Saving Organizations That Matter: Ascending From the Confluence of Chaos
By Rey Spadoni
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About this ebook
Saving Organizations That Matter: Ascending From the Confluence of Chaos is a practical guide to the turnaround and transformation of not-for-profit, mission driven organizations written from the perspective of someone who has been through many such experiences, whether as employee, consultant, manager, executive, CEO or member of the board. It features a number of strategies that can be deployed, often immediately, to help change the trajectory of organizations that are facing challenges and declining performance.
Rey Spadoni has been involved in a number of organizational turnarounds and transformations, some quite high profile, which have ranged from $5m programs to major divisions within multi-billion dollar enterprises. In one section of the book, he states: "The notion of a confluence of chaos can be likened to a tropical storm. Meteorologists study their causes and predict their expected trajectories. Those who are likely to be impacted follow these reports and act accordingly. Once the storm hits, however, those who are caught within it have little use for scientific data or predictive analysis.They are concerned about safety, survival and the status of their home and belongings. There is the top-down analytical approach to tropical storms and then there is the reality of confronting one from inside of it. So too with organizational chaos."
The author has been within many such "storms" and understands the overwhelming feeling that employees, managers, executives, and board members can feel as their organization is spiraling downward. There are theoretical books on this subject, but those within these situations are seeking clarity and speed and can be motivated often by urgency and fear.
Saving Organizations That Matter: Ascending From the Confluence of Chaos is for anyone in an organization that is experiencing struggle, seeking a way to improve, to reinvent themselves, and to chart a new course. It is also for leaders in stable organizations who are actively working to avoid future decline and threats to their mission.
Before describing how to ascend from the "confluence of chaos", the author first outlines the various reasons, some quite subtle, that cause such organizations to fall into disarray, likening this to a ship that sails perilously close to the edge of a plunging waterfall. With practical and actionable steps and strategies, the author seeks to inspire leaders to forge a new path for their organizations toward lasting, sustainable change. Having identified and systematically resolved institutional problems, including deeper cultural issues, mission-driven organizations can then sail toward calmer waters, better equipped to avoid such waterfalls in the future.
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Saving Organizations That Matter - Rey Spadoni
PREFACE
Saving Organizations That Matter: Ascending From the Confluence of Chaos is designed to help those responsible for improving the performance of mission-driven, not-for-profit organizations, though, in reality, I believe most of the ideas here relate to any type of organization. My goal in writing this book is to provide a practical guide to those who find themselves in a difficult circumstance and needing to assist in the transformation of an organization that matters.
As I will describe below, organizations facing such a challenge tend to become overwhelmed with a multitude of factors that increase internal chaos.
There are two primary parts to this book: Into Chaos and From Chaos. I have structured the content into these two distinct sections because I feel it’s important to understand how and why an organization descends into chaos. Ascending from chaos requires a reasonably accurate diagnosis, and the planning phase for creating a transformation approach demands a keen understanding of those reasons for the decline. Without that clear insight, focused strategies to improve are largely shots at a target in the dark. Also, because I believe in the there is always a waterfall
principle, which I describe below, understanding the telltale signs of falling into chaos can help successful and stable organizations avoid perilous declines.
Recognizing the primary reasons or factors for decline, which are outlined in the first section, is the necessary predecessor to developing effective and efficient steps to emerge from chaos. I have described four such reasons and often emphasize issues pertaining to organizational culture. There is no one-size-fits-all solution to every chaos scenario, but the seven specific strategies I outline in the second section have proven extremely helpful in the transformation situations I have encountered. Though chaos can present overwhelming challenges to an organization’s board and management team, the steps described here are practical and, when implemented as part of an organized transformation initiative, highly effective.
Organizations in trouble tend to be in trouble for various related and typically intertwined reasons. The various reasons form a convergence of sorts, a confluence of chaos. Developing a sense of the various critical strands that form this confluence is the first step toward improvement.
I do not want to leave the reader with the impression that all chaos is bad. In some ways, it is natural and necessary. Positive, productive, and lasting change sometimes requires a state of chaos or turmoil and pain first. The impetus to innovate and reinvent can demand an opposing force, one that seemingly stifles growth and eliminates healthy risk-taking behavior. That opposing force can come in the form of chaos, and it is often within the chaos that new leaders emerge, willing to suggest new ideas, daring to pose new visions. The history of enterprise overflows with examples of those who rise out of chaos and take their organizations to new heights.
I hope this book helps anyone responsible for the success and long-term viability of an organization worth saving, that matters, whether a leader or an emerging leader, a member of the board, or an interested funder or supporter. I also hope it is useful for students who are considering a career managing complex organizations. Most of my experience is within the health care industry, though I firmly believe that the ideas here are more universally applicable and can be helpful to other types of mission-driven organizations as well.
In short, I have written the book I have unsuccessfully searched for on many occasions. When I have been in an organization experiencing a significant challenge, I sought a practical guide, one I could read and begin to apply immediately. I hoped for a way out of the freefall and onto surer footing, not a theoretical treatise or academic tome that reviewed concepts and philosophical notions. I needed a way out of the chaos I was encountering and offered from the perspective of someone who had faced that storm before, head-on and from inside of it, rather than on the sidelines or from the safety of an observation deck. Saving Organizations That Matter: Ascending From the Confluence of Chaos is my attempt to deliver that very guide. My hope is that those responsible for improving the prospects of a mission-driven organization, i.e., one worth saving,
one that improves the lives of others, that helps the most vulnerable members of our communities, and one that leads with compassion, will find in this book their own way through the storm.
The point of Saving Organizations That Matter: Ascending From the Confluence of Chaos is not to simply preserve the entity but to ultimately soar to even greater and lasting success.
INTRODUCTION
DUSTY FROM THE TRAIL
Many years ago, my son and I were deep into the Grand Canyon during our first hike there, trekking along the Bright Angel Trail, when we encountered a man who was approaching from the opposite direction and who was carrying a large walking stick and toting an old and battered backpack. As he neared us, we noticed just how weatherworn he appeared. His hair was disheveled, skin darkened and wrinkled like old leather. He was dusty from the trail.
He slowed as he approached us, as though he wanted to say something. I don’t precisely remember how the conversation started, but within a few moments of encountering each other, we began talking about our respective hikes. He mentioned that he had spent years walking along that Bright Angel Trail, most typically hiking from the South Rim of the canyon down to the Colorado River and then up along the trail to the North Rim. Then, he would walk back in the opposite direction. This was a major thrust of his life, it seemed. At one point, I stated something along the lines of: You must be a real expert on hiking in the Grand Canyon,
and I have never forgotten his reply. He calmly and confidently noted: I’m no expert, I’ve just walked the trail so many times, I know a lot about it.
I’m no expert in turnarounds and transformations; I’ve just walked the trail so many times, I know a lot about it. I, too, am dusty from the trail, so I’ll begin by telling you about my own hike.
I have been involved in a significant number of organizational transformations, some quite high profile. At one time, I thought I should detail here every one of my experiences meticulously so that the readers of Saving Organizations That Matter: Ascending From the Confluence of Chaos might find me to be a more credible resource on this matter. However, there are two reasons I have decided to provide a much higher-level overview instead. First, many of my colleagues found these experiences to be difficult. Some lost their jobs in the process. Some were blamed, perhaps rightly so, for the failure of the organization. And some were accused unfairly. I have learned that such is life in a boat headed for a raging waterfall. I’m quite disinclined to offer a great deal of detail regarding these specific situations because I don’t want to offend those colleagues. Secondly, I think that a history lesson about my career would be incredibly boring to read.
Therefore, I will provide a broader summary of my experiences and why I feel qualified and compelled to write this book.
After I graduated with an MBA in health care management from Boston University back in the 1980s, I was employed by the consulting firm Ernst & Whinney (which became Ernst & Young while I was there). Before that, and while I was earning my master’s degree, I worked as an analyst and then assistant director for the Determination of Need (DON) Program of the Massachusetts Department of Public Health. At the DON program, which is responsible for approving major health care capital projects (called Certificate of Need in most other states), I worked with hospitals and other health care organizations that had experienced a cost or scope overrun on their approved projects. Without understanding it at the time, I spent every day interacting with institutions who were experiencing some type of problem or going through a form of transition. And though I didn’t know it, I was often witnessing large-scale organizational chaos in action.
At Ernst, I consulted with more than fifty different organizations on a wide variety of assignments. Over the course of approximately eight years, I served successful, marginal, or floundering organizations, and in a number of cases, ones that were experiencing some form of chaos. After that, I moved over to Harvard Pilgrim Health Care, which was the amalgamation of two major health maintenance organizations: Harvard Community Health Plan and Pilgrim Health Care. During the next eight years, I held a variety of roles, starting with Manager of Financial Planning and culminating with Vice President of Product Development. A major component of that experience was leading the expansion of the company to new geographic regions. A few years after the merger of the two former organizations, the company began to experience a significant financial decline, information technology platform failure, and extreme organizational dysfunction caused in large part by a prevailing and lingering unwillingness to effectively and fully merge the two former organizations. A new CEO was appointed to lead the organization during its darkest hour and just before a very highly publicized receivership phase, during which the Attorney General of the Commonwealth of Massachusetts essentially took over governance responsibility of the entity. The $2b enterprise was on the verge of failure, and so all eyes were on the new leader, Charlie Baker. What took place over the next several years was transformative for the organization and me personally, and I learned a great deal about change management. This shaped the balance of my career and demonstrated some of the principles I will describe in this book. As such, I will draw a great deal from this company and experience as it largely formed the impetus for my ongoing involvement in organizational transformations. At Harvard Pilgrim, I watched a company that was completely swallowed up by chaos ultimately emerge from it. As of the time of this writing, Charlie is the Governor of Massachusetts.
While at Harvard Pilgrim, and as many of my colleagues were being terminated all around me, I was called into the Chief Operating Officer’s office and expected the worst. Instead, I was asked to take over its failing managed Medicare plan, First Seniority. Some were calling for Harvard Pilgrim to abandon this market, but Charlie and the COO wanted to see if it could be saved. The first phases of work were to develop a clear diagnosis of the problem, to determine the true operating and financial status of the program, and then to create a transformation plan. I was asked if I could lead that effort. At the time, I felt that little had prepared me for such a challenge, but in reality, everything in my career to that point had prepared me for it. I won’t go into the specifics of this transformation here; rather, they will provide the underpinning for much of the proposed approach I will outline in this book. In short, it was a major success.
At that particular point in my career, now some nearly twenty years into it, I began to realize that I enjoyed working on organizational transformations and, dare I say, seemed to have a knack for it. The foundation that was laid at the DON Program and as a consultant at Ernst took shape within me during the transformation of Harvard Pilgrim. I felt ready, called even, to bring what I had learned to other settings. These included:
A Federally Qualified Community Health Center that had just received notice that it would lose Ryan White Care Act funding for HIV and AIDS-related programming due to non-compliance.
A Medicaid health maintenance organization, which had received a warning from the largest health care system in the state that it was preparing to drop them as an accepted payer due to non-performance of its member service and claims functions.
A community hospital that had just learned that a significant pledge of intergovernmental transfer funds it had been counting on was not forthcoming.
The nation’s first home health agency, which had experienced a decade long decline in volumes, growing tensions with its unionized workforce, and deteriorating financial performance.
A large