TransitionGuides

CEOs: Four Ways You Can Sustain Your Organization
By Don Tebbe, TransitionGuides, Inc.

At some point, you will leave your nonprofit. And when you do, you want to be sure that it will run well into the future. Its success is your legacy.

That's one reason why sustainability is on the lips of nonprofit leaders everywhere. Another is the fierce tenacity of the Great Recession, which has stressed even the most affluent nonprofits.

In 15 years of research and practice with 500-plus organizations we've found four areas that every nonprofit must assess and solidify to ensure sustainability. They are business model & business strategy, leadership, resources, and culture. Here are some quick questions to help you assess your strengths in each. For deeper help, contact us at (301) 439-6635.

1. Business Model & Business Strategy
The business model is how your organization creates and delivers value, and how it finances the value-creation process. Your business strategy guides the model. The strategy encompasses all the actions needed to create and sustain your market position so you can continue to deliver your mission. Business model and strategy work together to maintain your competitive advantage--the reason why clients, donors, funders, and other constituents continue to support you.

To determine your sustainability in this area, ask these questions:

• Does our business model have at least five to seven years of life in front of it?
• Is it built on quality services that are needed by clients and valued by donors and funders?
• Do we have a business strategy in place?
• Does our strategy position us to meet future needs and demands?
• Is our strategy written clearly?
• Do board and staff understand our model and strategy?
• Can board and staff describe how their actions contribute to our model and strategy?

2. Leadership

Executive and board leadership are critical to sustainability. Answer these questions to assess your leadership sustainability:

• Do our chief executive and senior executive team meet our current and future leadership needs?
• If our current executive will be departing in 1 to 4 years, do we have a clear transition plan? (See our upcoming Next Steps workshop for specific help here.)
• Do we have written succession plans in place to ensure leadership continuity?
• Do we have adequate "bench strength" to replace leaders temporarily or permanently?
• Do we have a system to nurture new leaders in the organization?
• Is our board a high-value asset to the organization? If not, in what ways does it need to change?
• What improvements in work style or membership does our board need?
• Is our board performing the three core roles of board: (1) shaping mission and direction; (2) ensuring leadership and resources; AND (3) monitoring and improving performance, including its own?

3. Resources

Resources generally refer to the funds and in-kind donations (such as donations of equipment or food) that power your organization. The term may also refer to nonfinancial assets, such as intellectual capital, human and organizational capital, and social or reputational capital. Sustainability questions should address both recent trends and future outlook, as follows:

• Are the trends in revenue, expense, and margin trending upward (favorable), flat (not so favorable) or downward (clearly unfavorable)?
• Do we have sufficient financial resources to meet our short to midterm commitments (6 to 24 months)?
• Do we have an appropriately diverse complement of revenue streams?
• What are the long-term prospects for each component of our revenue portfolio and for our revenue mix as a whole?
• Are we managing our funds and other assets well?
• Do we have a forward-looking resource development strategy? Is it written and clear?
• Do our executive team and board understand our resource development strategy and can they clearly state their particular role in it?
• Is there a sound business link between our business model, business strategy, and resource development plan?

4. Culture

Culture is a pattern of shared basic assumptions that shapes the way people in your organization perceive, think, and feel, particularly in relation to opportunities and challenges. These questions will help you assess your culture's sustainability:

• Are we resilient -- can we bounce back quickly from setbacks?
• Are we agile -- can we adapt quickly to a dynamic environment?
• Is our culture future-focused, results-oriented, and action-based?
• Are our board and staff cultures complementary and connected to one another or incongruous and disconnected?
• Are our board and staff teams focused on their jobs, and are they aligned in that focus? (Times of financial uncertainty demand an all-hands-on-deck sense of focus and alignment.)
• Is the value and worth of our organization widely understood by board, staff and volunteers? Could everyone on our team make a compelling case for support? Do we have oft-told stories that affirm and transmit our value among constituents?