Richard Ivey School of Business The University of Western Ontario IVEY 9B10C014 THE SCARBOROUGH YMCA: GETTING BACK ON TRACK Ken Mark wrote this case under the supervision of Professor Gerard Seijts solely to provide material for class discussion. The authors do not intend to illustrate either effective or ineffective handling of a managerial situation. The authors may have disguised certain names and other identifying information to protect confidentiality. Richard Ivey School of Business Foundation prohibits any form of reproduction, storage or transmission without its written permission. Reproduction of this material is not covered under authorization by any reproduction rights organization. To order copies or request permission to reproduce materials, contact Ivey Publishing, Richard Ivey School of Business Foundation, The University of Western Ontario, London, Ontario, Canada, N6A 3K7; phone (519) 661-3208; fax (519) 661-3882; e-mail cases@ivey.uwo.ca. Copyright @ 2010, Richard Ivey School of Business Foundation Version: (A) 2010-06-16 INTRODUCTION "I've been at the Scarborough YMCA since the early 1990s," stated Tammy MacDonald, the newly- appointed general manager. On February 12, 2003, MacDonald was discussing her plan of action at the Scarborough YMCA with the YMCA senior leadership team of the Greater Toronto Area. The Scarborough YMCA had been a perennial underperformer from a membership, member satisfaction and financial perspective, and MacDonald vowed to turn the facility around. She explained: I've volunteered my time, and I've worked in several different roles. During this time, we've seen four different general managers lead the facility through difficult times. I believe my team and I can find a way to close the performance gap in the next two years. When the meeting was over, MacDonald drove back to Scarborough, Ontario. She was excited by the potential to have a lasting impact on the facility; however, there were several challenges that she needed to address. Firstly, despite the fact that four general managers had given their best effort in Scarborough, the facility continued to lag behind the average YMCA in the Greater Toronto Area. MacDonald wondered whether the facility had the potential to be competitive on every level with the other YMCAs in Toronto. She sensed that some people in the organization had adopted a complacent mindset: some felt that Scarborough should be judged on a more lenient scale, given that the centre was located in what some would consider a "difficult" neighbourhood. People were not used to setting challenging goals, partly because holding people accountable for their individual performance was not part of the culture at the Scarborough YMCA. People were therefore not used to success! Secondly, MacDonald thought about the fact that she was an insider at Scarborough: now 31 years of age, she had practically grown up in the Scarborough YMCA. Many staff and volunteers remembered the days when MacDonald worked alongside them as a fellow volunteer when she was in university. Most recently, prior to her promotion to general manager, she had been in charge of membership sales and services.Richard Ivey School of Business The University of Western Ontario IVEY 9B10C014 THE SCARBOROUGH YMCA: GETTING BACK ON TRACK Ken Mark wrote this case under the supervision of Professor Gerard Seijts solely to provide material for class discussion. The authors do not intend to illustrate either effective or ineffective handling of a managerial situation. The authors may have disguised certain names and other identifying information to protect confidentiality. Richard Ivey School of Business Foundation prohibits any form of reproduction, storage or transmission without its written permission. Reproduction of this material is not covered under authorization by any reproduction rights organization. To order copies or request permission to reproduce materials, contact Ivey Publishing, Richard Ivey School of Business Foundation, The University of Western Ontario, London, Ontario, Canada, N6A 3K7; phone (519) 661-3208; fax (519) 661-3882; e-mail cases@ivey.uwo.ca. Copyright @ 2010, Richard Ivey School of Business Foundation Version: (A) 2010-06-16 INTRODUCTION "I've been at the Scarborough YMCA since the early 1990s," stated Tammy MacDonald, the newly- appointed general manager. On February 12, 2003, MacDonald was discussing her plan of action at the Scarborough YMCA with the YMCA senior leadership team of the Greater Toronto Area. The Scarborough YMCA had been a perennial underperformer from a membership, member satisfaction and financial perspective, and MacDonald vowed to turn the facility around. She explained: I've volunteered my time, and I've worked in several different roles. During this time, we've seen four different general managers lead the facility through difficult times. I believe my team and I can find a way to close the performance gap in the next two years. When the meeting was over, MacDonald drove back to Scarborough, Ontario. She was excited by the potential to have a lasting impact on the facility; however, there were several challenges that she needed to address. Firstly, despite the fact that four general managers had given their best effort in Scarborough, the facility continued to lag behind the average YMCA in the Greater Toronto Area. MacDonald wondered whether the facility had the potential to be competitive on every level with the other YMCAs in Toronto. She sensed that some people in the organization had adopted a complacent mindset: some felt that Scarborough should be judged on a more lenient scale, given that the centre was located in what some would consider a "difficult" neighbourhood. People were not used to setting challenging goals, partly because holding people accountable for their individual performance was not part of the culture at the Scarborough YMCA. People were therefore not used to success! Secondly, MacDonald thought about the fact that she was an insider at Scarborough: now 31 years of age, she had practically grown up in the Scarborough YMCA. Many staff and volunteers remembered the days when MacDonald worked alongside them as a fellow volunteer when she was in university. Most recently, prior to her promotion to general manager, she had been in charge of membership sales and services.Page 2 9B10C014 MacDonald had assumed other leadership responsibilities in the centre, including leading teams and taking on change initiatives; however, she sensed that it would be challenging to advocate change now that she was the formal leader. She explained: I've been part of the system for more than a decade now. I was in mid-manager roles at Scarborough - I actually played every single position on the Scarborough team; and then I took on a number of senior roles. This is the same system that I'm now tasked with changing. It's tough to sort of grow up within a staff team and then provide leadership to the team. I had to think about whether the facilities manager, program managers, senior volunteers and the members would respect me in the new leadership role. Will the team support me? Will the team work with me? Do I have the skills and competencies to effectively change the current situation? Because if I was going to come in and just maintain the status quo I would not have been interested in leading Scarborough. The YMCA The Young Men's Christian Association was founded in 1844 and the first YMCA in North America got its start in Montreal, Quebec in 1851. The YMCA described its mission, which had not changed from its early days: This was the industrial era - a time when major changes in agriculture, manufacturing, production and transportation were taking place. This brought more regimented routines with fixed work shifts along with a clear divide between the hours spent working and those spent at leisure. The YMCA supported people during their leisure time by focusing on their personal growth in spirit, mind and body. The YMCA was interested in putting Christian principles into action, giving people the opportunity to learn, improve themselves, choose a healthy lifestyle and support others. Today, the YMCA's mission still reflects those early day ideals. The YMCA grew up with Canada, changing and introducing programs needed by the communities it served; a practice that continues today. The YMCA's mission and values are shown in Exhibit 1. The YMCA had pioneered many social services that were later considered essential to communities; for example, adult education, daycare for children and community outreach. Once the YMCA had demonstrated that it was meeting an unmet need in the community, other providers for these services emerged from the private sector and, in some cases, from government-run programs. The YMCA priced its services to ensure that they were reasonable and still generated enough profit to be able to reinvest in the support of its overall mission. The YMCA usually conducted an annual funds campaign to help those who could not afford a YMCA experience. Unlike many not-for-profit and charitable organizations, YMCAs tended to operate with minimal grants from the government. To fund the construction of new facilities or launch large-scale programs, YMCAs embarked on fundraising campaigns.Page 2 9B10C014 MacDonald had assumed other leadership responsibilities in the centre, including leading teams and taking on change initiatives; however, she sensed that it would be challenging to advocate change now that she was the formal leader. She explained: I've been part of the system for more than a decade now. I was in mid-manager roles at Scarborough - I actually played every single position on the Scarborough team; and then I took on a number of senior roles. This is the same system that I'm now tasked with changing. It's tough to sort of grow up within a staff team and then provide leadership to the team. I had to think about whether the facilities manager, program managers, senior volunteers and the members would respect me in the new leadership role. Will the team support me? Will the team work with me? Do I have the skills and competencies to effectively change the current situation? Because if I was going to come in and just maintain the status quo I would not have been interested in leading Scarborough. The YMCA The Young Men's Christian Association was founded in 1844 and the first YMCA in North America got its start in Montreal, Quebec in 1851. The YMCA described its mission, which had not changed from its early days: This was the industrial era - a time when major changes in agriculture, manufacturing, production and transportation were taking place. This brought more regimented routines with fixed work shifts along with a clear divide between the hours spent working and those spent at leisure. The YMCA supported people during their leisure time by focusing on their personal growth in spirit, mind and body. The YMCA was interested in putting Christian principles into action, giving people the opportunity to learn, improve themselves, choose a healthy lifestyle and support others. Today, the YMCA's mission still reflects those early day ideals. The YMCA grew up with Canada, changing and introducing programs needed by the communities it served; a practice that continues today. The YMCA's mission and values are shown in Exhibit 1. The YMCA had pioneered many social services that were later considered essential to communities; for example, adult education, daycare for children and community outreach. Once the YMCA had demonstrated that it was meeting an unmet need in the community, other providers for these services emerged from the private sector and, in some cases, from government-run programs. The YMCA priced its services to ensure that they were reasonable and still generated enough profit to be able to reinvest in the support of its overall mission. The YMCA usually conducted an annual funds campaign to help those who could not afford a YMCA experience. Unlike many not-for-profit and charitable organizations, YMCAs tended to operate with minimal grants from the government. To fund the construction of new facilities or launch large-scale programs, YMCAs embarked on fundraising campaigns.Page 3 9B10C014 In 2003, the YMCA was a worldwide movement of more than 45 million members from 124 national federations affiliated through the World Alliance of YMCAs. The Scarborough YMCA In 1989, the YMCA of the Greater Toronto Area embarked on an expansion phase, increasing the number of health facilities and recreation centres in its region from three to five. The two additional facilities would be located in Mississauga (located in the western part of Toronto) and Scarborough (located in the eastern part of Toronto). In the years before 1989, the Scarborough YMCA had been a summer day camp and offered community education classes. When the YMCA opened, Scarborough was a rapidly-changing community due to the influx of ethnic minorities into the city. Both immigration and the higher cost of living in downtown Toronto increased the population in the Toronto suburbs. The relatively lower costs of housing in Scarborough attracted lower- income employees and their families. The Scarborough community was a mix of affluent households and lower-income families. During the planning phase of the two new facilities, a challenge for the Greater Toronto Area YMCA was to find experienced staff who could lead a full-service facility. These staff members would have to build the facility's membership from the ground up, and recruit and maintain a cadre of volunteers. The YMCA leadership seemed to have resolved this issue when most staff positions for Scarborough were filled prior to opening. Construction of the Scarborough facility had been delayed and cost more than expected: this was because the facility had been designed and built at the same time as Toronto's SkyDome, a massive entertainment complex in downtown Toronto. The SkyDome's construction employed thousands of contractors who would otherwise have been working on other local projects. YMCA management believed that due to the lower quality of subcontractors working on the Scarborough facility, the quality of workmanship was below acceptable standards, leading to problems such as leaking roofs, sub-par electrical wiring and poorly-insulated walls. Despite these setbacks, the facility opened at 230 Town Centre Court in June 1989, at the corner of Ellesmere and McCowan in Scarborough. It was a full-service facility with 110,000 square feet, offering health, fitness and recreation activities. There were 23 full-time and part-time staff and a growing list of volunteers; however, as a result of cost overruns in the construction phase, Scarborough's opening budget was halved. This meant that promotional activities were cut back drastically, which affected the facility's initial membership drive. Almost immediately after it was opened, Scarborough started to fall behind expectations for its membership drive. By the second month, the number of members was 30 per cent behind management's expectations; in addition, as compared to the other YMCAs in the Greater Toronto Area, it had 40 per cent more assisted members - individuals who received assistance equal to half of the regular membership fee. The Scarborough YMCA's first general manager, James Sinclair, struggled throughout this challenging time period. Sinclair was able to work with his staff to put various programs in place, and a volunteer base was slowly being developed; however, due to his time commitments and personal preferences, he had neglected to emphasize the importance of increasing members at the health and fitness centres. In a typical YMCA facility, health and fitness membership revenues accounted for approximately 40 per cent ofPage 3 9B10C014 In 2003, the YMCA was a worldwide movement of more than 45 million members from 124 national federations affiliated through the World Alliance of YMCAs. The Scarborough YMCA In 1989, the YMCA of the Greater Toronto Area embarked on an expansion phase, increasing the number of health facilities and recreation centres in its region from three to five. The two additional facilities would be located in Mississauga (located in the western part of Toronto) and Scarborough (located in the eastern part of Toronto). In the years before 1989, the Scarborough YMCA had been a summer day camp and offered community education classes. When the YMCA opened, Scarborough was a rapidly-changing community due to the influx of ethnic minorities into the city. Both immigration and the higher cost of living in downtown Toronto increased the population in the Toronto suburbs. The relatively lower costs of housing in Scarborough attracted lower- income employees and their families. The Scarborough community was a mix of affluent households and lower-income families. During the planning phase of the two new facilities, a challenge for the Greater Toronto Area YMCA was to find experienced staff who could lead a full-service facility. These staff members would have to build the facility's membership from the ground up, and recruit and maintain a cadre of volunteers. The YMCA leadership seemed to have resolved this issue when most staff positions for Scarborough were filled prior to opening. Construction of the Scarborough facility had been delayed and cost more than expected: this was because the facility had been designed and built at the same time as Toronto's SkyDome, a massive entertainment complex in downtown Toronto. The SkyDome's construction employed thousands of contractors who would otherwise have been working on other local projects. YMCA management believed that due to the lower quality of subcontractors working on the Scarborough facility, the quality of workmanship was below acceptable standards, leading to problems such as leaking roofs, sub-par electrical wiring and poorly-insulated walls. Despite these setbacks, the facility opened at 230 Town Centre Court in June 1989, at the corner of Ellesmere and McCowan in Scarborough. It was a full-service facility with 110,000 square feet, offering health, fitness and recreation activities. There were 23 full-time and part-time staff and a growing list of volunteers; however, as a result of cost overruns in the construction phase, Scarborough's opening budget was halved. This meant that promotional activities were cut back drastically, which affected the facility's initial membership drive. Almost immediately after it was opened, Scarborough started to fall behind expectations for its membership drive. By the second month, the number of members was 30 per cent behind management's expectations; in addition, as compared to the other YMCAs in the Greater Toronto Area, it had 40 per cent more assisted members - individuals who received assistance equal to half of the regular membership fee. The Scarborough YMCA's first general manager, James Sinclair, struggled throughout this challenging time period. Sinclair was able to work with his staff to put various programs in place, and a volunteer base was slowly being developed; however, due to his time commitments and personal preferences, he had neglected to emphasize the importance of increasing members at the health and fitness centres. In a typical YMCA facility, health and fitness membership revenues accounted for approximately 40 per cent ofPage 4 9B10C014 revenues from members. The gap between revenues and expenses worsened over time. Sinclair resigned as general manager less than a year after the facility opened. Senior leaders at the Greater Toronto Area YMCA approached Laura Palmer-Korn, the general manager of the West End YMCA, and vice-president of the YMCA's Eastern Region, to step in as Scarborough's next general manager. In September 1990, Palmer-Korn relocated to Scarborough, taking on the role of general manager in addition to her region-wide YMCA responsibilities. She saw a facility that was in need of help from an operational perspective. In a facility designed for 10,000 members, Scarborough had only 3,000 members, approximately 50 per cent of its projected target. About half of the members were in the assisted membership category. Palmer-Korn drew on her experience as a former manager for health, fitness and recreation to revitalize the department by setting new targets for staff. She scrutinized the membership drive efforts and replaced the incumbent membership director when she discovered that he continued to emphasize assisted memberships over regular, full-fee options. The biggest challenge Palmer-Korn faced was in reaching out to the culturally-diverse neighbourhoods; for example, there had been no strategy to promote the YMCA to Asian, South Asian and African-populated neighbourhoods. One of Scarborough's main priorities was to make sure that the membership reflected the demographics of the local community. Over the next seven years, Palmer-Korn divided her time between her regional duties (e.g. overseeing the licensed child care centres in the area, employment services or camping) and being the general manager at Scarborough. Her responsibilities meant that she was travelling at least 50 per cent of the time, thus it was only natural that the execution of ideas suffered, and that details fell through the cracks. An insider to the Scarborough YMCA opined: To have a leader that holds additional responsibilities outside of the centre draws their focus and attention away from that centre. When the centre wasn't meeting its targets or the hopes and dreams that we had for the Scarborough community - - that person wasn't given the opportunity to focus the energy and attention that it needed at that time. Frankly, even if the centre was doing well, it is a significant role for a person to play. By 1997, Palmer-Korn and her staff had boosted membership to the 8,000 range, though about 5,000 members continued to be on the assisted membership level. Palmer-Korn was promoted to senior vice president of National Initiatives at YMCA Canada. Scarborough saw its third general manager, Janet Johnson, hired at the end of 1997. Johnson came to the position with 25 years of experience at the YMCA. When Johnson reviewed the state of affairs at Scarborough, she set her sights on improving productivity at the facility. Her review had consisted of meeting with each of the 20 full-time staff members, talking to volunteers and members and analyzing participation reports for each of Scarborough's programs. Johnson scheduled regular meetings with staff to review their goals and objectives. She held staff members accountable for the programs they were running; for example, the program director was expected to be present during peak hours such as evenings and Saturdays - this was the only way, Johnson explained, that leaders at Scarborough could see how their departments were being run.Page 4 9B10C014 revenues from members. The gap between revenues and expenses worsened over time. Sinclair resigned as general manager less than a year after the facility opened. Senior leaders at the Greater Toronto Area YMCA approached Laura Palmer-Korn, the general manager of the West End YMCA, and vice-president of the YMCA's Eastern Region, to step in as Scarborough's next general manager. In September 1990, Palmer-Korn relocated to Scarborough, taking on the role of general manager in addition to her region-wide YMCA responsibilities. She saw a facility that was in need of help from an operational perspective. In a facility designed for 10,000 members, Scarborough had only 3,000 members, approximately 50 per cent of its projected target. About half of the members were in the assisted membership category. Palmer-Korn drew on her experience as a former manager for health, fitness and recreation to revitalize the department by setting new targets for staff. She scrutinized the membership drive efforts and replaced the incumbent membership director when she discovered that he continued to emphasize assisted memberships over regular, full-fee options. The biggest challenge Palmer-Korn faced was in reaching out to the culturally-diverse neighbourhoods; for example, there had been no strategy to promote the YMCA to Asian, South Asian and African-populated neighbourhoods. One of Scarborough's main priorities was to make sure that the membership reflected the demographics of the local community. Over the next seven years, Palmer-Korn divided her time between her regional duties (e.g. overseeing the licensed child care centres in the area, employment services or camping) and being the general manager at Scarborough. Her responsibilities meant that she was travelling at least 50 per cent of the time, thus it was only natural that the execution of ideas suffered, and that details fell through the cracks. An insider to the Scarborough YMCA opined: To have a leader that holds additional responsibilities outside of the centre draws their focus and attention away from that centre. When the centre wasn't meeting its targets or the hopes and dreams that we had for the Scarborough community - - that person wasn't given the opportunity to focus the energy and attention that it needed at that time. Frankly, even if the centre was doing well, it is a significant role for a person to play. By 1997, Palmer-Korn and her staff had boosted membership to the 8,000 range, though about 5,000 members continued to be on the assisted membership level. Palmer-Korn was promoted to senior vice president of National Initiatives at YMCA Canada. Scarborough saw its third general manager, Janet Johnson, hired at the end of 1997. Johnson came to the position with 25 years of experience at the YMCA. When Johnson reviewed the state of affairs at Scarborough, she set her sights on improving productivity at the facility. Her review had consisted of meeting with each of the 20 full-time staff members, talking to volunteers and members and analyzing participation reports for each of Scarborough's programs. Johnson scheduled regular meetings with staff to review their goals and objectives. She held staff members accountable for the programs they were running; for example, the program director was expected to be present during peak hours such as evenings and Saturdays - this was the only way, Johnson explained, that leaders at Scarborough could see how their departments were being run.Page 5 9B10C014 Johnson set priorities for three, six and nine months out. In addition to the formal, scheduled meetings that she set, Johnson made sure to walk around the facility as much as possible, greeting staff, volunteers and members, and demonstrating her commitment to change at the facility. As was the case with her predecessor, Johnson had to juggle multiple responsibilities: she was in charge of Regional Programs, Childcare and Employment for the Durham Region. Johnson travelled extensively to fulfill those duties. In 1999, Johnson was picked to become the general manager of the Mississauga YMCA. An external hire, Sarah Biel, was then selected to lead Scarborough. Biel had been vice-president at a provincial government department: she had no prior YMCA experience. A senior executive recalled: I think that the thinking at that time was that we had had existing general managers that had floated from one centre to the other, come in to Scarborough to see if they can affect change, and some were having some success, some incremental, some great success for a short period of time, and then things would slip back. I think the perception at that time was that maybe we needed somebody with an outside perspective - somebody with outside experiences that would think outside of the YMCA box that we tend to think in. Biel was very organized and had high attention to detail. She focused on putting in place reporting and operating systems that were similar to her previous role in government; for example, there would be a process in place to approve increases to budgets or to make changes to a particular program. If a department did not spend its budget for the year, that department's budget would be trimmed for the following year. Biel saw an organization that was in need of discipline; however, her staff saw the situation from a different perspective. The YMCA had always managed two bottom line priorities at its facilities: mission and margin. Biel had a hard time managing those two priorities when decisions had to be made. Furthermore, her staff found the adherence to process stifling. Morale dropped at Scarborough. Biel was removed as general manager of Scarborough in 2003, and a replacement was sought. After a search process, the committee hired Tammy MacDonald. MacDonald had been the director of Memberships at Scarborough. When she was hired, Scarborough had 23 full-time staff and over 200 part- time staff and volunteers serving approximately 7,300 members. A leadership change at the regional level preceded a shift in how the job of general manager was structured. A new layer of management was added to take over the general managers' regional responsibilities. From 2003, general managers would be allowed to devote all of their time on their own facility. Since there had been quite a few changes in leadership at Scarborough, there was a morale issue people were quite concerned with whom the new general manager would be and what changes he or she would bring to the centre. Tammy MacDonald MacDonald started volunteering with Scarborough while she was a student at York University. A Scarborough native, she taught fitness classes and worked as a fundraiser. She had seen how Scarborough had developed over the years. MacDonald recalled: As I was from Scarborough, I was familiar with the challenges facing the community and the facility. But the truth was a little more balanced than the news reports would have onePage 5 9B10C014 Johnson set priorities for three, six and nine months out. In addition to the formal, scheduled meetings that she set, Johnson made sure to walk around the facility as much as possible, greeting staff, volunteers and members, and demonstrating her commitment to change at the facility. As was the case with her predecessor, Johnson had to juggle multiple responsibilities: she was in charge of Regional Programs, Childcare and Employment for the Durham Region. Johnson travelled extensively to fulfill those duties. In 1999, Johnson was picked to become the general manager of the Mississauga YMCA. An external hire, Sarah Biel, was then selected to lead Scarborough. Biel had been vice-president at a provincial government department: she had no prior YMCA experience. A senior executive recalled: I think that the thinking at that time was that we had had existing general managers that had floated from one centre to the other, come in to Scarborough to see if they can affect change, and some were having some success, some incremental, some great success for a short period of time, and then things would slip back. I think the perception at that time was that maybe we needed somebody with an outside perspective - somebody with outside experiences that would think outside of the YMCA box that we tend to think in. Biel was very organized and had high attention to detail. She focused on putting in place reporting and operating systems that were similar to her previous role in government; for example, there would be a process in place to approve increases to budgets or to make changes to a particular program. If a department did not spend its budget for the year, that department's budget would be trimmed for the following year. Biel saw an organization that was in need of discipline; however, her staff saw the situation from a different perspective. The YMCA had always managed two bottom line priorities at its facilities: mission and margin. Biel had a hard time managing those two priorities when decisions had to be made. Furthermore, her staff found the adherence to process stifling. Morale dropped at Scarborough. Biel was removed as general manager of Scarborough in 2003, and a replacement was sought. After a search process, the committee hired Tammy MacDonald. MacDonald had been the director of Memberships at Scarborough. When she was hired, Scarborough had 23 full-time staff and over 200 part- time staff and volunteers serving approximately 7,300 members. A leadership change at the regional level preceded a shift in how the job of general manager was structured. A new layer of management was added to take over the general managers' regional responsibilities. From 2003, general managers would be allowed to devote all of their time on their own facility. Since there had been quite a few changes in leadership at Scarborough, there was a morale issue people were quite concerned with whom the new general manager would be and what changes he or she would bring to the centre. Tammy MacDonald MacDonald started volunteering with Scarborough while she was a student at York University. A Scarborough native, she taught fitness classes and worked as a fundraiser. She had seen how Scarborough had developed over the years. MacDonald recalled: As I was from Scarborough, I was familiar with the challenges facing the community and the facility. But the truth was a little more balanced than the news reports would have onePage 6 9B10C014 believe. Scarborough was not unlike any other small city: there are rich areas and there are parts which are struggling. Remember that Scarborough developed into a multi-ethnic community, so you'd have teenagers from a wide variety of backgrounds hanging out around the YMCA. Teenagers are naturally very energetic and, if they have no other place to go, they'll hang out in the corridors and on the stairs. Some members, especially those who were older or parents with young children, were extra cautious around these teens. But I knew that most of them were good kids. As director of Memberships, MacDonald had been focused on tweaking the mix of memberships at Scarborough. She explained: While young people comprised between 15-20 per cent of the community, they made up 40 per cent of the membership at Scarborough. I set out to change this, to attract families and to broaden the mix of members to reflect the community as a whole; for example, the was a need for a family change room - members had been asking us that for the past six years, as the community was becoming a family community. The revenue that we are bringing in from children and youth is less than half of what we would for an adult. We were fighting against media perceptions of Scarborough being a "bad community" - the fact that we were located close to the teenager hangouts. When prospective new members - a single adult or an adult with children wanting to use the facility as a family - walked into our facility for the first time, their first impression was not always positive. They'd see groups of loud teenagers walking around and being rowdy. This was because we had open enrollment programs for activities such as basketball and other team sports. When these programs ended, teenagers would spill out into the lobby and sit around the stairs. There wouldn't be any real issue - only the odd random theft once a month. But this would be similar to the situation in any other YMCA. To make our members feel safer, Sarah Biel, the former general manager, had hired security staff to sit in the lobby at night. But some believed that the mere presence of security staff was not the right message to send to our membership. She also observed: YMCA research suggested that potential members - especially more affluent individuals - choose to join private fitness clubs such as Good Life or Extreme Fitness over the facilities at Scarborough because there was a perception that singles adults didn't belong at the YMCA. Staff and volunteers often felt intimidated by the presence of the teenagers. Staff had not been consistently greeting members, or going out of their way to be helpful. There were no formal training programs in place to support a service culture. For many years, the YMCA had been the only large fitness and recreation facility in town; however, starting in 1997 and 1998, the centre was beginning to see more competition. Members in the community thus had a choice of which club or facility to join. People could choose to go to another club and be offeredPage 6 9B10C014 believe. Scarborough was not unlike any other small city: there are rich areas and there are parts which are struggling. Remember that Scarborough developed into a multi-ethnic community, so you'd have teenagers from a wide variety of backgrounds hanging out around the YMCA. Teenagers are naturally very energetic and, if they have no other place to go, they'll hang out in the corridors and on the stairs. Some members, especially those who were older or parents with young children, were extra cautious around these teens. But I knew that most of them were good kids. As director of Memberships, MacDonald had been focused on tweaking the mix of memberships at Scarborough. She explained: While young people comprised between 15-20 per cent of the community, they made up 40 per cent of the membership at Scarborough. I set out to change this, to attract families and to broaden the mix of members to reflect the community as a whole; for example, the was a need for a family change room - members had been asking us that for the past six years, as the community was becoming a family community. The revenue that we are bringing in from children and youth is less than half of what we would for an adult. We were fighting against media perceptions of Scarborough being a "bad community" - the fact that we were located close to the teenager hangouts. When prospective new members - a single adult or an adult with children wanting to use the facility as a family - walked into our facility for the first time, their first impression was not always positive. They'd see groups of loud teenagers walking around and being rowdy. This was because we had open enrollment programs for activities such as basketball and other team sports. When these programs ended, teenagers would spill out into the lobby and sit around the stairs. There wouldn't be any real issue - only the odd random theft once a month. But this would be similar to the situation in any other YMCA. To make our members feel safer, Sarah Biel, the former general manager, had hired security staff to sit in the lobby at night. But some believed that the mere presence of security staff was not the right message to send to our membership. She also observed: YMCA research suggested that potential members - especially more affluent individuals - choose to join private fitness clubs such as Good Life or Extreme Fitness over the facilities at Scarborough because there was a perception that singles adults didn't belong at the YMCA. Staff and volunteers often felt intimidated by the presence of the teenagers. Staff had not been consistently greeting members, or going out of their way to be helpful. There were no formal training programs in place to support a service culture. For many years, the YMCA had been the only large fitness and recreation facility in town; however, starting in 1997 and 1998, the centre was beginning to see more competition. Members in the community thus had a choice of which club or facility to join. People could choose to go to another club and be offeredPage 7 9B 10C014 the same programs. Prospective members would be going out and looking at options, and they would go to a centre and see brand new - and clean - facilities and new equipment. When members were surveyed on the state of Scarborough, the scores suggested that Scarborough lagged far behind other YMCAs in the country. The results were unambiguous: members reported that they were experiencing poor quality of service (see Exhibit 2). From a financial perspective, Scarborough had suffered operating deficits - between $500,000 and $750,000 per year - since its opening. The facility generally took in $3.7 million to $3.9 million in revenue per year. The YMCA was a not-for-profit institution, but the healthier the centre was financially, the more programs it could offer to the community and the more members it could invite to participate. Scarborough also faced the challenge of deteriorating infrastructure and ageing equipment. There had been little investment into the upkeep of the facility since it was built 13 years previously. Year after year had passed and very little preventative maintenance had taken place. Members were starting to see the wear and tear that the centre was experiencing. Its health and fitness equipment was circa 1990, therefore making it difficult for the facility to compete with private health and fitness clubs: the purchase of new equipment was challenging because Scarborough was running a deficit. In addition to ageing equipment, Scarborough lacked a formal schedule of fitness programs, a key feature that would be appealing to busy individuals looking to fit exercise time into their daily schedule. Moving from open enrollment to a schedule of programs would require staff to become more organized in their scheduling and more creative in their planning. MacDonald observed: We were allowed to be complacent - so therefore we did not necessarily need to have the latest and greatest equipment or programs. There wasn't a real expectation for Scarborough to grow in terms of its membership or to turn around its fiscal situation. Scarborough was always perceived as the poor community, and therefore the poor YMCA. The other YMCAs would contribute to support Scarborough. It was kind of like, "We'll just leave it alone" kind of thing. We had accepted the reputation of being the poor YMCA! I stepped into the role of general manager and wanted to turn things around. I really wanted the Scarborough community, as well as the Scarborough YMCA, to have a better reputation. At that time it had a reputation for not-so-friendly staff, a youth hangout and not serving the community well, as the focus was predominantly on youth and the young adults. My own personal goal was to turn Scarborough around in two years. There were low expectations for Scarborough - and thus I knew that the goal was a challenging one. MacDonald Looks Ahead MacDonald stated: Scarborough has great potential to contribute to the association. If some changes are put in place, if membership rises, I can see a point in time when Scarborough starts to contribute margin - in addition to mission - to the association. When the position for general manager came up, MacDonald had been eager to be considered for the position. It was a step up in terms of responsibilities: a chance for her to demonstrate leadership. She saidPage 7 9B 10C014 the same programs. Prospective members would be going out and looking at options, and they would go to a centre and see brand new - and clean - facilities and new equipment. When members were surveyed on the state of Scarborough, the scores suggested that Scarborough lagged far behind other YMCAs in the country. The results were unambiguous: members reported that they were experiencing poor quality of service (see Exhibit 2). From a financial perspective, Scarborough had suffered operating deficits - between $500,000 and $750,000 per year - since its opening. The facility generally took in $3.7 million to $3.9 million in revenue per year. The YMCA was a not-for-profit institution, but the healthier the centre was financially, the more programs it could offer to the community and the more members it could invite to participate. Scarborough also faced the challenge of deteriorating infrastructure and ageing equipment. There had been little investment into the upkeep of the facility since it was built 13 years previously. Year after year had passed and very little preventative maintenance had taken place. Members were starting to see the wear and tear that the centre was experiencing. Its health and fitness equipment was circa 1990, therefore making it difficult for the facility to compete with private health and fitness clubs: the purchase of new equipment was challenging because Scarborough was running a deficit. In addition to ageing equipment, Scarborough lacked a formal schedule of fitness programs, a key feature that would be appealing to busy individuals looking to fit exercise time into their daily schedule. Moving from open enrollment to a schedule of programs would require staff to become more organized in their scheduling and more creative in their planning. MacDonald observed: We were allowed to be complacent - so therefore we did not necessarily need to have the latest and greatest equipment or programs. There wasn't a real expectation for Scarborough to grow in terms of its membership or to turn around its fiscal situation. Scarborough was always perceived as the poor community, and therefore the poor YMCA. The other YMCAs would contribute to support Scarborough. It was kind of like, "We'll just leave it alone" kind of thing. We had accepted the reputation of being the poor YMCA! I stepped into the role of general manager and wanted to turn things around. I really wanted the Scarborough community, as well as the Scarborough YMCA, to have a better reputation. At that time it had a reputation for not-so-friendly staff, a youth hangout and not serving the community well, as the focus was predominantly on youth and the young adults. My own personal goal was to turn Scarborough around in two years. There were low expectations for Scarborough - and thus I knew that the goal was a challenging one. MacDonald Looks Ahead MacDonald stated: Scarborough has great potential to contribute to the association. If some changes are put in place, if membership rises, I can see a point in time when Scarborough starts to contribute margin - in addition to mission - to the association. When the position for general manager came up, MacDonald had been eager to be considered for the position. It was a step up in terms of responsibilities: a chance for her to demonstrate leadership. She saidPage 8 9B10C014 to herself: "I could really make a change here, and I want to. Scarborough is my home, and I grew up at (the) Scarborough (YMCA), and I really want to have impact in that community and I think I can do this." She had also met with Steve Boone, the vice-president of Membership, YMCA of the Greater Toronto Area. Boone and MacDonald had a candid discussion in which she told him that she was willing to take on the role of general manager, but that she wanted the autonomy to make changes in organizational staffing and reporting structures. She explained: This was important to me because we had never done that since the building opened. So to be able to get his commitment that yes, you can take this on, and yes, you'll have the autonomy to do what you think you'll need to do to effectively make change was important to me. It was evident that some positions were staffed with the wrong people - some people didn't really have the skills to be in the position they were in; for example, they did not always understand that financial health and fiscal responsibility was part of their role - they did not understand the budget process. Reporting relationships also contributed to ambiguities around ownership and responsibilities for results. Early in the selection process, she recalled reading the first paragraph of a report on Scarborough: Scarborough's lower than average income, age and educational status, coupled with its higher than average family size and unemployment rates make for a unique and satisfying challenge for the leadership team to provide strong hands-on leadership. 'It was the opportunity to make a difference that attracted me to this role," MacDonald explained. "How I start and what I choose to do in my first few weeks will be of great importance." She reached the parking lot at Town Centre. Locking her car, she walked to Scarborough's front entrance, thinking about her plan for the next few months. She wondered what her priorities should be, and what goals she should set for herself. How aggressive should her targets be for turning around the Scarborough YMCA? She was cognizant of the fact that her responsibility was to make sure her colleagues at Scarborough stayed motivated to achieve success, and stayed motivated for the reason that they joined the organization.Page 8 9B10C014 to herself: "I could really make a change here, and I want to. Scarborough is my home, and I grew up at (the) Scarborough (YMCA), and I really want to have impact in that community and I think I can do this." She had also met with Steve Boone, the vice-president of Membership, YMCA of the Greater Toronto Area. Boone and MacDonald had a candid discussion in which she told him that she was willing to take on the role of general manager, but that she wanted the autonomy to make changes in organizational staffing and reporting structures. She explained: This was important to me because we had never done that since the building opened. So to be able to get his commitment that yes, you can take this on, and yes, you'll have the autonomy to do what you think you'll need to do to effectively make change was important to me. It was evident that some positions were staffed with the wrong people - some people didn't really have the skills to be in the position they were in; for example, they did not always understand that financial health and fiscal responsibility was part of their role - they did not understand the budget process. Reporting relationships also contributed to ambiguities around ownership and responsibilities for results. Early in the selection process, she recalled reading the first paragraph of a report on Scarborough: Scarborough's lower than average income, age and educational status, coupled with its higher than average family size and unemployment rates make for a unique and satisfying challenge for the leadership team to provide strong hands-on leadership. 'It was the opportunity to make a difference that attracted me to this role," MacDonald explained. "How I start and what I choose to do in my first few weeks will be of great importance." She reached the parking lot at Town Centre. Locking her car, she walked to Scarborough's front entrance, thinking about her plan for the next few months. She wondered what her priorities should be, and what goals she should set for herself. How aggressive should her targets be for turning around the Scarborough YMCA? She was cognizant of the fact that her responsibility was to make sure her colleagues at Scarborough stayed motivated to achieve success, and stayed motivated for the reason that they joined the organization.1) What are the key issues that MacDonald will face? Evaluate the situation at the Scarborough YMCA through these key areas: Structure of the organization, Rewards: Employee goals and incentives, Processes: Information and decision processes, Culture: current state 2) Who are the stakeholders involved and what are their interests and incentives? 3) How should MacDonald tackle these key issues? Provide specific focus areas for MacDonald to focus on as a leader and provide ways that changes can be implemented