Bargaining with the Devil

by Robert Mnookin

  I soon learned, however, that the Five2 were not impressed with this honor. It was easy to get elected to the Players’ Committee, they said, laughing. Hardly anyone wanted the job! The Players’ Committee was a function of the orchestra’s union status. The Five were essentially shop stewards, like their counterparts at an automobile plant. Their job, making sure management lived up to the terms of the contract, was a time-consuming, unpaid, and largely thankless task. Indeed, the Five described the orchestra as something like an octopus without central control, one of whose arms was always ready to strangle you. Coordinating the unruly beast was impossible, and any assertion of leadership by the committee was likely to be challenged. Most of the musicians viewed the committee mainly as a conduit for gripes and grievances: for example, that a rehearsal had gone six minutes overtime. Whenever the committee worked with management in solving a problem, some in the orchestra would condemn them as collaborators.

  As part of my homework, I had asked Steve Toben to send me a copy of the latest contract. I was stunned by what I saw. More than twenty-six pages with two columns of fine print, it contained elaborate protections that were a throwback to old-style industrial labor contracts. For one thing, after a brief probationary period, every musician had tenure.3 Nearly all earned more than one hundred thousand dollars a year.4 Everyone enjoyed ten weeks of paid vacation and generous health and retirement benefits. What I found most surprising was the level of detail with respect to work rules. With limited exceptions for tours, there could be no more than twenty hours a week of combined rehearsal and performance time. Rehearsals were regulated down to the minute. The same went for concert scheduling (no performances during the summer or on Sunday afternoons), touring conditions (“first-class hotel accommodations in single rooms”), and even parking privileges.

  The contract was renegotiated every three years, but not by the Five. That was the job of a different committee—a “Negotiating Committee”—which came into existence only for the few months of negotiation.

  That brought us to the recent strike. “You have no idea how bruised everyone feels,” Hemphill said, “and how much anger there is among the musicians.”

  A primary target of their anger was Peter Pastreich, the executive director. Although the Five held different personal views of Pastreich, they all agreed that he was his own worst enemy. One said that he couldn’t resist demonstrating how smart he was by making someone else feel stupid. Another said his body language and manner often exuded arrogance and condescension. He was prone to barbs and biting sarcasm—exactly the wrong style for dealing with artists. Everyone in the orchestra saw him as a formidable adversary in contract negotiations, and many saw him as a bully who enjoyed outsmarting them in a good slugfest every three years. I was told that a significant number of musicians despised him and wanted to use the strike to get revenge and perhaps even get him fired.

  Another target of their anger, however, was each other.

  Nearly 100 percent of the players had voted to go on strike, but beneath that show of solidarity lay deep fissures. The Negotiating Committee had been split between two groups, which for simplicity I’ll call the Hard Liners and the Moderates. The Hard Liners were the ones who were angriest at management, most committed to playing hardball, and least experienced in contract negotiation. Having a majority of three to two, they seized control of the committee and hired the toughest lawyer they could find. The two Moderates—one of whom was the bassist, Chris Gilbert—were simply outvoted.

  To make things worse, as the strike dragged on, many of the rank and file lost confidence in the committee majority. The walkout ended with the committee majority urging, “Fight on!” and the orchestra narrowly overruling them and accepting a management offer.

  Afterward, there was a “profound split among the musicians and tremendous bitterness and a sense of betrayal among colleagues,” Hemphill said. A vocal minority thought the strike should have lasted longer, and a larger camp thought the strike had been a disaster. Some players hadn’t spoken to each other in months. Even some who shared the same stand5 were not on speaking terms.

  It sounded unbearable, and I could read the distress in their faces. What about the music, I asked. How could they perform under such conditions? As I was to hear from many sources, the performances were as good as ever. As Linda Lukas said proudly, “We play our hearts out anyway.”

  In fact, the Five were a reflection of the orchestra and its divisions. Two of them had backed the Hard Liners and voted against the settlement. One had denounced the Hard Liners’ approach as “stupid” from the beginning. The remaining two (Hemphill and Gilbert) had been Moderates, initially supporting the strike but later working to end it. For my purposes, I was just glad the Five were on speaking terms.

  Chris Gilbert knew the most about the contract negotiation process. A soft-spoken and even reticent guy, he had served on every Negotiating Committee for the past fifteen years. Contract negotiation was “the one time that [management] really has to listen to you and hear what you are saying,” he said. “It’s the one time you really have some ability to create some change. Force things to change.” He had often chaired the Negotiating Committee, but not during the last round, which he had found deeply frustrating and painful.

  I sensed that the Five liked my basic problem-solving approach to negotiation, which I briefly described. They all clearly wanted help healing the wounds among the musicians. This was a good sign. But they seemed extraordinarily anxious at the prospect of selling a negotiation training program to the orchestra. “If the musicians think management is pushing for some new approach, half the orchestra will vote against it for that reason alone,” Hemphill predicted gloomily. “This [initiative] isn’t going to happen simply because we recommend it. We’re just going to take abuse.”

  I could understand the others’ anxiety about getting too far out front, but Hemphill’s apprehension surprised me. He was one of the reasons we had gotten this far. Hemphill, Lukas, and Pastreich had been the first to contact the Hewlett Foundation, months ago, to discuss the possibility of launching a negotiation program. And dur-ing lunch Hemphill had expressed exuberant support for negotiation training—in fact, he seemed eager to claim partial credit for the idea. So why the ambivalence? I would later come to realize that despite his flamboyant personality and desire to lead, he didn’t have a thick enough skin for politics. Performing was one thing: he had once performed at a society ball dressed up in a gorilla suit so he “couldn’t be ignored.” But taking heat was another. At the end of the strike, he had personally intervened with Pastreich to make a modest change to management’s offer, believing correctly that it would make the deal more palatable to a majority of the musicians. The Hard Liners had really beaten him up for that, and the wounds hadn’t healed.

  As I came away from the lunch, certain conclusions seemed obvious. Many musicians were demonizing Pastreich and engaging in a lot of zero-sum thinking. Moreover, the musicians’ relationships with one another were badly strained. They were traumatized. They had no authority structure, no strong leadership, and no training in collective bargaining. No wonder they had not been effective negotiators.

  My next meeting was with the alleged demon himself. Peter Pastreich had Brooklyn roots and an Ivy League education, both of which were immediately apparent. Raised in a working-class neighborhood with left-wing parents, he had gone from a public school to Yale. Now balding, energetic, and fit, he still had a slight New York accent and wore the uniform of the Yalies of his generation: a well-tailored Brooks Brothers suit and a shirt with a button-down collar. He had discovered music management as a trumpet player in the Yale band, when he had organized and raised the money for the band’s first European tour. He would later tell me, “The preppies in the Yale Glee Club and the Wiffenpoofs6 all got rich alums to sponsor tours to Europe. I thought we public school boys in the band should as well.”

  I already knew of Pastreich’s stellar reputation in the symphony managemen
t world. When he joined the SFS in 1978, it was running a deficit, employed no full-time musicians, and didn’t even have a concert hall of its own. During his tenure it recruited gifted young musicians (including Hemphill and Gilbert, both of whom joined in their early twenties), established a full-time salary for its players, and achieved national prominence. Davies Symphony Hall, a magnificent concert facility, was built during this period. Pastreich brought the SFS bud-get into balance, amassed an endowment, and took the symphony on international tours.

  But as soon as we took our seats in his office, I began to see why the musicians found him difficult. After about two minutes of pleasantries, he began to test me. He treated me as if I were being interviewed for a job. I wouldn’t play that game.

  “What do you know about labor law?”

  Very little, I said.

  “What do you know about the orchestra business?”

  Nothing.

  “What makes you think you are the right person to help us?”

  Good question. I’m not sure I am.

  “Look, Peter,” I continued, “I’m here at Steve Toben’s request. I’m not looking for work. The purpose of this visit is for me to learn more about the symphony and its problems, and to share some ideas with you about problem-solving approaches to negotiation. Even if you are interested in a new approach, I may not be the right person. I’d be glad to help you and the Hewlett Foundation find somebody else.”

  It’s fun being interviewed for a job that you really don’t think you want. Fortunately, neither of us took this mano a mano jousting too seriously, and after this little contest he started educating me. I found him to be deeply perceptive about his role.

  The executive director of a major American symphony, I learned, does not have nearly the sweeping authority of a corporate CEO. He runs the business side of the enterprise—setting the budget, running the hall, negotiating contracts with soloists, arranging tours—with the help of a staff of about one hundred people, about the same size as the orchestra. But unlike a typical CEO, he is one of three leaders with interdependent roles, and he must constantly negotiate with the other two. One of them is the maestro. The primary mission of a major symphony is artistic, not profit-driven, which means that the maestro must have enough autonomy to define the musical product. But artistic decisions can profoundly affect the bottom line, so the executive director must manage this relationship skillfully. The third power center is the board of trustees. Like most nonprofit institutions, American symphonies depend on private philanthropy for survival. That gives the trustees significantly more power than ordinary corporate directors; they are more akin to board members who own a lot of stock. An executive director has to be careful not to offend them. The result is a complex triangular relationship among the three power centers. I was beginning to see the complexity of Pastreich’s world.

  He also surprised me with his attitude toward unions. He had nothing against them. To the contrary, his brother was a union organizer, and he was sympathetic to the union movement. He even thought that strikes could be cathartic for the rank and file. In 1981, he had writ-ten an article saying that one should not “underestimate the value of grievances, negotiations and even strikes as a safety valve for … frustration. … Why should the musicians be denied their triennial opportunity to talk back, even shout back, to management and, through management, to the conductor and the board?”7

  Why, then, had the last strike been so damaging? From Pastreich’s perspective, three main factors had contributed to the deadlock.

  One was his own relationship with the musicians. He readily acknowledged that the relationship had been deteriorating for years and that his personal style was partly responsible.

  Another factor was the composition of the Negotiating Committee, which had been controlled by the “most rabid players in the orchestra,” he said. “I was negotiating with a committee controlled by tough guys” and a lawyer hired “not to make a deal” but “to bloody us.”

  The third factor—the real killer, in his view—had been the “crazy” demands of the Negotiating Committee. Their first proposal had been a list of sixty-five demands that would have sweetened nearly every aspect of the twenty-five-page contract. In his thirty years of negotiating with unions, Pastreich had never seen anything like it.

  Pastreich explained that before the negotiation had begun, he had announced that the symphony was running an operating deficit for the first time in many years. He had laid off seven members of his own staff to underline the point. Wasn’t the committee paying attention? No, apparently they were in fantasyland. The musicians didn’t believe him about the deficit and accused him of cooking the books.

  The actual negotiations then got off to a terrible start when Pastreich tried to discover what the musicians’ real priorities were.

  Pastreich (referring to the list of demands): Which of these things really matter?

  Musicians: All of them matter to us.

  Pastreich: Well, wait a minute. They can’t all be of the same importance. Which ones are the most important?

  Musicians: It’s not our job to prioritize. … It is our job to deliver what [our colleagues have] asked for.

  After a few rounds of this, Pastreich saw no choice but to respond in kind. He submitted a counterproposal with an almost equal number of counterdemands. In his experience, the only way to get minor items off the table was not to argue them off, but to “trade them off.” He felt trapped into the following kind of conversation: “ ‘You want overtime to start at ten minutes? We want it to start at twenty minutes. Eventually, we’ll get back to fifteen minutes, which is where it was to begin with. You want to increase radio fees by thirty-three percent? We want to decrease them by thirty-three percent.’ And so on. It couldn’t have been more positional. Because they’ve taken sixty-five positions, we’ve taken sixty-five counterpositions.” In the end, “[t]he only way to see what was really important to them was to see what they would strike about and vice versa. It was a game of chicken to see if the other side was willing to drive off the cliff.”

  Was he motivated to try something new? I sensed that he was skeptical about the notion of negotiation therapy and not entirely sold on me, either. But, as he said, “the strike was a disaster,” relationships were terrible, and he wanted to improve them.

  I left my session impressed with Pastreich. He was sophisticated and worldly, but the Brooklyn boy in him abhorred pretension and snobbery. He thought orchestra musicians needed collective bargaining. When he stepped out of his role and analyzed a situation, he was astute and even self-critical. But I understood why many musicians saw him as the enemy: his competitive, controlling nature often caused him unintentionally to offend others. I did not think he was a bad man. He was certainly not evil.

  My third meeting was with Nancy Hellman Bechtle, president of the board of governors. She had invited two other trustees to join us: Dick Rosenberg, former chairman of the Bank of America, and Len Kingsley, the head of the trustees’ labor-management subcommittee.

  Bechtle, the scion of a pioneer California banking family, had a commitment to the San Francisco Symphony that ran in her Hellman blood. I would later learn that her great-uncle had been a founder of the symphony and that her grandmother, father, and mother had all served on the board. I found her energetic, welcoming, and quite down to earth—there was not a whiff of self-importance about her. I also sensed a certain toughness that I liked, a confidence and directness that made communication easy.

  Bechtle’s leadership of the board was undisputed, and her role represents the second point in the symphony’s leadership triangle. There are about eighty-five governors (akin to trustees) listed in the symphony’s programs. All are expected to contribute financially. A small number are actively engaged in governance. When I asked Rosenberg to tell me a bit about the board, he pointed to Bechtle and said, “She is the board. She raises more money than the rest of us, she works harder and puts in far more hours, and she knows mo
re about the organization. She really is our leader.”

  The board’s view of the strike was essentially that the musicians had behaved like spoiled children. Where did they think the money for their salaries came from? Without the board and its constant fund-raising, they’d all be out of a job. At the time, the annual operating budget of the symphony was over $40 million, and only about half came from ticket sales. The other half came from philanthropy. “We work very hard,” Bechtle told me. “A city like San Francisco has scores of worthy causes—the opera, the ballet, museums, hospitals, universities—all competing for donors. We’re volunteers. There are a lot of other institutions asking for our time and money. We don’t have to do this.” And yet the musicians’ behavior during the strike had made the whole institution look foolish—and the board’s job harder. “After this last strike, some donors just looked at me and said, ‘Why should we give money to that screwed-up organization?’ ”

  The board was most offended by two things the musicians had done during the strike. One was the Negotiating Committee’s claim—reported frequently in the press—that the operating deficit was phony. That had really sent the board’s finance committee through the roof. The other was the orchestra’s decision, during the last European tour, to distribute leaflets to concertgoers complaining about their working conditions back home. For what purpose? Solely to embarrass the trustees. In London, Paris, Berlin, musicians in formal dress had stood outside the concert halls handing out flyers complaining about their compensation.8 These tactics had drawn publicity all right, but not sympathy. The Europeans thought it was nuts. “It seems strange,” scoffed a London critic, “that an orchestra should come all the way across the Atlantic and then threaten not to play.” The Vienna Symphony director warned that his patrons hated such behavior, that the SFS might never be invited back, and that the Viennese saved their sympathy for the penniless Russian orchestras.9