Change or Die

What do the Housing Authority, the Zoo and the Orchestra have in common? Leaders who embrace change

Change or Die

What do the Housing Authority, the Zoo and the Orchestra have in common? Leaders who embrace change



Recent columns in this space on the Philadelphia Foundation and the Community College of Philadelphia urged those institutions to think bigger and aim higher.

Both are in leadership transitions; CCP has a new President and the Philadelphia Foundation is recruiting one. New leaders can help re-think strategy and reenergize staff, boards, customers, and funders.

The rigor and thoughtfulness of selecting leaders tells us a great deal about governance. Are boards looking for continuity or disruption?  Are they willing to go outside their comfort zone in terms of candidates? Most importantly, what is their understanding about their current position and possibilities?

Much of our time has been spent worrying about and handicapping the mayor’s race. But we have as much stake in the management of important civic and public institutions as we do in who occupies City Hall. In a city where great things often happen despite backward politics, our ability to attract and support strong leaders to run key institutions can be decisive.

Much of our time has been spent worrying about and handicapping the mayor’s race. But we have as much stake in the management of important civic and public institutions as we do in who occupies City Hall.

Whether as CEOs, management teams, or board members, leaders have to be capable of asking fundamental questions about the quality of operations, the core functions of the organization, and the forward strategy.

The leadership transition several years ago with the Philadelphia Housing Authority (PHA) is a case in point. We had the long public embarrassment of Carl Greene’s missteps and a somewhat shorter embarrassment with his immediate successor. Today’s PHA leader, Kelvin Jeremiah, has been at the helm for the past two years and seems to be doing a good job steering the once troubled agency.

The PHA board is capable but may not have all the real estate and finance experience it needs to effectively govern the fourth largest housing authority in the nation. PHA is the largest residential landlord in the state, serving some 80,000 renters. It lives on federal funds but is state chartered and locally governed. As we’ve seen, the wrong leader can manipulate those disparate accountabilities.

Getting it right and staying accountable matters, for tenants and for the neighborhoods they effect.  As the finances, management, and public credibility of the agency improves, there will be new questions to ask.

Atlanta is the first public housing agency to have torn down and rebuilt all of their projects. They now have rigorous tenant screening, social services, and job placement programs in effect. We do that here but we have room for improvement.

Moreover, in some cities (including Atlanta) they are asking fundamental questions once again about renter tenure. Public housing was originally created as temporary assistance and not life-long residence. That changed in the 1960’s and 1970’s, but should we rethink all of that once again?

Because Philadelphia is an old city, we get hung up on being among the first, more so than wondering if we are among the best. Surviving is not always so hard in the nonprofit and public agency world; being great takes more work.

The Philadelphia Zoo is an institution that has both survived and is on the road to being great. The Zoo was chartered in 1859, the first zoo in America, although it did not open its gates until 1874. Its Frank Furness designed gates and gatehouses are there today as they were on opening day, more than 140 years ago.

The zoo’s physical plant, finances, and leadership are on a sound trajectory.  They have had strong leaders over the past three decades including current President Vik Dewan.

Dewan came out of banking where he was a senior executive for Wachovia bank (now Wells Fargo), prior to taking the zoo job in 2006.  He knew little about zoos at the time. He did understand the management of complex organizations, creating and implementing strategy, the importance of happy customers and employees, using metrics to measure progress, and how to balance different constituencies.

I am sure today he knows more about zoos and animals then he every dreamed he would when he was running a bank.

If zoos are going to thrive in an environmentally conscious world they have to balance their role as entertainer with their conservation mission. Philly’s zoo has done this well, becoming an important center for endangered species breeding. There is no reason its conservation science and education role cannot expand.

Some of the innovations at the zoo involve great design. The zoo is still on the same 42 acres of Fairmount Park as it was when it opened in the 19th century and there is no expansion room. So it decided to expand by building a trail network in the air (and on the ground) that allowed animals to move about in caged trails.

The value of the trails is not just that the animals have more room to move or that people can see them more easily; it’s that the entire place is in motion, with a heightened sense of mystery. When the full transformation is complete it will be a more kinetic atmosphere, more of an ongoing performance than a glare against the window or wall.

Zoo President Vik Dewan came out of banking and knew nothing about zoos. But he understood the management of complex organizations, creating and implementing strategy, the importance of happy customers and employees, using metrics to measure progress, and how to balance different constituencies.

Jim Collins, the popular management theorist and author of books like Built to Last and Good to Great wrote a brief compendium to Good to Great, which discussed the social sector: public and nonprofit institutions.

Collins’ point was that becoming great in the social sector is not reducible to nonprofits acting like a business. Most businesses, Collins noted, are between mediocre and good. Becoming great means adopting a set of disciplines common to business and the social sector.

The appetite for adopting strategy is more common with private firms because competition and external investors drive change, including the search for market differentiation. The old business maxim that someone is trying to put you out of business, so you may as well do it yourself has, until now, been less applicable to the social sector.

But that has changed and the change is likely to pick up steam in coming years. Three transformations challenge many of the large nonprofit and public institutions built over the past century or more: shifts in demography, technology, and the economy.

Our population has become more diverse by ethnicity, culture, and interest. Most large American cities (and many states) are already majority-minority in terms of ethnic background, with dramatic numbers of new immigrants. The further you move down the age scale, the more profound the linguistic and national origin diversity. The global and the local has merged in our own communities.

Technology has changed the relationship between audience and performer, professional and amateur, teacher and student, customer and business. It is also creating a workforce increasingly functioning outside the traditional office setting and a consumer that is purchasing more goods online. Moreover, entertainment is no longer bound by a designated time whether on television or by a pre-arranged theatre subscription. I stream what I want, when I want.

And a rapidly changing global economy has decentralized the locations and processes of making and distributing goods and services. Moreover, changing technology has created a breathtaking churn in companies and company loyalty. And this has consequences for local civil society including how nonprofit and public sector institutions build partnerships and donors.

Just as private sector firms have had to adapt to these changes, (think of the rapid rise and fall of retailers like Blockbusters, Borders, and Radio Shack), large nonprofit institutions built over the past century have to make adjustments.

In some instances if your endowment or brand are strong enough you may be able to ignore a changing cultural, media, and business landscape, but only for a time. Eventually you have to respond to new circumstances. If you do not respond in time, the consequences can be drastic.

In this respect think of the famed Philadelphia Orchestra, which a few years ago was forced to enter bankruptcy (from which it has thankfully exited in somewhat better shape). You could see the writing on the wall for years in declining sales and a declining endowment. If you looked carefully you could also see that the orchestra had lost its national and global luster, something that many pretended was not so.

It took a few board members, most notably Richard Worley, to step out and become the change agent for the institution. He did what a good board leader does: he faced facts, put his money where his mouth was, cajoled everyone that would listen to join him in a reinvention process, was not afraid to hire out of town talent, and ruffled a lot of feathers, including many on the board who seemed oblivious to the iceberg that the ship had already collided against.

The Philadelphia Orchestra is a long way from being turned around but there is movement in the right direction. Its basic product is improving and the willingness of the Orchestra to expand its relationships locally and globally is impressive.

Has change been too slow and not radical enough? Perhaps. But the organization is no longer captive to past glory in decline, which is a capstone of mediocrity.

If you want to contemplate the potential of disruptive change in the nonprofit sphere, think about colleges and universities. When Sweet Briar College, a private college in Virginia, announced that it would close several months ago, it sent shock waves throughout academia. The small liberal arts school did not have the financial capacity to do what it needed to reinvent itself. Perhaps some last minute alumni efforts will reverse the decision, but that is not the point.

Why shock waves? Because an awful lot of college administrators have been avoiding the very issues that the Sweet Briar board was facing. There are more than 2,500 4-year degree-granting colleges in America. Many will have to merge with other schools to survive; others will close.

Shifts in technology, the rise of competency based education and alternative certifications, along with for profit college competition, could make many schools obsolete.

Our reliance on foreign students to fuel admissions may similarly change as several major exporters of students have invested heavily in their own university infrastructure, sometimes in partnership with American and European schools.

And finally, there will be an end to the student debt bubble. And it will not be pretty.

Four-year colleges in Philadelphia will be affected. It is hard to imagine that we will not have some of our own mergers and closures.

The fixed state of familiar civic institutions is in rapid motion today. It will require leaders able to run complex institutions in a changing landscape, not afraid to re-think core functions and identities. Let’s keep pushing the talent and governance expectations higher.

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