SKULLDUGGERY AND DIRTY POLITICS AT WSI

This commentary appeared in The Fargo Forum on Sunday, March 16, 2008

I‘ve been a student, teacher, and practitioner of leadership and organizational change all of my adult life. I’ve followed the drama at WSI (Workforce Safety & Insurance) for the past 15 months.

Last fall Governor Hoeven recommended that independent consultants determine what changes should be made at WSI. He said their recommendations should then be implemented.

Two consulting groups were hired: one to audit the WSI claims process (Marsh USA, Inc.) and the other to review WSI leadership, structure, and governance (Conolly & Associates).

The consultant reports are in. They are excellent. The recommendations should be followed. The media and citizens of North Dakota should hold leaders accountable for implementing them as Governor Hoeven directed.

Did the consultants find that WSI was “burn (ing) to the ground” as a Bismarck Tribune editorial asserted? Did they find a “dirty little secret” and a management conspiracy to hide improper claims practices from the Board as alleged by Kay Grinsteinner, internal audit manager at WSI?

Consultant Neal Conolly on Bismarck’s KX television: "WSI is really doing an excellent job. It was almost puzzling to come in here and after hearing everything that we heard to see an organization that I would stack up with any organization that does this kind of work in the United States.”

From Conolly’s report: “WSI is possessed of well trained and well meaning staff and managers who, in the vast majority of cases, serve well the work force of North Dakota.”

And, “The vast majority of WSI program staff are well trained, understand their jobs and responsibilities, perform as team players, and are lead by a strong group of mid level supervisors and managers. WSI is not in danger of collapse….”

What can we learn from the consultant reports?

1. The evidence in the reports is overwhelming that former CEO Sandy Blunt, his staff, and employees at WSI served their clients well. Business results were impressive. The consultant’s recommendations are non-spectacular and commonplace.
2. Blunt’s mistakes were in the leadership of organizational change. He made at least one terrible hiring decision of a senior executive. Methods used to change leadership positions and redesign areas of WSI were ignorant, manipulative, and hurt and alienated many people. The objectives were fine; the methods abusive. Those mistakes are, sadly, common; few leaders know how to lead change effectively. Blunt needed an experienced consultant.
3. Leaders need a healthy ruthlessness. Blunt should have fired executives he did not want on his team. Giving them lower-level jobs at WSI was a sure route to passive-aggressive sabotage. When members of his staff proved to be incompetent and others set out to undermine him, he should have dismissed them immediately. That did not happen and Blunt’s leadership errors foreshadowed the distrust, resistance, and subversion that followed. Blunt was doomed.
4. A shadow management culture evolved and enlisted the aid of the Burleigh County State’s Attorney’s office that brought frivolous criminal charges against Blunt (thrown out of court) and executed a Gestapo-like search warrant at WSI. Were personal and political ambitions behind such skullduggery? Citizens of North Dakota should ask the Disciplinary Board of the Supreme Court to investigate the conduct of the Burleigh County Attorney.
5. The shadow management also enlisted the media and politicians to their cause. Many were eager to join the trashing of Blunt and WSI without investigation or facts. No leader can survive such attacks—even when false. How ironic that an independent board was established in 1997 to ensure WSI’s “freedom from political influence.” I recall the undermining that led to the resignation of Robert Potts, former chancellor of the North Dakota University System. Neither he nor Blunt deserved the treatment they received. Is North Dakota government and media too cliquish—North Dakota too provincial--for outsiders to ever be accepted?
6. The Conolly report is scathing in its condemnation of the behavior of internal auditor Kay Grinsteinner and says her actions have, “divested her of the kind of perceived trustworthiness, objectivity, and organizational stature necessary to perform effectively within the organization.” She and her co-conspirators must be fired immediately. The shadow management that undermined so many at WSI must go.
7. WSI must hire an outstanding leader as CEO. This leader should be hired first for character, next for leadership talents, and finally for the appropriate skills and knowledge. Seek a leader who is a proven change agent for there is more change ahead for WSI.

It is always all about leadership.

POSTSCRIPT: Kay Grinsteinner, Billi Peltz, human resources director, and Jim Long, chief of support services were fired on March 12, 2008. See my previous commentaries on the events at WSI. I believe that most of those at WSI who claimed whistleblower protection did not deserve that protection; they were part of the shadow management at WSI. I hate bad leadership; I despise good people being sabotaged by political game-players even more.