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Hospital Development The ‘owners’ of a charitable non profit hospital were concerned that the organization had run at a loss for the last 5 years and eroded its equity to cover operating deficits. The buildings and equipment were now in need of major capital investment. The owners were no longer prepared to suffer operating losses and resolved that if the hospital could not be made profitable they would sell and use the equity to advance their mission in Africa. Previous attempts to resolve the financial position of the hospital did not realize desired outcomes, primarily as a result of failure to engage those affected, especially in middle management. In addition, over emphasising cost cutting as the solution, under valuing income expansion and poor execution like avoiding hard decisions had combined to create resistance and achieved nothing. The Board employed VMO’s John Mero to conduct a business model redevelopment. John advised the Board that savings could be made whilst at the same time improving quality and lifting income. John also advised the Board to recruit a CEO with proven commercial skills. These strategies were accepted, and the hospital achieved a major turn around in the first 12 months of implementing the plan. Board Development The newly appointed chairperson of a mid sized service organization contacted VMO seeking assistance to improve the performance of the board. There were a range of issues including poor teamwork and several directors who failed to respect the demarcation between governance and management. A board performance audit was conducted by VMO. It concluded that there were gaps in role clarity, the processes needed for effective board performance were under developed, and that a Board Charter was needed. Following the audit a special purpose board training program was designed and delivered. Positive results in the conduct of board meetings were noticed immediately and the performance of the board was enhanced. Organizational Review The CEO of a large education organization contacted VMO seeking assistance to improve organizational performance. There was a range of symptoms including tensions between senior and middle management, with the latter group being accused of resisting change. A review was designed to identify root causes which concluded that the Chain Of Command required development in several areas to overcome low role clarity, weak accountability and poor ownership of communication responsibilities. Following workshops to discuss the results, which were designed as change management processes, the CEO reported significant reductions in tensions and a far greater focus on servicing clients. Executive Performance The CEO of a large multi site service organization contacted VMO with a request to assist her to fast track the development of the executive team. The organization had just completed a major restructure and six of the nine executives were recently appointed, coming from different industry backgrounds. It was agreed to hold a series of executive retreats to progress team development. Topics included developing the agreed rules for how the executive will function and building an Executive Plan to implement the board’s directions. As the executive members are highly skilled, internal hot spots were quickly resolved enabling the retreats to address the most complex decisions facing the organization. The board and middle management reported significant satisfaction with the CEOs leadership of the executive. Dispute over Equity The chairman of a non profit organization, which receives 85% of its funding from government, contacted VMO to request assistance dealing with a dispute over ownership of accumulated equity on their balance sheet. The government department, following correct procedure, identified the equity and sought to resolve ownership. The CEO was hesitant to argue with the government department out of fear of damaging the relationship. An analysis of contract conditions and the financial history was completed by VMO and it was concluded that the non profit was entitled to 90% of the equity. This was accepted by the government department. To prevent a similar situation in the future, a number of changes were also made to how financials were reported against contract expectations. The Board proceeded to plan how it could best use the equity to meet the objects of the organization. Growth in Income A non profit organization contacted VMO to request assistance to develop a strategy to expand their income and equity. Whilst they receive some government funding, their long term vision involved building a robust and sustainable organization. The strategy involved identifying core capacities, market opportunities and the products and services they can realistically develop and offer. The primary weakness to be overcome before the strategy could succeed involved developing new skills and a culture throughout the organization committed to growth. After a year’s effort, funds have been secured through Regional Economic Grants for a purpose-built facility, and the income line has increased by 20% from the previous year. Business Systems The Managing Director of a publishing company contacted VMO to request assistance to overcome a long standing issue of poor communication between departments in the company that he had not been able to solve. A quick review process was established to determine the cause. The most frequent description of the communication problem was that departments did not inform each other of things they needed to know, which often led to poor relations with clients. For example, the sales department would make commitments without checking with production to see if they could meet the timelines. After the review all managers were engaged in finding solutions that they would be held to account for achieving. The consensus agreement involved agreed rules and a process map for all stages in the communication process when other departments were affected. By placing responsibility with those involved and building in the right tools, the communication issue was resolved. |
