The kinds of uncertainties and risks I regularly encounter in producing (and giving) concerts are not like what I wrote about when I was swimming in such jargon of energy trading and risk management. It’s no longer theoretical or mathematical. And I don’t suppose there are fancy models to hedge such risks or reduce associated uncertainties, other than the ideas of redundancy from my engineering textbooks. By redundancy, I mean having a back-up, a duplicate, something on stand-by, a readily available replacement or substitute course of action.
Producing a concert involves managing the uncertainties and risks associated with the unexpected. When I was preparing for my final exam composition concert last year, I considered every single one of the 40 musicians a potential source of risk. A musician may not show up for rehearsal or be late or leave early. No one was getting paid, and as such no one had an obligation to deliver. What assured me that they would actually show up on the day of the concert?
The implicit contract to participate and deliver a performance rested on their integrity as fellow musicians. I could have done away with this delivery and performance risk by binding them with legal contracts and financial compensation. But I was a fellow student on a shoestring budget, and the status quo was to help each other. I did actually face the above risks, and the stories deserve another blog or two.
What prompted me to write this blog entry is the dramatic beginning of tonight’s concert.
The concert of 5th of May 2009 was planned months in advance and noted on our website concert agenda. Yet for one reason or another, it could not be confirmed until the day before. This meant that it was nearly impossible to schedule other activities. The uncertainty turned into optionality when, on the day before the concert, we were given the option of having an additional concert on 6th May. Our host asked if we wanted to give one concert (and if so which) or both.
Given that these were free and unpaid concerts, we had no obligation to give them at all. In other words, we could choose (at this late stage) to 1) not give any more concerts than the two already given on this tour in Spain and spend the remaining few days under the sun; 2) give one more concert — on Tuesday 5th May or Wednesday 6th May evening; or 3) give both concerts. There was no penalty associated with these choices.
In risk management, optionality is not usually free. An option is defined in financial textbooks as the right but not the obligation. Optionality, in my language, translates to a kind of flexibility. A wide network of contacts gives you more access to knowledge and connections than a limited one. House keys are a kind of physical optionality for they unlock and open doors but you don’t have to use them. A multi-lingual person has more optionality than a mono-lingual one. A ticket to the theatre gives you the right to attend the show, but you can always choose to sell or give it away or forfeit the use and do something else.
As musicians eager to play and maximise performance opportunities, we decided to take the third option — to give both concerts . This left us with very little slack and only a few hours for a day trip to Santiago de Compostela. Whatever free time would be spent on rehearsing for these concerts.
One hour before the “cinco de mayo” concert in central La Coruña …”break a leg.”