The following letter was delivered to the board on Wednesday, Oct. 21, 2015.
Dear President Mattusch and Commissioners,
Over the past few years the Harbor District has experienced financial internal control problems and procurement problems. Tonight my informational report regarding IT equipment, software and support procurement (Item 6) is a reflection of my concerns about the District’s fiscal accountability. My hope is that this report will serve to clear the air on the specific reasons for my concerns. It is my sincere hope that the board and new management will put these problems behind us with improved fiscal oversight, innovative financial transparency tools such as OpenGov, appropriate accounting software, and policy recommendations from the Finance Committee.
The Harbor District has experienced a rapid culture shift over the past ten months. In January 2015 the board gained two new commissioners, shifting the District in a more open, progressive, and public-friendly direction. The retirement of the past General Manager at the end of 2014 and the relocation of the District’s administrative office back to the Coastside in May 2015 were indications that a transition was unfolding.
General Manager Peter Grenell ran the District for over 17 years. Commissioner Jim Tucker was first appointed in June 1998 and served for almost 17 years. Since their departure in December 2014 the District has experienced significant and sometimes painful culture shift towards a more contemporary form of governance. Past mismanagement left the current board with an astounding number of complex policy issues to clean up, and that process may require years to complete. To their credit the Harbor Patrol has continued to provide excellent service and emergency response while the board and management makes necessary changes.
Theory of Change
With change comes creativity, innovation, improved accountability, opportunities to evaluate and define long-term goals, and the need for greater cooperation.
Diversity Balances Biases
The District needs a complementary team – a team in which the members are different from each other, not similar, which means acknowledging the importance of differences in style and opinion. Each person’s style provides a counterpoint to the others. Our differences can provide opportunities to balance naturally biased judgments. Giving consideration to diverse perspectives and thinking critically about the challenges facing the District is a necessary process that builds a solid foundation for strong decision-making. That is teamwork, and is the reason why most governments are multi-member boards.
Trust, Cooperation and Flexibility
To keep the forward momentum the board and management must build trust within the community by being transparent and responsive, setting clear achievable goals, modernizing outdated policies, improving fiscal accountability, and correcting past mismanagement. And to do this we must become nimble.
Daryl Connor, in his 1998 book Leading at the Edge of Chaos, popularized the term “nimble” describing nimble organizations as those with “a sustained ability to quickly and effectively respond to the demands of change while delivering high performance.” Nimble leaders create goals and performance measures which recognize and reward nimbleness—for example, discovering a new way to meet regulatory requirements while also encouraging public participation.
Nimble leaders anticipate the need for adaptability by hiring flexible employees and preparing current employees for continuous change. They constantly push for higher performance, yet recognize that failure is to be expected with innovation.
Nimble leaders create fluid organizational structures that encourage interactions and change to meet new situations and solve new problems. They do not simply move boxes around on the organizational chart, but create structures that encourage collaboration and teamwork.
Implementing Objectives to Meet Goals
Nimble leaders balance near-term objectives and long-term goals. Commissioners and management staff need to look beyond the next election and not lose sight of the bigger picture and long-term goals. While responding to the public’s demands for greater transparency, for example, a nimble leader will also ensure that administrative staff members are receiving training and experience in working with new transparency tools such as OpenGov.
Adapting to Change
Nimble leaders overcome vested interests, legacy systems, and sacred cows by encouraging open communication and creativity.
Proactive vs. Reactive
Nimble leaders are always on the lookout for “bad news,” knowing that finding it before it finds the organization is important in order to respond effectively. They find ways to identify internal problems by encouraging internal critics, rotating personnel and hiring people with new perspectives. They discover problems in service delivery by meeting their customers.
Nimble leaders do not rely on a crisis to force change. Crisis in and of itself is not a powerful impetus for long-term change. If it were, cardiac events would cause heart patients to alter their lifestyles appropriately. Fear does not create change. More often, fear leads to denial and creates a narrative that reframes facts to fit preconceived ideas.
Instead, nimble leaders are proactive so that their agencies respond quickly and effectively to the demands of change.
The Harbor District needs a simple turnaround plan.
One of the nimble leader’s most important roles is to distill an organization’s many priorities and strategies into a simple plan, so that employees can remember it, internalize it and act on it. With clear goals and metrics, everyone can pull in the same direction, knowing how their work contributes to those goals.
Rules of the Road
In 2015 the Commission adopted board norms and a new culture began to take shape based on three values: respect, integrity, and equality. This is good news because cynicism and politics can metastasize within an organization, and are amplified by public opinion when an agency lacks core values or is not actually living out its code of ethics.
What truly matters is that the District has to live by its values, reinforce them every day and not tolerate behavior that’s at odds with those values. On July 15, 2015 the board unanimously approved the San Mateo County Harbor District Code of Ethics and Values adapted from the 1999 City of Santa Clara code. This was a positive step forward.
The past 10 months has presented numerous challenges for employees, contractors, the public and the Board. The District is in the process of implementing recommendations made by the Civil Grand Jury and LAFCo. And while necessary management changes and policy changes have occurred, more improvement is still needed.
The Harbor Commission is moving in a positive direction, and with Steven McGrath as the new General Manager comes new opportunity. My hope is that the Commission, the new General Manager, and the new administration will work cooperatively, in the best interest of the District and the people we serve.
Thanks for your consideration,