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When times are tough, you should increase your focus on strategy

Posted September 17, 2009 11:18 AM by Ted Jackson

I was perusing an article from the Nonprofit Times published back in November of last year, Layoffs Hitting Nonprofits Despite Need Increasing. The article of course focused on the fact that in an economic crisis, the need for social service nonprofits rises greatly, but the ability of these organizations to raise money goes down. Thus the nonprofits have to cut staff in times of increased need. How do they do it?

Well, many organizations focus on headquarters staff and their programs. The nonprofits have to narrow their view and many times dramatically curb their expansion plans and their goals. I worry about the nonprofit executives that sit in meetings and declare a 5-15% across the board cut. They then reach out to all of the business lines and say to reduce staff or open positions by 5-15%. Everyone is going to sacrifice and we will all work through this together. That is usually the message.

It usually is the wrong message.

Organizations should be investing in areas of their strategic focus and cutting in legacy programs or areas that are not critical to advancing their strategy. Across the board cuts do not make sense and usually cause an organization to lose people and momentum in parts of their organization that are critical to their future. Sometimes it is better to shut down complete departments rather than just do level cutting. I guess the challenge for these organizations is to be able to prioritize and focus on what their strategy is and how everyone contributes.

This is where a good strategy management system comes in handy. Imagine being able to see your strategy on one page and being able to align your resources to the strategy. Using the Balanced Scorecard, you can maintain a narrow set of strategic objectives and cut in areas that are not critical to the long term focus of your strategy. You can measure progress towards achieving results, and you can communicate how changes in the organization will affect the overall strategy. The initial success cases of the Balanced Scorecard came from the companies who had a "burning platform." Even as the economy has appearances of improving, I would argue that there are a lot of burning platforms that could benefit from a strategy management system.

If you don't already have a Balanced Scorecard, I would highly suggest you develop one, and if you do have one, this is a great time to increase your focus on your measures and results.

Filed Under Balanced Scorecard