By Chris Gandy

Over the past few months I have had the sad duty to attend the funerals of two friends. Both were men, lived in the same community (though didn’t know each other as far as I know) and were around my age. Both events were highly upsetting but what added to the grief and frustration was that it seems the deaths were highly avoidable. Although both men died of different causes, in each case they ignored tell tale symptoms and didn’t seek medical help until it was literally too late. As a follow mourner said at one of the funerals  “…… just didn’t heed the alarm bells”. They didn’t act when signs showed that “something just isn’t right”

These incidents got me thinking about one of the fundamental responsibilities of a not for profit board – to constantly check the organisation’s state of health and act swiftly and decisively when alarm bells begin to ring.

As a board member there are several alarm bells I keep an ear out for. Are any of these ringing in your organisation?

 1. Liquidity – Does the organisation have enough funds to cover its debts? If your organisation is stressing about the timing of the next cheque from your funding body to pay wages; delaying paying creditors; toying with idea of putting staff on a shorter working week etc, bells should be ringing. If the organisation doesn’t have a basic cashflow forecasting model in place, insist that one is implemented now! It will serve as a great alarm system.

2. Turnover – Sure, even the most highly engaged and effective staff sometimes grumble and complain. But when this dissatisfaction translates into people exiting the organisation the signs are that something is wrong. Discover the real reasons why people are leaving. Also, don’t be swayed by the excuse that “our turnover is in line with the industry average” or “we can’t match the wages of our competitors”. Firstly, the organisation should be aspiring to have a turnover much less than the industry average. Secondly, what is the board doing to generate funds to pay fair and competitive wages to attract and keep high quality staff?

3. Client/Community Dissatisfaction – What do your clients and the broader community think of your services? Is the take-up rate steady, growing or falling? If you organisation relies on donations from the community to survive, how are these trending? What is being said on social media about your organisation? These are all lead indicators of the  organisation’s general state of health.

4. Board/Leadership Team Relationship – How are things between the Board and the CEO and wider senior leadership team? Where does it sit on the continuum between hostile on one extreme to fully trusting and highly effective on the other. As you progress down towards the negative end the bells peal louder.

5. Funders – I have found funding bodies usually have the experience and monitoring techniques to decide whether trouble is brewing. If they start asking questions like “Do we need to talk about anything?” is a sure sign they think you do have something significant to talk about.

6. Regulators – Is the ATO asking questions? If your organisation monitored by an external quality accreditation body, what are their regular reports recommending? Are they suggesting system changes etc.? If so, act on the recommendations.

7. Peers – Network with peer organisations. Don’t treat them as the enemy but a friend. Compare how your organisation’s are tracking. If there are major discrepancies in key areas seek advice, share experiences, learn from others.

8. Experts – If professional advisors are recommending that change must occur, it is time to take note and consider. Very few consultants are attempting to feather their own nest when suggesting a particular course of action. Typically they have identified a problem and have put forward a solution. Your responsibility is to consider and enact the right response.

As not for profit board members you are the stewards of your organisation and responsible for ensuring maximum social impact. To do this you must continually watch the well being of the organisation and be ready to act on those tell tale signs that “something just isn’t right”

What other “alarm bells” do you use to measure the state of your organisation?

About Chris:  Chris Gandy is the founder and director of Cause and Effective – a provider of contingent resourcing and leadership search services to cause-based organisations.