The Board and the Vision: One View from Disability Services

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How do you stay relevant as an organisation when the entire industry you operate in is being turned upside down?

 

How do you stay relevant as an organisation when the entire industry you operate in is being turned upside down?

 

At Achieve Australia (Achieve) – a participant in the imminent National Disability Insurance Scheme (NDIS) – the answer starts with the board.

 

Under NDIS, all providers face a radical shift in the funding of disability services, from a welfare system driven by government grants, to a model in which people with disability buy their services according to their circumstances. Australia’s funding for disability will quadruple under NDIS, from $6.5bn to $28bn at first year of full roll-out, improving outcomes for people with disability, but also shifting us into a contested market. Many non-profit service providers are struggling with the coming changes. The demand-driven NDIS system puts great strain on service providers’ cash flows, because under the new system they will only be paid once the services are ‘sold’.

 

Achieve’s NDIS-restructuring journey is due in no small part to the relationship of the board and executive, and the capacity of our board to articulate a clear vision for the organisation.

 

We are two years into a three-year plan to change our entire business structure, and its current success lies in the board articulating a vision for the organisation that is clear and non-prescriptive so management can see exactly where the journey has to lead, yet can devise its own tactics to get there.

 

Look at the challenges in this sector: Achieve operates in NSW, where the government has mandated that large residential care facilities for people with disability must be closed by 2018. The NSW government upholds the social inclusion doctrine, which says that the health, welfare and human rights of people with disability are optimised when they participate in communities, rather than being segregated.

 

On top of this, the introduction of the NDIS means that we will now be selling services in a market, and if the customers do not like our service offerings, we will not have a business.

 

The problem was this: Part of Achieve was predominantly built around a large residential care facility in Ryde. Achieve would have to close down the large residential care facility, and also invest in new services and facilities. But, where would the investment funds come from, and how would we make up the loss in cash flow? Achieve was a classic case of being asset-rich and cash poor: what they call a ‘lazy balance sheet’.

 

The board conferred and consulted widely over the 2009-2012 period and set a number of high-level goals.

 

Firstly, Achieve would become a cash flow-positive organisation, with financial systems similar to the private sector. This central goal was crucial: the board was of the opinion that best corporate governance occurs when the financial models are transparent, market-driven and run by finance professionals. Whilst Achieve was already on a journey of improving its future, with the implementation of the NDIS, a commitment was also made to become an organisation that was not only accountable to the governing agency, the National Disability Insurance Agency (NDIA), but also to employees, clients and supporters of Achieve.

 

Secondly, Achieve would shut down its large residential care facility by 2014.

 

Thirdly, Achieve would become a provider of high-quality disability services and housing, linking us to customer demand and reducing reliance on government grants.

 

To fund this transformation the board decided to sell the 4.5 acre site in Ryde. The plan was to create a $32.5 million development of medium density housing, from which Achieve would draw down $8 million and also retain at least fifteen dwellings in the development, for accommodating clients of Achieve. We were able to create a balance sheet better weighted to cash flow, while also successfully transitioning the 50 Crowle residents into community living.

 

As recently as the 3rd of December 2014, Achieve received registration of platinum-certification for the 5% it will own of the more than 400 apartments to be built, and construction has commenced. They will house people with disability and will be NSW’s first socially inclusive homes to be built inside mainstream, medium density housing.

 

We are now looking at innovative capital raising strategies for the supply of more housing.

 

Nearly two years into the board’s three-year plan, Achieve now has a sound financial position ready to implement a 2015 NDIS trial.

 

We haven’t finished the journey yet but we can already point to some of our strengths in this transformation. Our vision is clear and.it is communicated very simply to the executive, via me, the CEO. I can say that a crucial aspect of Achieve’s successful transformation thus far is the board having a clear vision and remaining confident in that vision.

 

We also have a new financial system, providing transparency and confidence to board members, senior management and supporters. Achieve’s vision is underpinned by a goal of financial self-sufficiency, and that means developing new cash flow modelling, financial controls and balance sheet discipline. The reformulating of the financial model not only holds the executive to performance benchmarks, but is also a powerful corporate governance tool, allowing the board to judge its own vision against actual outcomes.

 

Finally, our investment in people must be mentioned. Our board members all have experience in operations, finance and services delivery and so their creation of a three-year plan not only has the visionary aspect of where we have to go, but also a practical grasp of the possible. The investment in good people has extended to a recruitment program that commenced in 2012 and continues to this day. We employed an executive team with core expertise in operations, finance, service design, business planning and HR. Most importantly, this team is motivated by the challenge of turning a non-profit recipient of government grants, into a financially sustainable provider of services, creating the capacity to change the lives of the people we service.

 

Achieve Australia’s is now a sustainable business model that champions inclusion, and was created with three important factors in mind: sustainable financial models, high quality services, and expert senior management. All of this originated with clear direction and vision.

 

About Anne Bryce

Anne Bryce has spent almost 30 years working within the Disability, Human Services and Health sectors. Anne has been with Achieve Australia since 2003 first taking the role of CEO of Hornsby Challenge in 2003, later renamed Achieve Foundation, leading the organisation through significant growth and a merger with The Crowle Foundation in 2009, growing the organisation from a $4.5million service provider in 2003 to a $10million enterprise by 2006. Achieve Australia, under Anne’s leadership, has grown into an over 350 employee organisation that supports over 500 people with disability through accommodation, employment and day services, whilst maintaining a strong focus on individual outcomes for people it supports. In the process of merging Achieve and Crowle into one powerhouse she’s learned the value of organisation purpose and values, communication, long-term organisational goals and the need for strong systems and a clear management vision of ‘building extra ordinary lives’. Anne has continued Achieve Australia’s philosophy of social inclusion, the right of people with disability to live in the community, and over the last 10 years Achieve Australia has moved approximately 80 people out of large residential centres into community housing.

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