How are you personally adding value during this crisis? For most leaders, the shock stage is starting to subside, and “normal for now” is starting to set in. Most leaders are busy adapting to how to work and deliver value in light of constraints of COVID-19.
How Boards Can Help
In the middle of the fray, one of the greatest gifts boards can provide the leadership team is moral support: providing calm in the midst of the crisis, making clear you have their backs, and that you believe in them.
Susan Miller, CEO of ATIS, an information and communications technology alliance, shared, “There is no playbook for this one. Every week is a new decision. If the board trusts the management of the organization, the board should be supportive of the on-the-ground management – while at the same time being supportive of innovative ways to still try to deliver on the objectives.”[1]
For nonprofits and associations, how they navigate the next six months may determine whether the organization survives at all. In fact, the Center for Nonprofit Strategy and Management suggests that perhaps as many as one-quarter of nonprofits – mostly small and midsize- will fail as a consequence of this pandemic.[2]
Actionable Insights, Not Random Ideas
Formally or informally, organizations are starting to brainstorm new approaches. And as they do, leaders welcome the experience of their board. Dawn McKenna, Executive Director, Children’s Hearing & Speech Centre of British Columbia, shared, “Boards can provide support and expertise: in HR management (regarding layoffs or reduction of hours), financial management (regarding managing cash flow and working with management to determine cost-cutting measures), and providing moral support in managing the organizing during this crisis.” [3]
But what is the best way for board members to share their ideas and experience – while not getting in the way? Random suggestions – even if based on valuable experience – may not help as much as you might think. What if there was a way to think through the impact of this crisis together more systematically? More strategically?
Boards and leadership teams of mission-led organizations are often comprised of talented people with a great deal of passion for the mission and the value proposition for the people they serve. Yet, I find that they often have less experience and expertise – and candidly, less interest — in the operations of the organization, and how it will be able to work as a viable business entity in the long run.
And then a crisis hits.
Seeing The Big Picture: Your Nonprofit’s Business Model
I believe that right now the business model of an organization can be an extremely helpful framework to help nonprofits think through the implications of this crisis – and determine a path forward.
A business model is your story: how you achieve your mission by organizing resources to create and deliver value to those you serve. One way to “see” your business on one page is the Business Model Canvas (BMC). Osterwalder and Pigneur created the BMC[4] to help enthusiastic start-ups think through how to get their “big idea” off the ground. The beauty of the Business Model Canvas (BMC) is that it provides a common vocabulary for boards and leadership teams and staff who tend to work in functional silos even in very small organizations.
Starting firmly with your mission, the BMC asks you to consider the different elements of your business model: your different customer segments, and how you serve them with your value proposition; the ways you support customer relationships, your channels (online and face-to-face), revenue sources, key activities, partners, resources and the costs required.
Evaluating Risks and Opportunities in Context
In light of today’s uncertainty, these business model elements can provide a helpful way to think through the changes you are considering while remaining true to your mission. Systematically look at each element of the business model and ask:
· What are the risks? What other parts of the business would need to change to reduce that risk? If revenues are down and we need to reduce costs, do we reduce our value proposition, or narrow the customer segments we serve? How do we keep building customer relationships so they come back after we’ve had to close?
· Are there opportunities in this crisis? What would it take to capitalize on them? Can we grow customer segments geographically using online channels? Can we add to our value proposition for members with new offerings online? What investment would be needed in other elements of the business model such as your infrastructure to seize that opportunity? How could we figure out new fee-based revenues or financing to fund the investment? Can we partner to scale quicker?
Do Your Homework. Then Share.
Board leaders can start by sketching out your ideas in context of the organization’s business model. This can help you formulate your own recommendations before you share them – and help leadership teams learn and readily see the options. Board committees can huddle to think through business model implications together before you share it with the leadership team – all of whom are on overload right now.
Context Matters
This approach requires a little more of the board than just picking up the phone and saying, “Hey, here’s an idea!” When board members can frame recommendations more holistically, the staff can better understand the implications of your proposal and how it would impact different functions of their team. They can also consider how to create the capacity to execute the idea well. They can more confidently pilot new ideas, and avoid false starts that could hurt credibility and morale.
During a crisis, leadership makes a difference. As a board member, you can help by providing support and guiding nonprofit and association leadership teams to think further down the road. But when you contribute your insights and recommendations in context of the business model, you are giving an even greater gift and positioning the organization to thrive over time.
If you’d like to discuss how this approach can apply to your own situation, and other ways to de-risk your “new normal”, contact me at susan.schramm@gotomarketimpact.com
[1] Part of Research with CEO ‘s and Boards of Nonprofits conducted in April 2020 by Go to Market Impact LLC (www.gotomarketimpact.com) and the Canadian Nonprofit Academy (www.canadian-nonprofitacademy.com)
[2] Center for Nonprofit Strategy and Management Baruch College [2] https://www.philanthropy.com/article/Nonprofit-Crisis-Management-A/248467
[3]Part of Research with CEO ‘s and Boards of Nonprofits conducted in April 2020 by Go to Market Impact LLC (www.gotomarketimpact.com) and the Canadian Nonprofit Academy (www.canadian-nonprofitacademy.com)
[4] Osterwalder, Alexander; Pigneur, Yves; Clark, Tim (2010). Business Model Generation: A Handbook For Visionaries, Game Changers, and Challengers. Strategyzer series. Hoboken, NJ: John Wiley & Sons. ISBN 9780470876411.
