Opinion: JCC Board Must Restructure Itself To Avoid Pitfalls

Newsroom

Newsroom

By Arthur Horwitz, JN Publisher

The current financial and structural challenges facing the Jewish Community Center of Metropolitan Detroit — and potential closing of its Jimmy Prentis Morris (JPM) facility in Oak Park as a way to mostly eliminate an agency-wide $1.2 million annual operating deficit — have been shared by the JCC and the Jewish Federation of Metropolitan Detroit and widely reported in the area’s Jewish and secular media.

Eyebrows are raised whenever a nonprofit organization acknowledges that it has been accumulating annual operating deficits of more than $1 million for much of the past decade. They arch higher when the organization’s controller and CEO head for the exits, leaving the organization and the community to once again sort through a financial mess and attempt to restore the organization’s credibility and integrity.

With the equivalent of an emergency manager and oversight board operating the JCC, the current fix-it effort is earnest and recognizes the chronic challenges associated with running it.

With the potential JPM closing as the lightning rod, the JCC and Federation convened public forums that generated a range of ideas and opinions about how to save JPM, close the Maple-Drake JCC, grow revenue, expand membership, enhance facilities and upgrade managerial talent.

Core Questions
But once the oversight board returns the keys to the JCC to its Board of Directors, a handful of core questions need to be addressed to avoid the inevitable return to financial distress:

  • Can a JCC model rooted in bricks and mortar — or any JCC model — meet the anticipated needs of Detroit’s aging and shrinking Jewish community in a financially responsible way?
  • Will the JCC Board of Directors create a new paradigm for how it shares responsibility with its next CEO?
  • Will the JCC’s Board make the needed structural and governance changes to hold itself more accountable?

The Maple-Drake JCC facility in West Bloomfield was constructed based on a grand 1970s vision that it would be a destination for Jews from Flint to Ann Arbor. The breadth and depth of the facility and its programmatic offerings would mean everyone within the Jewish community would be served. And its purported state-of-the-art design would provide flexibility to accommodate future needs.

What we know today — but still have trouble admitting — is a JCC for 21st-century Detroit wouldn’t look anything like Maple-Drake. Eliminating the JPM as a JCC facility doesn’t reverse this fact. To fix the core problems of the JCC still requires dealing with a massive, inefficient Maple-Drake facility designed for a long-gone era.

And with the community unready or unwilling to wield the wrecking ball to any part of the Maple-Drake facility, the heavy responsibility for figuring out how to operate it in a way that keeps its budget balanced without losing more of its Jewish raison d’etre falls to the soon-to-be selected CEO.

Closure of the Oak Park JCC is on the table to eliminate an annual $1 million deficit.

A New CEO
The October 2014 posting for the Detroit JCC CEO position through the Jewish Community Centers Association (www.jccworks.com) provides a window into what the Board of Directors wants in its professional leader.

While much of the recent discussion about the JCC focused on the agency being “more than just a building,” the very first sentence of the job opportunity suggests bricks and mortar are being used as the primary allure for a future CEO. It reads: “The Jewish Community Center of Metropolitan Detroit (JCC) is the second largest JCC in the world and the largest JCC facility in North America.”

The scope and range of responsibilities for the CEO, as contained in the job description, are truly staggering but consistent with the long-standing strong CEO/weak board model that can be found at many nonprofits, including the JCC.

The CEO, according to the summary of responsibilities, must be “a skilled leader with a vision for the JCC, a successful operational manager and someone who excels at strategic plan development. He/she also will be a confident executive who always leads with integrity. While overseeing the day-to-day operations and execution of all programs at the JCC, the CEO must maximize revenue-generating opportunities; ensure fiscal transparency and accountability; develop and maintain a ‘Best Place to Work’ culture; work successfully with lay leaders and volunteers, manage donor relationships; and integrate a customer-centric philosophy into the JCC.”

I wonder if Moses would come out of retirement to lead the JCC and its Board of Directors to the Promised Land? Then again, I doubt his skill set would qualify him for a second interview.

The JCC CEO is the most important employee of the Board of Directors. But based on more detailed aspects of the job description posting, the Board cedes to the CEO responsibility for “board administration,” including planning board meetings that “will ensure Board members are engaged” with JCC programs and services and “for recruiting top community lay leaders to the JCC Board …”

Board Responsibilities
Following the latest JCC meltdown, it is disappointing that the JCC Board of Directors isn’t taking more responsibility for its own governance. It is telling when responsibility for ensuring board member engagement falls to the CEO. And even though the Board of Directors is the CEO’s employer, responsibility for identifying candidates for the board of the employer falls to the employee it is supposed to be holding accountable.

The oversight committee should retain the keys for the JCC until its Board of Directors accepts more responsibility for its own governance and fashions a new model that jointly holds the CEO — and it — accountable for the successes and failures of the JCC.

A good place to start relating to governance is a review of the JCC Board of Directors structure.

The Detroit JCC website shows there are currently 54 members of the Board of Directors. Fourteen of these comprise the executive committee, with five board members for life and two liaisons with Federation’s NextGen and Institute for Retired Professionals (IRP). It is the classic, old school, largely ceremonial big board, leave-it-to-the-executive-committee model. Having served on JCC boards and/or executive boards in New Haven, Conn., Baltimore and Detroit, I can attest to it being symptomatic of how boards were built for the 1970s and 1980s.

I also recall my service on the Sinai Hospital of Detroit Board of Directors during its darkest financial days in the early 1990s. An outside entity, the Hunter Group, was brought in to run the place. One of its initial steps was to split Sinai’s large board in two — a small, nimble, fully engaged operating board and a Foundation board that would keep many of the community’s leading members and philanthropists connected to Sinai.

Given the chronic operational challenges faced by the JCC, perhaps a split of the large JCC Board into a similar configuration would have merit?

Another step should be for the Board (not the CEO) to recruit top talent, regardless of where it can be found, to its own ranks.

Gerard van Grinsven is the former Ritz-Carlton Hotel star senior executive who was recruited in 2006 to become CEO of the expanding Henry Ford West Bloomfield Hospital. Van Grinsven, who is currently the president and CEO of Cancer Treatment Centers of America, worked closely with the JCC on a range of initiatives and programs, many of which generated revenue for the JCC. Having opened Ritz-Carlton hotels around the world (and run them from the Mandarin Oriental Bangkok Hotel to the Ritz-Carlton Dearborn), to having chain-wide responsibility for its food and beverage division, the man knows a thing or two about excellent customer service.

Prior to moving, he shared with me that he expressed his desire to join the JCC Board, but was frustrated at being told he was ineligible because he wasn’t from the Jewish community. Aside from the fact that a significant percentage of JCC users at Maple-Drake are from outside of the Jewish community, might it have helped an institution that has had notorious problems with customer service to have Van Grisven’s knowledge and expertise in its own board room?

‘Nothing Will Be Hidden’
In a Jan. 12 article about the JCC’s financial challenges, Crain’s Detroit Business writer Sherri Welch asked JCC President Florine Mark about what the Board knew and when.

She told Welch that the Board got so busy “trying to make it the best community center we could, we just kind of never delved into the financials as much as we should have … it just got out of hand.” The story concluded with Mark telling Welch that going forward, the Board will closely look at finances, programs and everything that goes on at the Jewish Center … “nothing will be hidden from us.”

The JCC Board consists of many of the Jewish community’s most capable and dedicated volunteers. Especially during the most recent financial crisis, most have devoted countless hours of time and energy toward trying to find a way to keep the JCC afloat in a way that doesn’t further tax the overall community’s philanthropic generosity. Anyone who has served on a nonprofit board as a volunteer knows the rewards, sacrifices and occasional frustrations that come with it.

Hiring an exceptional CEO, coupled with the Board looking honestly and deeply at its own role and responsibilities in managing the relationship with the CEO — and governing itself — will not change the cost structure associated with the outsized physical footprint of the Maple-Drake facility. But it will go a long way toward reassuring the community that the Board deserves to be trusted with the keys to the JCC again.

  • No comments