Inner Workings

June 19th, 2017

We received an email a few months ago;  “The fiscal year begins (appropriately) on April Fool’s Day.  Expect a fresh batch of contributors in a few weeks.”

In time, they arrived, a new series of communications from CSA’s employees.

Credibility is key in getting new sources.  “Your diligence is very impressive, said one.”  From another;  “Your assessments of upper management are basically accurate.”  Sources are comfortable contacting us because of that credibility, as one said; “most of your findings do not surprise me.”

“I’m an employee and a big fan.  I don’t agree with all of your conclusions, but most of the facts are in line with my experience.”

And then the reason for their writing;

“You have stumbled onto a really big problem.”

The “big problem” for CSA isn’t public policy, it’s leadership deficiency.

The “CSA’s tactics are in some ways a measure of desperation,” said one employee.  “Despite a number of self-described ‘cash cow’ services, they still struggle to fund their big bureaucracy.”

While CSA has a lot of ‘cash cow’ services, taking a third of a billion dollars from taxpayers last year, they’re also saddled with a burgeoning and bloated executive structure, these executives being mostly long term employees, nearly all underachievers.  So, big salaries and big expenses; small minds and smaller output.

The CSA has been run for decades as a typical Government Agency.  In Government, accountabilities are different than we’re used to.  The standards for productivity, efficiency, and diligence are lower.  Over time, and through inertia, the least capable rise to the most authority.  The current iteration of CSA is organizationally underproductive, directionless and conflicted.

A US-based employee regaled us with some history;

“Each year, [CSA] balanced their budget by raising prices, motivating customers to seek alternative certifications such as [redact].  With each price increase, [the] volume of certifications dropped, making it that much more tempting to balance next year’s budget with yet another price increase.  They were reaching the practical limit of this strategy when Ash Sahi was appointed CEO.  His response was to lay off 10% of North American operations’ staff.  Unfortunately, most of the worst employees survived.  The overwhelming majority of the casualties were younger people who would have fixed the company if given half a chance.  Within 3 months of starting his job, Ash had basically destroyed any chance of saving [CSA].”

The CSA’s structural problems exist because of their conflicted mandate.  Are they a Crown Agency or a private company?  Do they work in the public interest or commercial interest?  The CSA doesn’t deal with this core conflict, they prefer to paper it over.  As a result, we have a Government Agency trying to extract massive amounts of money through commercial undertakings, all branded to appear as profitless beneficence in the public interest.

Consider their certifications dilemma.  In the real world, recovering a failing company burdened with lacklustre leadership and overpriced services would entail tightening service processes, a deliberate short term HR churn, and a sizeable downsize of superfluous expenditure (like overseas offices, travel costs -that sort of thing).  All this would normally boost productivity, efficiency and, in upgrading their management, improvements would also be realized leadership capacities (areas of discernment, consistency in communication and delivery, etc.).

Yet none of this took place.  An employee noted that CSA’s ridiculously lavish travel expenses are a pretty good gauge of their ongoing trouble;

“To a certain extent, I think upper management used perpetual travel as an escape mechanism to avoid administrative gridlock that prevented anyone from addressing painful problems in the core business.  How do you address the problem of a company overrun with underachievers who accept low salaries because they are underachievers?  One option is to get on a plane and fly to someplace enjoyable, and pretend to be doing something important.  How long can you get away with that?  Depends on who you are and who you know.”

That brings us back to CSA’s structural conflicts.  You see, what CSA calls its Standards Division is actually a series of legislative committees.  As such, this Division makes very little money, mostly in access payments and pay-to-play sales.  As for its legal and legitimate revenues, Standards makes nearly no money at all.  The Certifications Division makes money, some of it dodgy but less so than CSA’s legislative activities.  Because Certifications makes money while Standards looses money, Certifications props up Standards most of the time.

Said one insider;

“The business model of CSA has some built-in conflicts of interest.  The Standards division spends a lot of money, but it has very few ways to generate revenue.  CSA’s sort-of government status makes the Standards division feel justified in spending at the expense of the Certification and testing division.  The price of certification is marked up to cover the perpetual losses of the Standards group.  This [RestoreCSA] website exists because Standards tried to monetize their work by publishing a book of what is basically public information.”

Indeed, they tried a shakedown of PS Knight Co, ordering us to hand over a mass of money on false pretence or, if we refused, they’d harm us.  Well, we refused.  We don’t pay protection money.  And CSA’s been trying to harm us ever since.

Ironically, the attempt to solve their financial problem by squeezing PS Knight has needlessly cost them millions of dollars in legal fees and made their financial problems that much worse.  Additionally, this site has exposed the fallacies of their image as professional, honest and reliable agents for product certification.  By their own choices, the CSA has increased their costs in the face of declining revenues, and imperilled their reputation upon which their future revenues depend.

That’s not what competent leadership looks like.

Returning to recent sources;

“It is important to remember that until the certification business faced real competition, CSA was basically willing to spend as much money as they received in revenue.  Nice buildings, nice office space, nice trips, nice benefits, lots of people.  Because they could hire as many people as they needed, they opted for quantity over quality in their hiring decisions.  This is typical of government operations, and CSA views itself as a quasi-government Agency.  They simply never had the right people to make a big push for efficient operations (although it was not for lack of trying).  Headquarters staff understood accounting, and it was easy to find accounting software consultants, so they spent big on accounting.  Although every business needs a reliable accounting system, accounting is not CSA’s core product and it produces no revenue on its own.”

So why spend so much on accounting?  Well, said one headquarters staffer;  “Despite anti-bribery policies, the gravy train was carrying a long list of passengers.”  Where have we heard that before? 

She continued;  “SAP and law firms (etc) invite VPs and hand-picked CSA employees to luxury boxes at various sporting events -Toronto Maple Leafs and Cleveland Cavaliers, etc.”  It went on like this, and lushly.  Said another;  “CSA vendors are treated like royalty,” as though CSA needed them more than they needed the CSA contract.  Why?  Well, most such contracts are signed and maintained with a lot of schmoozing, a lot of drinks and box seats, golf clubs and pricey tickets.  A lot of taxpayer dollars are going down in a beer buzz blur. 

Some incredibly boozy choices have been made.  “SAP was an amazingly bad choice for a business that did not manufacture anything.  And yet they allowed SAP to make it nearly impossible to automate any of the actual work being done.”  And again;  “CSA shows unconditional love for their vendors, enduring high prices, poor support, and sub-par products.” 

The bottom line is that senior leadership didn’t have the capacity to take serious turnaround decisions, and didn’t have the self esteem to turn down the feting and the flummery of the never-ending salesmen.

“Operational efficiency didn’t really matter until erosion of the certification business could no longer be ignored.  After years of price increases to offset declining work volume, CSA was forced into poorly planned downsizing, described as ‘March Madness’ in the Glassdoor reviews” article.

“This was acceptable until even certification revenue was insufficient to offset these costs.  [In my humble opinion], legal action vs. PS Knight is a money grab, made necessary by little fiefdoms whose existence would be hard to justify if mere citizens are allowed to read the laws that governments pay CSA to produce.”

Well folks, it’s been more than half a decade of lawyers and litigation already, and CSA’s paid massive money for their money grab, and thus far it’s failed.  Even setting aside the ethical issues in play, it’s hard to argue that all this expense was a good idea, given the needlessness of it all.  And this testifies of CSA’s leadership incapacity more than any article or litigation ever could, and more than their employees could attest to.