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The 3 Questions Test

Back to Basics for Charities, that might also help private businesses.

The charity/not-for-profit sectors are ones that are very close to my heart. After working in them for the last 17years.

If you think that these organisations are pink and fluffy and have no business sense – think again!

A charity IS a business – one that is set up to meet charitable aims. Some of the most business-savvy people I’ve met in my career have been in the charity, or public sectors.

It is however quite common for organisations that have been around for a while and are driven by wanting to do good for their beneficiaries, to stray into areas outside of their expertise and suffer from mission-creep, often at a cost – either financially or reputationally.

Similarly, private businesses can suffer the same in the name of “diversification.”

People can naturally be drawn to the new, exciting and shiny service or product - what I call Magpie Syndrome. This often happens at the expense of their core activity and as a result the overall performance of the organisation is adversely impacted.

Many charity or business leaders find it difficult to take the time to stop and analyse their businesses, even when the bottom line is screaming that something needs to be done. Instead they get dragged into the detail and into fire-fighting and repeated, rushed interventions that fail to make the impact needed and end up creating operational chaos.

This may be down to lack of time, or focus. Or because the things that are causing the issues are pet-projects, or things that make the organisation look good and so people are naturally reluctant to face into them as the cause of their issues.

Having successfully led the financial turnaround of 2 charities, one large and complex, one smaller – both on the verge of closure and both essential to keep in business — I wanted to share with you the start of the journey my teams and I took both organisations on, in the hope that it might help you to move your organisation forwards.

How we assessed our pain-points

The turnaround began with a simple set of questions, or tests.

We started by getting a flip-chart and gathering the leadership team together away from the office, in a village hall to prevent distractions.

Then, on an individual page for each, we reviewed every service or product, regardless of size, that our organisation delivered.

We subjected each one to the following 3 tests.

  1. Does xxxxxxx meet with our charitable/business aims, aligned with our overarching strategy, or reason for being?
  2. Are we the best people to be doing it, for the good of our beneficiaries/customers?
  3. Does it, or can we make it stack up financially?

We answered each of these questions honestly and thoroughly. I was fortunate to have a very diverse team and it was important at this stage to make sure I heard the views of all the people I had gathered, as their views on how/if the tests were met varied and this difference in views made the final assessment and subsequent action much more rounded. This took some time, as the introverts in the team needed time to reflect and process their thoughts.

It was well worth the time!

Once we’d done this, we placed the flip-chart sheets alongside each other, around the walls of the village hall, so that we could see the whole organisation laid out service by service/product by product.

The things that were causing us the pain literally jumped off the wall at us and it became instantly clear what needed to be done.

Then the tough bit

For the services/products that failed any one of the tests, we took one of the following actions:

· Stop doing it, cut our losses and removed the loss-making distraction.

We removed £2.8m of loss-making services.

· Find someone else who is better placed to do it. Especially as people depended on the services.

A difficult and time consuming process, but ultimately resulted in people receiving a better experience than we could provide.

· Worked out how to make the service/product stand on its own feet financially, without being cross-subsidised by other parts of our income.

If you choose this action then it must be realised within a defined timescale – OR see bullet point one.

Make a plan and track

Once we had our results - we Made A Plan.

You will need a SMART, defined timescale plan to ensure that each of the services/products gets the attention and action required.

Review this plan weekly with your team to make sure that you get the pace you need to improve the situation. Weekly accountability and tracking meetings will help you to keep each of the changes live and moving towards the right conclusion.

This approach delivered some great results and created a huge amount of transformative work - financially, culturally and operationally. It was rewarding and exhausting in equal measure and so worth it!

Sound simple? – Good luck.

It would be great to hear from you. Let me know how you get on, and if I can help you on your journey, give me a shout using one of these links.


Email - Heath at MTM

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