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Newsletter: The Rocking Chair of Worry

Apr 15, 2010 6:54:00 AM / by Tim McCarthy

When revenue is a problem, often we hide using planning and worrying over taking action.  Great non-profit executives translate problems into plans to address those problems then adjust as the plan takes hold. [more]

Recently, I was working with a non-profit executive who sounded like she was singing a blues song.

When I asked what she was doing about the challenges of this economy, she said, "I've tried everything and I'm worried sick about it but nothing seems to work."

Her most pressing issue is declining revenue so I said, "OK, I'll facilitate an idea session for your board."

She responded, "The board doesn't want to be involved in fundraising."

I said, "OK, then, how about if you and I ideate for a few hours one day then you write a 'revenue driver plan'."

To which she said, "Tim, I can't even get my daily work done - there's no way I can also write a new plan."

That's when I realized she was on what my Mom called "the rocking chair of worry."

Mom used an old saw, which you've probably heard: "Worrying is like a rocking chair; you get a lot of activity but you don't go anywhere."

So I told my friend that I couldn't help her because she loves her rocking chair too much. That is, she's become so accustomed to being overwhelmed by her problems that she has given up. And she proves that by just doing the same things over and over.

She puts on a great fundraiser. She is the direct mail queen. Her Board loves her meetings and they get a lot done. She hires smartly and lets go of people when they need to move on.

In sum, the organization gets a lot done.

They're just not making progress, and that's a dangerous game.

The revenue shortfall is something we face a lot when counseling both profit and non-profit organizations, particularly in this economy. The following two questions often help us get started in addressing the issue:

  1. What are your specific sources of revenue over the last three years? In other words, what brings you the most revenue, in order of size?
  2. What are your specific costs, in time and people, to drive that revenue? 

Often in reviewing these numbers we find a pattern like this:

Item

%Revenue

%Time

%Cost

Events

15

40

35

Ad/mailing

25

30

40

Major donors

50

10

15

This of course indicates a sales organization that is severely out of alignment since about 70% of their time and money is spent raising about 35% of their revenue.

If we get this far with someone, we then work to help them reorganize their resources more wisely to match their hoped-for outcomes.

One time, having done this exercise, a partner asked me, "What if we replace direct mail with another revenue stream and it's not enough?"

Which reminded me what my favorite restaurant trainer, Jim Sullivan, says to his audience when they ask, "What if I invest all this money in training someone and they leave?"

To which Jim says, "What if you don't invest in training them and they stay?"

That is akin to what I told my partner about his direct mail question, I said, "What if you don't start replacing your direct mail and everything stays the same?"

Aligning resources to potential revenue is an exercise we should do every year on every business - profit as well as non-profit.

It requires a lot of work. What's worse, once you decipher your alignment, it's not easy to take the actions necessary to realign.

But it's a lot more fun than worrying

Tags: Newsletter, Revenue, Success, Decision making

Tim McCarthy

Written by Tim McCarthy

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