Emotional Challenges of Leadership in a Tough Economy

Leadership in this economy poses more emotional challenges than at any other time in my experience. Executive Directors have to reduce or cut services to clients in desperate need, let good people go despite years of faithful service, conduct difficult conversations with donors who may be embarrassed or ashamed that they can no longer contribute, and be the emotional rock that everyone looks to for support and a positive attitude.

On top of this, they have to manage the fear and frustration of the staff who remain, the plight of the clients, the angst of the board and the general paralysis of donors. All the while they have the same personal issues as everyone else as they watch their own savings shrink, worry about job security and witness their family and friends lose jobs or face diminished expectations.


This is always good advice but never more so. Exercise, sleep, be moderate in eating and drinking, and spend time with the persons, places and things that feed your soul. When was the last time you took a few hours, just for you, and went to the park, visited a museum, took a walk, stared at an open field, listened to the ocean, talked to a friend or watched a favorite movie? Unless it was yesterday, it has been far too long.

Below is an interesting article about the many challenges in leadership today:

The Executive’s Power and Responsibility: A Plan to Lead Your Organization Forward
by David E. Edell President, DRG Executive Search for the Nonprofit Sector

How leaders behave has a significant impact upon the emotional tone of an organization’s volunteers and staff. That has been a significant burden for nonprofit executives during these months of constant reports about the dramatic effects of the failing economy. Executives have had to respond to daily doses of news about the economy’s impact upon their donors, corporate funders, foundation supporters and government contractor s. They are making difficult decisions, with their volunteer and professional leadership, about how to help their organizations weather today’s crisis. They know their decisions will impact colleagues that they have worked with for years. They are responsible for nurturing all of these constituents through this economic free fall while privately dealing with its impact on their own family’s savings, retirement and investments. The overwhelming barrage of bad news and constant change causes many executives to lose sight of the forest for the trees. Spring 2009 is a moment when executives can help themselves and their organizations to change all of that and move ahead.

To break the oppressive, reactive environment that has enveloped us, organizations need to present a serious forward thinking plan for the coming year (s). For some leaders, managing monthly adjustments, “until we see what happens,” is a strategy that might work. I suggest that the budgeting season, usually the Spring for organizations with July 1 fiscal years, is a unique opportunity for bolder leadership. In that process, leaders can in effect, declare an end to continuous adjustments, create a new reality for their organizations, and set a foot hold for the organization to move forward proactively, not reactively.

Step One: Project Income
The steps are obvious, but not easy. The first step is to project income. Some of the indicators will be end of year giving in 2008, the pace of giving in early 2009 and any mid-year changes in 2009 giving and collections. Candid personal conversations with your organization’s top 25-50 donors about how they feel about their capacity for giving and paying commitments next year will be critical to the projection. Then, do the math and set a realistic number for projected income for 2009-2010. This review is not about setting fundraising goals. Rather it is about establishing reasonable and attainable expectations. You may have been a $20 million organization but this process may cause you to declare yourself a $15 million organization next year. Realistic and achievable will be helpful measures.

Step Two: Ensure Excellence in Your Core Business
The second step is to establish a fast paced process to consider what your organization will be able to accomplish at that new level of funding. For those who think that things will be better in 2010, the plans can focus on adjustments in staff and operations to balance a budget geared to getting through 2009. For those who think 2010 will be another year of uncertainty and we may not get back to business as usual soon, if ever, a more intensive review will be required. In these discussions, professional and lay leadership will have to reaffirm the mission and core business of the organization and ensure a level of excellence in delivering those core services or programs. Without clarity about mission, focus and excellence in program, it will be difficult to successfully compete for leadership, funds or clients.

The result of a renewed focus on core business may be the need to close departments and/or programs as well as cuts in staff. Those cuts may be especially controversial if the programs identified as peripheral are supported by key staff or influential leaders or donors. In addition, organizations will have to think about how they can operate differently and consider the use of technology, outsourcing and consultants as options.

Finally, fragile organizations are worried not only about their organization’s survival but about how they can sustain their important and unique services and programs. This is the time that they may have to consider the sale of assets, partnerships with other organizations and/or mergers, if those models provide for the long term survival of their core programs.

Step Three: An Open and Transparent Process
Step three is to make this process as open and transparent as possible. That means gaining input from a broad spectrum of stakeholders and staff. It may be an excellent time to invite “influentials” who have remained on the periphery of involvement with your work to lend their expertise to the discussions. This process requires regular communication. Let constituents know you are leading a planning process, that there is a timetable for its completion. By communicating a context for this review and decision making, you will help some to begin to look forward with confidence.

Step Four: A Budget that Reflects Decisions, Priorities and Values
Step four, is to prepare a budget for next year that reflects your values, decisions and priorities. The numbers will clarify and concretize the organization’s new direction and vision.

Step Five: Communicate Carefully with All Constituents
Step five is about effective “roll out” of the decisions and budget. It is important to take time to craft a message that conveys the values, reasoning and decisions in a way that reflects your awareness about the impact these decisions will have on staff, clients and constituents. Decisions must be communicated in a timely fashion and implemented in a planful and compassionate manner. The communications plan must consider how you will deliver a clear message to every constituency from the in- house rumor mill to blogs and the media. It is important that Board, funders and volunteers hear early in the process, and directly from the CEO and Board leaders, about issues and challenges that will be addressed. It is equally important that they hear about the results before they are reported to the public. There will be a great deal of formal and informal reporting about how your organization communicates with staff about cuts, the resources being offered to those affected and the sensitivity conveyed in the process.

How staff are notified of layoffs and the kind of resources that are being offered to support their transition, matter. Finally a plan must consider how the general community hears about changes at your organization and the message about the decisions.

Moving ahead with this process is a leadership challenge in an extraordinary leadership moment. Colleagues who have already begun the process will tell you that it challenges every part of an executive’s professional and personal creativity, sensitivity and energy. At the end of this fast paced process, you will be declaring a vision for the next year where your organization will have a focus, a direction, a plan and resources to accomplish its revised objectives. You will be saying that your organization will continue to focus on being great at providing its core services and programs and your clients and constituents can continue depend upon the organization in the future. That message will be very reassuring to all of your constituents who care deeply about your work.

Executives have the power and responsibility to change their organization’s direction and emotions. They can lead constituents from feeling like reactive victims of the economic crisis to being part of a proactive, mission driven organization that strives to control its destiny and organizes to sustain a level of excellence in its core business. In the process, executives can lead their volunteers and staff to look ahead toward new challenges with the confidence that comes from thoughtful planning and preparation. Equally important is that through this process, executives will reinforce their own energy and be able to convey a renewed level of enthusiasm that can lift the emotional tone of all of the organization’s constituents.

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