Michael Smith: Charleston Symphony Orchestra

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Oct. 11, 2016:  After a week of nailing up ply board, clearing outside furniture and loading up for evacuations, Rotarians assembled at the Harbor Club to celebrate their good fortune in being spared from the potential catastrophe of Hurricane Matthew.  It was a fitting and perfect program to have as our guest speaker someone to talk about the magic and inspiration of arts—and of survival. 

It was not long ago that the Charleston Symphony Orchestra (CSO) was fighting for its life as the economic downturn dramatically impacted ticket sales.  This difficult position was played out all over the country as arts organizations struggled for their very existence.  Added to the challenge was the very long—although ultimately spectacular!—renovation of the Gaillard Center that kept local arts organizations out of their regular performing venue. 

So how did the CSO survive and thrive to become one of the most respected symphonies in the country?  The answer is, as usual, extraordinary leadership–the right person at the right time.  In this case, the outstanding leadership of our speaker, Michael Smith, the Executive Director of the Charleston Symphony Orchestra. 

Michael Smith did not plan to become an executive, a manager or anyone who ever had to understand sustainable financial models and develop strategic plans.  Michael’s dream, from the time he was 10 years old, was to be an artist—the best trumpet player he could possibly be.  And he was.   For years he played with various orchestras around the US, landing a spot in the Charleston Symphony Orchestra in 2006 and advancing to first chair in short order.  Like so many of us, he fell in love with Charleston and decided that this would be his home, despite the low annual CSO salary of $17,000. Like so many of his fellow artists, Michael supplemented his salary with weekend engagements at other national symphonies, private events, weddings and church performances. 

But then 2010 came.  The CSO had been fiscally unprepared for the financial consequences of the devastating national economic recession and was struggling.  2010 was also the year was when the symphony’s collective bargaining agreement was up for negotiation with union demands facing an uncertain future. To his surprise, Michael was appointed chair of the CSO’s negotiating committee and had to face some hard choices in those tough bargaining meetings.  To survive the economic hardships, the very drastic and difficult decision was made to downsize the number of salaried musicians from 46 to 24.  This was a part of the collective bargaining agreement to preserve the CSO and while wrenching, the orchestra survived. 

In 2013, when the union collective bargaining agreement was again due for re-negotiation, Michael reprised his leadership role.  This time, however, in an unprecedented orchestral decision, the CSO voted to de-certify the union, making Charleston the only non-union major symphony in the US.  

At the time, the CSO was also conducting a national search for a new Executive Director.  When he learned about the surprising union de-certification, the CSO’s then leading candidate to fill the Executive Director’s position decided to back out.  Thinking of his role in the negotiations and his deepening understanding of and interest in the “business” side of the CSO, Michael Smith threw his hat in the ring for the job.  And, after rigorous interviews, the trumpet player became a business executive with a very big challenge on his hands. 

And the outcome?  Since Michael began his leadership in the collective bargaining process in 2010, the CSO has seen six years of black ink in their finance reports, musician salaries doubled, an endowment corpus protected and positioned to grow, and a culture change that has created an environment of transparency, trust, partnership and success. Not bad for someone who claims to have had no management aspirations!  

Michael said his key to organizational stability is the financial discipline he has instituted.  There are rules for bringing in and spending money and those rules aren’t abridged.  For example, early subscription sales, used by most orchestras to pay for operational expenses, are banked as a rainy day fund and a ceiling of no more than 3% for fixed expenses is firmly adhered to.  Variable expenses– those outside operational necessities–occur only as revenue allows.  The discipline is challenging, but it is proving to be the foundational structure for a sustainable financial model for CSO.  This foundation provides a sense of stability, security, and pride in a small orchestra that has developed an enviable national reputation for excellence. 

Presently, the CSO has a $3.5 million budget comprised of 50% philanthropy and 50% ticket sales. Michael is particularly proud of the support Charlestonians have for the CSO through these ticket sales, since most national orchestras, large and small, recognize only one-third of their revenue from ticket sales.  Philanthropic support comes from corporations, foundations, regional municipalities and grants but most of it is from CSO patrons.  These donations not only go to operational expenses but also pay for educational programs in which musicians and staff participate amounting to $500,000 a year.  One of Michael’s goals is to expand awareness, involvement and greater financial support from Charleston’s vibrant corporate community. 

Michael pointed out that youth and young adult-oriented programs are critical for the sustainability of the CSO since currently the average age of the audience is 57.  Bringing in new generations–and particularly engaging millennials–is a high priority and a consideration in designing creative programming, selecting visiting artists and garnering multi-generational participation.  

Michael’s upbeat, humorous and self-deprecating manner is charming and disarming and makes the organizational turnaround he has led sound almost easy.  He credits his success as CSO Executive Director to the positive relationships that have formed among the musicians, staff, board and community and the joy they all take in supporting an exceptional orchestra.  It is not lost on anyone, however, that Michael Smith, trumpet player extraordinaire, has proven to be an outstanding chief executive and community leader who has set in motion a sustainable plan to ensure the survival of one of Charleston’s most valuable assets.

 — Cheryl Kaynard