We Are Doomed to Repeat What We Do Not Understand

Albert Einstein once said "The definition of insanity is doing the same thing over and over again and expecting different results". He also said, "A man should look for what is, and not for what he thinks should be." Through these long months, I have maintained that the bankruptcy of the organization was built with love and care “is what it is.” In conducting post-mortem analyses and waiting for “the rest of the story” to reveal itself I’ve had to come to terms with laying down the expectation that “what should be” will become the basis for a future solution or resolution. More than anything, hindsight is a great teacher and I accept that train wreck occurred on my watch. I was driving the bus that stalled on the track, and when the train’s headlights appeared in the darkness, I made the decision to rely on the advice of system ‘experts’ to restart the engine rather than acting on my instinct to push it off the track. We all died.

There are of course, no clauses in the FAR playbook that define what contractors are to do when there’s a train on the track speeding unchecked in your direction or when federal procurement officials decide to your detriment, to throw away the rulebook in favor of their own contrivances. There is no guarantee that, had the dispute been properly resolved, we still wouldn’t have been placed into an involuntary bankruptcy imposed by the merger of Regions Bank with Amsouth. Our lending requirements were defined out of the scope of the loan profiles that were carried into the merger on the portfolio ‘keep pile.’

“What should be” is represented by an ideal world in which there’s no such thing as political interference; regulators do the jobs they are compensated for; mistakes are never made or if they are, they are recoverable; and agendas are openly communicated and disclosed for the benefit of all. Unfortunately, that is not the world we live in and while I did not fail to identify that the processes which governed our work were being impeded, I failed to comprehend the degree to which our work was being interfered with - in the media, politically, contractually, and in the financial world. Like my peers in this industry, I believed that the constraints and safeguards imposed by regulations would force “reasoned heads and regulations to prevail.’ I did not understand that if the engineer driving the train that is headed in your direction has no brakes and is traveling unchecked, there’s no need to replace the starter while stalled on the track.

Now I know that it is inevitable that there will always be the likelihood of unpredictable catastrophic events occurring that have the potential to wipe us out. And I also know that catastrophe can be predicted, and (not if but) when these events occur, the work will be impeded or destroyed at great cost and loss. The key to understanding how to avoid catastrophe is analysing, understanding and planning for reducing the deleterious impact of catastrophic risk events through the preventive application of continuous risk management and change control practices. Ultimately, those practices are not necessarily what we learn through executive management schools – unfortunately, they are best identified and learned through ‘trials by fire’ and real life experiences captured, memorized, dissected and distributed.

Somewhere between “what should be” and “what is” lies the definition of that entropic event that we know as “risk.” And that is where we who serve on corporation boards or who hold executive management positions work while we create communities, and manage programs, services, and financial affairs. According to the Project Management Institute, “Risk is a type of event, positive or negative, which has the potential to effect the outcome of an organization’s projects or activities, and may be “known,” that is, identified and planned for, or “unknown or a known unknown” with the potential to occur and overwhelm the organization.” To sum, the following risk events acted like dominoes to swamp the Advocacy and Resources Corporation into becoming fodder for a bankruptcy filing:

1. 
   The media created a platform of perceived and widespread misconduct as a pattern of behavior in the JWOD program. All six hundred affiliated organizations were painted by the same brush, and the top twenty producers in the program were particularly targeted. Misstatements and political agendas forwarded by the media were widely reprinted and became the ‘sieve’ through which all attempts at correction of the facts were filtered, whether or not veracity could be established.
2. 
   JWOD leadership failed to comprehend the impact of the media upon local community rehabilitation programs and recoiled from their responsibilities to (1) issue correcting information while managing the media and correcting the record, leaving it to individual agencies to fight each media battle separately and (2) manage the day to day operations associated with contractual obligations, allocate personnel to the conduct of business, and left it to individual agencies to fight for course correction in the impeded environment without coordinated national support from either the central non profit charged by law to broker the programmatic relationships or the Committee for Purchase.
3. 
   Politcal appointees and staffers in government seized on the media’s activities and the lack of response from JWOD leadership as a basis for furthering their own political agendas,[1] impeding contractual processes and failing to ensure that contract management obligations were met, thus knowingly and purposefully creating extreme financial strain on this organization in the post Katrina economic environment. All they had to do was direct their staff to do nothing to meet their obligations and that is exactly what they did. They waited us out until our resources were exhausted, thus benefiting commercial firms.
   
4. The secured creditor and their representatives deftly capitalized on (1) media reports and the capability of the media to control the message, (2) political and economic conditions imposed by the government’s failure to act in accordance with contract terms, and (3) the very integrity of the social enterprise business model as a strategic and acceptable method for economic development, to seize and convert the assets of the not for profit organization for the purpose of meeting pending merger write-downs from their loan portfolios.
   
5. Our elected local, state and national political representatives, whom we relied on to represent the community, reframe political processes and demand course correction, looked the other way, failing to appropriately value or appreciate the loss of the federal activity to our local communities, the impact on individuals with severe disabilities, the financial impact to creditors supporting these federal contracts, and the ultimate loss of core services that cannot be replaced without social entrepreneurial practices at work in our communities.
   
6. The assigned Bankruptcy Court Judge, whose responsibility is to manage proceedings, has never questioned the appropriateness of the bankruptcy in front of him, the independence or actions of the appointed Trustee to act in the best interest of the community, and has failed to appreciate whether the rehabilitation of the organization is being handled in accordance with the wishes of the community, regulatory requirements, or in the interests of the persons the agency is charged to serve. It’s bankruptcy as usual and the only beneficiaries to the process are the attorneys who have waived the ‘bankruptcy flag’ over their open checkbook, and who will most assuredly have their fees paid when creditors and employees are harmed again, when the organization is reorganized to chapter 7, and persons with severe disabilities and their families are without the community and employment supports they desperately need.
   
7. The community has for whatever reason, failed to raise its’ voice, acknowledge the loss, demand an accounting, or register the value it placed on the service system that was forged from the successful application of social enterprise practices at work in the community. The primary stakeholders to this process, persons with severe disabilities, have lost their primary organizational support system, and cannot muster the voice without community assistance. To date this has not happened and the service system that was sponsored by ARC has not been replaced as no other agency or political entity has stepped forward into the advocacy breach.
   

The danger in any entrepreneurial enterprise is that while it might be important to enterprise leadership, it might not be important to those who manage and set the agendas for the enterprise’ stakeholders-citizens, persons with disabilities, creditors, customers. Whether this event is resolved on behalf of the segment of the community served by the former Advocacy and Resources Corporation depends entirely upon whether the community stakeholders to this process determine that the outcome is important to them and organize toward an effective solution. In this case, it would seem that if decapitating the leadership effectively dissolved the assets of the enterprise for the benefit of the ‘negative stakeholders,’ then one should question whether the enterprise was ever necessary in the first place. While that is for the stakeholders to the process to decide, our communities are still faced with the lack of supports to approximately 1,500 of the most defenseless of our citizenry-mothers, fathers, aunts, uncles, brothers, sisters and neighbors-persons for whom there are no other services or funded supports.


[1] GAO & Washington Post Articles