When Bad Things Happen to Good Organizations

How Effective Managers Prepare for Crisis

Starr Mayer

• Publisher: Morgan James Publishing
• Year: 2011
• ISBN:
  9781600378621
• Topic: Business
• Subtopic: Nonprofit Organizations & Charities
• Index: Business

This road map will give confidence to leaders of nonprofit organizations and faith groups facing the unknown with sometimes limited resources. The many examples--of actions which averted calamities and of failures resulting in chaos--are engaging. "When Bad Things Happen to Good Organizations" answers the questions that are often in the backs of the minds of those who lead organizations: How do I know this is a crisis? Can crises be prevented? What do I do when I walk out the door and the media has questions? What actions can our board or council take right now? The guides which are included are easily adapted by any organization. Every nonprofit leader should own "When Bad Things Happen to Good Organizations". Every board should discuss this topic. Every organization should have a plan for "When Bad Things Happen to Good Organizations".

CHAPTER 1

Questions to Consider

Is this a crisis or merely a problem to be addressed? Here are some defining questions to consider:

• Is this situation something the press might be interested in? If a story were published, would it be a threat to the organization?

• Does this situation involve

Money?

Sex?

Possible endangerment of a child or children?

• Does this situation represent a potential lawsuit, with the organization or its staff or board as plaintiffs or defendants?

• Does this situation threaten the organization’s credibility?

• Does this situation threaten the organization’s ability to exist?

Crises come in two forms: those that are external—usually acts of God or nature—and those that have an internal genesis. In either case, they must be addressed.

External Crises

All organizations are subject to the external crises that come with little or no warning and are not a result of negligence. While, in some cases, they can be anticipated and their damage somewhat mitigated (by insurance, safety measures, or training and policies), they are a risk. Fires, floods, and hurricanes fall into this category. Deaths caused by accident, suicide, or homicide fall into this category. A sudden illness—whether mental or physical—can be an externally caused crisis for an organization.

One nonprofit had a client who was murdered, and the death was linked to the organization in front page headlines, even though the assailant was unknown to anyone but the victim. Another organization had a volunteer who died from an aneurism while working at the program site. Hurricanes and floods have wiped out organizations’ headquarters, the homes of their clients, the products of their volunteers’ labors, and their vital records. For some organizations, such events delivered a fatal blow.

Internal Crises

This form of crisis cannot necessarily be anticipated but is created within the organization. The rule of thumb for identifying a terrible occurrence that can destroy an organization is this: It involves sex, money and/or harm to children. Worse, of course, is any combination of the three.

Any real crime connected to the nonprofit will cause unwanted attention and can create an immediate crisis.

What Makes a Crisis Life-Threatening

An organization’s bread and butter is its reputation. This is especially true for nonprofits. A crisis at a for-profit organization has to be truly catastrophic for the world to take notice. Think of BP, Toyota, or AIG. But even a relatively small event in the life of a nonprofit can make the headlines and undermine public confidence. An embezzlement of as little as $500 has created a serious situation for small nonprofits. It is as true of organizations as it is of individuals: once a reputation is tainted and the public’s faith is shaken, it is very difficult to rebuild trust. Carefully guarding that primary asset is the only responsible way to lead nonprofit organizations.

Anything that threatens the ability to continue functioning and meeting your mission is a crisis. If the organization has to lay off all staff; if there is no more money for program expenses; if donors determine the organization’s cause to be suspect; if protests are set up and it is impossible to conduct business; if an unhappy board member, volunteer, or client decides to go to the media and give details of dishonesty or mistreatment of others—these are crises. As crises they must be addressed immediately by the full board of directors.

Prevention and Cure

Prevention is easier and cheaper than cure. So why doesn’t every organization devote money, time, and personnel to preventing risk? Perhaps it’s because the nonprofit world is full of optimists who think that, if the mission is laudable and leaders just do the best job possible, intentions will be rewarded and nothing bad will ever happen.

Organizations wish and hope that no bad things will occur. Then, when bad things do happen, they are sad and bewildered. How much better would it be if we could persuade people to provide for prevention?

The best way to prevent crises is to invest in:

POLICIES
PEOPLE

Almost every bad occurrence can be prevented, mitigated, or resolved with careful attention to having good policies and good people.

Often, conversations among those who care about nonprofit work center on which is more important—having good policies or finding the right leader. It is a chicken-or-egg question with no right answer. On the one hand, the first thing good leadership does is ensure there are solid organizational policies and systems. On the other hand, policies not only outlast the people in an organization—they create a climate that is attractive to the right people and which can help legitimately rid the organization of the wrong people.

Even with good people and good policies, crises may happen, and conflict will almost certainly occur. The key to healthy organizations is to have ways of dealing with crises and managing conflict, which can address or neutralize crises and turn potential risk into organizational benefit. Then policies and people become the cure.

The Keys to Crisis Management

• Understand what constitutes a crisis. (Chapter One)

• Mitigate the risk and impact of crises with policies and people. (Chapters Two and Three)

• Know when an incident or a culture is a precursor to a crisis. Knowing allows you to intervene proactively. Dealing with conflict well and early can turn a situation that might become a crisis into something positive. (Chapter Four)

• Handle an unexpected crisis in a timely and professional manner in order to minimize damage. (Chapter Five)

• Continue important repair work after the crisis. (Chapter Six)

• Plan for a crisis. Create a team to monitor and protect the agency in a continuous way and have a strategy to activate should a crisis appear. (Chapter Seven)

Many organizations have come through crises on the other side—some even stronger than before they went in—because they were honest in their assessment and intentional in their remedies.

 

 

PREVENTING CRISES WITH POLICIES

Most organizations have some policies. Fewer organizations have a full manual of up-to-date policies with which everyone is familiar and which guide the work of the organization. Having such policies in place can prevent many of the missteps which could become crises. If a crisis occurs, policies let the public know that your management exercised foresight. Good policies can provide the sort of neutral programmatic guidance which is transparent, fair, and consistent. Policies create a more stable and pleasant work environment. While there may be magic in policies, there is no mystery in creating a solid base of important documents. All it takes is intentionality.

CHAPTER 2

What is a policy? Policies, procedures, guidelines, standards—all are board- or council-approved ways of operating that provide consistency to the way the nonprofit functions. Here is the fact: Policies are your organization’s friend. They make organizational life easier. They allow the nonprofit to treat all situations and all persons the same—those they like and those they don’t. An organization or its leaders can never be accused of playing favorites if the same documents are asked of all clients, the same policies are applied to all constituents, and the same rules govern all programs. All get the same treatment.

The Benefits of Policies

Policies are, of course, only as good as their application. Real policies don’t just allow you to do the things mentioned above; they require you to do those things. Having policies that are ignored or applied inconsistently can have serious consequences.

In one example of policies ignored, a leader created a sense of disorder that was worse than not having policies in place. As the head of a nonprofit organization, he essentially wanted people to depend on him rather than on the structure of the organization. His door was always open. He made policy on the fly, and he also defied it. He was fond of what he called “one-off’s”—which translated to his constantly making exceptions. Of course, this led to conflict and frustration on the part of those who saw themselves as not being favored. It also ...

Table of contents

• Cover
• Title
• Copyright
• Dedication
• Contents
• Acknowledgments
• Introduction
• Chapter One: About Crises
• Chapter Two: Preventing Crises with Policies
• Chapter Three: Preventing Crises with People
• Chapter Four: Precursors to Crises
• Chapter Five: It’s a Crisis
• Chapter Six: The Crisis Has Passed
• Chapter Seven: Making the Organization Safe
• Prescriptions: In Case of Emergency
• About the Author
• Bibliography
• Additional Resources
• Endnotes