Changing the culture at a 40-year-old not-for-profit housing service meant changing the whole organisational structure.
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CEO: Tony Keenan
Company: Hanover Welfare Services
Business type: A not-for-profit service for people dealing with homelessness and the housing crisis
Founded: 1964
Employees: 100 full-time; 70 part-time/casual
Turnover: (2006 - 2007) $11M
Head office: Southbank, Melbourne (administration); Service locations: Southbank, South Melbourne, Northcote, East St Kilda, Windsor, Cheltenham and Dandenong
Contact details: +61 3 9699 6388
The Hanover Welfare Services Story
Helping those without a home is a noble cause, which Hanover Welfare Services has been doing for more than 40 years in Melbourne. But any organisation can acquire some bad habits and inefficient practices over four decades. When Tony Keenan took over as Hanover's CEO in 2006 he soon realised that providing a charitable service requires the same organisational discipline and focus on results that any business needs. Hanover had to change.
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Key learning points:
- Change - What are the dinosaurs in your corporate cupboard? Search out the old bandaid solutions that have become fixed processes or the taken-for-granted elements of your organisational structure or culture that hinder rather than help.
- Outputs - What does your organisation really sell to your customers: A solution to a problem? A feeling of security? An emotional response? Your structure should reflect those real outputs.
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The Hanover Centre (as it was then known) was founded in 1964 in Hanover Street in the inner Melbourne suburb of Fitzroy by various churches and welfare agencies. It initially worked with homeless men and in 1972 expanded its services to include women and families in need. Hanover is now an independent organisation with no links to churches, institutions or governments.
Keenan, 48, has been Hanover's Chief Executive for two years. He is friendly, confident and wears trendy black-rimmed glasses. When he became CEO, he realised Hanover needed to shift from being a passive welfare agency to finding long-term solutions to homelessness. That called for a big cultural change within Hanover. He says: "I get the giggles when people say, ‘Oh you've got to run more like a business'." Hanover turned over $11 million last year.
Keenan, with the Hanover board, developed an ambitious five-year plan that aimed to shift the organisation's focus from bandaid crisis accommodation to permanent housing solutions. That required a new way of working with clients, including helping them with issues such as employment and education. But Hanover's existing internal culture and structures made the plan hard to implement. He says: "The problem was that the organisation had very strong local cultures. There was passive resistance to change."
Hanover had nine service locations, which were grouped into four separately managed geographic divisions. As a result, it lacked cohesion and organisational focus. Keenan says: "Over time, separate cultures had developed at each site and separate policies at each location." For example, each division had its own approach to employment with separate units having their own leave policies. "The staff felt their loyalties were first to the geographic division and second to the organisation as a whole. There were many issues where policy decisions were seen as advisory."
The Challenge
To bring about cultural and organisational change.
The Solution
Hanover engaged HLB Mann Judd Consulting to develop a new structure for the organisation. It came up with three options. Keenan says: "We went for the drastic change one."
Keenan says the old structure had confused, overlapping lines of reporting. "I had managers of corporate services, research, external relations and client services." There were also four divisional managers who ran services in specific geographic regions. They reported to both Keenan and the manager of client services. "It was dual reporting, which never works."
The new structure has three general manager positions: corporate services, research and organisational development, and client services. There are three managers of client services, reporting to the GM client services. The focus is now on clients rather than geography, with all but one of the managers based at the head office.
Moving from geographic- to service-focused territories left the problem of managing each local office. These are now run by assistant managers who take responsibility for what Keenan calls "turning out the lights" site issues, such as health and safety, security and processing leave applications. "But the focus is very much on reporting up through the new portfolio areas."
Keenan knew that the proposed changes would be a difficult sell. Staff were consulted about the changes in a series of meetings across the organisation. "We didn't think for a minute that everyone would like it because it changed some people's jobs. But you should give people the opportunity to say what they think - and don't expect them to feel loving and warm and gooey about it immediately."
Once the plan was ready to go, it was important to be clear about how staff would implement it. "The fact that someone didn't like it was not a valid reason not to follow the new plan."
As general secretary of the Victorian Independent Education Union for six years (and at the union for 16 years), Keenan had seen good and bad restructuring practices. The most appalling practice involved lack of communication. "People would make a decision, implement it, and sort of suck it and see." Keenan believes that it is important to keep explaining the reasons for any change. "You've just got to get the message across; it's like a broken record. Trust, communication and transparency are key to a process like this."
Mentors and friends have been important in helping Keenan to cope with the personal stress of his work. "I'm single, so that's not as easy, but I have a group of single friends, and we'll debrief around work issues." Does he run or cycle? "God no, I drink and eat," he laughs. "I've made a bigger effort this year to do things you're supposed to do, like exercise. Last year, I didn't at all, and I paid for it."
The Result
In an organisation with 100 full-time staff, only two managers left voluntarily to work elsewhere. Keenan says managers are enthusiastic about having a unified direction within Hanover. "It was a major change with minimal disruption, so I think there's quite a degree of acceptance, which is unusual for such a big change."
Keenan says it will take some time before he can quantify the ultimate outcomes of the change. But early reports indicate a 20% increase in client throughput by some Hanover services.