Turnaround Strategy: Reclaiming Your Place

Those of us of a certain age remember the advice from a famous beer commercial to “know when to say when.” As anyone who has ever tried to do so can attest, the problem is that it is difficult to recognize when you have reached the point when it is time to say when. Instead, you find yourself after you have crossed the line saying things like, “I shouldn’t have eaten that third donut” or “I should have stepped away from the table while I was ahead.” In the case of nonprofits in decline, the refrain is, “how did we not see this coming?”

The factors that contribute to nonprofit decline are numerous and varied. Most likely, it is some combination of complacency, misplaced trust, and insularity. In simpler terms, sometimes the world passes you by and is out of reach and out of sight by the time you realize what has happened. The question facing the nonprofit in decline is whether there is anything left worth fighting for. Key considerations include these, in order of descending importance:

1 Is our mission still relevant to the community?

2Have we maintained the quality of our programs?

3Do we still have an identifiable place within our service market?

4Are we able to attract the resources we need?

The courageous decision is to decide what to do next. If the obstacles to relevance, quality, and viability are too high, then the noble thing to do is take control of the situation and plan a dignified exit.

If, however, the board believes that there is enough potential within the mission – that is, there is something worth fighting for – then the board needs to adopt a startup mindset and work toward repositioning the organization.

The key attribute in a repositioning strategy is focus. Rather than replicating or recreating the organization as it was during its peak, a repositioning strategy is built from the essential elements of the organization. Specifically, a repositioning entails the three steps described below.

1Realign mission priorities:

• It is important to remember that a mission is a general statement about the community’s intended benefit. Assuming the mission itself remains relevant, it is likely that it can be reinterpreted in light of the new circumstances within which you must now operate.

2Narrow the scope of impact:

• You’ve heard the adage that sometimes less is more. It is possible and even advantageous to plan to reemerge as a smaller, more focused version of your former self, focusing on depth of impact over breadth.

3Reestablish a business model:

• The tipoff to the nonprofit in decline is likely the loss of funding. Old programs that did not attract funding will not now magically do so now. Establishing a viable strategic position includes attracting the necessary funding, which may require venturing into new and uncharted territory.

Maturity versus decline is the difference between thriving and surviving. Recognizing and acknowledging decline is made more complicated if the organization has become accustomed to operating in crisis mode. The fact is that putting energy toward maintaining an organization’s pulse in decline detracts from the board’s primary duty, which is to ensure mission impact.