Felicelli added that concerns about confidentiality in the board’s management of personnel matters prevented him from offering specifics.
Contracted by SMPA’s board of directors, the Vector Group, Inc., with offices in Denver, Philadelphia and London, conducted the analysis during the summer of 2011. Because of confidentiality concerns regarding personnel matters, the Vector study has not been made public and its recommendations have been discussed by the SMPA board of directors only in executive session.
SMPA’s power-purchasing members, who in essence own the rural co-op, might never have learned about the study if not for a blog posted in two parts on Aug. 10 and 14 by Vector Group Managing Partner Gary Craig. Though he did not identify SMPA, Craig described how the analysis was conducted, summarized the conclusions and, finally, discussed his frustration that nothing was being done by the client after the presentation of results and recommendations.
Craig described SMPA only as “a small rural utility cooperative,” but SMPA Board meeting minutes and SMPA attorney Jim Link both confirm that SMPA did contract with Vector Group for an analysis to improve efficiency within the organization.
While the intent of Craig’s blog was to offer a case study in a consulting job that led to frustration, his summary nonetheless paints SMPA as lacking in organization and leadership.
Gathering data from board member interviews, staff interviews, group interviews and observations of goings-on in the workplace, Vector ascertained that, according to Craig’s blog, SMPA was “sorely lacking any form of effective management and totally devoid of leadership.”
As an example, he wrote, field crews had to wait every day for their work assignments, anywhere from one to three hours, while management was engaged in deciding what needed to be completed that day. Once the crews got their assignments, they had to look for supplies, often not having what they needed.
Craig also suggested that SMPA had a “culture of command” that resulted in a scenario where employees were expected “to check their brains at the door” to work there, and that no matter what an employee might recommend for improving the operation, “only management knows best.”
This, Craig stated, led to a lack of trust, no sense of urgency and “a sinking staff morale.”
Vector made 112 actionable recommendations to the board of directors, which included recommendations on governance, structure, management, leadership, and culture.
When Vector representatives planned to offer their findings to the SMPA Board of Directors, Craig wrote, they recommended doing so without having General Manager Kevin Ritter present. Ritter, Craig suggested, should receive a full report once the presentation was given.
But Ritter was allowed in the room during Sept. 20, 2011 presentation, Craig wrote, and an unexpected melee unfolded.
“On the day of our presentation to the board, we witnessed a dramatic scene unfold,” Craig stated in his blog. “One board member led a coalition of board members to launch a coups d’état in order to depose the current President of the Board and select a new one. Of course, in this melee, the GM was allowed to remain in the room to hear the in-depth report of findings.”
Later, as the board discussed the findings, it became clear to Craig that members of the board began to dismiss the results as opinions or perceptions.
“This was the ‘shooting of the messengers’ by attacking our credibility and expertise in conducting such an operational analysis,” he stated.
One of the conclusions found in the analysis, Craig wrote, was that Ritter “had done his best to sabotage the process” from the beginning by portraying the analysis as some sort of “head-hunting expedition” or an “indictment of his management and leadership capabilities.” Craig claims Ritter sent out communications to staff and members of the board that the analysis was actually an “efficiency study where we could come in and tell people how to do their jobs better.”
Despite that perception, Craig wrote that much in the report was not good, but also not grim.
“Our conclusion was that with no changes in staff, the entire operation could be turned around in 90 days, with significant and noticeable changes within 30 days,” Craig stated. “This small co-op could have been built into a model of effectiveness and increased efficiencies. The staff really wanted things to change for the better; the board wanted things to be better but did not want to ‘stress’ [General Manager Kevin Ritter]. But management thought things were fine and were not going to question the GM’s judgment on anything.”
Upon following up with the SMPA Board of Directors, after presenting the results, Vector Group officials, according to Craig, clarified how the analysis was completed and reminded the co-op that staff was expecting to hear the results and hoped for improvement.
“We also added the caveat that if the board and GM did not follow up quickly and effectively, the co-op was ripe for return of a labor union.”
But, Craig added, the board allowed Ritter to defend against or rationalize about each recommendation, and then let Ritter decide how to move forward with the results of the analysis.
“As predicted,” Craig stated, “the co-op returned to union representation after three-four months of waiting for management to take some clear actions with the results of the analysis. This might have been avoided if the analysis had not been done in the first place.
“Even data-gathering for this kind of operational analysis raises people’s expectations,” he observed.
Craig’s assessment of the analysis was not completely negative. “In defense of the board, this was undoubtedly something they did not sign up for in their want to give something back to their respective communities,” he wrote. “Generally, this is a group of nice, well-intentioned people who want to represent and advocate for their constituents and attend meetings that are productive, informative and void of high drama and conflict.”
Craig also wrote that despite some challenges, the analysis found a “dedicated staff that was competent and able to provide service to the co-op members/owners despite the organization and its management.”
Felicelli said Tuesday that he could not go into detail on the results of the analysis, but that changes have been made in its wake.
“This was done a year ago,” Felicelli said. “There were a number of recommendations, but I can’t go into detail on them. What I can tell you is that we have reduced the number of issues, and we have worked with the board and staff to implement changes in the co-op to make us a more efficient company.”
In reading Craig’s blog, Felicelli did take issue with a number of statements in the piece, most particularly those concerning precisely what actions have taken place since the analysis was completed.
“There are a number of things where he may have stretched the truth a bit,” Felicelli said of Craig’s blog.
“They have no real knowledge of what we’ve done. A lot of it was after the fact, and they have no idea what was done after that.
“I can tell you the board took it very seriously and staff took it very seriously. It’s been over a year now and we have implemented a number of changes.”
Reached by email, Craig refused comment on the blog, and would neither confirm nor deny that it was written about SMPA.