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January 31, 2011

Leading A Turnaround At OSV: Jim Donahue | After years of declines, attendance makes a comeback at living history museum

Jim Donahue was very upfront about the limitations of his resume when he met with the board of trustees at Old Sturbridge Village about their 2006 search for a new chief executive.

“I told them, ‘I’m completely unlicensed to drive this museum,’ ” said Donahue, the 2011 Worcester Business Journal Nonprofit Business Leader of the Year.

And while it’s true that Donahue’s museum credentials were lacking, it’s become clear — as evidenced by a vastly improved financial picture and increasing attendance — that he had the business background to not only do the job, but do it well.

Dark Days

By all accounts, Old Sturbridge Village’s survival was in peril in 2006 when the nonprofit’s board of trustees set about on a new executive search. Attendance had fallen from a high of more than 500,000 annually in the 1970s to a disappointing 200,000. Financially the picture was no better.

So hiring Donahue was a make-it-or -break-it moment for the living history museum, which offers history enthusiasts and school groups a glimpse into New England life during the late 1700s and early 1800s. And the OSV board was upfront about the conditions.

“We were brutally honest,” recalls Bruce Moir, the board chairman during the time of the executive search. “Attendance was plummeting… It was a pretty dire time at the village. You would think that that would have scared people (like Donahue) away.”

But Donahue wasn’t deterred, and he knew what he was getting himself into.

“There wasn’t a whole lot of room for failure,” he said.

Once Donahue came on board in 2007, he, along with the senior management team, had two main focuses: attendance and fundraising. At the same time, they had to make some tough decision to trim the organization down to reflect the current attendance.

“Attendance drives so many other line items,” Donahue said. “It’s hard not to focus on that.”

And under his tenure, the village has made remarkable gains in that department. The organization’s fiscal year ends Jan. 31, and OSV is expected to end its third year in a row of annual attendance growth, a feat that hasn’t happened since the middle of the 1970s, according to Michael Brockelman, the board’s current chairman and a partner at the Worcester law firm of Bowditch & Dewey.

Fundraising has also been an area of growth under Donahue’s management. The key to success in fundraising, Donahue said, has been an engaged board of trustees. They stretch to support the museum’s annual fund and they’re “not afraid to roll up their sleeves.”

Old Sturbridge Village has also been on the receiving end of some luck as well. Last spring, a covered bridge on the property was damaged to the tune of about $50,000. The nonprofit’s lean budget had no money for repair, so they put out a call to their 7,000 members via e-mail. Almost immediately a member from New York City with a personal affinity for covered bridges stepped up to cover the cost.

“When that happens, it speaks to how important the village is in people’s lives,” Donahue said.

Career Path

Donahue took an interesting path to get to Old Sturbridge Village. He graduated from Colby College in Maine with a degree in economics, but ended up taking a banking job. During his tenure at the bank, he became involved with Junior Achievement, a national nonprofit program that connects business people with children in the classroom. He spent Monday nights teaching business basics to kids in Newport, R.I, and soon found that he was “looking forward to Monday nights more than Monday days,” and decided to try out teaching professionally.

His first paying teaching job was at an inner-city school in Providence. He soon moved into education administration and was recruited to lead the first charter school in Rhode Island. The school, called The Highlander, was launched in 2000 and grew to 300 students during the six years he was at the helm.

The job at OSV was far from an obvious fit, but he was drawn to the position after doing a site visit during the Halloween celebration of 2006.

It Takes A Village

When Donahue joined, he said one of the obvious problems was an outdated reporting structure with “a management team that was much smaller” but “with more layers.”

Since then the organization has evolved into a leaner, flatter structure. And to make sure he stays in touch with what’s happening on the front lines, Donahue holds “skip-level meetings” with employee groups. These informal meetings make sure he’s not getting “swept up in my own myth of how things are” and often reveal small problems with simple solutions that he can help quickly fix.

Donahue also places a premium on transparency. Before he came on board, he recalls, there were senior managers who had never seen a balance sheet. Today, financial results are part of most staff meetings.

“I use financials a lot,” he said. “It tells the story of the institution.”

Donahue also has clear expectations for measuring management performance, using a slightly adjusted version of Jack Welch’s Four Es: Energy, Energizers, Edge and Execute. He adds Endurance to measure performance because at OSV, “You have to be able to run the sprint and run the marathon,” he said.

Old Sturbridge Village is out of “critical care,” as Donahue puts it. The organization is back in the black, but, he admits, it’s not swimming in cash. The museum has also had its fair share of scares, even under Donahue’s tenure. The economic collapse of 2008 severely impacted the village’s investments, and made an already precarious situation worse. Tough choices were made. Staff had to take a pay cut.

And now, with the troubles of 2008 squarely in the rear view mirror, board chairman Brockelmen says “everything is moving in the right direction.” And despite the tough decisions Donahue had to make, he still has the support of the staff. Brockelman remembers thanking a staff member for her commitment after the pay cut was announced. She replied, “It’s easy when you work for a guy like Jim.”

“You can’t get any better than that,” Brockelman said.

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