The hatchet man

In some ways events at Chico City Hall since Brian Nakamura became city manager last fall are reminiscent of what happened at Enloe Medical Center in early 2006, shortly after Dan Neumeister became CEO there.

For nine years before then, Neumeister had been the hospital’s chief operating officer under CEO Phil Wolfe. He is credited with taking a facility that had only 11 days’ worth of cash on hand when he arrived and building reserves up to 130 days and restoring financial stability. He made several other valuable changes as well, including instituting the expansion project that reached fruition last year.

But financial success came at a cost. Neumeister was forced to cut expenses so drastically that employees began referring to him as “Dan, Dan, the hatchet man.” He also led the effort to stop nurses from unionizing, calling in a Southern California union-busting firm, the Burke Group, to do the dirty work. It was overkill, and it failed.

When Wolfe stepped down, in August 2005, Neumeister ascended to the CEO post. Enloe’s trustees liked him, and so did high-level administrators. But to the rank-and-file he was forever “the hatchet man.”

Then, still in money-saving mode, he tried to reduce anesthesiology expenses. When negotiations with the anesthesiologists broke down, Neumeister started bargaining with a small breakaway group of anesthesiologists. Nearly all of the original anesthesiologists quit, so the hospital had to start bringing in temporary anesthesiologists to take up the slack.

Some of these doctors apparently had questionable skill levels, and the rest of the medical staff became concerned about patient care—rightly so, as events proved when some patients died on the operating table, allegedly because of anesthesiology errors. Malpractice suits ensued.

The conflict between the doctors and Neumeister proved to be his undoing. Something had to give, and in the end it was the CEO. He resigned in June 2006. (A generous severance package sweetened the deal.)

One of the several morals of this story is that it’s often difficult for a “hatchet man” to metamorphose into a benevolent CEO.

Brian Nakamura has come into the Chico city manager job determined to carry out the wishes of his bosses, the members of the City Council. They want the city’s finances fixed, even if it means reorganizing city government—as he has proposed to do—in such a way that a number of excellent veteran employees may be laid off or demoted. And they strongly support him, as they again emphasized at this week’s council meeting on Tuesday (Feb. 5).

So far, at least, Nakamura hasn’t tried to win over city staff, many of whom are fearful about losing their jobs. Out of necessity, perhaps, he left them in the dark about his plans until he revealed them to the council.

A time will come, of course, when the cutting is over. Only then will we learn whether Brian Nakamura has the skills to rally his staff, earn their trust and create a great team.