CS 1 – Turn-around Strategy
The Scenario: A social service agency is headed toward insolvency because of systemic dysfunction.
Organizational Profile: 100+ staff members and a similar number of volunteers operating eight programs at ten locations.
Outcomes: Solvency, renewed clarity of mission, revitalized reputation in the community.
Saving the Agency
As I was first becoming acquainted with the Board of a church-related social service agency, I remember asking the Chair of the Search Committee about the financial stability of the organization. “We have no money problems,” he assured me in a tone that indicated some surprise that the question had even been asked.
Three months later, the Director of Finance dropped his first set of monthly financial statements on my desk and declared simply, “We lost $86,000 this month. Welcome to the agency.” Thus began an adventure in organizational dysfunction that spanned four years, two million dollars, and the consumption of untold numbers of bottles of Ibuprofen.
In retrospect the agency’s woes can be succinctly described threefold:
a – the development and public relations functions had atrophied to the point of near non-existence
b – program quality had slid to the point of jeopardizing necessary operating licenses
c – programs had been allowed to proliferate without any overarching, guiding strategy
With fees for service, donated dollars, and licensing reviews all trending in the wrong direction, it was clear that swift action was needed on several fronts simultaneously. Without strong, concurrent measures on all these fronts, the future would be bleak.
And so, work began immediately in these several directions in a veritable maelstrom of activity. A comprehensive development plan was prepared and implemented with the aim of not only averting a cash flow crisis but also of broadening the base of support again.
Coordinated with that plan, a marketing initiative for the fee-for-service programs was launched which addressed directly and forthrightly the growing concerns about program quality. Meanwhile, as those two externally oriented efforts took place, the Board of Directors and the Senior Management Group tended to a strategic planning process which included a thorough evaluation of every single program.
There were many moments when it seemed that the worst-case scenario would not be avoided. Cash reserves were depleted; licenses called into question; worthwhile programs put on hiatus for lack of clients. Yet, with encouragement, board and staff members persevered, refusing to surrender and, gradually, the turn-around began to occur.
The operating losses leveled off; clients and donors started to return; licensing issues were resolved. Perhaps most importantly of all, the organization’s leaders regained clarity about the nature and importance of the agency’s fundamental mission and started to make programming decisions strategically in view of that mission.
The last monthly financial statement before I concluded my work there was the third in a row with slight balances to the good. And at a farewell reception for me, I was congratulated not only by colleagues within the agency but by other community leaders as well for bringing new life to a valuable community resource.
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