When a consultant’s report about the management of North Dakota’s workers’ compensation agency was published, legislators welcomed its conclusions that it was generally doing well at serving its injured clients.
What was played down was the report’s tales of upper management secrecy, bullying and a department overhaul planned and executed so bizarrely that the report calls it “unprecedented, either in the insurance or business world.”
The board of directors of Workforce Safety and Insurance was oblivious to it all. “Of the five current members of the board we had the opportunity to meet and interview, none was ever made aware of the details of what we learned,” the report says.
Board members have embraced the conclusions of the report, done by Conolly & Associates, a firm whose namesake, Henry Neal Conolly, presented it to board members and the Legislature’s interim Industry, Business and Labor Committee.
They used its recommendations to justify firing three Workforce Safety and Insurance managers and eliminating the jobs of two others. This week, board members are hoping to adopt its suggestion to hire an outside interim chief executive officer to restructure the agency’s upper management.
The genesis of WSI employees’ discontent, the report says, dates from the summer of 2005, about a year after former chief executive Sandy Blunt was hired.
Blunt organized a meeting to discuss revamping the agency’s management structure, which included the “demeaning and occasional humiliation of then-current management by subordinates,” the report says.
It was followed by another meeting that fall, with about two dozen participants who were ordered to keep the discussions secret. Participants were given copies of a motivational book, autographed by Blunt.
“Word of (the meeting’s) occurrence spread quickly, as did a fearful perception among the staff, supervisors and managers that a large reorganization was coming,” the report says.
In late 2005, the chief of employer services, Dave Spencer, unveiled a new structure for the department that was vague about the duties of jobs listed on it, the report says. Managers and staff were told they had 24 hours to pick a new position.
In replying to a question about how someone should choose a job without a description of its duties, Spencer allegedly replied: “If you have passion, it should not matter whether you have experience.”
Service from the employer services division, which included handling new accounts, premium collections and safety, deteriorated, the report said. “Trained and competent staff were transferred from their trained activity and demeaned, while unqualified and untrained staff took their places,” it said.
Spencer said he had not read the report and declined comment. Blunt said the report did not mention “the successes and professional developments by many of those who did transition into roles that were well suited for them.”
He apologized to employees for difficulties that the reorganization caused, Blunt said in an e-mailed response to questions about the report.
“The approach, while uncommon, was designed to tap into what people wanted to do in their career, and allow them to have a say in selecting a role that they wanted to perform,” Blunt said. “The execution was not as fluid as we had hoped, and in the end, we had to backtrack on a number of decisions.”
Spencer was dismissed in September 2006 after senior staffers confronted Blunt and demanded he be fired, the report says. The reorganization was reversed.
The events “have become internally legendary, and are widely cited as the seminal cause of staff and supervisory fear, distrust and emotional scarring at WSI,” the report says. “These same actions are universally regarded as mistakes, and as symbols of the kind of management action or inaction that has produced today’s turmoil.”
Conolly, in an interview, called the reorganization “ridiculous.”
“‘It really tore apart this place, and there are people who are still very angry about it,” he said.
Blunt said he believed the report’s conclusions were too broadly drawn.
“While I do not believe I would ever undertake such an initiative again, I will also now characterize the entire effort as an abject failure,” he said
Topics Workers' Compensation
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