Note: Continuing down the path on the subject of trust, here are two case histories (one will be next week) from the client file when I knew the moment I crossed the line of breaking a bond of trust, and there was no going back. Enjoy. Previous installments of my weekly blog from 2013 can be found on my website at http://stevemarshallassociates.com/steves-blog/.
In early 2002 I began work on a community education briefing project for a hospital in Washington State. This hospital had protested the building of a competitor's hospital in their county with the Washington State Department of Health. The resulting backlash had stained their image, and I proposed a community leader education program to explain why they did it.
What is a Certificate of Need?
I am sure you are asking why did they do this and how could they do this? A Certificate of Need (CON), in the United States, is a legal document required in many states and some federal jurisdictions before proposed acquisitions, expansions, or creations of facilities are allowed. CON's are issued by a federal or state regulatory agency with authority over an area to affirm that the plan is required to fulfill the needs of a community. The concept of the CON first arose in the field of health care and was passed first in New York in 1964 and then into federal law during the Richard Nixon administration in 1972. Certificates of need are necessary for the construction of medical facilities in 35 states and are issued by state health care agencies. I am sure that is more than you ever wanted to know about CON's, but I always say I like to learn something new every day and ta-da; look what you learned!
My client, the largest and oldest hospital in this county, decided to mobilize public fervor against this competitor coming into their area. A massive advertising campaign was launched, billboards went up, and editorials were written. It backfired; the public saw it as one greedy hospital trying to keep another out and keep the toybox to themselves. Predictably, the sacrificial lamb was the hospital CEO; he was fired, and my briefing program was put on hold.
Still, what remained was that the hospital needed, more than ever, to adopt a competitive posture and expand their facility to the tune of $150 million. They hit their bonding capacity at $125 million and needed the community to give the rest through charitable contributions. I enter the scene again in 2003, stage right, to perform a planning study in the area to assess their capability to raise $25 million + in philanthropic contributions.
The Planning Study
I had met the hospital's foundation director during the first community briefing project, and she called me back when the way was clear going forward as to what had to be done. We had become quite close during the first stalled project, and I wasn't surprised when she sent me the RFP for the study. I won the contract and went to work to individually interview the top 60 modest influential people in the community to assess their interest in the project, their perception of the need for the expansion, the image of the hospital, their propensity to give, and the internal capacity of the hospital foundation to mount a successful effort to raise the funds.
I interviewed all of the foundation's board members first and was pleased to find that most of them had complete confidence in the skillsets of the Executive Director. Due to scheduling conflicts, I had to put off the operating board interviews for awhile, so I started interviewing influential people in the community. These conversations were instructive but not necessarily damaging to the executive director; it was just that she was mostly unknown to the movers and shakers of the city. (NOTE: Often, a major philanthropic effort is a great way for the foundation's chief staffer to get to know the leaders in any community.)
It is customary and best practices not to communicate with the client about any findings until the study is halfway completed when an interim report is presented to the client. I had completed about 35 interviews at this juncture, and I wrote the progress report and delivered it. On the surface, the metrics for a successful outcome to raise $25 million were present. The ED pressed me for further details and because of our relationship, I did share that the project looked like it could be successful and any challenges she would face could be fixed.
The Study Goes "South"
Then I started interviewing the hospital's operating board members, and the story was quite different; 80% of them had no confidence in the ED's ability to be successful, and some even said that they would not give a dime if she were still there when a campaign started! What was worse about this outcome was that the greatest propensity to give the most money (seven figure gifts) was on the operating board, not the foundation board. The killing blow for her came when I interviewed the CEO and the rest of the Executive Team - none of them wanted to or were willing to work with her. In fact, the CEO was secretly hoping that my study would give him enough ammunition to fire her!
At the end of that trip, I got on the plane homeward, very dejected and wondering how in the hell I was going to prepare and deliver this report? On the one hand, I felt compelled to call the ED and warn her that awful news was coming her way; on the other, I had to remember that my primary responsibility was to the client, which was both the hospital and the foundation.
I wrote the report and requested a joint meeting with the two boards to deliver the results. Operating board meetings were scheduled a year in advance, and it was fixed as an evening meeting. When I queried the foundation board as to the feasibility of changing their (year in advance) scheduled meeting to coincide, they said no; "Give two presentations." This is not my favored approach - I want everyone in a governance position to hear the same thing at the same time, but, hey, the customer is always right - right?
The Horror Show
First up was the foundation board meeting and, not surprisingly, it didn't go well. In short, it was horrible. When I reached the "Recommendations" section of my report and listed as a requirement going forward that "new leadership will be required for the building campaign to succeed," the room erupted into gasps and the Executive Director abruptly walked out of the room. The foundation board chair challenged me in open debate whether this type of recommendation was even within my purview, to which I had to respond that it was, given the primary objectives of the study from the outset.
The meeting ended shortly after that exchange and another board member pulled me aside and demanded a private meeting, to which I agreed. That turned into a tirade from her defending the ED and me defending my methodology and my findings, conclusions, and recommendations. She finally calmed down when I impressed upon her that much of the weight of my findings and recommendations was based on the comments and statements from the interview respondents, from which direct quotes (anonymous) were included in the report.
With a splitting headache, I now faced the challenge of presenting the same report that very evening to the operating board. With an overwhelming feeling of dread, I went to the night meeting and awaited my cue to present the report. It went swimmingly well! The board took a break after my presentation and both the board chair and others congratulated me on an outstanding assessment of their current situation and a clear path forward. Wow!
What Happened Next?
I attempted to call the Executive Director several times after the disastrous foundation board meeting, but she refused to take my calls. Her assistant finally told me to stop calling and I did. After that? The ED was asked to resign, which she did and was never heard from again, despite several foundation board members attempts to reach her. A new ED was hired, she led the hospital to a successful campaign conclusion of over $50 million in charitable donations, and the $150 million expansion was built and opened in 2007.
What Did I Learn from All of This?
- Try to be a caring, sensitive human being first and foremost, and, at all times.
- Bring people along with you in your path forward and never surprise them (good advice for leaders, too), especially with bad news.
- If there are two governing bodies, never allow the client to have two meetings for the final report presentation.
What Do I Do Differently Now?
I recently had an opportunity to test the above three lessons with a client in eerily similar conditions as the above situation. I prepared the ED for any potential bad news almost from the beginning by showing her that I cared about her and my appreciation for the five years of hard work that had brought the organization to where it was today. In other words, I built a basis for trust between us right from the beginning by being explicit about the expectations and potential outcomes - no surprises.
It happened. I had to recommend, based upon the comments made by respondents and my studied conclusions that it would be best for the organization that she step aside and bring in new energy and a fresh face to present to their constituencies. It went well; she agreed, and the group is looking for a new ED.
My conclusion - since 2003, I grew up.
Next Week: Another tale of broken trust.