Cutting jobs may be only a short term saving in an economic downturn. But hold on to staff if you can – by exploring flexible working arrangements, or seeking secondments to other organisations. You’ll need experienced and loyal staff to fuel your recovery when the economy picks up.
When times are hard, you may be tempted to cut back on training. A more sustainable approach could be to invest in ‘up-skilling’ your staff –increasing their productivity and reducing the need to buy-in some services. Also make the most of unpaid input from volunteers with private sector experience – as advisers, mentors, or directors.
Be bold about stopping ‘pet projects’ that are losing money, particularly if they’re not furthering your mission. The idea of ‘organised abandonment’ in the not-for-profit sector dates back to management guru Peter Drucker’s work in the mid-1980s. He had some blunt advice: If your products or services aren’t number one or number two in the market, kill them.
If you’re starting a new enterprise, are you clear about the difference between working ‘on the business’ and working ‘in the business’?
This has been a hot topic at our problem-solving action learning set sessions at the Lloyds Bank Start-up programme at the School for Social Entrepreneurs in Ipswich. It manifests itself in different challenges.
Since few people have the luxury of working full time on their start-up business, there’s the division of time and energy on the paid-for work and on developing the would-be enterprise. Assuming we’re talking about a six or seven day working week, you’ll find that social enterprise development is worryingly-often squeezed into evenings and weekends (to compete with childcare and other domestic duties). Commitment to make the world a better place can make us the hardest of taskmasters.
The two areas of work may be quite separate or complementary. On the face of it, having overlapping areas of paid and unpaid work may seem like a good thing – working in one domain helping the other – but this brings with it other issues. What if, down the line, you hope your current clients will buy from your new social enterprise? Or maybe your current employer/line manager might be a future customer or competitor? Murmurs about conflicts of interest and accusations of double-dealing, however unjustified, may circulate.
And if you’re starting a business and need to go looking for a part-time job to pay the bills, another issue is whether recruiters think you’ll be using their time to develop your start-up. The interview panel could never admit to such discrimination but the unspoken suspicion may remain and harm your chances of getting a job offer. One answer is not to mention your ‘other business’ (could be tricky…) but if you do, how do you convince the would-be employers of complete separation between the two ‘shifts’?
The core of the discussion is about how soon you might expect to take money out of the business to pay yourself and, ultimately, be able to leave the financial security of your current employment. Unless you have unlimited savings (and even this is not without its problems…) or a start-up subsidy of some kind, you may have to work the double-shift – bill-paying work and business-development – for years rather than months.
In a great blog about start-up for social entrepreneurs, Lynn Sarafinn suggests that seeing your company’s income as your salary is a mistake “You are one part of the ‘machine’ that makes your business work. You are not an employee but the CEO; you have to steer and nurture the business. The income from the business is for the company first. Your salary might not come for a long time.”
Another issue for me (and perhaps others?) is that I find working ‘in the business’ much more fun than some of the necessary drudge associated with developing it. I’m setting up The Repair Shed because I would have loved to have had something like it around when I was unemployed.
I love making stuff (and now call it ‘product development’!) I’ve just finished making a second product – a patio palletable (see photo) – having just sold one of our first, a pallet pub. When I’m designing and making furniture (it used to be beds, now it’s pallet furniture) I experience ‘flow’ – a total absorption in what I’m doing to the exclusion of everything else, including food and the passing of time. I simply don’t get that with any aspect of business development; the only other activities that give me a comparable mental state are cross-country running and singing in a choir.
I know I’m going to have to work until I drop; a career in the not-for-private-profit is not a route to later-life travel and golf, as many will know. The sooner I can get someone else to start a Repair Shed that I can join as a member, rather than an entrepreneur, the better.
Read Lynn Serafinn’s blog at http://bit.ly/VslZBh
As a social enterprise, you’re expected to balance social, financial, and environmental objectives. This will involve particularly hard decisions in an economic downturn, such as how to keep vulnerable staff who may not be the most productive, and how to maintain quality as demand for services expands without the resources to match.
‘Good fences make good neighbours’ is a line in a Robert Frost poem that’s much better known than the poem itself – Mending Wall* – which we studied at school many moons ago. I think of it every time I repair the windblown fence panels in our back garden (and trample all over our neighbour’s flowerbeds while doing so).
I was reminded of it again recently when resolving an incident with a partner organisation that could have had severe consequences for The Repair Shed’s future. In the not-for-private-profit-sector there’s a tendency to think that because ‘we’re all in it together working for a common cause’ we’ll collaborate, co-operate and generally be nice to each other. This, of course, is not always the case.
I’ve spent 35 years in the not-for-private- profit sector and I’ve been a member of a trade union all that time (I’m amazed how few of my colleagues have been union members). When I first joined a union I was told “you’re wasting your money, you’re working with friends”. But that’s the point; it’s harder being hard with people you know and like. Having a professional body to intervene on your behalf de-personalises and professionalises the negotiation. This has been the case on a couple of occasions in my 35 years (and recovered the cost of my union subs many times over!)
Not that the recent ‘falling out’ needed anything like union intervention, but it did result in us agreeing to formalise expectations about relationships and behaviour by putting it in writing – to make it explicit to everyone involved – friends new and old and those yet to come on board.
Someone recently said ‘I’m straight with people and then I don’t lie awake worrying’. I can now see the wisdom in that – being clear, consistent, direct, but sensitive, in our written and verbal communications can go a long way to maintaining friendly and effective relationships inside and outside work.
So make good your fences and you won’t need to mend them so often.
Professor Ian Bruce of the Centre for Charity Effectiveness points out that if you price too low to ensure affordability for all, and then go out of business, nobody benefits. When everyone pays something, however little, everyone has an interest in your success.
That we have two ears and two eyes, but only one mouth should be a constant reminder that effective communication uses different senses. It’s said that over 50% of face-to-face communication is through body language (with tone of voice being much more important than the actual words for verbal communication that’s not face-to-face).
There are 101 reasons why someone does or doesn’t buy a product or service, and price is just one of them. Don’t get hung up on pricing but, if you think it’s particularly important for your offering and/or customer group, test that theory before you go too far with a bit of research!
Most business is based on personal relationships – we judge organisations by our inter-actions with the people who work in them. Your reputation can be damaged by the loss of key staff to competitors, or the mud-slinging of disaffected staff leaving in difficult conditions. So recruit carefully, make them feel valued, and do all you can to keep them!