Experienced leaders and managers of non-profits/NGOs have typically been through one or more economic downturns in the past. For others, this will be a first-time experience. We don't know what will happen in the future, but there is every indication that the period that we are entering will have a severe impact on many kinds of organizations.
This likelihood cannot be an excuse for inaction or delay. Whatever lies ahead, there are things that the leaders of organizations can do to minimize the damage and position themselves for the long-term. The "rules" that follow have been proven to work in bad times in the past. They are particularly valuable at the front-end, but also work in the ongoing process of planning, executing and adjusting.
Rule One: It is always worth choosing between bad and worse. It is usually a mistake to think solely in terms of percentages or dollars. What are the outcomes that we most want to avoid? Where are the opportunities to protect what we most value and shed what is marginal? Where do we have leverage?
Rule Two: Don't deny reality. Descartes once said, "The most corrupting lies are problems misstated." In emotion-laden periods of uncertainty, the pressures to misstate problems are substantial, and the clock is always ticking. Spend time understanding the problems, breaking them into their component parts and understanding the time constraints under which you are operating.
Rule Three: Leaders have to lead, but also to change and learn. Leaders define both the process and the culture. In addressing cutbacks, they and their organizations are often in uncharted waters. The leadership qualities that produce the best outcomes are active listening, problem-solving approaches, building and aligning a core team and focusing on the right issues. The negative qualities that have proven the most destructive have a long and dishonorable history. They include arrogance, non-listening, know-it-allism, blaming, and pessimism.
Rule Four: Have a plan. Periods of high stress tend to foster incoherence and ambiguity. They, in turn, produce a complete menu of bad outcomes. The antidote is a solid, reality-based plan. The plan is the map to the future and the glue that holds the management team together and keeps it focused on the right things.
Rule Five: Focus on execution. Having a plan is critical, but only if it is executed. The key ingredients: a clear and realistic strategy with defined priorities, the right skill sets and committed people, and basic systems, processes and tools for converting plans into action.
One of the most important of these tools is effective communication with staff at all levels. Rules 5a and 5b: over-communicate, i.e., whatever you think is adequate, multiply by two and you will be in the ballpark. And, because there is so much uncertainty, communicate probabilities in an honest and clear manner. Adults will understand that you don't know what is going to happen in the future.
Rule Six: Making cuts is not the end of the process. "Whew! Thank God that's over." But it isn't. After cuts have been made, there is an immediate need to review basic work processes, roles, workloads and gaps or problems that the cuts have created. It is also critical to reassure managers and staff that this step is being taken, and that we are not going down the fictional path of "doing more with less."
Rule Seven: Don't trade the easier short-term solution for long-term success. "Let's just get through this" is a formula for long-term failure. It typically leads to easier solutions such as "across-the-board cuts" that carry the illusion of fairness. There is an essential need to have a long-term vision of what we want the organization to look like at the end of this painful process. That vision should become the framework for action.
Rule Eight: Politics isn't evil. Leaders and managers should think politically in the best sense of the term. Who is important to us? What do we need from them? What will they want from us? How can we mobilize the support we need — both internally and externally — in this environment?
Rule Nine: Don't accept decline. Acceptance of decline can take a number of forms. One is denial of reality and the presentation of a future that everyone knows is going to be unattainable. The other is pessimism and defeatism, each of which is a self-fulfilling prophesy. The most common form of decline is dilution and the erosion of quality that results from pretending that nothing has changed. The second is a job-protection strategy that subordinates mission and vision.
Rule Ten: Be true to core values. "They used to be a first-rate organization." What a terrible indictment. At an early point, make clear what we are most proud of and how we will protect those sources of pride during this painful process and over the long haul.
If we look back over the history of economic downturns, a clear pattern emerges. Non-profit organizations tend to fall into three categories. The first are those that did not survive, many of which were very good at what they did, but simply could not beat the odds. A second group includes the "survivors," those who are still in business but "used to be a first-rate organization." You feel defeat and lethargy the minute you walk in the door. Those in the third group are the models, those organizations that planned, stayed true to their mission and vision and came out at the other end different, but with their values and their value intact. They should be the template during what is likely to be an extremely painful period.
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