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Addiction Treatment's Generational Leadership Shift
Written by Ted Jackson   

In the mid-1990s, Doug Tieman was hired away from Hazelden, where he had initially been charged with setting up what is now the Hanley Center, and began his duties as the new CEO of the venerable Caron Foundation. (Full circle: Caron recently took over struggling Hanley) This year celebrating its 55th anniversary, Caron was at the time, like most of its addiction treatment brethren, going through a tumultuous and difficult period. "My predecessors, and pretty much everyone else in the addiction industry, had assumed that the growth of the 1980s would continue," says Tieman. "Then managed care came along, and, of course, that didn't turn out to be what happened." When Tieman assumed the helm at Caron in 1995, he was among the very first of a new generation of leaders at the non-profits, which account for 60 percent of the treatment industry, that in recent years have begun to take over from a generation of charismatic founders and builders who in previous decades shaped the treatment industry into its contemporary form. In Tieman's case, he took over from Leo McLaughlin, who had before worked as the top lieutenant to Rick Esterly, who himself took over management from the Caron family and built the institution into one of the founding top tier private treatment providers in the nation.

Torch Passing

At Hazelden, there has been a similar multi-stage torch passing, with the controversial Ellen Breyer taking over from several CEOs mostly closely associated with the era of Dan Anderson, who was both a top executive and CEO for more than 25 years at Hazelden until 1986. Like Esterly at Caron, Dan Anderson is considered to be one of the top major historic addiction treatment institution builders. This generational passing of the baton is increasingly being played out throughout the private and public sides of the treatment industry, with other well known private players like Father Martin's Ashley also making changes at the top in the last ten years. And there has been some speculation that Betty Ford CEO John Schwarzlose, also a historic major institution builder, but decades later, might soon step aside. Schwarzlose refused, when this article was originally written, to comment. Since then, there have been major board battles going on at Betty Ford, resulting in the departure of the Fords from representation at the institution they founded, and increasing speculation about leadership at Betty Ford. Schwarzlose - at one point the highest paid non-profit CEO in the industry - has experienced big census drops at times on his watch, resulting in price slashing, due to intense competition from proliferating Malibu Model centers throughout California. Under Tieman's leadership, Caron has emerged as probably the most successful of the top tier, industry founding private non-profits, registering very strong approximate 20 percent annual increases in revenue in recent years amid an impressive array of innovative organic and acquisition growth initiatives in Florida, Texas and elsewhere.

Hazelden Stumbles

Hazelden stumbled in important respects, such as the forays into urban markets inHazelden’s New CEO Hits Deal Ground Running Chicago and New York, efforts which Breyer scaled back. Under Breyer, Hazelden lost its critical presence in South Florida - Hanley - and it was left to her successor Mark Mishak to finally oversee Hazelden's return to the critical treatment destination, this time in Naples. But Breyer successfully integrated prior expansion efforts, like the Springbrook acquisition in Oregon, and she presided over the opening of the new women's facility at the Center City, MN headquarters. A big swath of the top echelon of Hazelden executives, virtually its entire leadership cadre, left under her reign, creating enormous management turmoil. A Treatment Magazine article, picked up by the Minneapolis Star Tribune, called attention to the problem, and almost immediately after Hazelden's board moved quickly to rid itself of the imperious, widely disliked Breyer in early 2008. Her successor, Mishak, has inherited an institution that was once considered hands down the world's best addiction center that is no longer considered, not even close, as a shoo-in for that title - all due to a series of leadership choice mishaps that ended with the arrival of the highly experienced Mishak and illustrating the critical nature of the industry leadership shift that has been underway.

The Public Side

The generational switch over is also well underway on the publicly funded side of the treatment business, and nowhere has this been more evident than at venerable Phoenix House. In February of 2007, the non-profit announced that Howard Meitiner, a Phoenix House board member and highly experienced corporate turnaround specialist much in demand in retail circles, would succeed the institution's legendary founder Mitch Rosenthal as CEO. That Mitch Rosenthal can be put in the same class as Hazelden's Dan Anderson and Caron's Rick Esterly, the class of seminal institution builders who shaped the treatment industry as we know it today, there can be no doubt. In fact, there could be an argument that Rosenthal may be in a class all his own in this respect.

Phoenix House

Over 40 years, Rosenthal built Phoenix House into a $100 million a year treatment behemoth with over 120 programs in nine states, the largest non-profit player in the country. The list of its trail blazing innovations is long, with Phoenix House having been the pioneer in introducing corrections based treatment, as well as a major innovator in the early development of adolescent academies, an industry that on the private side of the business is became probably the fastest growing behavioral healthcare sector before the housing crisis cut massively into parents' ability to pay big cash tuitions, causing a huge therapeutic schools slump. Realizing it was time to pass the baton to a new generation, Rosenthal, and his board, began a major nation-wide search that closely examined over 100 candidates for the CEO job. As is often the case, Phoenix House's extensive search led it right back to its own door step. As a board member, Meitiner worked with Rosenthal to restructure Phoenix House's New York operations.

Reaching Outside Treatment Industry

Meitiner is the latest, and most high profile, example - Mishek is another - of non-profit boards reaching outside the treatment industry for professional business leaders capable of managing increasingly complex treatment enterprises. Some decry the trend, saying it moves the industry away from its tradition of often being led by that in recovery themselves, but observers say that the trend toward a new technocratic, professional leadership class will likely accelerate in coming years.

Unapologetic

And Rosenthal is unapologetic: "A guy like Howard, who has enormous managerial expertise, is critical for our organization going forward," he says, pointing out that Phoenix House now has more than 150 different public sector treatment contracts, each one with separate goals and reporting requirements. "The complexity of the management task is just huge," he says. Meitiner, who's philanthropic history has been focused on troubled youth, a Phoenix House mainstay, says that there are very big similarities been the retail business he came from and the management challenges he has been facing at Phoenix House." In retail there are a multitude of relations with suppliers, all with individual contractual arrangements, so there has been an absolute parallel." And will he regret missing out on rich paydays as a sought after turnaround artist? "It's nothing compared to the satisfaction of helping people," he says.

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