Focus: People Management - Coaching session with Stephen Bubb

Stephen Bubb, chief executive of the Association of Chief Executives of Voluntary Organisations (Acevo)

Q: Our organisation has a declining income base and falling usage. We face financial crisis. How can I turn this around?

Restoring the fortunes of an organisation that has fallen on hard times calls for bold moves, and this is where leadership will really show through. The first step you need to take is to understand the problem.

Is it about expenditure or income?

If it is expenditure, you really need to look closely at your big cost items - inevitably this means you need to look at staffing and office costs. Have you been building up your staff numbers too quickly, or taking on extra spending? If so, you are going to have to have a cool hard look at your staff base and inevitably look at redundancies.

Fatal mistake

But do be careful. Many organisations make the fatal mistake of making redundancies in areas where they need to grow. And redundancies can be demoralising for other staff, of course.

It sounds like you have an income problem. You have to investigate the reasons for the declining usage. Is it temporary or long-term? Are there other markets? You need to think about new ways to bring in money. I expect you are already thinking of all the various grant applications you can make or contracts you can acquire. But a word of warning here - manage this financial crisis carefully. Funders don't want to invest in failing organisations.

Rosbeth Moss Canter, the Harvard management guru, said that one of the first things you need to do is to investigate the culture and dynamics at work in your organisation. She said that in organisations in decline a kind of helplessness sets in.

Be honest, generate confidence

So my strong advice is to look at your communication channels. Be honest about your problems and invite them to be part of the solution. As the leader, you'll need to generate confidence that the problem can be turned around. Have a good look at the ways in which you are organised. You might want to establish a special team to drive a new area of work, or think about changing work practices or generating more income.

One major, failing private sector organisation achieved a turnaround by establishing cross-group collaborative teams that thought up income-generating schemes and redoubled the sales drive.

The ancient Chinese book of wisdom, the I Ching, says, reassuringly: "After a time of decay comes the turning point. The powerful light that has been banished returns. The old is discarded and the new is introduced."

Financial crises are extraordinarily depressing, but they can be a spur that drives you forward and changes your fortunes for the better. - Send your questions to stephen.bubb@haynet.com.

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