Challenge can bring out the best

External changes can be challenging but they can also bring out the best in organisations, says consultant Louise Emerson.

The recent AIM survey showed that the most common concern right now is energy costs, followed by capital costs, and core cost pressure continues. About 50% of respondents believe they can manage in the short term, which leaves six months to decide on the changes needed to increase sustainability, notwithstanding the uncertainties that abound.

Others are thinking of the last resort – using reserves. And no one is sure when these pressures will subside. But uncertainty is a condition for innovation and disruptions create opportunities to make lasting, substantive, positive change. For example, Covid prompted many museums to sort out long standing governance issues, start to build better local connections and reminded us how important team well-being is.

We all know that the issues that put us at risk take on a sharper focus when uncontrollable external change happens. So, perhaps now is the time to check your underpinning assumptions and think strategically, and at least ensure that the decisions to deal with today’s issues align with future goals.

In this article I offer some suggestions for the short-term and pose some questions for medium/long-term.

Short-term considerations

Reducing services and activities:

• Calculate the whole cost, not just financial
• Think holistically – what is the impact on other functions?
• Focus on benefits: financial, social and customer, before cutting whole services
• Plan for ‘what ifs’ – the energy crisis may continue.

Increasing income:

• Interrogate existing income streams to increase efficiency
• Negotiate well on every cost
• Invest where there is proven growth
• Fundraise for activities that are strategically aligned.

Prioritising:

• Delay – what is not appropriate / necessary at this time? What will not have a payback (financial)?
• Can that refurbishment or purchase wait?

Reducing staff costs well:

• People – Your best asset and (possibly) your biggest cost
• Cutting vs reduced contracts – consider role changes
• Be very clear on rationale for change and communicate and listen to feedback on impact and options
• Think holistically – role interdependencies, informal networks, the impact on visitors
• Use a scalpel rather than a cleaver.

Keeping the team motivated:

• Cuts to personal development and cuts/delays to projects impact morale, increased spending scrutiny leads to quality concerns, reduced staff means workload pressure
• Listen and consult
• Get everyone involved in contributing to efficiencies
• Communicate the results of everyone’s efforts and ideas, recognise them
• Is working from home a cheaper or better option?

Using reserves:

• Only use reserves to fund operational costs as a last resort. Why?
• Funding bodies want to see reserves
• No reserves – no fund for emergencies – operational costs need to be managed
• If you build reserves from surplus or topped up from CRF, it will be hard to recoup.

Building a sustainable future

Visitor forecasting:

• What is going to be valuable to the customer of the next ten years?
• Who are your best visitors and what need could you satisfy?
• What does your local community need? Can you partner/or deliver?

What assumptions are being made and are they still relevant?

• Are opening hours between 10am to 6pm best serving your visitors?
• Could a competitor become an ally?
• What sort of relationships do you want to have with partners and visitors?
• How could you reinvent how your service is paid for?
• Are you holding on to something that you need to let go of?
• What alliance could generate visits?

Louise Emerson is a Business Consultant working with museums to create value. Click here to visit Louise’s website>>