By Melanie Lockwood Herman
I’ve been engrossed in the pages of a new book this week: Surviving and Thriving in Uncertainty: Creating the Risk Intelligent Enterprise by Frederick Funston and Stephen Wagner. The pages of this text offer a refreshing approach to integrating the principles of effective risk management into organizational planning, strategy-setting and decision making. While the intended audience is business leaders, the book offers some provocative lessons that can be adapted and applied in a nonprofit organization.
One of those lessons concerns the importance of considering the environment that surrounds an organization as part of every risk management process. For many years now the Center has been advising nonprofit leaders to “consider the context” prior to identifying and analyzing risks. Funston and Wagner remind readers that the context or environment in which an organization operates is constantly shifting. To use their words: “shift happens.”
A metaphor I find useful for understanding the changing environment in which nonprofits operate is the concept of tectonic plates—pieces of the Earth’s crust that move slowly but whose movement may cause earthquakes, volcanoes, mountains, valleys and deep sea trenches. Like tectonic plates, shifts in the environment may be hard if not impossible to see while they are occurring, despite the fact that the results of the shifts may be dramatic and plainly visible.
Even though gradual shifts may be hard to see, leaders are well advised to consider steps that offer a better vantage point, such as:
- Examining and challenging the nonprofit’s conventional wisdom (e.g., its funding model), envisioning its destruction, and looking for threats and opportunities in the rubble;
- Tapping into the perspectives of a wide range of stakeholders;
- Considering risks that have impacted neighboring or similarly focused nonprofits;
- Reflecting on past trends that were under the nonprofit’s “radar”;
- Seizing opportunities to learn more about the environment in which the organization operates and trends that may impact its goals, strategies and capacity to manage risk; and
- Recognizing that shifts in your environment may create the need to adapt, expand or “shift” your goals and strategies.
Next week I’m attending a nonprofit management conference that will offer opportunities to see my world from a different vantage point. Each conference plenary and workshop I attend will offer lessons and insights ripe for adaptation and application. The NRMC’s fall conference offers comparable opportunities to learn and apply practical risk management wisdom from leaders who have “been there” and “done that.” Even though the specific circumstances facing your nonprofit will differ in some respects from the experiences of our expert faculty, we promise to deliver an experience that will broaden your perspective, challenge your gut instincts, and help you develop a practical game plan to boost and revitalize your risk management approaches and strategies.
Melanie Lockwood Herman is Executive Director of the Nonprofit Risk Management Center. She welcomes your feedback on this article and questions about the Center’s resources at Melanie@nonprofitrisk.org or 703.777.3504.