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Wednesday
Jul112018

Financial sustainability at every cycle of life

This post originally appeared in Gail Bower's newsletter BowerPower PapersGet on the list to be among the first to receive important articles just like this one.

 

It was a beautiful sunny summer afternoon when an young woman walked by me wearing a simple sleeveless top, jean shorts, and sneakers. 

She had long flowing hair, an easy-breezy outfit and gait, and carried nothing. 

No purse, no packages, no bags. Nothing. 

She seemed the height of carefree—as she should be in her late teens or early twenties.

Every cycle of life—for individuals and organizations—is characterized by its own adventures and challenges, lows and highs.

Did I wish I could be her age again?

No way.

Could I lighten my proverbial load and enjoy carefree moments as well as the advantages of my life today? You bet. 

And so can your organization, no matter what life stage it’s in.

This article is not about existential angst. Rather it’s about what happens during various organizational life cycles and the steps for sustainability to move to the next.

The Start-Up Cycle. 

The start up phase is about passion, purpose, and experimentation (along with lots of highs and lows). 

When you create a nonprofit or a business, you have a vision for how to make the world a better place, and you work like a maniac to make it happen. Like our summertime friend, the start up phase can feel carefree when you as the chief executive realize how freeing it can be to create something out of nothing. These moments are some of the highs.

Every day is an adventure and a validation of your ideas. 

Of course other days can make you wonder what the heck you were thinking when you launched this crazy idea!

When it comes, financial success is sweet. At this stage of business life, financial sustainability is perhaps unsteady—this is where the real lows come in—and thus you have the signal that it’s time to move to the next phase.

Sustainability Strategy: 
Continue fanning the flames of your organization’s passion. Now focus on balancing that passion with financial stability.
  • Define your business model, if you haven’t done that from the beginning.
  • Identify and develop the right revenue options that allow you to generate repeatable and profitable revenue.
  • Grow slowly and steadily, lean and mean.

The Stable Cycle. 

When you arrive at the next phase, your revenue is more stable, but that doesn’t mean you take your foot off the pedal. Keep accelerating and focus on improvement all around.

Organizations at this level are able to invest in their staff—either expanding it or supporting continuous learning. Stable organizations build better and more efficient operations and also expand their brands. 

Whether yours is a mission-driven business or a nonprofit, you are now in a better position to expand and experiment with your mission to enhance your organization’s impact.

These new focal points enable organizations in the Stable cycle of their lives to grow exponentially through new partnerships, collaborations, and alliances. Leveraging these opportunities along with every asset it has is what takes an organization to its next life cycle.

Sustainability Strategy:
  • Continue to take sound risk.
  • Improve profitability through stronger systems.
  • Grow your reputation, visibility, and influence.
  • Leverage, leverage, leverage.

Too Big to Fail. 

Then organizations grow to a whole new size, with cash reserves, clout, and competitive advantages. Your ability to achieve significant mission results through your programs and mission-driven services is unquestioned.

You’ve figured out your regular and repeatable revenue sources and generally revenue flows in.

But be aware of a double-headed danger: comfort and complacency.

Your organization—and you—should always be innovating to stay ahead of your competitors. Sometimes that doesn’t happen. 

When you grow so large, life starts to get too easy. The organization starts to coast. You don’t notice issues and challenges. You may have taken your eyes off the future. Or the immediate landscape. 

Change feels herculean.  Your culture is too entrenched, and shifting the ship’s direction feels, well, Titanic. 

You need to grow uncomfortable. Let go of the status quo and remember those early days of adventure and passion. You may need these energy reserves to lead your organization and infuse it with new life.

Sustainability Strategy:
  • Pay attention to the future and where society is shifting to get a head start innovating and course correcting.
  • Reclaim that passion of your start up years and innovate, always focusing on the needs of customers and creating new market segments.
  • Be an entrepreneurial nonprofit leader who grows and evolves, always looking at life with curiosity. 

Sustainability is important, no matter what stage of life your organization is in. The signs and symptoms indicating change is necessary may look different during each stage. But evolution, innovation, and foresight are necessary along the way.

 

Want to learn more about nonprofit sustainability? Check out these resources.

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