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Weekly UpdatesJANET BRAY, CAE, KNOWS WHAT IT'S LIKE TO TAKE OVER AN ASSOCIATION IN CRISIS.
She remembers vividly the shock of discovering fantasy-based budgets and unpaid taxes ... the stress of delivering constant bad news to panic-stricken board members ... the agony of figuring out which staff she couldn't afford to keep and which ones she couldn't afford to lose.
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The amazing thing: Bray has turned around associations not once but twice--and she loves the experience. "I find it exciting and exhilarating. Organizational maintenance bores me. I need the chaos." She found all the chaos she needed when she was executive vice president of the National Association of Enrolled Agents, Gaithersburg, Maryland, and now as executive director of the Association for Career and Technical Education, Alexandria, Virginia.
According to Bray and others, CEOs with a flair for the turnaround possess a combination of skills that take management to a new level, and they have clear strategies for dealing with the three core constituencies--the board of directors, staff, and members--whose support is essential for any recovery.
Considering characteristics
Charles E. Bartling, CAE, wrote a book called Managing Association Turnarounds (1997, ASAE) after living through one himself. He thinks the word to describe the ideal turnaround artist is gutsy.
James R. Sargeant, author of Last Rites or Turnaround? 10 Fundamental Reasons Why Businesses Fail and How to Overcome Them (2003, Arges Publishing Company), thinks a good moniker is merchant of change.
Janet Bray's favorite descriptor is more blunt: "You have to be an idiot!" she laughs. "You have to have a very strong constitution. You have to say, 'This is a mess, and here's what we have to do and do it quickly.' You can't wait for the board and get buy-in. Just make sure you have a contract so you can't get fired, and go at it."
Because no two turnaround situations are identical, it's impossible to say exactly what you must do. In one of Bray's associations, a staff reorganization worked swiftly and smoothly; in the next one, a reorganization faltered. Uncovering the problems, she says, is like peeling an onion: You never really know what you'll find as you pull back the layers. At her current association, she uncovered tax problems that couldn't wait for the next board meeting. "In a turnaround situation, you act now and ask for permission later. I'm not saying that you ever sign contracts that have nothing to do with the association or spend gobs of money without approval. But you act as fast as you can"--and adapt as fast as you can as you learn more.
According to Bray and others, association turnaround artists share these common characteristics:
Quick reaction time. In a genuine crisis, you have little time to ruminate, says Sargeant. Chances are the association faces a dangerous mix of problems, from inertia to turf wars to the staff's and volunteers' urge to put personal interests ahead of the organization's. You have to quickly provide reliable guidance and direction by sizing up the situation, thinking through the ramifications, and keeping everyone focused on the facts.
Brutal honesty. If your association is in need of a turnaround, Bartling says that it's important for you to be the first to say it. This shows real leadership, and even if the facts take the members of your board by surprise, they will respect you for dealing with them. Says Sargeant, "You have to make everyone understand that there's a common interest in a turnaround situation--and that is survival."
Conversely, if board leaders discern problems you haven't detected or reveal them before you do, they'll probably think that you're not on top of the situation--and it's time to find someone who will be.
Brutal honesty also applies to the organization's sacred cows. Bartling recalls such an incident from his initial days as CEO of the Financial Institutions Marketing Association. Soon after starting, he was surprised to learn that in only three weeks the savings- and-loan-related group was scheduled to hold an annual black-tie dinner for board members and spouses--entirely at the association's expense. He confronted the board and made it clear that such luxuries were no longer sustainable for an association representing a dying industry.
Ability to inspire confidence. With bad news all around, "you have to be able to demonstrate that you know where you're going," Sargeant says. "You have to convince others of the benefits of even undertaking the turnaround before you can speak on specific issues and ways to improve."
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Although much of Sargeant's experience is with businesses, he has had enough dealings with associations to know that getting various interest groups together isn't easy. Constituents' hostility is often caused by their frustration that something they cared about has gone so far awry. Sargeant recommends mixing decisiveness with interactivity, so that you constantly receive input, express appreciation, and show that everyone has an interest in working together despite the hard times.
Juggler's reflexes. Handling a turnaround is similar to starting a new organization while keeping the old one afloat. "You can't think, 'I'll get this one thing right and then go on to the next.' It doesn't work that way," says Bray. "You don't have the luxury of time."
Turnaround artists decide what's most important at the moment--and leave the rest for later. "When you make a poor decision or just plain fail, you have to pick up and move on," she says.
Stage presence. By the time an association is in obvious need of a turnaround, its reputation is damaged and other organizations are eying its turf-if they haven't moved in already. A turnaround artist sends a public message about the association's viability by maintaining a high profile with the board and members. A can-do example is equally important around the office. When Rob Katz, managing director of Executive Sounding Board Associates in Philadelphia, manages a turnaround, he aims to be the first person at the office in the morning and the last to leave at night.
Deep roots inside. Every CEO needs a champion--someone on the board who not only recognizes what's needed but also will serve as an outside advocate. When grappling with her association's surprise tax problems, Bray spoke daily to her then-president so that she would understand the consequences of inaction, the reasons for what Bray wanted to do, and the importance of communicating that rationale to others. If you don't have a champion, you'll need to create one--through strenuous re-education of your top board leaders.
Getting the support you need is not always simple. Once Bray had to struggle with a less-than-cooperative board leader whose special interest was micromanaging her chief financial officer. Bray approached the problem from several angles. She took him to a strategic planning seminar where he could hear a respected third party explain that the board's job is to set policy, not sit on the staff. She also told him herself--as many times as necessary--that dealing directly with staff was unacceptable and he had to work through her instead.
Deep roots outside. As a long-time ASAE member, Bray has developed contacts to call when she needs advice on the best strategic planning workshops for a recalcitrant board member or the best deal on accounting software. She has also created an informal support group of colleagues "whom you can call up and say, 'You won't believe what my board just did.' Misery does love company. When you think you can't do this anymore, that gets you through."
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She also has a husband "who's extremely supportive and takes care of me" and a gym membership she can't live without, A lunchtime trip to the treadmill not only recharges her batteries but also helps generate great new ideas.
Dealing with the board
Board members don't sign on for a turnaround because they want to close down programs, face angry members and donors, lay off staff, or attach their names to a faltering enterprise. Turnarounds are emotionally hard on top volunteers, says Katz. They may be in denial. Or they may be highly territorial--their pet program can't be the one to shut down. They may even take bad news as a personal insult.
If things weren't "that bad," you would probably proceed slowly and diplomatically toward a compromise. But when you're doing association CPR, you don't have that kind of time. Here's how to bring your board on board for the tough decisions.
Communicate. When Bray started at the National Association of Enrolled Agents, one of her first official acts was to write a memo to the board spelling out her priorities for the first 90 days and the next 180 days. Her message: "If you disagree, tell me now." Once she started carrying out the plan, she began a series of regular communications, eventually sending the board an e-mail report every Monday to make sure that everyone knew what she was doing and why. Especially in troubled times, "you can never communicate too much," she says. "When [board members] felt they knew what was going on, they left me alone."
Remember you're serving members. In the rush to rescue, it's easy to avoid controversy by steering clear of directors' pet programs. But a crisis is the time to do triage, and saving a niche program at the expense of your core services won't improve your prognosis. Put the sacred cows on the block, and arm yourself with "stacks of information, from needs assessments [to] focus groups," says Bray. "Make it clear that you must meet the needs of the majority of members, and the board is not usually the typical member."
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