MidState Arc is a nonprofit that enables people with intellectual and developmental disabilities to lead independent lives. Founded in 1952, and formerly known as the Arc of Meriden-Wallingford, the agency now supports hundreds of individuals in 27 Connecticut towns. The organization provides residential services and conducts employment and children’s programs designed to help people with disabilities develop skills, form social relationships, contribute to their community, and meet the challenges of daily life.
When I took the helm at MidState Arc in 2001, it was a small, stable, nonprofit. We had around 80 employees and served 150 people with disabilities on an annual budget of about $3 million. Our agency at this stage was run like a small business. We had, for example, very little formal human resources structure. I knew everyone’s name and situation and resolved the occasional problem informally, on a case-by-case basis. We also had very little formal accounting structure. Money came in, and money went out, and analysis didn’t go much beyond making sure that we were in the black each year.
My goal was to grow MidState Arc. There was and still is a great need for what we do, and I knew we could expand to serve more individuals who needed our support. And grow we did! For the next decade, we expanded by around $1 million a year. By 2016, our budget was about $11 million, and we had over 250 employees. On the surface, things were great. It was thrilling to be empowering more people with disabilities than ever before and doing so in exciting new ways. Beneath the surface, however, cracks were beginning to form.
I was still running the business as I always had, but it wasn’t working anymore. I could no longer keep track of everyone’s names and HR issues were piling up. Though our revenue had skyrocketed, we were losing money in some of the programs and we lacked the financial tools to see what was happening. To patch the holes and keep the agency afloat, I was continuously asking peers I knew who were executives elsewhere how to deal with various problems.
Eventually, I realized what I was missing: formal business training in the way larger companies are run. So I went to the MidState Arc Board of directors and outlined the dilemma in detail with two outcomes: find a new CEO with the right experience, or send me back to school to earn an MBA. Happily, they chose to send me to business school.
Growth can be great, but it can also be disastrous without the proper structures in place.
The most important thing I learned in business school is that a larger business must be run very differently from a small business. One of the first things we did was hire a new director of finance with experience in large-scale operations. We now have a detailed understanding of the health of our programs and can easily identify inefficiencies and cost centers. We learned, for example, that most of our programs were loss-makers, propped up by a couple of programs that were supporting the rest. This allowed us to take focused action and now the majority of our programs are in the black.
We also created a more formal HR structure with a broader knowledge to handle the vast array of HR issues, and are working toward a transparent system where everyone is treated fairly and situations can be resolved quickly.
Now that the day-to-day activities at MidState Arc run like a clock, I can focus on a more important agenda: transforming the way we work to maximize independence for the individuals we support. The stability of our organization allows us to explore exciting new ways of empowering people with disabilities—and enables us to measure our success.
Growth can be great, but it can also be disastrous without the proper structures in place. MidState Arc outgrew its mom-and-pop business model many years before our organizational structure caught up. Now that we’ve learned how to scale properly, we are poised for sustainable growth.
Photo courtesy of MidState Arc