Managing through crisis

Laurie Nafziger

Four Mennonite business leaders reflect on being at the helm during tough times

By J.B. Miller

Laurie Nafziger had been president and CEO of Oaklawn Psychiatric Center in Goshen, Indiana for less than two years when the crisis hit.

It was 2008 and the US was entering the Great Recession, the most severe global recession since the Great Depression of 1929. Oaklawn, like many businesses, was fighting for survival. What must be done?

“What is really vivid in my mind,” Nafziger recalls. “everything was crashing, we were facing very significant financial challenges.

“I can pick the moment. After a lot of planning by our management team, I called an all-staff meeting. Standing in front of everyone I outlined our plan. The plan included pay cuts for everyone, reductions in benefits and other operational changes with an explanation as to why it was necessary.

“It was a very hard day,” Nafziger reflected, “and still, what’s so amazing to me is, it went so well. The staff understood it, they bought into it, they were saying kind things to me afterwards. I will never forget that.“

Phil Bontrager
Phil Bontrager heads Sauder Manufacturing Company

Leadership. Why do some people excel during times of crisis and turmoil, and others flounder? Are there common themes that successful leaders exhibit? What are the skills and qualities they possess? The current pandemic is one of those challenging times. What can we learn from four successful executives and the leadership qualities that guide them during times of crises and uncertainty?

• Laurie Nafziger joined Oaklawn after graduating from Goshen College in 1978 with a bachelor’s degree in social work. She was named president/CEO in 2006. She serves on several boards of non-profits and is congregational chair of Eighth Street Mennonite Church.

• After three years of voluntary service in Nicaragua, Phil Bontrager earned an Economics degree from Goshen College and an MBA from the University of Michigan. He joined Hill-Rom, Inc., a manufacturer of hospital beds and patient room furniture. He held various executive positions over an eighteen-year tenure. He then led the restructuring of Mennonite Publishing House to MennoMedia. In 2003, he was named president/CEO of Sauder Manufacturing Company, a manufacturer of institutional and church furniture in Archbold, OH.

• Greg Gaeddert is a managing partner of B12 Capital Partners and B12 Real Estate Advisors based in Kansas City. He has been a principal in three private equity funds and two investment vehicles. Prior to co-founding the B12 entities, he held various executive positions with banks and manufacturing companies. He has served on numerous boards, and currently serves on MEDA’s board as vice-chair.

• Howard Brenneman began his career with Hesston Corporation while still a high school student and joined the company fulltime after graduating from Bethel College in Kansas. In 1975, at the age of thirty-four, he was named president/COO and later CEO. He served in that role until 1986. In 1992, he was appointed president/ CEO of Mennonite Mutual Aid (MMA), now Everence. He retired in 2005 and currently serves on several corporate boards.

For some people, the selection of Brenneman as president and CEO to lead MMA was an unlikely choice. Brenneman was an experienced executive, having led Hesston Corporation through two deep farm crises, but he came out of the corporate world and had no health insurance experience, MMA’s core business.

You have to be willing to recognize the brutal facts in front of you.

– Greg Gaeddert, managing partner, B12 Capital Partners

MMA was under tremendous stress. To meet unprecedent rises in health care costs, insurance premiums needed to be raised dramatically, and many members were leaving for cheaper plans.

Laurie Nafziger
Laurie Nafziger is president of Oaklawn Psychiatric Centre

“What I knew about health insurance was zero,” Brenneman recalled, “but I knew it was a matter of going in and identifying three or four of the main drivers, negotiating contracts with providers, and diversifying the company.

“We also needed to convince the constituency we needed to make a profit in order to run a not-for-profit in the insurance and financial services business. At both Hesston and MMA, the principles were the same – identify the main drivers, face up to the problems, and diversify the company, if necessary.”

When Bontrager thinks about leadership during turbulent times, his reflections are an interplay of stewardship responsibilities of the company and sensitivity to how staff will be impacted. The current pandemic has been particularly challenging. 
However, during times of crises, Sauder Manufacturing develops a vision paradigm as the crisis unfolds. “We know we’re at point “A”, and there’s a frontier, Point “D” that we want to reach at some point in time.”

There are principles or touchstones that provide boundaries around what the company will do or can do. Rather than develop points B, C, and D, the objective is to get from “A” to “B” based on the best information available.

When point “B” is reached, a reassessment takes place. What has been learned, what has changed, what should be done next? So rather than a straight linear progression from point “A” to point “D”, it’s jagged steps, all of which are right, as long as it moves toward the frontier within the established boundaries.

“I think we’re best served by building momentum and then adjusting, as opposed to having everything figured out,” Bontrager commented. “I had a colleague tell me ‘you can’t steer a ship that’s sitting still.’ So, get moving and make course corrections, if necessary.”

B12 Capital currently has ownership interest in 10 companies, and Greg Gaeddert’s position as managing partner and chairman of the board provides a vantage point to assess various leadership styles of the CEOs of the companies.

For Gaeddert, the key to effective leadership during times of crisis is to be highly focused and a steadying force. “With that in mind, I think you have a better chance to make good decisions, but you have to be willing to recognize the brutal facts in front of you. You must be able to problem solve and self-reflect with a level of honesty with yourself and the situation you’re facing.

“This is a critical time to build consensus with your management team, but it’s important to never forget what the core business is. Sometimes there’s a tendency to solve other problems but staying focused on the company’s core business is critical.”

Howard Brenneman
Howard Brenneman

Serving the mental health needs of a two-county area is Oaklawn’s core business. Maintaining that mission focus is paramount for Nafziger. “We’re here for the mentally ill, persons who struggle with substance abuse, and other people who need us. That’s the important thing to keep in mind.”

When times are challenging, Nafziger reminds herself she has a board of directors and the community behind her, and a strong management team. She prefers to deal quickly with things that can be solved easily, and thinks long-term, focusing on fairness and what’s best for Oaklawn. “Finally, it’s our work, our mission, that’s the most important,” she said.

When the leaders are faced with economic and financial challenges, the impact on personnel is particularly stressful. “People decisions are always the hardest decisions,” Gaeddert said, “I don’t tend to agonize over decisions upfront as much as live with them or replay them after the fact.”

Brenneman recounted living in Hesston, KS, when the farm crisis forced Hesston Corporation to downsize, eliminating hundreds of jobs. “Everyone knew each other in Hesston,” he recalled. “You really didn’t want to go to church. Everywhere you turned you saw people you had laid off; you couldn’t get away from it. It was a very stressful time for our family and that small community.”

When Bontrager was working for Hill-Rom in Europe, a country manager developed terminal lung cancer, affecting his ability to perform and jeopardizing business operations. The manager was a well-liked leader and a personal friend, and wanted to remain in his position.

The anxiety on the front end is because the business may be deteriorating and waiting to deal with personnel matters usually makes it worse for everyone but knowing it will impact individuals makes it difficult, he said.

After two to three weeks of living with the situation, Bontrager visited the manager and his family in their home. Following several hours of pleasant conversation, Bontrager suggested the manager take a leave of absence so he could spend time away with his family.

Greg Gaeddert
Greg Gaeddert’s firm owns a stake in 10 companies

”I’d like to know how you feel about that,” Bontrager asked. “You can either tell me now, or we’ll talk next week. He was quiet for a little bit and then he said ‘Phil, that takes a load off me, I’m glad you asked me to do that.’ You don’t get prepared for those kinds of things,”

While leadership styles vary among the four leaders, there were common themes among them. First and foremost, leaders must be problem solvers with an ability to analyze the situation and act decisively. A strong management team, where trust is a given, is vitally important.

Hire people that complement your skillset, and don’t be intimidated by people who might be smarter than you. They’ll make you look great. Be transparent with employees throughout your tenure. It will serve you well during the difficult times.

Mike Krzyzewski, Head Coach at Duke University seemed to capture the sentiments of the four executives: “You’re not going to get there alone. Be on a team. Surround yourself with good people and learn how to listen. You’re not going to learn with just you talking. And when you do talk, converse. Don’t make excuses. Figure out the solution.”

JB Miller is a retired banker who was a long-time Everence employee and got to know the people interviewed for this article. He lives in Sarasota, Florida.

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