Turnover, Once Again, at the Top

Like in Lewis Carroll’s literary classic Alice in Wonderland, things get “curiouser and curiouser” all the time when it comes to the National Kitchen & Bath Association.

In Carroll’s fictional “Wonderland,” curious developments that draw interest and often defy logic occur all-too regularly – just like they do in the real-life kitchen/bath-industry landscape occupied by the NKBA.

That, however, is where the similarities end.

In Carroll’s timeless masterpiece, the storyteller uses expressive language to communicate profound, inspiring philosophies.

Readers, along with Alice, are challenged to make sense of illogic but, in the end, gain immense wisdom from the absurdities they face.

In contrast, after a glimpse into the curious, perplexing world of the NKBA, one is left simply scratching one’s head.

How can most NKBA members not be scratching their heads in the wake of last month’s announcement that Michael P. Kelly is abruptly out as chief executive officer of the association, months shy of his three-year anniversary in that post (see NKBA Begins Search for New CEO After Departure of Mike Kelly)? How can members not be asking questions about what has become a sad and all-too-familiar pattern of constant turnover at the top of the industry’s most important trade association?

Questions, for example, like these:

What is it about working for the NKBA that results in such a high degree of executive turnover? Is association leadership simply prone to making ill-advised, poorly matched hiring decisions? Is there something inherent about working either at the NKBA’s Hackettstown, NJ headquarters or with constantly changing voluntary leadership that makes long-term employment for top executives a long shot at best? Is there something in the CEO’s job description that makes meeting the position’s requirements all but impossible? Are there other factors at play? The association’s structure? The political climate? Shifting and/or conflicting goals and priorities? Personality conflicts? Something else?

Surely, voluntary leadership should be asking these questions. Surely, answers are needed if NKBA members truly wish to reverse what’s long been a troubling and disruptive pattern of staff turnover – not just at the CEO level, but among top managers in marketing, education, membership and other key areas.

Regardless of the answers, though, what’s irrefutable is that the NKBA goes through CEOs at an alarming rate far in excess of most trade associations. The revolving door in Hackettstown seems almost endless. The turmoil resulting from the turnover hangs over the association like a dark cloud. Eyebrows continue to be raised. Questions continue to be asked.

And the situation gets curiouser and curiouser.

Announcement of Kelly’s departure, buried obscurely in the final paragraph of a routine NKBA press release, was curious enough in itself, clearly belying the significance of the development. It was almost as if news about the parting of the ways was structured in a way not to draw attention. Why?

Curious, too, were the details of Kelly’s departure. Although NKBA officials said the surprising development took place by “mutual agreement,” most observers believe that the decision about Kelly’s departure was anything but mutual, precipitated instead by a variety of issues that troubled – and deeply angered – the association’s Executive Committee over the past year. Kelly himself has not commented publicly.

In truth, though, that’s where the curiosities only begin.

Take, for instance, the matter of timing.

Kelly’s departure occurred literally on the eve of the NKBA’s most significant annual event, this month’s 2008 Kitchen/Bath Industry Show in Chicago – an event at which the former CEO was to play an active, highly visible role. One would think, at the very least, that the “mutual agreement” regarding Kelly’s departure could have been postponed 30 days and been made effective after the show, if only to temporarily avoid the inevitable distractions, public relations fallout and embarrassment resulting from such a pre-show development.

Interestingly, there’s precedent for the timing: Kelly was named CEO in July of 2005, shortly after the similarly abrupt departure of former CEO Larry Spangler – also just prior to that year’s K/BIS.

Nevertheless, who needs developments like this when so many hard-working staff members, apparently facing morale issues as is, are working so hard in preparation for such an important event? Had the relationship between Kelly and NKBA leaders deteriorated so dramatically that his departure – if, indeed, unavoidable – couldn’t have been announced at a slightly less sensitive time?

Equally curious is the fact that Kelly, by more than a few accounts, was performing well enough to avoid the unfortunate fate that befell so many of his predecessors.

Indeed, most traditional performance metrics during the former CEO’s tenure seem positive at first glance. Association revenue rose sharply in 2007. Membership is up. Member retention has risen to an all-time high. Educational offerings have been expanded. New programs and services have been introduced. Kelly also brought a measure of much-needed business discipline to the nonprofit association, and was a voice of reason during a particularly troubling period of internal turmoil in 2007.

Kelly, in fact, was commended roundly as recently as 18 months ago for his leadership, hard work and collaborative skills in helping spearhead a $122-million K/BIS-management contract with VNU Expositions – an agreement that should assure the NKBA’s financial health for at least the 20-year duration of the pact. That agreement was reached within only months of the former CEO’s arrival, after prolonged negotiations that seemed, at times, to be heading nowhere.

Kelly was further commended enthusiastically by the NKBA’s show partner after the 2007 K/BIS for “making a real difference” at the NKBA – and for the success of the trade show, which accounts for the vast majority of the association’s $14.2 million in annual revenue.

Interestingly, NKBA sources report that Kelly was actually rewarded only months prior to his departure with a substantial raise in pay and, until recently, was said to be negotiating an executive employment agreement with the NKBA – a contract that CEOs have not been offered in the recent past, if ever. Both those developments seem to fly in the face of contentions that the former CEO was performing at a level that warranted termination, or that he was contemplating abandoning his post.

Apart from whatever else he accomplished, Kelly also forged a more productive working relationship between Kitchen & Bath Design News and the NKBA than at any time in the magazine’s 25-year history. The former CEO was professional, conscientious, candid, responsive and a man of his word. Largely through his efforts, KBDN and the NKBA developed a highly successful and much-needed educational conference program and a series of special annual supplements to the magazine.

All this is not to say that the Executive Committee was entirely pleased with the job the former CEO was doing. Sources reveal, in fact, that the EXCO met early in 2007 to discuss the status of Kelly’s employment, declaring that it was unanimous in its support of the CEO, and expressing the belief that he’d be successful in leading the association into the future.

However, Kelly was also informed in writing at the time about “significant concerns” regarding a number of areas that, without substantial improvement, could cause the committee to re-evaluate his continued employment.

Among those areas of concern, according to sources, were the extent and circumstances of the former CEO’s travel, his ability to handle required administrative tasks, his need to conduct monthly staff meetings and improve staff morale, and his communication and time-management skills.

Those items, Kelly was informed, played a large role in his overall evaluation and, if not promptly addressed, would likely outweigh whatever positive qualities he brought to the association. Kelly was further informed that the committee would be monitoring his performance to determine whether significant improvement was demonstrated prior to a formal review at the end of 2007.

His fate was apparently sealed at the NKBA’s recent board meeting in Arizona.

It’s sad it had to end the way it did. Sad for Kelly and sad for the NKBA, an organization that’s comprised of legions of hard-working, well-meaning industry professionals, but where something – for all the association’s achievements – unfortunately seems to be in need of fixing.

Trade associations such as the NKBA simply need to find a way to keep their top executives around longer. Most, of course, do.

The CEO’s position at NKBA is clearly a challenging, multi-faceted post that involves balancing a wide range of functional and governance responsibilities, including management of staff, which grew from 33 to 53 full-time employees under Kelly’s watch. It involves meeting both objective and subjective benchmarks, including such intangibles as being “a visionary who accepts and champions change,” and an “ambassador for the association who projects an image of leadership and professionalism.”

That is certainly a tough role to fill.

Whether Kelly adequately filled it, of course, is no doubt open to debate. Clearly, the EXCO, closer to the situation than anyone, felt that he failed – and they certainly have the right not only to make that judgment, but to act in what they believe is the NKBA’s best interests.

One can only hope they acted in exactly that way – and that their decision was reasoned, rational and fair, unmotivated by personal agendas. One can only hope, too, that the NKBA can move forward from here with a minimum amount of damaging disruption, fix whatever is broken within the association, and help the next CEO find a way to hang around long enough to truly do the job.