NO PLAN B

uday@redochre.org.uk

www.redochre.org.uk © R

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What is Plan ‘A’?

What form does planning take?StrategyBusiness planningFunding applicationsBudgetsRisk analysisOther?

Categorise of risk

People Information

Operational Property

Financial Reputation

Funding Regulatory

Social Technological

Competition Political

Management Governance

Strategic Natural

Identifying risk

Failure to…. Inability to…

Loss of….. Inappropriate…

Concentration of... Reliance on…

Non-compliance with… Disruption to….

Lack of… Inadequate…

Reduction of… Increase in…

Conflict between... Delay in….

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Depth of Planning?

• Risk analysis – produced for TAR?• Budgets – How realistic?• Usual to take Best/Likely/Worst case scenario • Strategy exercise – how realistic?• How much is remembered after the exercise?

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General statements

If things go wrong we will….Cut costsFund raise harderDiversify incomeTake adviceRecruit new trusteesIncrease insurance coverTake on new activities/diversify

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What does this mean?

• We will act after the event• Do you have the flexibility to do so?• BP – Texas explosion – risk strategy was to change

safety procedures after an incident• Result – Deepwater Horizon• But BP big enough to absorb catastrophe

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Recent example

• Board with 3 accountants• Strategy• Risk analysis signed off• Reserves planning undertaken• Cash flow crisis in mid-August –Unexpected crisis• None of the trustees available• Panic calls to bank/ funders etc.• Loss of confidence• No Plan B

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Guidance

• Long distance • Approach to funders• Approach to bank (no OD facility)• Communications• Staff• Stakeholders• Confidence! Confidence! Confidence!• Now working trough worst case scenario

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Donald Rumsfeld

• Known Knowns – those things that we know about and so prepare for

• Known Unknowns – where there are things that we know that we don’t know about

• Unknown Unknowns – Those things that we don’t know about and have never considered

• The latter is the famous “Black Swan” event• Prepare for Doomsday scenario

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Tool

• Have a toolkit to deal with problems• Have to know what the problem might be• Think of consequences• How to react• Responsibilities• Who to approach• What to say

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Think the unthinkable

• Sudden loss of funding• Fire/flood/earthquake• Loss of chief executive• Major legal dispute• Media exposure• What else?

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Review Operations

• What do you do?• Why do you do it?• Is it necessary?• Can you discontinue it?• Do you need to be where you are?

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Create Time/Space

• Cash flow forecast!!!• When will current funding run out• How safe is current funding – particularly statutory funding• Extent of reserves• Knowing ongoing commitments and liabilities• What can be cut immediately• Timelines known• Communication channels with funders• Start dialogue with collaborators/potential partners

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Instructions

• Accountants• Solicitors• Advisors• Charity Commission?• Support organisations – NCVO/ACEVO etc.• Politicians• Media• Stakeholders

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Next Steps

• Document• Circulate• Amend• Disseminate• Estimate resources• This may lead to fundamental rethink on a number of issues• Feed this back into Plan A• Re-review Plan A

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Responsibilities

• Agree responsibilities• Sub-committees?• Agree how communications will work• Regularly review and update plan – reflect external

and internal changes• Check skills set of trustees and SMT• Can you improve this?• Establish safety nets

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Other steps

• Check skills set of trustees and SMT• Have they the breadth of skills?• Have they the networks?• Can they fundraise?• Can you improve this?