Sunday, March 22, 2009

Beating the Recession

I keep getting asked to do pieces about how to beat the recession at the moment so I thought I'd start by blogging about it.

My main response to the recession so far has been to fear it but not actually do that much! This is, so far, a mainly private sector recesssion. The 100,000 or so people signing on for JSA each month do not, on the whole, work for charities or councils!

However, this is changing. PriceWaterHouseCoopers have just predicted a 1.6% real annual reduction is public spending from 2010 till at least 2013 - or a 50 billion annual tax hike. As Andrew Rawnsley said in today's Observer, the game is up for the public sector - and their big deliver-partners such as charities, many of whom, like Speaking Up, now get most of their money from the state.

The better charities are now taking pre-emptive action. And, yes, I count Speaking Up among this number. It is clear to me as a CEO that everything is on the line for us in the next three years. Worst case is that we lose all our gains over the last five years and retreat to being a local charity in Cambridgeshire. Best-case is that we continue to grow, create abundant social profit and recast our business in the face of new needs. The likely outcome is something in between. My job, as CEO is to get as near to best-case as it is possible for someone in the top job to do.

So how will you beat the recession? Three things will matter. The first, and most important, is to advocate the right strategy for the organisation. Get this one wrong - and many do - and the mission stalls. And in a recession, a bad strategy stalls you real quick. Good strategy means understanding your environment and aligning the resources of the organisation - current and future- with changes in that environment. It sounds easy but its not. You need to look at everything, including radical restructuring, strategic partnerships and mergers, if this serves the mission long term. The alternative is failure. And CEOs that get strategy wrong will, I predict, be those signing on for JSA in a couple of years' time.

The second important thing for CEOs is to face the reality that the third sector is about to enter a deeply turbulent period - and act accordingly. This means using your power as CEO to cull projects and roles which you know, in your heart, aren't adding value. Things which, in the good times, you didn't really feel it was worth sticking your neck out about. Accepting that you, as CEO, will have to make tough choices is the first step to actually making them.

Thirdly, beating the recession will be about delivering services cheaper and better. This means recognising the needs of commissioners and funders and taking out cost, even when people say it can't be done. It also means being innovative, finding new ways to deliver more for less. The `burning platform' of the recessionw will give CEOs a one-off opportunity to press their staff to create the necessary change for organisations to survive.

So, three ways the recession: the right strategy, willingess to make very tough choices and a renewed focus on delivery, value and innovation. All of the above will require you, as CEO, to face-down people who think you're out to downgrade the work of the organisation. The response to this is to remind people that without the right changes there simply will be no organisation and the long-term mission will, withing a very short time, not exist. And if in doubt, remind yourself of your role as CEO: to protect the long-term mission of your organisation.


Mark Griffiths 'ideally speaking...' said...

Craig, it's all very well journalists like Andrew Rawnsley saying this (and, to be frank, people like me - I commented on your Third Sector magazine article on the subject). It has to be owned by people within the Sector. And that looks like you!

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