Summary of the Task Force on Smithsonian Business Ventures

January 28, 2008
News Release

Background:
The Task Force was established by Acting Secretary Cristián Samper in August 2007 to review Smithsonian Business Ventures and recommend ways to improve its operation and maximize financial- and program-related contributions to the Smithsonian. The nine-member Task Force was comprised of staff and members of Smithsonian advisory boards. Marshall Turner, former chair of the National Museum of Natural History board, served as chair. The Task Force report was presented to the Acting Secretary in mid-January.

Overall statement:
The Task Force began its report to the Acting Secretary by stating that generating revenue for the Smithsonian through commercial activities is "a desirable and important component of funding," but only when conducted in concert with the Smithsonian's mission and values. While they recommend that the business operation continue as a discrete organization within the Smithsonian, they are not endorsing the status quo. The report outlines the cultural changes and specific improvements that are necessary to improve the business operation and ensure it aligns with the Institution's mission.

The report's introduction states clearly that business activities provide an important extension of the Smithsonian experience and should be worthy of the Smithsonian name. The best products and services should symbolize and highlight the research, collections, exhibitions and educational programs for which the Smithsonian is well-known and respected.

The Task Force's observations led them to conclude that financial performance and overall quality fell short of expectations because the Institution was unnecessarily divided against itself, and that this cultural divide persisted despite recent improvements in communications and the dedication of all employees—in SBV, the museums and science centers—to the Institution's mission.

Key recommendations:

  • Closely align all business functions with the overall mission of the Smithsonian by adopting a set of principles that would govern all business activity. Business operations should be characterized by collaboration, transparency, accountability, judgment and integrity.

  • Retain the business operation as a centralized, distinct organization within the Smithsonian, but better integrate it through changes in its governance, accountability and leadership.

  • Disband the advisory board (called the SBV board of directors), have the business unit leader report directly to the Secretary and increase Board of Regents oversight.

  • The leader of the business operation should have a title other than CEO, such as Director or Executive Director.

  • Retain performance-based approach to compensation, within the context of the unified compensation philosophy recently adopted by the Board of Regents.

  • Reorganize the business into three large groupings—Retail (stores, catalog and online catalog, IMAX theaters, food services), Business Development & Licensing (new businesses, product development & licensing, student and adult educational travel) and Media (Smithsonian magazine, online publishing, Smithsonian books, Smithsonian Networks, goSmithsonian magazine).

  • Do not outsource the retail stores, but instead improve internal retail merchandising, leadership and the relationships with museum staffs.

  • Revamp and standardize the revenue sharing formula to encourage cooperation between the museums and retail staff and enable museums to have a greater share of profits.

  • Establish an informal strategic advisory committee comprised of Smithsonian staff from across the Institution to offer advice and guidance on business operations and product and licensing ideas.
  • Better align the purpose of the licensing group with the Smithsonian mission.

  • Develop a strong, coordinated online presence.

  • Change the name of the organization. (The committee suggested "Smithsonian Enterprises," but the Institution should come up with an appropriate name).