Did you have a global pandemic, Tiger King and murder hornets on your 2020 bingo card? I certainly did not. For most organizations, 2020 has challenged the assumptions we had about the way we work, the way we interact and how we grow our businesses.
And while we certainly don’t seem to be out of the woods yet, with COVID-19 cases increasing in 38 states as of early July, there are many lessons that organizations can take away from these times to build a more resilient approach and emerge from the pandemic stronger than ever.
Resiliency Planning isn’t a new concept. It’s been used in many industries and academic disciplines. One of the common uses for resiliency planning is to help cities plan for environmental issues and challenges like affordable housing, congestion and socioeconomic and racial inequity. These techniques can be applied to organizations that are struggling to keep their business afloat and remain relevant to members in the wake of COVID-19.
The Need for a Resiliency Plan
Over the past several years, we have witnessed unprecedented economic growth in the U.S. Association membership was on the rise, attendance at annual tradeshows was solid and engagement was high. But the pandemic changed everything in a matter of months. Organizations have had to scale back operations, postpone or cancel events and make significant changes and decisions on a very quick timeline. And, many are still in the trenches.
A resiliency plan can help your organization not only anticipate but also plan for changes and events that will affect your revenue projections and your bottom line. And this is particularly relevant now. According to the ASAE Research Foundation, 77 percent of associations anticipate the need to use financial reserves to offset revenue losses due to the current global health crisis.
Developing a Resiliency Plan
First, I should clarify that resiliency planning is not a one-time activity but rather a cycle where leaders regularly monitor and evaluate progress and then re-assess their needs and priorities. A robust plan will support both the short- and long-term sustainability of your organization.
Here are the building blocks of a resiliency plan for an association or nonprofit:
1. Assess risk and vulnerability
Create a leadership task force made up of individuals across the organization that can contribute to the resiliency plan and highlight things to keep in mind for their respective functions and impact on the business. Do this before making any moves or decisions that will impact your staff and your members. You want to ensure that you have the right people in the room and that it’s a group of diverse, representative voices at all levels of the organization.
With your task force, hold a series of discussions where you evaluate your organization’s bottom line, look at where membership revenue and renewals stand today, revisit your mission and vision, identify vulnerabilities that have arisen as a result of COVID-19, and identify how you are engaging stakeholders to address these challenges. Consider sending a survey to members to understand which programs, activities and events they want to take advantage of now to help determine changes to staffing and your budget.
2. Plan and prioritize
Once you have an understanding of your organization’s vulnerabilities, challenges and opportunities, prioritize the strategies and potential actions to address those issues.
For example, has membership suffered in recent months? If so, do you offer a payment plan to members and does it make sense to offer a free one-year extension to people who have lost their jobs? Are you taking your meetings and annual conference virtual? What percent of revenue do in-person events account for? And, do you need to spin up digital programs to offset the lack of events taking place this year to reaffirm the value that you offer to members?
Develop short- and long-term priorities for each area of your business that takes today’s economic environment and public health concerns into account, and your expectations for these a year or two from now.
3. Reshape Your Strategy
Most associations and nonprofits have experienced significant disruption to business-as-usual operations and will continue to do so while we are living with COVID-19. To help address these challenges and keep your organization humming, consider these actions:
- Evaluate short-term liquidity. Your finance team is likely evaluating cash flow and working capital to understand how the pandemic has affected the growth of the organization. Monitor short-term cash flow and maintain a strict discipline around collecting receivables. If you don’t offer a payment plan for members, consider adding this option to increase recurring revenue and provide flexibility.
- Assess financial and operational risks. Associations should monitor increases in their direct costs and the impact to overall margins. Look to re-negotiate terms with vendors or lock in pricing for a longer period to provide stability for your organization. Explore solutions that can offset losses in membership revenue such as online learning, virtual events and more. Evaluate your organization’s technical debt and how your technology stack enables or prevents operational flexibility and efficiency.
- Determine how the pandemic affects budgets and business plans. Organizations should stress-test their financial plans for multiple scenarios to understand the effects on economic performance and any long-term impacts. If you’ve had to furlough staff at your organization, will you be able to reinstate these positions in late 2020 or early 2021 given your current cash flow expectations? When you’re able to return to the office, what percent of staff will continue working from home? And, does this affect the real estate needs of your organization? Should you budget for a hybrid conference option in 2021 to ensure that you’ll recoup attendance and sponsorship revenue even if members cannot meet face-to-face?
4. Communicate with Stakeholders
Clear, transparent and timely communication is crucial when developing a plan to reshape your association and to secure ongoing support from members, staff, partners, suppliers, your board of directors and more. Share updates regularly as policies change and as you are putting any programs or activities on pause and introducing new ones.
Revisit the survey that you sent to members and create targeted messaging based on their previous engagement. For example, if you are creating virtual coffee chats to replace a monthly networking event, send a personal message to members who have participated in networking events over the past six months and let them know about the changes. Also, share the activities broadly to encourage participation from people who may not have been able to join previously due to time conflicts or geographical limitations.
Share regular updates to members in your member newsletter or in weekly emails that detail changes to membership dues and renewals, the addition of digital programming or virtual events, plans to postpone in-person meetings and networking activities and more.
5. Monitor, evaluate, and adapt
If I’m looking for the silver lining, the current environment offers an opportunity for reflection and a chance to evaluate what’s working and what’s not. But I want to reiterate that this isn’t a one-time activity. Continually monitor and re-assess your efforts throughout this pandemic and afterwards.
Consider both internal and external cues to understand when your strategy needs to change and evolve. Internal cues include staff sentiment for going back into the office, the number of staff needed in a particular facility and which programs and services can be delivered virtually. External cues include local and state restrictions around gathering, whether cases are declining or increasing along with the availability of testing and hospital capacity in your area. As these numbers and information change, update your plans accordingly.
Want to Learn More?
Economic downturns are hard to predict but we can be confident that they will happen. Build a resiliency plan now so that you’re ready for when a downtown occurs. Join me for a free webinar on Wednesday, July 15th at 11:30 am CT / 12:30 pm ET to learn how your organization can leverage technology to develop a resiliency strategy to emerge from COVID-19 stronger than ever.
During the webinar, you’ll explore concepts in:
- A review of the shutdowns and re-openings that took place across the country and the effects for member-based organizations
- How organizations are adapting with examples from the National Association for Home Care & Hospice, the American Optometric Association and the National Association of Secondary School Principals
- Tips for building a resiliency strategy to weather the current pandemic and evolve for the future