Feeling uncertain about your business or organization’s future? You’re not alone.
In late 2019, only 27% of over 1,500 global CEO's surveyed by PwC reported feeling “very confident” in the 12-month financial outlook for their companies. Their main reason: Uncertainty.
Nonprofit leaders headed into 2020 with their own uncertainty. In the US, while the size of charitable giving has increased since the Great Recession, the share of American households giving is decreasing. (Giving USA) In other words, philanthropic revenue is consolidating. And while earned revenue makes up the lionshare of the sector’s overall revenue (National Center for Charitable Statistics), many organizations rely overwhelmingly on contributed revenue, making the current trend lines worrisome.
Enter a global pandemic.
None of our forecasts for 2020 factored in COVID-19, the deadly disease caused by a highly infectious novel coronavirus. We didn’t anticipate whole countries shutting down and entire industries grinding to a halt. We didn’t expect mass unemployment and an unprecedented test of our public health systems. We weren’t ready for massive quarantines and a future-of-work experiment on this scale with this little notice.
But here we are.
So, how do organizations plan for the future when the future is wildly uncertain? There is no magic fix, but here are four things to consider:
Business continuity. This is step one for everybody. If you had a Business Continuity Plan in place - brava! You’re ahead of the game. If you didn’t, now is a good time to convene a lean team to assess the current state of each of the following and to develop a list of critical actions for:
Communications - Your customers, clients, and stakeholder community need to hear from you during this time. Who is responsible for your primary communications channels now? Have key crisis messages been developed? Is there a chain of command established for approving messages and back-filling key roles?
Employee safety and well-being - Your organization is nothing without its people. Who is leading HR? Is leadership providing clear and transparent information to employees, and providing them a way to express how they’re coping? Have you assessed whose function can be performed remotely and set up flexibility and systems to support this? Have you assessed the current guidelines for your state’s unemployment and programs that could help in case reductions become necessary?
IT- Information technology has never been more critical. Who is your point person? What protocols are in place for managing key functions remotely if necessary? Are backup systems in place?
Remote access - Can everyone access what they need to perform critical functions - without jeopardizing privacy? Are files and data secure? Who is managing remote accounts, passwords, etc? Has a video conference account been set up to enable team check-ins?
Key vendors - Who is tracking your organization’s roster of key vendors - from payroll to suppliers? Do they have a handle on the current state of operations for each key vendor, and a backup plan in case these vendors can’t perform?
Cash management - If revenue is falling, new processes for monitoring cash flow are needed and you may need to shift to weekly or even daily choices to manage expenses and slow the free fall. Who is responsible for tracking key financial indicators? How often are you reviewing and making decisions? How many days of operating funds are on hand?
Regulatory environment & public benefits - You want a handle quickly on changes to relevant industry rules, filing dates, and federal / state/ local support efforts and programs. Who is tracking these and assessing their applicability to your situation? Who has decision making authority? Who has access to key information necessary for filing requests or applying for emergency extensions, grants, and loans?
Gather intel. The enormity of what’s at hand is overwhelming - for you and your team. As the leader, you’ve got to help bring that scope into focus on your stakeholders and what you can do for them. Where can you get reliable insights about what’s happening in your industry, market, vertical? How can you learn what your customers are feeling and what they need? The clearer your view, the better positioned you are to develop a responsive and emergent strategy for moving forward - one that is grounded in information, not assumptions.
Free up capital. This is easier said than done. The bigger your balance sheet, of course, the easier it is to shed assets. But smaller firms and organizations will also benefit from reducing or eliminating expenses that aren’t mission-critical in the next 3 months. If your organization is a nonprofit supported by grantmakers or large donors, contact these funders and ask them to release restrictions on funds so you can redeploy people and resources to respond to emerging needs and priorities in a rapidly changing environment. Put your banker to work assessing the availability of lines of credit or other financial products you might need next quarter (or next week). The more capital you can access or free-up, the more options you're going to have.
Get creative. There is no playbook for what we’re experiencing right now. But you’ve built a team of smart, dedicated people who are aligned around a common vision, mission, and values. Immediately give them tools (like virtual whiteboard sessions) and permission (explicit, like an invitation from their leader) for blue sky conversations about what to do next. Carving out ongoing time for ideating can be a relief from the daily stress of uncertainty, and it just might yield promising solutions you can’t see right now.
The only thing certain right now is uncertainty. It’s ok if you don’t have answers. It’s ok if you’re scared. Business resilience is about both continuity and adaptability, and the sooner you can direct your energy to what’s in your control on both levels - like business continuity, gathering insights, freeing up capital, and getting creative - the sooner a path forward might start to emerge.
And I'm rooting for you.
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