Your institution's financial sustainability is at risk. How can you use strategic thinking to prevent it?

Financial stability is ALWAYS at risk--its unwise to believe differently! Risk and stability are opposite ends of a continuum. Money doesn't drive the mission; mission must drive the money. In my career, I have enjoyed coaching others to understand how what they do every day impacts the bottom line. No fancy words. No fancy reports. Just "good guys" and "bad guys". I can't tell you how fun and satisfying it has been once the lightbulb clicks on and folks start making wise decisions that are supported by their complete ownership of the financial impact. YES! Mission accomplished.

La cultura del forecast es una herramienta que debe ser implementada en todos los elementos de la organización. El vivir en lo que pasa el dia a dia te limita a solo reaccionar, mientras que el forzarte a generar una vision hacia adelante te permite declarar una estrategia y poder evaluar si está funcionando correctamente o si es necesario realizar ajustes. En temas de flujo de efectivo te permite anticipar si necesitas obtener recursos financieros para cubrir tu operación y negociarlos con anticipación.

First: if my institution's financial sustainability is at risk, it's already happened and can't be prevented. Now, I will talk about prevention. The primary objective is to manage cash flow. Two critical departments in an organization are Accounts Receivable and Accounts Payable. It's imperative that A/R be productive on collecting payments timely and following up on past-due accounts. It's imperative that A/P focus on paying bills as close to the due date as possible and not sooner (unless there is an attractive discount). Also: the company needs to have a cash flow projection model that they update monthly. It's important to have enough cash on hand for operations and not an excessive amount, and invest available funds.

Your strategic priorities must focus on long-term viability assessment. Analyze root causes, assess external threats and opportunities, and leverage your core competencies or seek expert assistance to develop sustainable solutions, addressing immediate concerns while laying the foundation for future growth. Develop 2-3 scenarios to anticipate and prepare for potential outcomes, which will help in risk assessments, contingency planning, strategies alignment and effective resource allocation to build resilience to financial shocks, ensuring long-term sustainability. Explore new revenue streams, by diversifying and continuously innovating your offerings, to stay agile, and secure long-term financial health and growth.

To safeguard your institution's financial sustainability, employ strategic thinking by conducting a comprehensive financial analysis to identify weaknesses and potential risks. Develop strategic initiatives to diversify revenue streams, reduce costs, and enhance operational efficiency. Implement a long-term plan with measurable goals to ensure the institution's stability and resilience against financial challenges.

Conduct an honest and transparent audit. Ensure that the money spent (on whatever that may be) has measurable and impactful efficacy on your ability to deliver your vision and a great education for your students. Anything that doesn't feed that necessity in a direct and long-term way can be considered less than essential expenditure.

We need to prioritize immediate fixes and medium term to short term priorities. We need to maintain solvency and work om immediate stop the bleeding part. After this , we must focus on businesses generating negative contribution margin and either adjust prices or optimize cost.

Priorities start with articulating clear and reasonable goals. In a financial situation, it is not the time to be ambitious. Balance and engagement will be critical and without a well thought out goal that has reasonable expectations. No team will stand behind you.

One of the most difficult things to do is to stay focused on what adds the most value to the organization. We are often presented with many good alternatives to grow business and improve performance but many times a plethora of options result in an inability to focus. This stretches the organizations resources thin and does more damage than good. Make a list of ten projects that would improve the organization, circle the top three things that will impact the current stress situation the most and eliminate the rest. Clearly communicate the importance of achieving these goals and set up reward/incentive around those objectives.

Financial sustainability can be at risk temporarily due to external unforeseen circumstances not due to fault of the company - If this is the case, how to mitigate the volatile period has to be discussed with top management and all possible action to be taken to pass the period.... But if the financial sustainability is at risk due to internal issues, it would have happened over a period of time - realistic dip stick measurement to be done whether the aspiration of company is likely to happen or not. May be new products / set of new stores / line of business / one or more of manufacturing facilities pulling down and making a mess. We have to identify that cancer and remove it after deliberation. All efforts to be taken without surgery..

Considering the overhead cost of the establishment, think of essential and non-essential services. Finances of non-essential are to cut down or reduce the cost of non-essential in such a way it would not work against daily running of the establishment. Essential services are needed to join or combine related departments such that it would reduce the total overhead costs. As a result of this suggestion, financial situation may likely to improve .

It is important to understand the needs of your neighbors. In schools this includes what specialized programs you have and that your neighbor district has. It is possible to establish a current program as a tuition accepting one if there is space. Additionally it is important to think of ways to retain funding instead of spending it. Often requirements like Least Restrictive Environment when implemented appropriately are fiscally advantageous as well. Keeping students in district or partnering with a neighbor district instead of a far away and isolated placement is what should happen.

Strategic thinking is a skill that can be honed through continuous learning and practice, leading to better decision-making and long-term success in various endeavors.

On thing that can be added is the anticipation of the changes that the company and markets are facing. For instance, electric vehicles vs gasoline ones

To safeguard the financial sustainability of our educational institution, strategic thinking is crucial. Firstly, we can diversify revenue streams by offering new programs or services. Secondly, implement cost-saving measures such as energy efficiency initiatives or renegotiating contracts. Thirdly, focus on student retention and enrollment strategies to maintain steady income. Lastly, develop partnerships with businesses or other institutions for funding or collaborative projects.