The first part of this series of 4 was published last week. It was about the macro concerns involved with organizational change. Part 2 below involve some specifics about an organization in trouble I worked with for over one year. The organization I am going to discuss provides professional services to special needs clients. The organization had developed a terrible reputation. The organization was being under-utilized by the potential clients because the perception was the services were of questionable value. The funding for the organization was decreasing because of the lack of services provided and the poorly operated financial operations of the organization.
The Board of Directors realized there was serious problems and knew they were going to have to make significant changes if the organization was going to remain viable as a multi-community service provider. A decade of poor leadership had established a culture of “everything goes” relative to staff behavior and performance.
The staff undermined a long time director. Because of staff members who were close friends with board members or, in many cases, were related to them, lied about the director’s performance. Sadly, much of what the staff told the members of the board was true. The leadership was severely lacking. Ultimately, the director was fired. A new director was brought onboard to “clean up the mess.”
As hard as he tried, the existing culture of “anything goes” stayed in place. The new director did not know how to change the culture. He had no new vision or mission for the organization. He knew there were problems, but established no new rules, policies, and procedures to deal with the problems. He could not get accurate financial reports from the support staff because they were inadequately trained and more than one had close ties to one or more board members. The new director felt he was not in a position to fire any of the staff.
He tried to provide training for them. Computers were updated, new software was purchased, and a technology director was hired.
Because the financial support staff had no formal bookkeeping training, the new hardware and software provided little improved financial reports. Professional staff making false entries into their service logs compounded the accuracy of the financial reporting. Some staff were reporting services being provided to clients, but the support staff had no one to bill services to since no services had actually been provided. There was no check and balance system to allow the director to detect the problem between false reporting and lack of billing. The director read staff reports and saw services provided, but the financial reports were vague to the degree there was no way to see if the billing matched the service logs.
The new director began to question why revenue was not increasing. He also began to notice that certain staff were absent during working hours even though their service logs showed they were providing services. When confronted about being absent but reporting services provided, the director was told clients were being met off-site or in one of the satellite locations.
As the director began to try and get standard operating procedures for professional and support staff, staff began what they had done to the previous director. They would go to board members and make complaints against the director. There were enough board members at this point in time on the board that there was a majority to pass anything they wished. The members of the board began considerations to fire the director. However, a part-time staff member knew exactly what was going on and asked for a closed session meeting with the board. At that meeting, the board was told the truth about what was happening on all fronts – professional staff, support staff, and finances.
With new information available, the board decided to give the current director a chance to retire rather than be fired. At the same time, they were given a complete new vision and mission for the organization by the part-time staff member who had been working with the organization for two years. With a new plan to change the culture of the organization in hand, the part-time staff member was appointed to take over as director pursuant to the retirement one month later of the current director. This was only possible because board decisions were made when certain board members working a personal agenda were absent from meetings.
Part 3 of this series of 4 will follow next week. It will get into what happened once major changes began to be made and how the staff reacted.