Frontier Associates, Inc.

Case Study #14 The Case of the Stepping Stones
This is the story of how a quasi-governmental agency transformed itself from a culture of frustration to one of inspiration. Before, everyone felt they were doing the best they could given that they had nowhere near enough money, time, and staff to meet the needs of their clients. Now, they are excited, inspired, almost evangelical. Everyone is committed to making a major difference in the world and they feel that they have the power to do whatever is needed, including marshaling the resources, to make that difference.
The Situation
The Housing Authority of the County of San Bernardino (HACSB) is an independent government agency that provides housing to at-need families and individuals in San Bernardino County, CA. The Agency is highly rated by the federal Department of Housing and Urban Development (HUD), which provides about 73% of the Agency's $89-million annual budget. Rental income provides most of the rest.
The Agency serves about 32,000 residents and has been innovative in finding ways to provide housing, including developing low-cost housing on its own. Nevertheless, there was an 8-year waiting list for housing.
When Dan Nackerman became executive director in 2004, he instituted performance appraisals and goals in an effort to move the Agency to greater efficiency and productivity within the limitations of its federal funding. By 2007 Dan felt that a basic infrastructure had been established and the Agency was ready to set bigger goals.
For the Agency to be able to serve more residents under a fixed-or even decreasing-allocation from HUD, Dan believed that a number of issues had to be resolved:
•	The Board, management, and workforce had not agreed on a consistent direction for the Agency. For example, they lacked agreement on what, if anything, the Agency should provide for residents beyond basic shelter, such as after-school programs or healthcare for seniors.
•	Each manager tended to focus on his or her particular accountability. Managers needed to think about the entire Agency. The Agency needed to be more collaborative across department and Agency boundaries.
•	Agency goals tended to come from the executive director. More origination and ownership needed to come from the other managers.
•	The staff's focus was generally on what needed fixing. More innovation was required: new programs, new solutions, new ways of providing housing.
•	The Agency's workforce was strongly committed to serving their clients. However, there was a widespread belief that, as a result of inadequate money, people, and time, there was only so much they could do. A corollary belief was that they could do little or nothing to solve the problem.
The Goals
Dan's long-term goal was to increase the Agency's ability to meet the demand for affordable housing in the county. His interim goals included:
•	Have the entire workforce own and become engaged in the long-term goal, rather than believe "We are doing the best we can with the available resources."
•	Increase cooperation and collaboration across department boundaries.
•	Increase cooperation and collaboration between the Agency and other government and non-government organizations serving the residents.
•	Increase workforce creativity in developing ways to meet the demand for housing.
Our Analysis
A Frontier Associates, Inc. (FAI) consultant conducted a number of confidential 1-1 interviews of staff throughout the Agency. In general, the findings were that people…
•	Loved their jobs and enjoyed the people with whom they worked.
•	Felt they were paid well and had good job security.
•	Were inspired by their ability to make a difference in people's lives.
•	Lacked awareness of the reasons behind changes and the allocation of the annual budget.
•	Were concerned that there was a shift from providing resources to the front line to increasing administrative staff.
•	Felt overworked and frustrated that they could not do more due to inadequate resources, about which they felt they could do nothing.
An additional finding was that there were numerous communication issues between departments.
The FAI Solution
The Agency needed an organizational transformation, also referred to as a "culture change".¹ People's behavior is governed by the context in which they act. The biggest context most of the workforce had was "We provide housing and, while we would like to do more, we can't because of limited resources." This needed to be altered to a commitment to provide far more housing and an openness to new possibilities. The new context had to include "Nothing will stop us." In addition, improvements in communication throughout the Agency were required.
We recommended that the Agency engage in FAI's Organizational Transformation Program.² This Program has two components:
•	FAI's Strategic Planning Workshop to design the future for the Agency
•	FAI's Effective Leader Program for management
In December 2007 approximately 30 people, including Board members, senior management, and "influencers"³ from throughout the Agency participated in a 2-day Strategic Planning Workshop. In the "Designing the Future from the Future" approach, an organization goes far into the future, beyond where prediction is possible, and creates what they stand for, what gives them passion.⁴ The participants realized that their real commitment wasn't just to providing housing, but to "creating a world in which all people have a stable and enriched quality of life." That was their Vision.
The participants concluded that the primary view (paradigm) preventing such a world was the pervasive belief that there was insufficient housing and resources. They took on the task of shifting this paradigm to "It is possible that there is enough affordable housing and resources, and all people can use these as a stepping stone to achieve a stable and enriched quality of life." This led to them creating the Agency's Mission: "HACSB empowers all individuals and families in need to achieve an enriched quality of life by providing housing opportunities and resources throughout San Bernardino County."
Placing themselves within this Vision and Mission, the participants created a set of strategic goals that would be evidence that fulfillment of their Vision had moved from "impossible" to "inevitable." One of the most significant goals they approved was "No eligible family waits longer than 10 days for housing" - a considerable reduction from the current eight years. Through their commitment, the group created a number of feasible strategies to accomplish this breakthrough. They had moved a long way from the original culture's perception of "I'm doing the best I can with inadequate resources."
In early 2008, all Agency managers participated in FAI's Effective Leader Program. In addition to the new insights into communication, management, and leadership provided by this program, the managers saw that many of the problems their organizational units faced were symptoms of Agency-wide issues that needed to be addressed in a collaborative manner.
The Results
Dan Nackerman, the executive director, said, "I had assumed that the staff didn't recognize the importance of our work. One of the main surprises for me was their desire to make a difference and to elevate lives. Transforming lives and creating stepping stones became the core of the strategic plan and of everything we do."
The new view of being a "stepping stone" to a stable and enriched life for county residents electrified and coalesced the Agency's stakeholders. It was clear (and written in the strategic plan) that to fulfill this Vision was going to require collaboration with many organizations outside the Agency. In addition, "out of the box" thinking and many breakthroughs would be required. For example, the time required for the preparation of a housing unit for the next tenant after a vacancy had long been a source of conflict, with many blaming the maintenance department. In the Effective Leader Program, managers saw that the factors determining turnover time went far beyond the maintenance department, and that solving the problem required the attention of the entire Agency. Soon thereafter a multi-department team was formed to produce a breakthrough in unit turnover time.
The commitment to "all individuals and families in need" soon demonstrated its power. There was a long-standing policy of denying and removing from housing individuals-and their immediate families-who had broken certain laws and agreements. While the safety and support of others has to be maintained, the Agency realized that if it were really committed to its stated Vision and Mission, the law breakers could not simply be forgotten. While the answer has not yet been created (another breakthrough is needed), the question is being addressed with a solid commitment to resolution.
Carlene Friesen, the Director of Human Resources, said, "Because of the wide participation in developing the strategic plan, it had ownership by all stakeholders, including the Board and the workforce. Employee ownership has benefited us significantly in the areas of employee/manager relations, productivity, performance, morale, enthusiasm...and on and on."
Probably there is no better illustration of the impact of the culture change than the Agency's Annual Report.
The cover of the 2006 Annual Report (before the culture change) is shown below.

Note that the emphasis, which continues throughout the document, is on buildings. Inside, the paper was light brown, and the text mainly dealt with data.
Now, the cover of the 2007 Annual Report (after the culture change):⁵

The people-oriented focus and the "stepping stone" theme are carried throughout the document. There are numerous pictures of people and the paper color is bright and bold.
The importance of context was learned in the Effective Leader Program. Part of the prevailing public context that would hinder fulfillment of the Vision is that public housing is "synonymous with the lazy and uneducated." Shifting this context is addressed in the first two pages of the Report in a section entitled "Public Housing in Context." After showing data that contradicts the common misunderstandings, the writers conclude, "Public housing should be a stepping stone, a phase of life toward greater living arrangements and therefore a base for a better life."
The entire document focuses on how the Agency has helped individuals and families achieve a better quality of life.
In summary, Dan observed, "We have accomplished all four of the Interim Goals of the engagement with Frontier Associates. As an organization we went from thinking small to thinking big in about two months time. There is now automatic excitement and drive behind each staff member effort that is a joy to observe- and of course much easier to guide, coach and manage…."
Summary
The Housing Authority of the County of San Bernardino provides a clear demonstration of the power of organizational transformation to inspire people and produce breakthroughs. The Executive Director's long-term goal was to increase the Agency's ability to meet the demand for affordable housing in the county. His interim goals, all of which have been accomplished, included:
•	Have the entire workforce own and become engaged in the long-term goal, rather than believe "We are doing the best we can with the available resources."
•	Increase cooperation and collaboration across department boundaries.
•	Increase cooperation and collaboration between the Agency and other government and non-government organizations serving the residents.
•	Increase workforce creativity in developing ways to meet the demand for housing.
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¹	See "Organizational Transformation #1: The Value of Organizational Transformation."
²	See "Organizational Transformation #5: Organizational Culture Change Implementation."
³	In "Strategic Planning #11: Stakeholders Must Build and Drive the Plan" we propose that every stakeholder in the organization experience having a say in the design of the plan. As used here, a stakeholder is defined as anyone who believes he or she is a stakeholder. To accomplish this, ideally every stakeholder would be at the planning sessions. In a large organization, a set of participants who are viewed as the most influential (the "influencers") can be selected. When these pivotal people understand and own the strategic plan, they are in a strong position to enroll the rest in supporting and implementing the plan. As a result the workforce will be clear about what's in it for them and why the plan says what it says.
⁴	See "Strategic Planning #5: Designing the Future from the Future."
⁵	The HACSB 2007 Annual Report, and the 2008 Annual Report which built on its foundation, may be downloaded at www.hacsb.com/press_room.htm. A few aspects of the 2007 Annual Report worth noting:
	•	Constantly reinforced is the theme of the importance of a home to people building stable and enriched lives (the organization's Vision) and how HACSB is helping its clients achieve that goal.
	•	Throughout the document are writings and data that support a new paradigm of public housing as a stepping stone.
	•	There is an emphasis on people (rather than buildings), as evidenced by the photographs, the captions, and listing the names of all HACSB employees.
	•	Partnerships with other community organizations (see page 16) are highlighted.
	•	The employee highlighted on page 21 said that her most memorable moment at the Housing Authority was being asked to participate in the strategic planning session.
	•	The color and layout are bright, full of life and exciting.
Article version 1.1 © 2008 Frontier Associates, Inc. Permission is granted to reprint and distribute this article provided that the copyright and source information are included.