When Unconscious Demons Possess a Business: A Case Study

Pasadena, California
Friday, September 20, 2019

When Unconscious Demons Possess a Business: A Case Study

Echoing my recent post discussing an employee’s abrupt resignation, I vividly describe how a powerful unconscious dynamic possessed a local clinic. It took over like an evil demon. A colleague told me the dramatic tale over lunch. I share our ideas about the demonic possession in the hope of enlightening readers curious about how unconscious dynamics affect groups, organizations, or businesses.

I fictionalized the details to protect the guilty, the innocent, and the unconscious of the parties involved.


Here’s the setting for this nearly Shakespearean drama:

A well-meaning physician, the Founder, opened a small family practice clinic intended to provide excellent, efficient services for economically disadvantaged patients. The clinic was a residency program in family practice. She hired resident physicians, called clinicians, to provide the services. Patients paid small fees based on their individual economic situations. The clinic was mostly funded by charitable grants and private donations.

The business model was simple. Clinicians received supervision from attending physicians who oversaw their work. A clinical director (CD), Charles, worked onsite to manage clinic operations. The clinicians reported to Charles, who also taught them a weekly class in family medicine. The clinicians received additional education, and specific patient guidance, from their own supervising physicians.

Clinic operations were overseen by a Board of Directors (Board) which met monthly to manage clinic operations. Unfortunately, the clinic could not afford an executive director (ED), creating one of many fault lines leading to the major organizational earthquake.

In a well functioning nonprofit Board, the ED would be the primary manager reporting to the Board. The Board president, John, ended up performing that role much of the time, creating yet another fault line. Technically, any Board president serving such a dual role is behaving unethically, possibly even illegally. The Board president, if acting as ED, serves conflicting roles of volunteer/employer (Board member) and manager/employee (ED).

Backdrop complete, I delineate the unfolding events leading to the near-disaster. Chronology will provide the best way to organize what happened.


A full year passed with no ED, burdening John and Charles with conflicting, stressful tasks. John, the Board president and a non-physician entrepreneur, became over-involved in managing clinic operations. In other words, he became acting ED. Charles, the CD, was busy teaching and supervising clinicians.

During this same year, and for first time in its 10 years of operation, several of the ten clinicians became unsatisfied with the training program. Every single previous year the clinicians gave the Clinic rave reviews. They loved its mission; they appreciated its efficiency; they lauded the capacity to provide services for poor patients free from bureaucratic impediments. Another fault line developed, then, from the Board’s lack of experience with aggrieved clinicians.

Some clinician complaints were legitimate. They wanted more structured instruction in family practice. They wanted more money. They wanted representation on the Board. The Board responded rapidly, granting every one of these requests.

Some of their grievances lacked legitimacy. A few clinicians wanted to skip the one-day of clinical training once per month. They wanted a major role in overseeing the clinic. They wanted to switch their supervising physicians whenever they wished. Although these complaints were entertained and discussed, they were not granted.

Yet another gaping fault line, the clinicians failed to follow the proper grievance procedure noted in their employment contracts. The procedure required them to communicate any concerns, in writing, to Charles, the CD.

Instead of following this process, an explosive run-around between one of the clinicians, Manny, and a Board member occurred. This turned out to be the slippage that triggered the nearly 9.0 Richter scale earthquake.

How did the run-around happen?

As Board members only later learned, Manny personally knew the ethically-challenged Board member. A pulmonologist, the Board member had treated Manny for asthma for the past few years. They had also become friends as Manny progressed through his medical school training. Manny, reaching a point of frustration with the clinic and with Charles, the CD, reached out individually to this Board member. They met for dinner on a Wednesday night.

Even before the fateful meeting, multiple, conflicting relationships existed between the Board member and Manny—namely doctor-patient, doctor-friend, and employer-employee.

Most importantly, the Board member, who should have known better, could have aborted the entire disaster by simply saying,

Hey, Manny, I hear your concerns. Please follow the usual grievance procedure. I’m not allowed to meet with you individually.

Similarly, had Manny followed proper procedure, he would have filed a grievance with Charles. If the complaint remained unresolved, Charles would have brought it to the Board’s attention.

Either of these actions would have prevented the earthquake from occurring.

Sadly, neither man resisted the temptation for what psychoanalysts would call the Wednesday night meeting—an unconscious enactment.

The tri-level-boundary-violating Board member called John, the Board president, immediately after his dinner meeting with Manny. John, who, again, was an MBA/entrepreneur, became alarmed by what he heard. He did not understand that an ethical, boundary-violating episode had just occurred. There would be no reason for him to know about it as an ethical rule; he also did not know the other, conflicting levels of the relationship. John emailed all Board members, summoning them to an ad hoc meeting the following day, a Thursday. Only several Board members could attend. John, Manny, and the Founder attended.

Charles had not been invited.

Here, another overt error in governance occurred. The Board met with one of its clinician-employees, Manny. Manny’s supervisor, namely Charles, the CD, was absent.

Hinting now at destructive unconscious dynamics at work, consider the parallels between how businesses and families function. Experts in Family Theory consider parents as the architects of the family. Boundaries exist, naturally, between parents and the children. Competent parents do not discuss sex, finances, and other private, adult matters with children.

In like manner, a hierarchy between Board members, managers, and employees in the nonprofit or private sectors exists. Ideally, and like boundaries between parents and children, power differences are managed in a kind way, allowing for open communication. But boundaries between hierarchical levels serve a crucial function. They need to be respected and honored. Obviously, they were not in this situation.

Nothing resulted from the ad-hoc meeting because the Board lacked a quorum. Perhaps, though, John became emboldened by hearing Manny’s complaints personally. But no formal recommendations could be made by the Board.

Later that night, John informed Charles that he wanted appear at the training session scheduled for the next day, Friday. Charles asked him to wait one week. He consented. However, John then surprised Charles by showing up that Friday anyway—accompanied by the Board member who’d committed the multiple, conflicting role violations.

Charles felt “ambushed” by these two officials showing up. A multiplicity of problems plagued this Friday morning meeting. Charles’ authority was almost irretrievably damaged. There he stood, with two of his superiors (the Board members), and all of the clinicians, present, completely un-empowering him. The Board members facilitated a discussion. During it, one of the clinician’s used the triggering phrase, “hostile work environment.”

Nearly panicked by that phrase, John called an attorney that afternoon. It would have taken 12 hours to bring any attorney up to speed with the unfolding situation. Having only a half-hour to talk, the attorney, anxious about the same phrase, recommended that Charles be placed on a paid administrative leave and that the clinic operations be suspended for one-week.

In retrospect, both were foolish decisions. One cannot really blame the attorney, however, because she was asked to offer counsel with limited information.

On Monday morning, John placed Charles, despite his excellent reputation and his five-years of untainted service as CD, on a one-month paid leave-of-absence (LOA). No verbal or written explanation was provided for the leave. No personal meeting was held. John simply informed him of it by email.

The reasons for Charle’s exclusion will become clear when I explain the unconscious dynamics.

John also retained a nonprofit consultant to evaluate the allegation of hostile work environment. The consultant interviewed John and a few other Board members. He did not contact Charles, further undermining Charles’ authority and also destroying the legitimacy of the consultant’s investigation.

Around ten days later, on a Tuesday, John called a meeting of Board members and the consultant—without Charles, the CD. Here, the Founder herself behaved in a way that widened all extant fault-lines. She moved that the consultant be dismissed and his report disallowed because the investigation was incomplete, the investigative report had not been disseminated in advance, and Board members had no chance to vet the consultant.

A heated discussion ensued during which the Founder foolishly said to the consultant,

I’m so angry I feel I have to restrain myself from hitting you.

The egregious remark by the Founder, also a Board member, needs no explanation. She blew it. After discussing her motion for around 15 minutes, the Board voted against it 14 to 1. Members, including the Founder, then heard the consultant verbally present his findings. He concluded that no hostile work environment existed; he believed Charles had behaved in an entirely professional fashion. Ironically, the Founder and the consultant got along well the rest of the meeting. The Founder even complimented the consultant, suggesting the Board work with him in the future.

Surprising because of this friendly tone, the consultant, over the weekend, retained an attorney who, in turn, wrote a letter to the Board identifying the Founder’s remark as an assault. He recommended she be removed from the Board. On the Tuesday after the contentious Board meeting, John set up a meeting for the next Friday to discuss removing the Founder.

The Founder, already barely containing her rage, aggressively reacted to the email. She proclaimed that any effort to remove her was foolish in light of recent events. Charles still was unaware of his status, the clinicians were confused by an acting CD suddenly appearing and the clinic closing for a week, and who knows what the patients felt. The Founder considered returning the CD to his job, resolving the clinician’s complaints, and fully resuming clinic operations the highest priority. When this had little effect on the email discussion, her emails became angrier. They included threats of litigation.

The day after the furious email exchange, John, the Board president, resigned. Within the next 24 hours, 11 of the 15 Board of Directors resigned. Only the Founder, two other physicians, and an attorney remained on the Board.

But for the intervention of another, extremely competent nonprofit consultant, the clinic may well have folded. The new consultant told those few remaining Board members that the clinic provided services without significant interruption—despite the Directors melting down. He recommended hiring an ED, revising the clinician’s employment contracts, and responding fully to their grievances.

The Board, despite reeling from the recent events, carefully, even meticulously, followed his instructions. As a result, and somewhat miraculously, the clinic not only survived this catastrophe but continues to thrive.


The major fault lines have been delineated above. In the way of a brief overview, the Board member’s boundary violation, John’s overzealous assumption of the ED position, his impulsive involvement of the attorney and the first nonprofit consultant, and the overly angry behavior of the Founder all combined to create the destructive, tremulous earthquake. Further, the initial nonprofit consultant aggravated an already-extant schism by failing to interview Charles as part of his investigation. He also had no right to retain an attorney to suggest how the Board deal with its anger-prone Founder.

Most undergraduate business majors, and certainly any first-year MBA student, would identify the same features.

They seem rather obvious.

But what about the realm of psychoanalysis, the unconscious, about which the business world, in general, knows little?


These are innumerable but I delineate the major themes one-by-one:

First, the straying Board member—the one who met with Manny alone for dinner—probably got engaged in an unconscious rescuer-victim theme. This one Board member had the greatest opportunity to identify this trend and prevent the rolling earthquake.

However, on some level, we are all injured children with ongoing vulnerabilities. It is likely that this person’s pull to rescue the aggrieved clinicians, represented by Manny, overwhelmed his judgement—allowing him to throw his own management employee, Charles, under the bus.

Second, and supporting this same hypothesis, the Board president, John, waded into the pond of the ED role to near-drowning levels. Unexperienced in organizational psychology, and filling in the unfortunate gap caused by the lack of an ED, he behaved impulsively.


By calling a poorly-attended Board meeting with less than 24 hours notice, allowing the aggrieved clinician to be present without his supervisor, invading that supervisor, Charles, usual Friday training, and then summoning legal and nonprofit consultant advice without the consent of the Board.

John and the unethical Board member became, I believe, overwhelmed by this rescuer-victim dynamic. The Board president also appears to have engaged an unconscious, grandiose part of himself, micromanaging the situation and behaving in a rather autocratic manner. Little other reason exists for explaining how Manny and the few other unhappy clinicians managed, along with the Board president, to marginalize Charles.

Why would a fairly large Board betray a management employee whose tenure greatly exceeded that of any of the clinicians?

The question stands out as the most puzzling of the entire story.

One reason, again, could be Board members identified with these metaphorically injured children. This identification process overshadowed consideration of their loyalty to their own, more senior employee.

Everyone has a part in this drama, though, including Charles. It turns out that Charles’ Friday morning training often lacked structure, creating an environment inviting some initial, small grievances to gain in strength. He is also a rather maternal figure. Further, he appears to have too openly expressed some of his own negative reactions towards the aggrieved clinicians, creating yet another invitation for their dissent to grow.

As egregious as was the boundary-violating Board member’s behavior, the Founder herself played a significant role in the near-tragedy. She clearly had over-identified with the clinic itself as her baby. Her utterance of the veiled threat, no matter how subtle and indirect, i.e. “have to restrain myself,” was unequivocally unprofessional. Her enraged emails, which seemed to trigger the multiple resignations over a 24-hour period, had an unnecessarily hostile tone. They signify the power of her unconscious fears of loss of her “child.” She happened to be recovering from a major illness, perhaps weakening her judgement.

The first nonprofit consultant, who knew one of the Board members personally, demonstrated a bias perhaps traceable to this friendship. His conclusions cleared Charles of any wrong doing. They supported the other data points suggesting the presence of some legitimate grievances but none reaching the level of hostile work environment. He publicly denied his bias, but nonprofit experts agree that no investigation, however preliminary, could have proceeded without interviewing Charles. Therefore, this consultant was also, even if unwittingly, pulled into the rescuing dynamic which created a major schism in the clinic’s organizational structure.

Finally, the 11 Board members who resigned so rapidly, one after the other, appear to have been mostly motivated by avoidance of conflict. On the surface, each resignation showed sound professional personas. Each expressed reasons like, “too busy to continue,” or, “would have preferred a more civilized dialogue.”

As I noted in a recent post, not every professional has the constitution for Board governorship. If interested, you can find that post here:


Medical professionals enjoy a unique capacity to hide behind their white coats, to engage in asymmetrical intimacies with their patients. This Board suffered, in part, from its lack of experienced businesspeople. As all Board members involved in this crisis painfully learned, running a clinic is like running any other business. It requires a mature capacity for consenting adult behavior—for balancing conviction with consensus , for speaking and listening with equal clarity.

Ultimately, though, the lesson here primarily concerns the power of unconscious dynamics. Yes, the lack of the ED, the straying Board member, the empowered Board president, and other factors contributed to the structural weakness nearly bringing the clinic’s metaphorical building to the ground. But, in the final analysis, the role of unconscious dynamics played a highly significant role.

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