circles -- concentric circles of functions and positions in a staffing design that looks almost organic. Job rotation becomes an enriching reality. People move in circular ways - learning new skills, expanding positions. We need to ban a hierarchy not suited to today's knowledge workers, 'who carry their tool kits in their heads."' "Across the globe, for leaders aware of the tenuous times ahead, the journey to transformation is a journey into the future. These leaders are taking today's organization and transforming it into tomorrow's productive, high-performance enterprise. While the milestones on the journey are known, the destinations are uncharted, and for each organization the destination will be determined not only by the curve of the road ahead but also by the quality of the mission and the leadership it inspires." I have attempted to address that transition, in six categories and a summary, which seem most relevant and timely to me: 1. Evolving Board Structure and Responsibility 2. Strengthening Management 3. Improving Operations and Managing for Growth 4. Serving our Audiences and Promoting our Message 5. Securing our Financial Future 6. Building an Education Base EVOLVING BOARD STRUCTURE AND RESPONSIBILITY You volunteer Trustees, individually and collectively as a Board, have served with devotion and wisdom. Each of you has willingly accepted assignments within the capacity and time of their individual life, and have functioned in your individual assignments. Each of your contributions have made an important difference! The Board's functions, and the structure of Board Committees, have reflected the necessary tasks of transitioning from a quiet bureaucratic state entity to a vibrant and flexible nonprofit structure. Those tasks are now completed, and it is in order to reorder the Board into a structure more traditionally consistent with nonprofit boards. The Board must differentiate the twin functions of governance and management, and must position itself now fully in the time-honored board position of governance. With that, the responsibility and authority of management must be more precisely defined and accountable. With regard to board structure, the National Center for Nonprofit Boards recommends:
Again, quoting Frances Hesselbein:
The National Center for Nonprofit Boards has defined ten basic responsibilities of nonprofit boards: 1. Determine the organization's mission and purpose
2. Select the Executive
3. Support the Executive and Review His/her Performance
4. Ensure Effective Organizational Planning
5. Ensure Adequate Resources
6. Manage Resources Effectively
7 Determine and Monitor the Organization's Programs and Services
8. Enhance the Organization's Public Image
9. Serve as a Court of Appeal
10. Assess Its Own Performance
STRENGTHENING MANAGEMENT AND IMPROVING OPERATIONS Peter Drucker, internationally renowned for his management wisdom, says "The mission statement should simply explain why we do what we do, our reason for being --our purpose. Knowing management is a tool, not an end, we manage not for the sake of managing in its own right, but for the mission." To that end, it is appropriate and essential that as the period of transition is complete we as the Board of Trustees now undertake an immediate and complete assessment of management, its duties, strengths, weaknesses, and resources, but not personalities. We must consider the core competencies of the organization as presently staffed. When we address these, we are well on our way to managing for the mission. Again quoting Dr. Hesselbein: "There should be no sacred cows as we challenge every policy, practice, procedure, and assumption. In transforming themselves, organizations must practice 'planned abandonment'--discarding programs, policies, and practices that work today but have little relevance to the future and the organization we are building to meet that future." As is customary in nonprofit and for-profit organizations, the Board must now implement measurable performance objectives for the chief executive and other senior personnel, coupled with a quarterly and annual progress-to-goals review procedure. Operationally, the Board must review the entire staffing structure, in terms of adequacy, competency, and capacity. We must more fully, as management experts advise, "disperse leadership across the organization." Some speak of "empowerment;" others of "sharing the tasks of leadership." Some refer to this as dispersing leadership-- with leaders developed and performing across every level of the organization. Leadership is a responsibility shared by all members of the organization. IMPROVING OPERATIONS AND MANAGING FOR GROWTH The transition has produced momentum and growing public interest, albeit so far comparatively minimal. In an effort to maintain that momentum, the Foundation must create many new programs to respond to a hopefully growing visitor demand. Our resourcefulness and responsiveness are commendable, but we cannot maintain the quality of our programs forever without adequate supporting infrastructure. This is a critical matter, and the Board must devote time and resources to carefully defining and strengthening our financial, administrative, operational, visitor, maintenance, communications, marketing, assessment, and development functions. These critical functions must operate more effectively and efficiently to sustain and increase current levels of visitors. Visitor program growth must be the result of a careful process, presently nonexistent, which ensures reasonable outcomes and that the appropriate personnel and organizational infrastructure is in place to sustain those outcomes. To date, we have necessarily tended to invest heavily in facilities without yet making the needed corresponding investment in those program activities, which support, maintain, improve, and promote the interpretive and outreach programs of those facilities. Building infrastructure has been and is just the first step. The Foundation now requires a Board-directed strategic management plan, which enunciates clear Board established priorities and guides the Park's growth. If Park management and operation are not focused, and if the Board and management do not share a common vision and a single set of goals, the Park will not be able to sustain itself over the long term regardless of popularity. We cannot be all things to all people; deciding exactly what we want to achieve and developing a sound management plan for accomplishing those goals are essential. Thus the Board must define Park-wide resource priorities to guide management, and adopt a procedure for on going Board assessment of management. Adoption of a viable strategic management plan through a directed Board process will provide ~or appropriate allocation of human and financial resources, encourage rational program growth, unify the staff, ensure that quantity never compromises quality, and strengthen the Park in multiple ways. SERVING OUR AUDIENCE The Park must serve and be responsive to many diverse audiences, among whom are important constituencies. Key constituencies include the schoolchildren and families of Utah, the descendants of pioneers, tourist visitors, religious communities, donors, the Governor and the Legislature, those with a connection to our history, scholars and historians and educators, and the media. While the LDS community by virtue of its founding pioneer role is central, the interest and engagement of other religious communities are also significant to our mission. Our audience--the people who visit the Park or benefit from its programs?includes all these constituencies and many others. in looking at visitation, which is only one but the most important segment of our audience, albeit a priority of the Board and the Utah Division of Parks and Recreation, over the period of transition there has been minimal growth. Though disappointing, this is somewhat understandable recognizing the administrative challenges associated with the transition. Visitor growth and service is now and must always be a major responsibility of the Park's board leadership and of the management. One of the keys to expanding visitor ship is maintaining and expanding excellent relationships with our primary constituencies through a variety of ongoing personal contacts and communications. Nurturing these relationships on a regular basis through both formal and informal means must become a priority of the Board and a foremost responsibility of management, and requires a focused and understood mission that is unwavering. EXPANDING OUR AUDIENCES AND PROMOTING OUR MESSAGE To date, the Park has been modestly successful with the public, but it would be unwise to be complacent about our popularity. We must work aggressively to sustain and expand our current audiences and to create new audiences. Maintaining our current audience requires a substantially improved and constant effort to understand their wants, to produce high quality mission-driven visitor programs and experiences, and to promote these programs much more effectively. We acknowledge as a Board that there is broad public interest in learning about the pioneers. However, we must design programs and marketing, which target audiences for visitation which are not currently being served. Management must be directed to undertake an analytical review of visitor trends in Utah, park visitor demographics, cost of admission, and visitor experience satisfaction. No such careful analysis has yet been performed. Management must also work on expanded visitors levels. Further, the Park could be doing, and must do, much more with its current programs to engage new audiences. The Park should also more formally explore creative partnerships that help us connect with new audiences. Joint programming with other organizations, such as Red Butte Garden and Hogel Zoo, can expand our reach dramatically. Relationships with state cultural institutions and agencies, community organizations, and private business must be explored more formally and exhaustively. For example, today many corporations have exhibition space in office lobbies. A Park exhibit sponsored by the corporation and complemented by visitor and/or educational opportunities for its employees could make a valuable impact. Expanding our visitors also requires a serious evaluation of our current audiences, programs, initiatives, and implementation of the long-overdue website. The Board should systematically conduct both formal and informal assessments of management and its program effectiveness in order to improve the quality of programs and services. The Foundation's investment in program and visitor evaluation is deficient, and I would encourage that as resources allow we devote more resources to this area that is so critical to our long-term planning, fundraising, annual reporting to the Legislature and Governor, and to mission accomplishment. The Board must routinely assess the work of the Foundation and create an environment where we encourage learning from our successes and our failures. A comprehensive examination of our tendency to be locally focused is urgently needed. We should be working towards a future when we are providing high-quality visitor experiences to an ever-expanding local, national, and international visitor audience-- and the Olympics of 2002 are such an immediate and global opportunity for which we are woefully delinquent and deficient in our planning and involvement, especially with respect to national and international television location production decisions. The expanding interpretive program has been a first step in this direction, but there is much more that can and must be accomplished. Management must be charged with optimizing the visitor experience, and expanding programming that can occur more frequently and less expensively. The Foundation should consider regularly sponsoring public programming, teaching training, and special educational and commemorative activities in other areas of the state. Undertaking this as a major initiative would enhance our donor base, bring the Park's educational message to those Utahns who never visit the Park, and increase visitorship. If we are serious as a Board in our commitment to the Foundation's mission, then undertaking a vastly improved public outreach effort, including a major, serious, concerted, and immediate focus on the singular Olympic opportunity, must be the next major initiative that we undertake. Fellow Trustee Cleo Atkin was assigned to chair a task committee to consider how best the Foundation should address the Olympic opportunity. That committee of Trustees has made a serious recommendation to the Board; the Board must carefully consider that recommendation. SECURING OUR FINANCIAL FUTURE Although the Foundation, through the efforts of a select few, has been reasonably successful to date in securing funds for capital improvements, virtually nothing has been accomplished with respect to operating funds or an endowment. Management to date has virtually no involvement or accomplishment in fundraising. As a healthy economy has produced the phenomenal asset growth of private foundations, the Foundation has not been the recipient of proportional and significant philanthropic giving. The Board and management must immediately become more proactive and systematic in this regard. With the transition now complete, the Board must now revise the duties of the chief executive to be more consistent with virtually all traditional nonprofit organizations, wherein a (and often the) primary duty is fundraising, or immediately find a suitable creative alternative. Legislative relations and fundraising activities have been too isolated, and it is critical that management, as well as Trustees, feel invested in keeping the Legislature and donors informed about and engaged in the work of the Park. Institutional outreach efforts directed at donors, prospective donors, educators, the media, and the general community must become a foremost duty of management, and on occasion Trustees. Equally, a thoughtful Board-approved program, which presently does not exist, must be devised by management for the sustaining of existing donor. relationships. Additionally, having a clear and viable strategic management plan to support the mission is essential to maintaining and expanding our financial support. Donors must feel the Foundation's goals are important to them and to Utah, and have confidence in management to achieve them with excellence and efficiency. The Park must further ensure that our "product"--the exhibits, programs, publications, and products?are continually worthy of support. To date we have been deficient in these critical areas, a classic example being the gift store inventory which is so often highly inconsistent with the mission. The Foundation will face increasingly stronger competition for donor funds, and therefore we must offer a product that is both valued and appreciated. There are many fine nonprofit organizations in Utah with equally worthy missions, and it is up to us to ensure that we capitalize on those unique aspects of our Foundation which differentiate us from others. Today I became aware of something of which I was not previously aware, and which is most concerning and must be immediately rectified. Operationally, because management has not submitted for Board approval nor implemented written financial management policies which are customary and essential in all organizations, especially nonprofits, the Board must immediately so direct management. For example, no Board- approved written policy exists for security of donated stock certificates; they are presently held in unsecured management files. No Board-approved written policy exists for the tactically timed sales of donated stocks to ensure optimum financial benefit to the donor and the Foundation. No Board-approved written policy exists for immediate management acknowledgment to donors of stock contributions nor receipt to brokers/donors for certificates received. Immediate improvement in cash management must also be directed by the Board; for example, cash boxes have sat undeposited for weeks on end in non-secure locations within the Park. BUILDING AN EDUCATION BASE The Foundation must do more to promote awareness of the Park and its programs and facilities among the education community. This includes, among other things, increasing our presence at academic conferences, effective use of our presently non- existent website, promoting the Park in various academic newsletters and forums, and a concerted outreach initiative to all public, private, and parochial schools in Utah. Formalized relationships must be explored with institutions of higher education, such as elementary and secondary Utah history teacher re-certification programs being conducted in the Park. Because of the unique nature of the Park and its vital importance to Utah, well-conceived conferences, new Utah history research, and Foundation-sponsored publishing are all possibilities which fill the important gaps in the public's understanding and awareness of the Park, and can contribute to the Foundation's financial stability. SUMMARY & BOARD ACTION Jack Welch, legendary chairman and CEO of General Electric, once compared his organization "to an old house. Over many years all organizations, especially older established ones, accumulate outmoded practices, policies, and procedures; the leader's job," he said, "is to clean out the attics and closets. We need to take stock, assess our organizational estate, and discard what no longer works. Clearing the cobwebs from this old house is an adventure in 'planned abandonment,' to use Peter Drucker's evocative phrase." As the transition phase is completed, it is natural to look back at what we have together accomplished--which indeed is significant and noteworthy, and for which we may be properly pleased--but even more necessary to look ahead to what is possible. It must be a time of serious and thorough assessment. We know that the Park's future demands a new and evolving approach to planning, that changes are required, and that the Board must lead that change. "Business as usual" cannot continue. Vision, mission, and courage will carry the day. For generations spring cleaning has helped people refresh and renew their lives. I submit that this practice is invaluable in the life of the Foundation and its mission. We must, as a Board, first of all, revisit our mission: the short, powerful statement of why the Foundation does what it does, its reason for being. From a relevant mission flow the few powerful goals that reflect the Foundation's vision of the future. And from those goals flow the objectives, action steps, organizational tactics, and changes that will allow the Board and management to move the Foundation forward. As a Board, we must ask the five classic questions that Peter Drucker has charged organizations to answer for the past 60 years: What is our mission? Who is the customer? What does the customer value? What are our results? What is our plan? Dr. Hesselbein says, "Creating organizational coherence is just the first imperative of change. The second dimension of good housekeeping is the plan for the leadership of the organization. Preparing our leadership house for the future requires as much time, energy, and rigor as the strategic plan for the enterprise itself." To create a plan for management, Dr. Hesselbein says we must ask ourselves several more questions. These include: What are our management strengths? What are areas to be strengthened? Are we leading from the front? Do we anticipate change and articulate shared aspirations, or simply react to crises? How do we deploy our leaders, our teams, our people to further the mission and achieve our goals? Do we use job expansion, job rotation, and opportunities for development in innovative ways to release the energies of people and increase job satisfaction? Do our managers see themselves as the embodiment of the mission, values, and beliefs of the organization? The answers to these questions will help us build an effective management team, appropriately allocate limited resources, and develop energetic managers in response to goals and objectives. As a Board, and individually as Trustees, we must reserve the time for introspection and reflection as we honor our stewardship. As Trustees we are responsible for understanding the Foundation's strengths, ever so briefly applauding its accomplishments, correcting its inadequacies, and preparing for its future. It is our responsibility to assess management's strengths and weaknesses and take responsibility to implement whatever action may be necessary, and ensure that management and Board performance are consistent with the values and mission of the Foundation we are charged to build and the Park we are charged to shepherd. Moving from vision to reality is an evolutionary process in which we continue to be engaged. We must leave behind business as usual and lead the Foundation and the Park to their wonderful potential. In spite of obstacles and challenges, and personalities notwithstanding, we must honor the trust given us and ever keep faith with those noble Utah pioneers we honor. Thank you for allowing me the privilege of having served as your Chairman. It has been an honor I shall cherish always.
(Signature Line)
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