Transcript of interview

Marketplace Staff Oct 25, 2007

Transcript of interview

Marketplace Staff Oct 25, 2007

Kai Ryssdal: Reynold Levy, welcome to the program.

Reynold Levy: Thank you. Good to be here.

Ryssdal: We can barely hear it from up here on the, I guess it’s the ninth floor. But, what is that noise down in the plaza, the jackhammers and the dump trucks?

Levy: Well, it’s the beginning of the transformation of Lincoln Center, the physical transformation of Lincoln Center, which by the end of the first quarter of 2010, we will have completed.

Ryssdal: What’s it going to look like at the end of the first quarter of 2010?

Levy: Well, we’re going to have a brand new Alice Tully Hall inside and out. We’re going to have a 40,000-square foot expansion of the Juilliard School. We’re going to have two new screening rooms for the Film Society and an amphitheater. We’re going to have a destination restaurant with a lawn rooftop. And, we’re going to have the introduction of Twenty-first century technology all over Lincoln Center’s campus. So, that by 2010, people who now say, “Meet me at the fountain,” will say, “Meet me at the lawn, meet me at the destination restaurant, meet me at the atrium.”

Ryssdal: What’s that going to do, though, for what we in radio call the content, the opera and the music?

Levy: Well, first of all, one of the things we’ve learned is that social discourse is enormously important to the enjoyment of the performing arts. And, what it will do is provide an opportunity for those who are coming to performances to come early, to leave late, to linger, to actually talk about the work they’re about to see or the work that they’ve just seen. And, it will also allow artists to do the same.

Ryssdal: In a word, it enhances the product.

Levy: It enhances the product. It fuses artistic excellence with social discourse. We have a 16-acre, open campus and we want this redevelopment to symbolize and to actually make happen the physical opening of the campus. When it was built, it was built in a slum area on a plinth designed to protect concertgoers from the community around it. As we approach our 50th anniversary, our effort is to open it up in every way physically and otherwise to the community and to visitors, domestic and foreign.

Ryssdal: You are the president of Lincoln Center for the Performing Arts. There are twelve other organizations here, resident organizations, many of which are global, independent powers of their own: The Metropolitan Opera, The New York Philharmonic. How do you control that herd of cats when you’re trying to get something done like this redevelopment?

Levy: Well, one of the first rules is we don’t call them cats.

Ryssdal: Yes, bad thing to do. [Laughs]

Levy: No, we just don’t do it. One of the reasons that it’s such a pleasure to be at Lincoln Center is that there is an extraordinary aggregation of talent. And, that talent resides in these twelve world-class institutions that have their own direction, that have their own dynamic. What we try to do at Lincoln Center is find where we can add value together, where working together will improve and enhance the direction of each of these companies.

Ryssdal: But, what you want to get done for this 16-acre campus, for the larger umbrella organization, is not necessarily what The Metropolitan Opera wants to have happen or The New York City Ballet wants to have happen.

Levy: It is now.

Ryssdal: (Laughing)

Levy: We have crafted a plan that all twelve constituents have signed up for. You know, the mayor of our great city, who cares a lot about the arts and understands Lincoln Center is an engine of economic development, once asked me what the difference was between Lincoln Center and the UN. And, I . . .

Ryssdal: Yeah.

Levy: . . . couldn’t tell him the difference. And, finally, he said, “The Security Council has only five vetoes, you have twelve.” We were able to get those twelve institutions to agree to a common vision for the future of Lincoln Center physically.

Ryssdal: Not artistically though?

Levy: No, not artistically. Although the result of this intensive effort to get agreement on redevelopment, which at one stage in Lincoln Center’s history was kind of cord in a Gordian Knot, has resulted in many other forms of cooperation: artistic cooperation, managerial cooperation. For example, we are opening a new facility — a privately owned public space — now called the Harmony Atrium. We’re going to invest some $20 million in it. It will become a student center for all the constituents, a tourist center, and it will be the place where Lincoln Center for the first time in its history offers discounts for tickets to any performance every single day.

Ryssdal: Which sort of echoes the TKTS booth in Times Square.

Levy: Yes, but with a distinct difference. If you’re on Broadway, here’s what you don’t have: you don’t have subscribers, you don’t have corporate sponsors, you don’t have donors, you don’t have 450 trustees of these institutions, and you don’t have price points that go from $10 for a ticket to the Film Society to a top of $450 to The Metropolitan Opera. So, figuring out what the algorithm would be for these discounts across all Lincoln Center constituents was a real challenge. And, the spirit was so good, the motivation so high, we were able to get it done.

Ryssdal: Explore that for me for a minute. Do you lock a bunch of accountants in a room with some spreadsheets and say, “Listen, we need to be able to discount some of these tickets. Figure it out.”

Levy: We put the marketing directors of each of the constituents in the room and they puzzled it out together, led by Nan Keeton, our vice president for marketing here at Lincoln Center.

Ryssdal: How much of your time do you spend on marketing?

Levy: Very little of my time is spent on marketing. I would say the critical mass of my time is spent on fundraising, with this project is about $1 billion worth of work. Lincoln Center’s own obligation is $800 million. We’ve raised about $515 million of that sum to date. Seventy-five million of that $800 million is incremental endowment money. The chairman of Lincoln Center, Frank Bennack, David Rubenstein, who is the chairman of the capital campaign, the founder of the Carlyle Group, and I are fond of saying that any telephone calls from us are collect calls.

Ryssdal: That billion dollars, I’m wondering how you justify spending it on infrastructure and not the art itself?

Levy: Well, some of the things I’ve mentioned do spend it on the art itself. The Alice Tully Hall, the brand new Alice Tully Hall will have many changes that are focused on artists. It will have a stage constellation that will allow for three different sizes of the hall, going from 1,100 seats to 800 seats. It will have new backstage facilities for artists, green rooms, rehearsal spaces and the like and be much more comfortable for artists. It will have special sound dampening for The Film Society. So, when films are shown, the acoustic for film will be just as good for it as the acoustic for chamber music will be when it’s in another condition. Another great focus of this redevelopment is on the patron. The patron’s comfort, the opportunity to provide new spaces where patrons can hang out, new places where they can dine at various price points. In other words, getting comfortable with Lincoln Center, not just as a place that you come to for a performance but a place where you can hang out.

Ryssdal: Patrons obviously are important as an audience, as people who are consumers of the arts. They are also, to some degree in this institution, the very lifeblood because you depend on them for donations large and small. At the same time though, you’re trying to fund a $1.1 billion project here. Do you worry at all about donor fatigue? Going to the well too many times?

Levy: No. I don’t for many reasons. First of all, there is an elasticity to giving. There’s . . . in my experience . . . there’s a lot more discussion about fundraising than there is fundraising. I always ask the question of a board or my colleagues, “How many times were you turned down this week for giving? How many requests did you make for $10,000 or more where people said ‘No’?” And, very, very frequently the answers fall short of energetic invigorated giving. Giving is like baseball. One out of every three hits, you bat .333, you’re a most valuable player. It is not like graduate school. One out of every three correct answers, you have flunked. So, you need to step up to bat. And, we live in a city and a country that’s been blessed by an extraordinary amount of affluence. So, it’s my experience that the right approach by the right person results in gifts.

Ryssdal: What’s it like to make what the people in development call “the ask,” when you call somebody up and say, “I need $100,000… I need $1 million”? I mean, walk us through that.

Levy: Well, it’s . . . first of all, it’s an extraordinary amount of fun to find the intersection between the interests and background of a donor and the needs of an institution. If you find that intersection, that’s the sweet spot. And, my personal attitude is that we are really doing the prospective donor an enormous favor by asking for support because their gift will provide a meaning and a consequence to their lives that will otherwise not exist. It will make them feel better about themselves and about their families knowing that they made a contribution to Lincoln Center. Imagine for a moment descendants of the founders of Lincoln Center, who were the original givers, who can look back with so much pride on the civic institution they created. Well, we are now planning for the next generation of artists and audiences and I have absolutely no doubt that those who have given to us to date and those who will in the future will feel terrific about their contribution.

Ryssdal: You have a list, I’m sure, someplace in this office of the donors and of people you’d like to be donors. How do you keep adding to that list? How do you recruit? How do you get people interested in supporting Lincoln Center and the vision that you guys have?

Levy: Well, we have almost 3.9 million ticket buyers on an annual basis of the 5 million individuals who use Lincoln Center. And, many of them are individual donors. They’re friends of our institution. So, they’ve declared an interest in Lincoln Center. And, those are some of the lists we look at. We also look at contributors to other institutions around New York City. We also look at new sources of wealth. The real estate community in New York, which has always been generous, has had a particularly good run here in New York City in the last decade. The growth of hedge funds has been enormous. There are more hedge funds than mutual funds. And, there’s a significant concentration of hedge fund managers here in New York City. We’ve made it our business to get to know them and to find out who they are and to talk about Lincoln Center and to entertain them here and to introduce them to our place. And, we continue to do that with great energy and enthusiasm.

Ryssdal: You have run a number of nonprofit organizations: the 92nd Street Y, a major cultural institution here in New York City; the International Rescue Committee, a major international aid group; the AT&T Foundation. I’m wondering how your management has changed from group to group and whether a nonprofit is a nonprofit is a nonprofit? Or, do they all sort of demand different skills from you as the boss?

Levy: Well, I think each of the settings I’ve worked in call for more focus on some skills than on others. But, I think the basic approach has been the same. If I were to offer the common denominator, it would be creating an environment in which driven, talented people can do their best work, whether that’s trustees of the institution or staff of the institution. Creating an environment that has drive, that has purpose, that has meaning and offering the resources and the support that free up gifted people to do their best work.

Ryssdal: How is what you do different from what Jeff Immelt does at General Electric?

Levy: Well, I think part of the difference is scale. I would suspect that Immelt spends an enormous amount of time on strategy. I think at Lincoln Center we have set forth a strategy but it’s not a weekly preoccupation. Having set it forth, it’s now time to execute it. The complexity of General Electric would require many, many strategic sessions. Jeff Immelt has engaged in a significant number of mergers and acquisitions. Lincoln Center hasn’t acquired any nonprofit institutions. Our growth has been organic growth. You know, the Chamber Music Society of Lincoln Center, the Film Society of Lincoln Center, Jazz at Lincoln Center were originally concerts produced by Lincoln Center and then they found their own audience and their own support and they became their own institutions. So, our approach has not been to acquire arts institutions but to grow them naturally. And, that’s . . . and one of the functions of the organization I run is to find new audiences for different art forms, create institutions and then spin them off. They remain part of the family, but they have their own independence and autonomy.

Ryssdal: Day to day, what do you do?

Levy: Well, I mentioned earlier, I spend an enormous amount of time winning friends and influencing people.

Ryssdal: When you say enormous, how much is enormous?

Levy: I’m . . .

Ryssdal: Hours and hours a day?

Levy: Hours and hours a day. My father once said to me that I had this proclivity no matter where I worked never to earn more than $10 an hour.

Ryssdal: You’re doing better than that now, I hope.

Levy: So, the hours just grow. People ask me how much time I spend fundraising, for example. And, I think the answer is about 50 hours a week, which is about half my time in a typical week. A significant amount of time working with the staff at Lincoln Center on a whole variety of projects, and a significant amount of time working with our board. Because the board of Lincoln Center is an active source of energy and intellectual firepower. They’re deeply engaged in our planning and the execution of our strategy.

Ryssdal: Much like a for-profit institution, you also have a product, right? A for-profit company makes widgets, sells them, gets revenue, makes more widgets, sells them and it goes on and on. Yours works a little differently. You have to go out and get the resources first. You have to go out and get the money and then you can offer this product. Describe the mindset of that business model.

Levy: Well, you . . . I look over your right shoulder and envision that with support that comes from you, Mark Morris will be able to bring to life a new piece called Mozart Dances. And, in the State Theater, we’ll be able for the first time to put the Mostly Mozart Orchestra, conducted by Louis Langree, with Manny Ax and his wife both playing piano, giving life to a brand new piece that has become now a signature work of Mark’s repertoire and played year round before hundreds of thousands of people and regarded as an important major piece of work. Well, Lincoln Center commissioned that work. Lincoln Center raised the money to make that work happen and to give it life. There is nothing that we do that is more exciting than helping artists realize their dreams in the creation of new work like that. And, there are dozens and dozens of illustrations of that all around the 16-acre campus every month of every year.

Ryssdal: There must be days, though, when you just want to throw up your hands and say, “Oh, this is insanity.”

Levy: Well, the arts have a kind of propulsive impact. One of the, I think, differences between, for example, the work at the International Rescue Committee and the work here is that I’ll be sitting at my desk, talking to Nigel Redden or Jane Moss, my programming colleagues, about the 2011-12 season. And, then, I’ll walk into a hall here in 2007 and see a piece of work that was first discussed in 2004. So, there’s this future orientation to the arts that propel us forward to talk about what will happen four or five years from now. In the field of humanitarian service, you are very much focused on the here and now, today’s emergency. And, it’s extremely difficult to do contingency planning around failed states and around when a crisis might erupt.

Ryssdal: Do you have to be fundamentally a salesman at heart to have this job?

Levy: I think that’s true now of the CEO of almost any nonprofit institution. The answer is absolutely yes.

Ryssdal: Why? Because it won’t work unless you can sell it?

Levy: Well, you have . . . you’re in a competitive environment. So, I need to sell Lincoln Center to recruit the very best and brightest employees and to retain them. I need to sell Lincoln Center to attract Board members with access to resources and with networks of influence and with generosity. And, I need to sell Lincoln Center to corporations and foundations and individuals who are our lifeblood.

Ryssdal: One of the things you hear when you talk about nonprofits is that, “Oh, it’s not really a business and if only they would be more businesslike they wouldn’t need as much donation, they’d be more efficient with their time, and they’d generate more giving and, thus, more arts or culture or whatever the product is.” What’s your take on how you run this place? Is this a business for you? Is it an enterprise?

Levy: It is an enterprise. I taught the management and leadership of large nonprofit institutions at the Harvard Business School. And, colleagues all the time from the for-profit world are enormously curious about the business dynamics of a large institution like our own.

Ryssdal: Well, what are those dynamics? I mean . . .

Levy: Well, we have our own versions of every aspect of a for-profit business. As you mentioned earlier, we have a product. We price that product. We have markets to address. We need to reach patrons. We need to focus on the philanthropic market, which helps us to sustain the arts. We need to pay attention to our inventory. We need to pay attention to our capital infrastructure. So, all of the functions that you would normally think of as occurring in a for-profit institution have their version in a nonprofit.

Ryssdal: But, it sort of takes a little bit of the romance out when you think about it that way, doesn’t it?

Levy: Well, we never forget what our mission is. And, so, the drive is what gets on that stage or how that child in an elementary and secondary school in the Bronx or Brooklyn get exposed for the first time to the arts. I was one of those kids at PS100, and at Abraham Lincoln High School. And, were . . . growing up in a working class family. And, were it not for the early exposure that I got to music and the arts out of the elementary and secondary schools, I never would have gravitated to where I am today.

Ryssdal: Did Lincoln Center come find you for this job or did you express an interest in it?

Levy: I was on my way to the Harvard Business School. I had been offered a tenured appointment. I had been teaching there while I was at the International Rescue Committee and made a sharp left to Lincoln Center.

Ryssdal: Hmm.

Levy: The mayor had just been elected. We were in the aftermath of 9/11. And, there was a sense that Lincoln Center was at an important flexion point and that the . . . an investment in its physical infrastructure and an investment in its future was really important to this great civic institution. And, I thought if I could make a contribution to that, that would be a worthwhile thing to do.

Ryssdal: How do you know, running this institution, that you’re getting it right?

Levy: Well, you’ve got . . . there are three . . . institutions can be complacent. Institutions can have their quality eroded if they’re not very careful. So, there are . . . I have three or four different checks that I watch. First is the reaction of my board members, who are in but not entirely of Lincoln Center. The second is the press. Lincoln Center doesn’t do much that isn’t noticed by the press. And, there’s lots of critical commentary, which I pay a lot of attention to. The third is the donor community. When you try to sell a product or a service, you get a lot of questions and a lot of curiosities about how you are doing and a lot of suggestions about how you can improve what you’re doing. And, the fourth is our customers and what they have to say about us. So, we monitor very carefully what their commentary is on how we’re doing. Those are four, I think, important outside forces that help us to monitor whether we’re doing well or not.

Ryssdal: What’s the best part of this job?

Levy: It’s being in the concert hall and seeing the fruition of the work. It’s going out to the Bronx and seeing what the Lincoln Center Institute does to integrate the arts into the curriculum of that school. It’s watching a teacher who’s been relatively unexposed to the arts in his or her own elementary and secondary school education learning some of the techniques of teaching the arts. It’s coming out of a performance of the New York City Ballet, back here into the Rose Building, where we are speaking to one another, to pick up or at least to take home, and listening to the kids in the School of American Ballet, who are in the elevator with me, excitingly describing what they just saw on the stage of the New York State Theater and how much they want to be those ballet dancers.

Ryssdal: The flip side, of course, is what’s the worst part of this job?

Levy: There’s a . . . it requires an enormous amount of energy output. You need to always be on. And, it’s an important characteristic of a leader to be optimistic, energetic, and engage all the constituencies around you. It’s a very public position. So, it requires a level of energy output, which is significant and continuous.

Ryssdal: Those performances that you attend, I’ve read someplace that most nights a week you can be found here in one performance or another.

Levy: That is true.

Ryssdal: Is that work for you or is it pleasure?

Levy: It’s both. I do it to entertain potential donors. I do it because it represents an informed discourse with all of the artistic administrators around the campus who appreciate the president of Lincoln Center really caring about their work, but I do it for another reason: I learn a lot. I have the privilege of watching a piece of work on a stage and asking Peter Martins about it or asking Peter Gelb about a piece of what occurred in the opera and why he made an artistic decision that he made. So, for me, this has been just a fabulous learning laboratory about how arts are created and how they’re performed.

Ryssdal: What’s your vision of Lincoln Center in . . . and it’s place . . . in the national arts scene?

Levy: Well, Lincoln Center . . . when you are at a world class standard and you’re delivering the performing arts at a world class standard, maintaining that level of excellence and not losing that status is a major effort, not having that erode. So, the orchestras of this country, the leading orchestras of this country, anywhere from 25 to 35% of those players are graduates of the Juilliard School. The leading ballet companies around the country, 20 to 25% of those dancers came out of the School of American Ballet. When you see dance on Broadway, it’s more than likely that a substantial portion of those dancers are graduates of the School of American Ballet. When we see tourists come to Lincoln Center and ask them, “What brought you here? Why are you here?”, they say, “I saw Live from Lincoln Center on public television.” It’s the second or third most frequently offered reason why students applied at Juilliard or the School of American Ballet. They say, “You know, I saw that dance. I lived in Dubuque, Iowa, and I saw that dance performance and I said, ‘I can do that. I can do that.'” So, Lincoln Center represents a standard of excellence that reaches across the country and now across the world because we draw from the world’s youngsters at the Juilliard School and at the School of American Ballet because our ensembles tour all around the world and because the work we create gets performed all around the world and all around the country. So, the level of discourse, the level of quality of what we offer in a world, which is often coarsened, is something we are very proud of. And, maintaining that standard, I think, is something that all of the constituents of Lincoln Center have a real commitment to.

Ryssdal: You have run the AT&T Foundation, which is to say you were in the business of giving away money, of making charitable donations. Now you are on the other side of that equation. I’m curious as to your explanation of that sweet spot that you mentioned, where you can get those two interests . . . both the giver and the recipient of the money . . . you can get them to align. Give me an example of what you’re talking about.

Levy: Well, let’s take a donor who is business-oriented. They’re interested in strengthening Lincoln Center and so we have developed a plan to change the economic model of Lincoln Center away from just relying on ticketed revenue and just relying on contributions to finding other sources of continuous revenue. That’s been an evangelistic effort on my part. If there were oil under Lincoln Center, we would find it. We don’t have oil but . . .

Ryssdal: Well, you know, at $90.00 barrel, you know, not bad, not bad.

Levy: But, we’ve got air rights . . .

Ryssdal: Oh, there you go.

Levy: . . . in abundance. And, so, we’ve explored what we could do with those air rights.

Ryssdal: Air rights, which is to say the rights above these buildings.

Levy: Correct. Which can be transferred to developers who can increased their floor area ratio and which has a dollar value, which can be monetized. We’ve developed a relationship with John Wiley, a publishing company, and we’re going to be doing five to seven books a year that yield some significant value. We’ve completely reoriented our catering and restaurant revenue. We have the largest underground parking garage in the City of New York.

Ryssdal: Is that right?

Levy: That’s right.

Ryssdal: Who knew?

Levy: And, how we deal with that, how we price that, whether we experiment with valet parking and other things, can make a contribution. So, we have donors who are very, very interested in changing this model and in helping us to support that change.

Ryssdal: Do you talk to other cultural institutions and arts groups in New York City and around the country and the world about that very thing? About how to continue monetizing their institutions?

Levy: There’s a group of leading performing arts administrators that meet three times a year around the country and just, at their last meeting, they asked me to talk about the transformation underway at Lincoln Center. And, this was an important part of it.

Ryssdal: Why are you the president of Lincoln Center for the Performing Arts and not the CEO? And, is there a difference?

Levy: This reminds me of a story. When I was president of the International Rescue Committee, I would frequently go out to refugee sites, huge refugee camps, 30, 40, 50,000 people. And there was a committee of refugees that would prepare for my presence, and they would normally thank me and then ask for a variety of additional things that the IRC could do. And, in that process, they called me His Excellency. So, I brought that back to home, Kai, and tried to see whether it would work. It . . .

Ryssdal: But it wouldn’t take here in Manhattan?

Levy: It just didn’t work at home. Actually, for historical reasons, the CEO at Lincoln Center has always been thought of as the chairman of Lincoln Center. And, the president as, in effect, the head professional at Lincoln Center. In reality, the chairman of the Board really behaves as the chairman of the Board, to whom I report. For all intents and purposes, the chief professional at Lincoln Center is the CEO as well as the president.

[NOTE: The text above is an extended excerpt of the interview and may have been edited. It should not be taken as a verbatim record.]

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