“A merger is not a failure.
A merger requires vision and selflessness.
Letting down those we should be helping is a failure.”
– Alex Green, Founder Loom Consulting
Like many, I was amazed to see the big disability and aged care provider Annecto announce its closure at very short notice in the last few weeks.
The fact that a disability (and aged) services provider found it impossible to be financially sustainable is no suprise at the moment (even a big one : 1000+ staff, 4000+ clients, $80m+ turnover).
But what shocked me was that a 70 year old organisation, turning a surplus in recent years, went through whatever turmoil it experienced, and left its clients, in some cases less than two weeks to line up another organisation for the supports that they depend upon.
“I am disappointed finding this out as a media release.” – Annecto Client
I’ve tried to contact the past CEO and Chair to find out more about what happened around the board table, but have had no reply. So going off the very brief short press release, and the online discussions, it looks like a combination of factors including failed audits and workforce issues and finally financial challenges proved the straw that broke the camel’s back.
“This is absolutely devastating!!” – Friend of Annecto client
In their letters to clients, they recommend organisations to which clients’ NDIS or Aged Care package could be transferred.
“For the elderly people … who is going to provide their services? We will continue in the interim – even if it means doing that for nothing – until another provider comes on board and takes on their packages.” – Subcontractor to Annecto
I can only assume there had been discussions with those organisations early enough to support these potential transitions (about which very little information or time was provided). My biggest regret for them is that it’s now too late to explore a merger, transfer of assets or other corporate structure which would have provided a more seamless, gentle and kinder experience for those clients. I can only assume they falsely hoped they would be able to fix the problem or trade out of their challenging environment – until this “5 Minutes to Midnight” closure.
Whatever the early warning signs were, they didn’t go off early enough. Or at all. Or were ignored by those that should’ve been listening. Where did the financial, compliance and quality oversight fail?
I’m sure there are many lessons that can be taken from the Annecto closure, but the key one for me is to put clients’ interests above all else – even if it means you’re not supporting them – then look ahead, explore outward, think long term. If your organisation is struggling to sustain its support alone, don’t give your clients two weeks’ notice. As For-Purpose leaders, keeping focus on what’s best for the clients should be our #1 priority. If you can’t do this alone, start discussions about this internally now, and with potential merge partners asap. This is the best way to protect your legacy, and most importantly your clients.