At the heart of the work that I do with nonprofits, philanthropy and government is to help organizations find the connection between facilitation and process.  Most often that connection is at the point of strategy.  Strategy is the critical element for, among other things: a) strengthening the core of social sector agencies, b) thinking creatively about innovation and growth, and c) managing through times of challenge and crisis. The focus on strategy is often the “antidote” to the tyranny of oversimplification in all three of these categories.   In this post I want to focus on the latter challenge of thinking strategically in a time of crisis. This post is also an extension of the theme that I began in my last article about creating a culture of courage.

In a recent blog that appeared on the Chronicle of Philanthropy ‘s website titled: Bankruptcy Isn’t a Solution to Nonprofit World’s Woes, the Philadelphia Orchestra was held up as a “poster child” of an agency where bankruptcy was the wrong solution to a fiscal crisis. In this article, the author argued that debt restructuring rather than bankruptcy was the correct and more appropriate solution to the crisis.  The point of the article was to declare bankruptcy as bad strategy.  However by focusing myopically on the debt of the orchestra, the author  oversimplifies the complexity of the crisis.

In the case of the Philadelphia Orchestra, a cursory Google search reveals a number of articles and commentaries suggesting that along with debt, there were other internal and external issues contributing to the crisis that included tension with the musicians who opposed the bankruptcy,  ticket sale declines dating back to last season, fiscal pressure caused by pension obligations, as well criticisms of a lack of leadership accountability.  One thing is clear, the fiscal crisis of the Philadelphia Orchestra did not appear “ex nihilo” but was years in the making and it is an oversimplification of the crisis to suggest that the solution was simply choosing the best option for debt restructuring.

I would argue that, similar to the orchestra, that  most organizations in fiscal peril are in that place because of a composite of internal and external factors in the social-citizen sector ecosystem. With the exception of grassroots and small nonprofit organization, fiscal crisis is rarely caused by a single event. Rather, fiscal crisis is often the culmination of ongoing failures in the organization’s strategic capacity. In the case of the Philadelphia Orchestra, publicly leading with bankruptcy rather than strategy was just one more  organizational leadership failure. Leading with bankruptcy rather than strategy was the self-inflicted cause of intense public criticism leveled at the Orchestra’s top decision makers.

The purpose of this blog is not to dissect the bankruptcy decision of the Philadelphia Orchestra but focus on the what it means to lead with strategy in a time of crisis.  To this end I would suggest the following attributes of leading with strategy:

  • Lead Beyond Crisis Thinking: Over a year ago, I wrote a blog about crisis thinking where I outlined the importance of focusing on mission, vision, outcomes as well as participatory leadership as the keys to moving beyond crisis thinking. My contention was (and is) that collectively reflecting on the core of an organization’s purpose and achievements is the prerequisite step to unleashing transformative creativity.
  • Lead Systemically: Managing from strategy requires a systems view of the nonprofit agency and the local “ecosystem” in which the agency operates.  In other words, by mapping the patterns of the external ecology (i.e., local economy, grant-maker funding patterns, the political landscape) and the internal ecology (i.e., employee moral, program quality and innovation) directly effect an agency’s ability to design broad solutions to a crisis.
  • Lead with Transparency: The most critical attribute in managing in a crisis is to be relentlessly committed to transparency.  Internal staff and the external community deserve absolute transparency and honesty. Transparency discloses how the agency got into the crisis with candor and responsibility.  Without transparency a crisis in confidence linger as a cancer even if the presenting problem is resolved.
  • Lead Restoratively: The concept of restoration is a causal chain.  First and foremost, restoration presents a wholistic solution to manage and prevent recurrence of the crisis.  Crisis requires leadership repair, which, in turn leads to the repair of confidence.  Crisis evokes fractured relations with board, staff, community, funders and clients.  Leadership repairs. Without a focus on restoration, the crisis ripples to a secondary “confidence crisis” that can cast a lasting shadow over an organization.

While this post has been written from the perspective of managing while in crisis, the principles outlined are perhaps best understood as a primary or secondary prevention strategy applicable to a broad cross-section of agencies.  The leadership qualities described in this post, applied as prevention are diagnostic and beg the question, “how durable would your strategic leadership be in the time of a crisis?”  For most, the answer lies in the degree to which the agency actively cultivates the qualities of strategic leadership in the absence of crisis.  After all,  leading with strategy is simply the discipline of good leadership.

As always, your thoughts are welcome.

Mark Fulop
Mark founded Facilitation & Process in 2009 to help organizations and communities bridge the gap between where they are today and where they want to be tomorrow. He’s led dozens of Portland nonprofits, government agencies and philanthropic organizations through complex change initiatives including strategic planning, revenue planning, board development, collaboration, and facilitation.