Is your Organisation Walking a Tightrope?

by | Gestion des risques, Strategie

In my experience I have come across two main types of non-profit organisations or NGOs: those that walk a tightrope high up in the air, where the issue of balance and control are paramount for survival, growth and sustainability; and those that walk a rope that is laid on the ground, where the operational environment is seen to be smoother and easier, and therefore safer to tread.

On the face of it, it would seem understandable if organisations would rather be closer to the ground than be higher up where the risks might be higher and the fall greater.

With the former, whilst the skill lies in ensuring an organisation does not tip over in its finances or reputation, it requires resources and maturity to reach a point of no wobble. But of course not many organisations manage to operate smoothly in an environment challenged by socio-economic or demographic issues and changing philanthropic trends. A small tip on one side or the other can have serious consequences financially, reputationally, or on its people. If, however, it gets the balance right, then the rewards are greater. The risk/return trade-off would suggest that higher risk levels has the potential to lead to more profitable returns – whilst at the same time, higher risk could also mean greater potential losses on investment.

The key question is: are non-profit organisations often willing to take the risk of choosing to walk the higher tightrope by investing their resources in order to get more significant returns?

Meanwhile, many organisations that walk on a rope laid flat on the ground tend to operate from a comfort and risk-averse zone, dealing (or not) with change as it comes to them. Those that manage it well, may continue to function as “business as usual”, whilst others might struggle to face the challenges and have a more turbulent journey.

The main difference between the two types of organisations is that the ones whose ropes are elevated evolve by learning from their mistakes and anticipating change, whilst the ones on the ground potentially face significant risks of being vulnerable to unexpected changes in their environment and shifts in their constituents’ trends and behaviours. The other difference is that those in the former category, and particularly if they are geared for increasing their social impact, tend to possess a longer term view and appetite for sustainable growth and scale. They are thinking more about their growth-driven organisational development plan, implementing a high impact fundraising strategy, and revitalising their governance framework.

Do you think it might time to take stock and conduct a self-assessment for your organisation to see how high the rope is and just where that “wobble” is?

I am reminded of the American entrepreneur, Ray Kroc, who famously quoted that “it is no achievement to walk a tightrope laid flat on the floor”. In 1955 he had come across two men running a highly successful small restaurant in San Bernardino, California. He realised that their success was due to the fact that focusing on just a few items on the menu – burgers, fries and beverages – allowed them to run the operation efficiently, provide good customer service and serve quality products. This soon led to the creation of the McDonalds brand and by 1958, McDonalds had sold its 100 millionth hamburger.