Almost every nonprofit faces the prospect of dramatically lower than expected revenue over the next few months. The economy is in a recession, and while we don’t know the depth or length of this downturn, recessions almost inevitably reduce resources available for nonprofits. While exploring additional sources of revenue, how can you squeeze more effective performance out of your nonprofit right now? Here are five tips you can begin implementing today.
Ask your customers what they want. Nonprofits often presume they know what their beneficiaries want and need. Now is the time to make sure that you actually ask. After all, any services that don’t meet your customer’s needs generate waste, and you should reallocate resources away from that waste.
For example, assume your nonprofit provides counseling to college students to support their academic activities. Now is the time to ask students what aspects of your counseling are most valuable to them and what elements (if any) they consider expendable. Maybe your students value all aspects of your counseling the same. If so, you may not find anything to trim. But you might find that while students genuinely appreciate monthly video chats, weekly resource emails are rarely opened and ever more rarely read. Based on that data, you might reduce or eliminate emails in the short run, reallocating staff time to more valuable video chats.
As another example, suppose you run a food bank. You pride your organization on providing highly nutritious and varied items for your target population. But have you asked your beneficiaries how they value total nutrition, convenience, variety, and elements like total calories? Asking your customers gives them a sense of agency: they have some voice in what they receive. But beyond that, you may learn that your target population has preferences that you could meet while reducing overall cost. For instance, perhaps your target population does not care about variety, or even nutrition, so much as total caloric content. That might influence what you put in the bag. Understandably, you may be hesitant to emphasize calories at the expense of nutrition. Still, you would be able to make more informed choices of resource allocation by asking your consumers.
Document your processes. It said that there are four different processes for any given function.: (1) How do senior personnel think a task is performed? (2) What does the documentation currently say? (3) How do employees perform the job in practice? Finally (4), How could the task be accomplished if we articulate and harmonize the first three?
By documenting processes in your organization, you will find ways in which your organization is generating waste. You will also begin essential staff conversations about potential improvements. Finally, by documenting processes, you will reduce your organization’s vulnerability in the event of staff cuts or attrition. By getting core processes documented and clarified, you reduce the chance that people walk out the door with mission-critical information in their heads.
Documentation should not be a massive undertaking. You don’t need to create 50-page manuals. Focus on the core elements. As Gino Wickman writes, “If you document 100 percent of the core process, it might take 30 pages. If you document the most important 20 percent, you should need around six pages.” Traction 154 (2011).
Perform a risk inventory. A risk inventory is a structured brainstorming of threats (negative risks) and opportunities (positive risks) in every function of your nonprofit. By performing a risk inventory, you will identify waste – outmoded processes, easily addressed vulnerabilities and opportunities for improvement. (You can learn more by searching for the term here on the Risk Alternatives website.)
Stand in the circle. Toyota Motor Company revolutionized automaking and factory performance by instituting a series of innovations during the 1970s and 1980s. Collectively, those innovations have been termed “lean management.” One Toyota exercise involves “standing in the circle”: having an employee observe a process in operation for some time and note as many things that bother them about the process as possible. Once again, this methodology will identify waste and potential areas of improvement. (You can learn more about “kaizen,” or continuous process improvement, here.)
Consider using these challenging times as an opportunity for senior management or staff members to “stand in the circle” and observe others as they perform their tasks. Front-line employees might virtually shadow each other. Similarly, a manager might take time to carefully focus on how each step in a program is being achieved, following a client’s journey from intake to resolution. By doing so, you may find valuable shortcuts or innovative solutions that increase your effectiveness at no additional cost.
Create visual controls. Once you have identified and documented your core processes, find ways to create clear visual signals that your staff can use to track their progress. The benefits of visualization are substantial. “If all employees visualize the progress they are making, two particular things are made possible. First, if the progress is going according to plan, we know that we are on track. The visualized information allows us to see that the situation is normal. We are doing what we are supposed to be doing. Secondly, if progress is not going according to plan, the visualized information enables us to react instantly.” Niklas Modig and Par Ahlstrom, This is Lean 136 (2017).
Online, visualization might include tools like Trello, which permits people to see and move cards in an intuitive fashion. In your actual offices, visual controls might consist of posters that document how activities should be performed and describe each step.
By taking these five steps, you can make your organization more effective and less wasteful. That means you can do more with less. So in these trying times, give yourself the gift of continuous improvement.