Thursday, January 15, 2009

What to do now? Part 1

On my last post, I promised I would start a series on What To Do Now?, based on the chapter in my book Nonprofit Stewardship entitled "Stewardship in Good Times and Bad".

Times are tough, or worse, for many nonprofits. I just finished the current issue of the Chronicle of Philanthropy and was depressed all over again. Then I read through the economic news on Google News and felt worse. As I've said before here, we're in for a loooonnnngggg haul. My longstanding view is that, at best, things will only get worse through 2009 and that we may see a leveling in 2010, with a beginning of a recovery late that year or early 2011. At best, could be worse.

So, if you aren't already cutting, strategizing and re-thinking, you need to be. The economy is NOT a short term problem.

Today, we'll start with organizational signs of trouble for nonprofits. Next post, we'll look at strategic things you can do.

Signs of trouble are things that I see in my consulting role that are indicators of less than optimal performance or warning signs of impending crises for any nonprofit. We start here because you want to make sure that your basics are in shape for the downturn for your nonprofit.

Look for these issues and fix any you can now:

No (or insufficient) financial reporting. Sounds dumb--of COURSE you're going to report, right. You'd be amazed. Anyway, keep the financial reports coming, and definitely develop a six month cash flow projection and update it every week. Every WEEK, not every month. More about this when we get to tactics.

Excessive staff turnover. This is less of a problem in a steep recession/depression, but look at organizations like FedEx. Everyone took a pay cut rather than lay people off. Hmmm.

Excessive board turnover. You need to keep your board on board now. So, keep them informed, use them as resources. Don't scare them off by lack of information or involvement.

No new programs or methods of provision. Keep trying new stuff. Really. I know your dollars are tight, but keep innovating in program provision, fund raising etc. You may not be able to do BIG innovations, but you can still do lots of small ones. These keep staff energized and show the community you are moving forward.

No regular and repeated Asking. You gotta ask. Keep your staff, board, funders and the people you served involved. Ask them what they want, ask them for ideas on how to weather the storm (notice I did NOT say "cut back"), ask what's critical to them about your organization. Ask, ask, ask. It's cheap and essential.

No Staff continuing education. Ooooh, easy to cut right? Non-essential, right? Wrong. When you cut staff training you cut the quality of service, reduce staff morale, hurt services. I know you can't send everyone off to a conference, and perhaps not anyone can go out of the area to a meeting this year or next. But there are still book clubs, local training, online options, etc. Get creative, and DON'T stop pouring new ideas into your people's brains.

Out-of-date internal policies. I know, I know you're in a crisis. But life (and good management) goes on. Make sure you regularly update your HR, financial and QA policies. These are essential and help prevent distractions and problems down the line. You're keeping your insurance, yes? Keep your policies up-to-date, too.

No Strategic Plan. Again, I know you're in a crisis. But the most important time to have a strategy is now, not when thing. More on this in the next post when we talk about strategies.

Little or no sharing of information internally. Regular readers know I'm a zealot about this. Use all your staff's minds, not just some of them. Same with your board and volunteers. To do that you HAVE to share information, like budgets, plans, contingencies. You need people's ideas more than ever. You need them to have a sense of contribution to the problem. No matter how smart you are, you don't have all the ideas or all the solutions. As John Chambers, CEO of CISCO says: "No one of us is as smart as all of us". I could not agree more. We'll come back to this in our tactics post.

Inadequate marketing materials/website. Focus focus focus in your materials and website. Too big an issue to cover here, but suffice it to say that this is a great time to look over your marketing materials and website and to make sure they focus on your current priorities, and that they reflect the current economic times.

Poor use of technology. See the last two issues above? They beg for better use of technology, as does more asking and more sharing of financial situations. USE your tech to help you through this. Whether with staff wikis to hone ideas, or special online editions of your newsletter to keep people informed, push your tech. Ask your young staff how to best do this--they know!

And, don't panic. Ever.

Nervous? Fine.

Scared? Me, too.

Panic? Not a useful leadership response.

You need to go home and scream into a pillow? Good. Do that. At home. Not at your nonprofit.

As my Dad (an engineer and attorney) used to say, "Don't angst, work the problem." I agree. The people we serve need us to FOCUS on still getting the most high quality mission out the door as possible.

Think about these, and next post we'll look at some strategic responses you can start with.

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