Bob Beall at the Cystic Fibrosis Foundation

12/14/2010
By: Gregg Ragalie Daniel Paulsen Luigi Sosi

Take a deep breath. Seems like a very easy thing to do right. Well, now take a coffee straw and try to take a breath, not so easy is it? Now imagine you had to live the rest of your life breathing like that and oh by the way that may only be to your late thirties. A hard life no doubt but this is the life of people who suffer from the disease Cystic Fibrosis. There are not only the physical issues but also huge financial burdens that go along with those suffering from this disease, with the costs of insurance, medication and treatment. So what is Cystic Fibrosis exactly? Mutations in the Cystic Fibrosis Transmembrane conductance Regulator (CFTR) are the cause of Cystic Fibrosis. An easier way to explain this is that Cystic Fibrosis or CF is an incurable, inherited, life-threatening disease that affects the lungs and digestive system. People with CF have two copies of a defective gene that causes the body to produce abnormally thick mucus, which clogs the lungs. The mucus also obstructs the pancreas, causing difficulty with absorbing nutrients in food, causing the body to starve no matter how much you eat. This disease affects 70,000 men, women and children in the world. Cystic Fibrosis research has made great strides over the years. Ponder this. In 1962 people who suffered from Cystic Fibrosis only had a life expectancy of ten years. Through great strides in scientific research, life expectancy for people suffering with CF has increased to thirtyseven years old. How does advancement like this happen? It happens when good people come together for a common goal and that is exactly what the Cystic Fibrosis Foundation and Bob Beall have done. The Cystic Fibrosis Foundations (CFF) mission is to assure the development of the means to cure and control cystic fibrosis and to improve the quality of life for those with the disease. The Cystic Fibrosis Foundation IsHope in Action! Until they conquer the disease, the CF team works tirelessly to extend and enhance life for those with cystic fibrosis by

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functioning as: Scientific pioneers, blazing new trails in CF research; Fund-raisers, securing the money needed to support our efforts; Advocates, keeping CF a top priority in government, industry and research; Investors, funding drug discovery and development; Caregivers, linking patients and families to specialized CF care; and Family, offering support, information and resources. Bob Beall and the CFF have brought those suffering with this incurable disease a long way from the sixties when most people suffering from it only lived to around ten. To help understand how far they have come in helping those suffering with CF we need to take a step back and take a look at the structure of the CFF. Next we will discuss the CFFs organizational structure, covering its formalization, centralization, management processes, personnel ratios, and best practices. The chart below depicts what the CFF was at the beginning and how it has evolved over time.

When the National Cystic Fibrosis Research Foundation was founded in 1955 the level of formalization was very low and organized in a grass roots style, with people directly impacted from CF banning together. As, the years passed the CFF became more formal and people that were not directly impacted by the disease began working for the company. -3-

Centralization with CFF also started out de-centralized in the mid 1950s with sub groups from different communities organizing their own fundraiser charities and managing their own bank accounts. In the late 70s and early 80s the company began to show signs of a vertical structure, they became more centralized. They developed a central headquarters in Washington D.C. and also developed a centralized accounting system to manage all monies in one account. CFF was able to cut the spending budget down to 10-11% for fundraising administrations by centralizing. The management process at CFF started out very organic, the management style was very loose and free-flowing among the few members. There were few rules and regulations set in place to govern the organization. As the company grew and expanded, the management process shifted. By becoming a more centralized organization the CFF shifted its management process towards a mechanistic approach, where the environment became more stable due to formal rules, procedures, and a clear hierarchy of authority. Establishing best practices at the CFF became a huge step in forming a vertical structured organization. By establishing best practices they were able to set benchmarks up against their standards and begin to improve on them. By forming a comprehensive list of foundation events the CFF was able to tighten its straggling fundraisers into more successful ones by using strategies that were found in the more successful fundraisers. As of 1980, the CFF managed a total of 1,400 fundraisers. Another best practice that the CFF developed was a unified national telemarketing center which played a significant role in fundraising, and the CFF was able to increase both revenue and efficiency. Along with comprehensive fundraising lists and national telemarketing centers, putting metrics on their drug discovery pipeline is another best practice CFF established. Putting metrics on the drug discovery pipeline helps to measure themselves

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against other pharmaceutical companies. This also helps the CFF to measure which investments are producing the most productive returns within the pipeline. With a better understanding of what cystic fibrosis is, the Cystic Fibrosis Foundation, its mission, and the structure of the CFF, lets apply theory learned from our class and Richard Dafts Organizational Theory and Design. In the early years of the Foundation basic structural deficiencies resulted in inefficient operations. The lack of centralization and coordination resulted in delayed decision-making, an inability to respond to environmental changes for nonprofits, and conflicting methods in the area of research and development. (1) In order to solve these many issues, CFF made the choice of centralizing their accounting and telemarketing operations, and organized a central patient data base to assist research efforts. (2) This brought the organization to a higher level of professionalism which is a character of a more vertical structure. There was staff accountability and delegated responsibility, with many of the administrative tasks being outsourced. Under a goals approach for determining the best structure for a philanthropic foundation a measure of real output needed to be established. (3) When Beall adjusted the mission of the firm from cure and control to cure, control, and quality of life, the underlining values of the staff changed as well. Their research objectives were modified to not only finding a cure, but to improving the prospects of living with the disease. The metric used to determine how efficient they were at meeting these goals was patient life expectancy. With Beall in charge there was values-base leadership from the top down. (5) The organization culture was characterized by shared beliefs in the importance of the mission and that they were making a difference in the lives they touched. Staff members trusted under a clan like mentality that there is meaning in their work. The true culture of CFF is that they are

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focused on achieving their goals with an external focus on the health and well being of patients with the disease. The organization used knowledge management tools to foster a culture of intellectual capital in the areas of research and fund raising. (4) The environment used to implement these tools needed to be more mechanistic in order to coordinate the high volume of drugs and treatments in the research pipeline. Flexibility is necessary to make necessary adjustments to the external environment. An adaptive culture is characteristic of such an organization. (6) In order to be able to change in an uncertain environment the management core needs to be mechanistic. Implementation of the decisions made at the top, are more effective under this scenario. Whatever Beall determines to be the right choices to solve the fundraising crisis, will be approved and put into practice at CFF. The decision-making models according to the Daft methodology are based on a contingency framework. The two factors to consider when choosing which of the models to employ are Problem Consensus and Solution Knowledge. (7) When there is agreement about what the problem is and how to apply available information to providing a solution, the Management Science model is used. When there is a lack of consensus about the nature of the problem but certainty about the information technology available to find a solution, The Carnegie model is best. With a clearly defined problem identified but no solution metrics clearly defined, an Incremental Decision model is applied with a trial and error method of finding a solution. When a problem consensus and how to find a solution are uncertain, the Garbage Can method is used. Implementation of the strategies chosen to solve the problems facing CFF will be facilitated easily because of the collegial environment at the foundation with all participants committed to the mission.

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Funding is at the core of problems facing the organization but many uncertain factors influence this problem. Will the many therapies in the pipeline be successful? Will the economic outlook improve? Will invested assets rebound from their recessionary losses? Will research costs increase? Will contributions from the public continue to decline? There are many possible solutions to the funding crisis as well: government contributions, cuts in staffing, cuts in research funding, increased spending from invested assets, increased public funding initiatives, approval of insurance coverage for patient treatment options, and a reduction of foundation funding for the many care centers providing ongoing treatment. The high level of funding issue uncertainty makes the foundation appear like an organized anarchy. There is no database of information to dictate solutions. The alternatives and solutions are ill defined presenting a great deal of ambiguity for CFF. Funding for a philanthropic organization is an ever-present problem. The Garbage Can decision making model is the best option for Beall and the foundation as a consequence of the high level of uncertainty. A team approach to problem solving by all stakeholders is necessary to find a solution. The strategies that CFF used to make up for their fiscal shortages were: the use of investment moneys (reduced from $138 M to $104 M on financial statements); Encouraged Federal Funding efforts, and enlisted help from NIH Director who found the CF Gene in his research; The organization found a private donor to match up to $6 Million in private contributions; Implemented a webbased funding strategy of Clicks! for a cure; Reduced the level of research funding from $54 to $43 million; Increased receivables from their pharmacy services from $85 to $96 million; and Reduced the level of medical program services from $185 to $181 Million. (8) Under implementation of a garbage can approach to problem solving, simultaneous implementation of alternative solutions are tried with the reality being that some will work.

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Works Cited

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"CYSTIC FIBROSIS FUNDING URGENTLY NEEDED." NBN. 18 May 2010. Web. 13 Dec. 2010. <http://www.nbntv.com.au/index.php/2010/05/18/cystic-fibrosis-funding-urgently-needed/>. "Cystic Fibrosis Innovative Fundraising." Squidoo : Welcome to Squidoo. Web. 27 Nov. 2010. <http://www.squidoo.com/cysticfibrosis>. Daft, Richard L. Organization Theory and Design. Mason, OH: South-Western Cengage Learning, 2010. Print. National Institutes of Health (NIH) - Home Page. Web. 13 Dec. 2010. <http://www.nih.gov/>. NIDDK. "Cystic Fibrosis Research Directions: NIDDK - WrongDiagnosis.com." Wrong Diagnosis. 12 Feb. 1998. Web. 28 Nov. 2010. <http://www.wrongdiagnosis.com/artic/cystic_fibrosis_research_directions_niddk.htm>. "Partners - Inspire Pharmaceuticals." Home - Inspire Pharmaceuticals. Web. 13 Dec. 2010. <http://www.inspirepharm.com/about/partners.php>. PikaAirLift. "YouTube - What Is Cystic Fibrosis? And Who Does It Affect?" YouTube - Broadcast Yourself. Web. 10 Dec. 2010. <http://www.youtube.com/watch?v=5n29ZCvtCI8&feature=related>. Rados, By Carol. "Statistics about Cystic Fibrosis - WrongDiagnosis.com." Wrong Diagnosis. Web. 28 Nov. 2010. <http://www.wrongdiagnosis.com/c/cf/stats.htm>. Stoelby. "YouTube - What Is Cystic Fibrosis?" YouTube - Broadcast Yourself. Web. 10 Dec. 2010. <http://www.youtube.com/watch?v=6v5o9AzjH6Q>. Strom, Stephanie. "Short on Fundraising, Red Cross to Cut Jobs | The Virginian-Pilot and The LedgerStar, Norfolk, VA Newspaper | Find Articles at BNET." Find Articles at BNET | News Articles, Magazine Back Issues & Reference Articles on All Topics. 2008. Web. 13 Dec. 2010. <http://findarticles.com/p/news-articles/virginian-pilot-ledger-starnorfolk/mi_8014/is_20080116/short-fundraising-red-cross-cut/ai_n41381466/>. "Welcome to Clicks! for Cystic Fibrosis." Clicks! for Cystic Fibrosis - Home. Web. 27 Nov. 2010. http://www.clicksforcf.com/.

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1. Bob Beall at the Cystic Fibrosis Foundation, Robert Kaplan & Sophie Hood, Harvard Business School, 15 April 2009 p. 5 2. Understanding the Theory and Design of Organizations 10th, Daft, 2010, p. 59 3. IBID, p. 118 4. IBID, p. 433 5. IBID, p. 355 6. IBID, p. 33 7. IBID, p. 321 8. http://cff.org/annualreport/2007-2009

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