Deborah Cannon had to reconcile for-profit and nonprofit business strategies to rescue the endangered Houston Zoo

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Deborah Cannon understands how the world of private, for-profit business works. She was president of Bank of America for the Houston region before retiring with 30 years in the industry.

Courted out of retirement by a headhunter, Cannon took the helm of The Houston Zoo, becoming its president and CEO shortly after the floundering city property had undergone partial privatization in an attempt to reverse its financial atrophy.

“The zoo was, frankly, losing ground every year,” Cannon says. “The city was not charging adequate admission fees to be able to do all the things that needed to be done, so you had deferred maintenance that was building up. The zoo was getting worse, not better, every year.”

It wasn’t an issue that the zoo was spending too much money. It just wasn’t making enough.

“To me it was pretty obvious that we really had to increase revenues,” Cannon says, so she began floating ideas on how to generate cash flow.

“Coming from Bank of America … when we said, ‘Here’s what we’re going to do, here’s why and here’s the impact it’s going to have on you,’ everybody got behind it and said, ‘Fine,’ because your bonus was predicated on this new change of course,” she says.

But that’s not the way things would work at the nonprofit zoo. Her message about raising revenues was met with resistance.

“I kept hearing people say, ‘Doesn’t she understand we’re a nonprofit.’ It took a while to get everybody at the same realization that we needed to have a lot more members, that we needed to have repeat visits, that we needed to be able to have more revenues,” Cannon says.

“I didn’t realize how slow change comes in a nonprofit and how important the consensus building among all the groups is before you can start affecting any real change.”

 

Beat of the same drum

“The single biggest difference we made early on was the change in our employees’ attitudes toward the guests,” Cannon says.

Much like the budget, employee morale at the zoo was sagging from years of working for an organization barely able to make ends meet. That dismal attitude showed up in the way staff treated guests.

She had to take employees from seeing guests as being “kind of a bother” to understanding their importance to the zoo’s future. Without positive employees, the zoo didn’t have happy guests who came back with their friends and spent money.

“That’s where guest experience came in, creating that really great guest experience so that people wanted to come back,” Cannon says.

To get staff focused on the guest experience, the zoo designed its own training program. It assigned new employees a “buddy,” a current staffer not in the department of the trainee, to get them acclimated to the grounds and begin to convey the values the zoo wants in its staffers.

It was also important for the staff to understand where the company was going, how it would get there, and what role they play in order to build consensus and get shared buy-in.

To do that, Cannon began gathering the entire staff together five times a year for a general meeting. The budget, conservation efforts and ongoing capital improvements are among the topics discussed, and staff is given presentations from departments ranging from development to elephants.

“So it’s just keeping people informed, keeping them part of the team,” she says.

The improvement in attitude from these changes has been noticeable, according to Cannon. Smaller, early morning meetings used to be a place where staffers would vent their frustrations. But now staffers offer suggestions on how the zoo could be improved.

“It was a very different kind of conversation,” Cannon says. “They were really looking at things from the guests’ side.”

 

Convincing, growing the base

Improving the guest experience at the zoo was critical, but more was needed in order to raise revenues.

Prior to privatization, admission prices at the zoo were low — 50 cents for children and $2.50 for adults. And the tax dollars from the city and revenue from concessions put constraints on the zoo’s income stream that left no room for additional investments, or even basic preventative maintenance.

“There just was vastly inadequate funding coming to run a good zoo,” Cannon says. “We were frankly in danger of losing accreditation if something wasn’t done.”

Generating more revenue through increasing membership and doing more special events happened fairly quickly. The harder piece, however, was raising money through donations.

“We needed to increase the number of donors we had,” Cannon says, which was a tough thing to do considering she was starting from scratch.

The zoo undertook a capital campaign to pay for the first phase of its African Forest. Cannon says it was originally estimated that the campaign would take two years to complete — it took more than four.

“It took a lot longer because we didn’t have a track record,” she says. “We hadn’t proven that we could do this and do it right and do it on time, on budget.”

The construction of the first phase of the African Forest on time and on budget made raising $27 million for the second capital campaign quicker, it took a little less than two years.

“We’ve established the fact that we’ve made money every year for the last eight years and generated a very good positive cash flow,” Cannon says. That along with seeing the physical improvements gave donors the positive track record they needed to believe in the zoo’s ability to make good on its promises.

Cannon was also seeking donors not for big capital but for the zoo overall. So the first donor club, called the Asante Society, was formed with an annual membership minimum of  $1,200 per year. It grew from zero members to about 280 members today.

The zoo also started two additional donor clubs for younger professionals that sought intermittent donations, and used mailings to solicit new donations.

“We hired a completely different staff for our development office — we’ve got a really good staff right now. We have done some different things in terms of membership. So it’s a question of just continuing to build that brand and continuing to make contact,” Cannon says.

Because of these efforts more than $100 million has been invested in the zoo since privatization in 2002. This has meant new exhibits, a new restaurant, gift shop and restrooms. It’s also helped with the $29 million gorilla project and a $3.5 million bughouse, both of which are under construction.

Besides allaying the concerns of hesitant donors, Cannon and the zoo had other concerns to address related to the privatization — continued affordability for the general public.

Today’s prices are much higher compared to 2002 levels, with children’s admission costing $11 and adult admission at $15.

“We undertook some programs to ensure that even though we we’re raising prices, albeit slowly, we developed a couple programs so that people who really couldn’t afford to come could still come, and we built some support for that, too. So they realized that the zoo is really a zoo for all,” Cannon says.

 

Rewarding victory   

The workforce at the zoo has more than doubled since privatization in all areas, growing from around 150 to almost 400, with a significant increase in rangers, a position totally dedicated to guest services.

It’s upped its marketing efforts online, dedicating a four-person team to take advantage of all the major social media channels. It has had particular success on YouTube where millions have viewed videos of a range of its animals, including two bathing baby elephants.

These investments have paid off. Annual attendance has improved from roughly 1.2 million visitors in 2002 to 2.15 million in 2013. And last year the zoo generated 26 times the cash flow it generated the first full year after privatization.

But the zoo is just getting started.

“We’re in process of doing design development, our schematic design, of two huge projects, which will probably total something north of $100 million, and that’s over and above the $7 to $8 million we will spend every year out of earnings that we make for rehabbing the existing facilities,” Cannon says.

The plan is to redo the front entry, move the existing sea lion pools near the entrance and enhance them. A restaurant would be built where the sea lions are today that would accommodate a number of public and private functions simultaneously.

Another piece of the project would transform roughly seven acres of the zoo into a series of exhibits featuring African animals to complete the African Forest area.

 

Reflecting on progress

When Cannon visited the zoo before being named its president, she says, “It was not a great zoo at that point in time.” But she was intrigued by the project and thought it was a great opportunity to build something really good for the city. If given the chance to go back in time and give herself advice at the outset of her involvement with the zoo, she would emphasize the need to build consensus.

“The fact that you can’t just change things overnight. The fact that you need to spend a lot more time getting people on board with what we needed to do,” she says.

“I don’t know that it would have made a big difference in the long run. I don’t know that we would have done it any faster. We just would have done it with a little less resistance.”

 

Takeaways:

  • Employee attitudes translate to customer service, good or bad.
  • Investors need proof of success or they will remain hesitant.
  • Shared buy-in is critical to implementing organizational change.

 

The Cannon File:

Name: Deborah Cannon

Title: President and CEO

Company: The Houston Zoo

Education: She began at Georgetown University and transferred to Southern Methodist University where she earned a bachelor’s degree in business administration.

Born: St. Louis, Mo.

If you could spend a day as an animal in the wild, which animal would it be? A lion. They’re less hunted than elephants and rhinos. They have fewer enemies, they’re not the prey of many animals other than people, and they’re really not shooting lions at the same rate that they are elephants and rhinos. I would be a male because females do the hunting and bring the males the food to eat first.

Which animal would you least like to be? The impala seems to be everybody’s dinner in Africa. They’re beautiful, but the impala and maybe the wildebeest; everybody eats them.

What about your perspective has been most affected since you took your position at the zoo? I have a much greater appreciation for the peril these animals are in in the wild. I had no idea how hunted and persecuted they really are.

What’s the one piece of advice you’ve passed on most often to others? I always tell people don’t burn bridges. It’s amazing how many people do that.

What’s one thing you love to talk about but never get the chance to? In Houston, people do not realize how much The Houston Zoo does from a conservation standpoint, conserving animals in the wild — animals and local people — helping local people find other means of supporting themselves than just slaughtering animals. So we need to find a better way to educate the Houston population about all that we’re doing to save animals in the wild and get people to help us do that.