Experts from Sage have developed a list of actions to guide charities through the process of change assessment
Charities have faced an unprecedented period of change and COVID-19 will continue to have an impact upon operations for many years.
The rapid move into the first lockdown meant charities had to quickly adapt to a new way of working. Access to key financial information was one of the most important factors in determining how organisations initially reacted to the pandemic.
In this article, we outline key steps that a charity might want to take to prepare for future changes in their operating environment and help inform decisions when change arrives.
Change management can be defined as a structured approach put in place to ensure that transitions are handled smoothly. A change management process ensures that charities are set up to benefit from the long-term effects of change. A key component of this is assessing the impact of changes.
So how should an organisation go about assessing and reacting to changes? What conclusions can they draw from reporting, and how can they use this information to manage change and make both strategic and operational decisions? Here is a ten-point list that will help you make the right decisions.
Having clarity of the context of financial modelling and decision-making is vital before any change assessment is undertaken. Financial sustainability should not be a means to an end.
This will help you to determine what information is required.
Develop realistic scenarios of what you might need to react to. This could include:
While ultimately change management is about assessing the impact on an organisation as a whole, it involves constructing an understanding of how different areas of your organisation combine together.
Identify the building blocks required to assess overall impact, including the impact on cost structures, cashflow, individual initiatives, staff and beneficiaries.
For some people, only presenting numerical data may not be appropriate. For example, not all trustees have the financial expertise required to evaluate such information.
Consider contextualising examples from a leadership perspective and offering a more descriptive explanation of the scenarios being assessed.
It is vital to assign responsibility for key actions within the organisation. This should then be supported with clear progress monitoring and reporting to ensure that actions remain on plan and any issues are reviewed and reacted to in a timely manner.
You will probably have a lot of financial information. Be reasonable and proportionate – you can’t measure, assess, analyse, and predict everything.
Change is scary. It can provoke inherent caution. But change management isn’t just about mitigating risk. Rather than just focusing on doomsday scenarios, it should be seized as an opportunity to operate more strategically, build infrastructure, and invest in technology.
Bear in mind the goals of recovery, resilience, and positivity. To build on opportunities with confidence, senior management needs to feel it is reliably making decisions based on sound financial data and change assessment.
Charities want to do their very best and be successful. For this they need to understand what they are trying to achieve, and what they can do to improve performance. Being prepared can help a charity deal with change when it happens.
Preparedness can also enable the organisation to focus on what it is doing now, and what it needs to do an ongoing basis to meet its strategic objectives, enjoy financial sustainability, and deliver impact.
Find more charity finance resources at the Sage Non-profit Success Hub.