62. A CMO is largely a knowledge and systems-driven business and is
significantly reliant on human and information systems and related resources for its effectiveness. It would thus be important to do an overview of the current inventory and investment in staff in relation to the various functional areas in the organization (i.e. front office, back office and management, including the board). This can be done based on the following focal areas:
163 Organization culture refers to ‘the values and behaviors that contribute to the unique social and psychological environment of an organization’, and includes the organization’s expectations, experiences, philosophy and values, as expressed in its ‘self-image, inner workings, interactions with the outside world and future expectations.’ See www.businessdictionary.com/definition/organizational-culture.html (accessed on 15 December 2014).
2.16 The Human Resources (HR) Function
63. Closer scrutiny of the operations of the HR function, in particular its role in staff recruitment, selection and retention, needs to be undertaken. This is the key role of the HR function and it plays an integral part in the deployment of human capital to the organization. The question therefore needs to be asked whether HR is correctly carrying out this role: What is the impact of HR’s policies on human capital deployment? If a wrong person is deployed in a legitimate (or right) place or function in the organization this can lead to regression; on the other hand, if a right person is deployed in a wrong place, this can lead to frustration. If, however, a right person is deployed in the right place, this leads to progression. Overall, the placing of the right people in the right places in the organization results in multiplication164.
2.17 The Role of Leadership
64. The role of leadership in the advancement of human and intellectual capital in the CMO needs to be also considered. True leaders value their team members and in fact, add value to them, making them more valuable. Good CMO leaders use their influence at the right times for the right reasons. They ensure that they can lead themselves successfully before attempting to lead others and appreciate that their dispositions are more important than their positions. They take a little greater share of the blame and a little smaller share of the credit. Nevertheless, true leaders do not leave their team loose and without structure, but instil within them a sense of responsibility by creating structures of authority and accountability, while allowing the team enough freedom to be creative and innovative165.
2.18 The Level of the CMO’s Investment in Learning and Development
65. In the beginning of this section, we emphasized the fact that a CMO is largely a knowledge and systems-based business. In view of this, it would be important to invest resources in providing training and learning opportunities for CMO staff in critical areas of their roles, particularly in relation to the core functions of the CMO. A CMO needs to have a sleek team of well-trained and coordinated licensing representatives that are able to confidently approach users and to adequately and convincingly explain the basis for requiring music licenses. In the same manner, an effective and efficient debtors’ control team and function must augment the work of licensing representatives by ensuring that licensees timeously deliver on their
164 See Maxwell JC, What every Leader needs to Know 101 Series (Maxwell Motivation Inc.
Georgia 2003), generally
165 Ibid.
undertaking to pay license fees. This is important to ensure that members/
rights holders are in fact paid in respect of the exploitation of their works.
In the end however, license collections must in fact be distributed and this must be done accurately and on time. Staff involved in this function must therefore be well-trained in the matching of works with earnings and rights holders and to effectively carry out the research required to do so. In addition to this, a well-trained and equipped CMO leadership is necessary to steer the CMO ship to its desired destination. In all these instances relevant, on-going training and development is important.
2.19 Systems and Processes
66. A systems and processes review needs to be conducted to ensure that there is an appropriate level of integration between human and computerized resources. It does not help to have an expensive IT system that is, in fact, not being used effectively and optimally. The review must also consider the CMO’s ICT resources (i.e. its hardware and peripherals and both pre-packaged and special applications software) to determine if they are able to adequately satisfy the growing needs of the CMO. Issues relating to Internet connectivity and the choice of telecommunication services need to be considered also. Important considerations in selecting an appropriate Internet Service Provider (ISP) for the CMO include considerations of the availability of the particular ISP’s connectivity and ‘uptime’; the level of bandwidth required and available, and connection with decentralized operations (i.e.
individual workstations and office locations). In today’s economy with its energy problems access to clean power is also an important consideration to take into account.
2.20 Other Resources
67. Important considerations in this regard include the financial and other related assets of the CMO and the fiduciary management of such assets. Is there a proper surplus cash management system that will ensure that members obtain the most optimal benefit from such funds? Does the CMO invest monies received pending distribution in safe, interest-bearing instruments administered by reputable, approved institutions?166 Further to this, the CMO needs to monitor and minimize costs through the implementation
166 Often there is a lapse between the time when license fees are collected and the time when they are actually distributed – sometimes between six months to a year. It would be prudent for management under such circumstances to invest such moneys in reliable investment instruments. The invested portion can then be paid out as additional, ‘non-royalty’ income to members or it can be used to defray administration costs, thus releasing most of the collected license fees for distribution to members.
of sound financial management practices. This includes the proper use of budgeting processes linked to the achievement of goals (see below under 81 for a discussion of budgeting167). Traditional capital expenditure (capex) budgets may be used and a template circulated to all cost centers to ensure capex uniformity. The budget needs to be reviewed on a regular basis and amortization sufficient to cover developmental needs must be provided for.
Expansion (or special capex) budgets, to cater for the expansion of existing programs, new programs, special adjustments in reward schemes etc. may also be used. These can be particularly useful in the allocation of portions of the collections to reserve funds, as dealt with earlier above. Appropriate reserves policies would then need to be created in this regard.