Q: Our funding has just been cut, leaving us with unfunded staff. How should I tackle the problem?
A: How did you get yourself in such a predicament? More pressingly, how are you going to get out of it? Once you have recovered (and you will), how will you ensure it doesn't happen again?
There are tactical and strategic issues here. First, you need to act fast to protect core business and minimise corporate risk. Work with your board and, if appropriate, your senior team to identify the opportunities and threats. Blue-sky thinking with a range of informed colleagues will help you in leading your organisation forward.
Are you absolutely clear about the full extent of your funding gap? You should have undertaken a full cost recovery exercise before your funding was cut, which will support your decisions on resource allocation at this time. Once clear about the situation, get tactical on managing the position.
- Consider flexing your people resource. Can you reduce hours or pay levels - temporarily or permanently? How can interns support your work streams?
- Can you bring in additional funding or support? Do existing supporters have the ability and inclination to go further? What can your trustees do to help?
- Look at the short term: maximising income streams and minimising expenditure.
Promotions on services or products can be useful as long as you don't compromise long-term customer or stakeholder value.
Once you have stabilised the situation, pause for reflection. Ask specifically if terms of employment reflect funding positions appropriately. And how will you manage the risks associated with your remaining funding streams in the future?
In developing your tactics to prevent repetition of this scenario, assess the distribution of your income sources. Over-reliance on one or a couple of streams could be unhealthy. A full risk assessment of your current funding streams and the resource commitments necessary to meet them would be a timely activity.
Revaluating the detail of how the staff base is allocated against income streams could also flag up some discrepancies that need to be managed, if not acted upon. Remaining focused on core business and aware of where activities are being subsidised by unrestricted funding is crucial to successful leadership of our organisations.
From the outset, be a strong leader and keep all staff informed. They will play a key part in rebuilding morale and focus, and rumour mills are destructive forces. Don't shoot from the hip on this one. Act fast and in a robust fashion. This is a moment where your leadership will shine through.
- Stephen Bubb is chief executive of the Association of Chief Executives of Voluntary Organisations (Acevo). Send your questions to email@example.com.