Black Swan Leadership: Ten Recommendations for Leading a Non-Profit During a Pandemic

Black Swan Leadership:

Ten Recommendations For Leading Your Non-Profit During A Pandemic

By Jason Janz In the 17th century, a Dutch explorer discovered a black swan, disproving the prevailing belief that all swans were white. Former market trader Nassim Nicholas Taleb popularized the story in his 2001 book and later used it to title his 2008 book, The Black Swan: The Impact of the Highly Improbable.

A Black Swan is an event that takes us completely off guard and has deep, impactful consequences.

Usually, hindsight will judge it to have been avoidable.

I’ve heard several times over the past week, “This is a once-in-a-century event.” If that’s the case, we have seen a black swan. The world is entering a period of suffering we haven’t seen in our lifetimes.

What is the need of the hour? Leadership. Great leadership. Leadership that can guide people through the Black Swan.

In this mini-guide, I want to speak to those who lead America’s non-profits (including churches). Our country has over 1.5 million non-profits and 350,000 houses of worship. These organizations make up over 5% of the GDP, but their impact is far greater than financial. Over half of all Americans go to church. One out of four volunteer and over half give to a non-profit.

For context, I co-founded and lead a non-profit called CrossPurpose that abolishes poverty through career and community development in Denver, Colorado. We serve 300 neighbors a year by creating deep community and robust career training so they get out of poverty and stay out. I’ve also been a pastor for 24 years and currently serve as the Elder of Teaching and Vision at Providence Bible Church, an urban multi-ethnic, socio-economically diverse Christian congregation. This article is a compilation of what I’ve learned about leadership over the years. I trust some of what I’ve learned and gleaned over the years will be of help to you who are leading in these perilous days.

As non-profit leaders, we have a large responsibility to our organizations and our fellow citizens in this time of the Black Swan. We are responsible for a sector of society to which millions of Americans not only donate their time, money, and energy, but also look for moral guidance.

In the 1970’s, John D. Rockefeller III instigated an effort called ”The Commission on Private Philanthropy and Public Needs”. In the accompanying reports, they pioneered the idea of moving from looking at American as a two-sector society to a three-sector society: Public, private business, and philanthropy. This framework gave philanthropy its first serious look at being its own sector.

Since that time, this idea has lodged in the American mind. But what is philanthropy at the core? Robert Payton and Michael Moody wrote Understanding Philanthropy in which they define philanthropy as “voluntary action for the public good1.” In the book, they describe the defining idea of government (public sector) as power, business (private sector) as wealth, and philanthropy as morality.

So, if we are the “morality sector,” in a time of great national suffering, it is crucial that we bring the full weight of our entire sector to bear on this issue.

While the public and private sector will play a significant role in this pandemic, the philanthropic sector will be the one activating tens of millions of Americans, with a moral imperative and an infrastructure to boot, to volunteer for the public good. Hospitals, aid organizations, food banks, schools, churches, shelters, foundations, donors, and all who make up this moral heart will be pushed to give their best. Therefore, it is vital that our organizations thrive and are led well.

If you’re like me, your head is still spinning from the last four weeks. My hope is that these ten recommendations will serve as a checklist for leaders to help them navigate through the fog.

1. Get your head on straight.

I will always remember the week of March 16, 2020 as “Hell Week.” The Thursday prior, we had just hosted a mock interview day at our headquarters for the neighbors in our program, and the building was packed with excitement and hope. Our families were getting ready for their upcoming careers.

By Monday afternoon, it was a ghost town. As the first orders came through, it became obvious that life was changing. I just didn’t realize how fast. I felt like an eight-year-old who sees the ocean and runs towards it excitedly until a wave knocks him off his feet. He gets up, wipes the water out of his eyes, coughs…and then another wave hits him.

Hell Week was five straight waves. By Saturday, I had a stress hangover headache and began to grieve the loss of all that was. While lying on the proverbial beach exhausted, I had to think and process what happened. By Sunday, I was still motionless on the beach and it was time for some selftalk. Monday wasn’t far away. I went through a mental checklist: 1. Are you in peacetime or war? War. 2. Is your organization winning or losing? Losing, our conventional weaponry has been taken.

3. How are you feeling? Angry, sad, and fearful.

4. Are you emotionally healthy or unhealthy? Healthy, but depends on the hour.

5. Is the mission worth fighting for? Yes, now more than ever.

6. Are you going to fight or surrender? Fight.

7. From where are you drawing your strength and wisdom to lead? God, our team, and friends.

8. Are you ready to get up and lead courageously? No. I need a nap and then I’ll be better.

Part of getting your head on straight is re-visiting your mission. Do a real gut check. Do you really believe in what you are doing? Does your mission still make sense?

The ugly truth is that non-profits come and go during these times, and perhaps it’s a good time for some of them to go. However, if you do the gut check and are convinced you should continue, pick yourself up off the beach and lead.

Leadership Perspective After the nap, I began to think about what my job was during this Black Swan. The best piece I’ve read on this was an article in the Harvard Business Review entitled, “Are You Leading Through The Crisis…Or Managing The Response?” Just reading the title made me hang my head! In the article, they say,

“For nearly two decades, we’ve researched and observed public and private-sector executives in high-stakes, high-pressure situations. What we’ve learned is that crises are most often over-managed and under-led.2” They go on to say that in a crisis, our view naturally narrows and we are seduced by managing the day-to-day. This may seem comfortable, but it’s lethal. The organization needs a leader who is looking at next week, next month, and next year. To avoid that narrow, survival-mode vision, pull

yourself back to get a bigger picture of what is going. Most importantly, don’t forget the human factor. In a Black Swan, every person is hurting to one degree or another. So, walk with them in the midst of the chaos and pain. Lead through the crisis, don’t just manage the response.

Leadership Demeanor Next, my thoughts went to how our team must be feeling. What do they need? What do they need from me? What do they not need from me? I was reminded of Milton Friedman’s classic book, The Failure of Nerve, in which he says the fundamental skill of leadership is the ability to manage anxiety.

He describes leadership as an emotional process of regulating one’s own anxiety and that of the organization.

A good leader is able to differentiate themselves from the work and keep good boundaries, which allows them to model leadership with a non-anxious presence. In a Black Swan situation, that triggers our deep fears, it’s easy to inject that anxiety into our teams. On top of that, some of us have team members who are already emotionally toxic people. Toxic people infect others with their emotional distress wherever they go.

Even worse, Black Swans give a platform to the sensational media, doomsday prophets, and pajama social media epidemiologists. This just amps up the anxiety. Your job as a leader is to provide a non-anxious presence and to guard the organization from those who inject anxiety into the culture.

Friedman says this acts like an emotional immune system for an organization. You can model this leadership in how you show up for your team and in your organizational communications.

Time Management Your most important discipline will be your management of time and tasks. If your last month was like mine, you were hit with emergency meetings, board calls, an onslaught of email, and plans that were thrown out 24 hours after they were made. Normally, I use the following list to prioritize my responsibilities for the week: • • • • • •

People – board, exec team, staff, HR, participants, alumni, donors Strategy – annual plan, 5-year plan, replication Execution – program, facilities Cash – fundraising, personal donor portfolio, budget Ecosystem – partnerships, networks Direct Reports – list of those I supervise

In the Black Swan, I’ve had to re-prioritize these. My friend Bill Kurtz of the Denver School of Science and Technology asked me, “What does your organization need from you?” This is a great way to sift out the secondary and tertiary tasks that need to be delegated. You must come to grips with the fact you can’t get everything done and must make decisions accordingly. Don’t underestimate

how much time it will take to just respond to people, let alone to have some “think time” to try and get ahead of what’s next. Especially in a crisis, it’s essential to begin your week by planning it out carefully.

At the end of the day, leading a group of people boils down to trust. In a Black Swan, you will quickly see how much trust your team has in you. No matter how full your “trust reservoir” is, you can build deeper trust by leading well. My coach, Ed Wekesser, says people develop trust in a leader when they develop consistent, outward behaviors. He wrote to me,

“When a group of people, tens or millions, have come to believe in, to trust in, how their designated leader is going to respond, that leader will have their undying loyalty.”

2. Establish A Situation Room.

One of the privileges I had this year was getting a private tour of the West Wing of the White House compliments of a friend who works there. Down a hallway in the basement is a “Keep Out” sign. My personality always wants to disobey those signs and figure out why they’re there. But, in the White House, my better angels prevailed. Turns out, it was the doorway to the famous Situation Room. This command center was installed after the failed Bay of Pigs invasion because leaders lacked real-time information. The room is now deemed an essential part of our national security, where an executive team debriefs all intelligence, coordination, and communication. In a Black Swan, you need your

own Situation Room…or perhaps we should call it the Situation Zoom! We moved from a weekly executive team meeting to a daily meeting at 3:30 pm. We will continue this meeting as long as needed, following the same key aspects as a White House Situation Room briefing.

• Intelligence. As Peter Drucker said, “When we know the facts, the decisions jump out at you.”

As a team, we discuss what information we need to be aware of, pandemic news, organization updates, staff feedback/input, program participant feedback, donor input, etc. We ask which experts we can consult to help us in our decision-making and assess how much cash we have.

• Decisions. Then, we look back on which decisions we have made. What decisions need to be made or are upcoming?

• Execution. We make sure we know who is doing what and by when, and how our current plans are working.

• Communication. In this essential step, we cover what, when, and how we are communicating to the board, staff, program participants, donors, and wider family. We have agreed that once the meeting no longer seems necessary, we will cut down the rhythm. At three weeks in, we are still meeting daily.

3. Determine Your Priorities.

Before the Black Swan, we were in the middle of working on a five-year plan as an executive team with a local consultant. Obviously, the plan had received no attention since, but our scheduled check-in call was coming up. We decided to go ahead with it because the firm is led by a friend who is smarter than me by a long shot. I trust his judgment and strategic mind and I wanted his opinion.

When we all hooked up on Zoom, I asked, “What should be our plan moving forward?”

He said, “I’m more concerned with how you make that decision than what the decision is.”

“What do you mean?” I said. “What are the factors you have to take into consideration and how do you rank them?”

He had us start by scribbling down our “factors”: current participants, the mission, cash, staff, future participants, graduates, donors, future growth, etc. Then, we entered into an intense discussion where we ranked our top six factors by importance. Initially, it felt like one of those typical exercises consultants love to facilitate but ends up sitting in some report gathering dust.

This had the opposite effect. It gave our team the confidence to know what was important to us and how we would judge the merits of all ideas moving forward. Our consultant ended up writing an article on this experience (You can find it here and do the exercise yourself and save the money).

We now have a grid through which we pass all decisions, allowing us to walk away knowing we are staying true to our values and convictions.

4. Get a Tight Grip On Cash.

In order to accomplish your mission, you need cash. One year ago, one of our top donors asked me on the phone how much cash we had that day and I couldn’t answer him. We were in the middle of a significant capital project and I didn’t have a firm grasp on operational cash. I vowed I would never be caught flat-footed again. Now, with our monthly financial statements, we have a cash flow document that gives a snapshot of how much cash we have for operations, restricted purposes, and reserves. This week, we added a new number to that report: Days of Cash.

First, a word about cash reserves: the Nonprofit Finance Fund’s State of the Sector report revealed that less than 25% percent of nonprofits they surveyed had more than 6 months of cash in reserve.

In fact, the majority of the nonprofits reported that they had less than three months of operating reserves, and close to 10% had less than thirty days of cash on hand.

A perfect score on Charity Navigator demands one year of operating capital. For most non-profits, a cash reserve is luxury, and therefore it doesn’t get much attention. One positive outcome of a Black Swan is that having a solid cash reserve will become a necessity, not just a nicety.

Your first task is to assess how much cash you have. We divide it into two categories: (1) The number of days of operational cash (2) The number of days of operational cash plus all reserve funds. In other words, how many days could you survive before you exhausted your liquid cash and started to go into the red.

We set up a stoplight system and let our stakeholders know where we are on this scale. We use the following indicators: • Green light – 90+ days of cash • Yellow light – 60-90 days of cash • Red light – under 60 days of cash Second, cut your budget. If you haven’t already cut your budget, you are behind. We are entering a financial season that will make fundraising more difficult for at least the next two years. You must conserve cash. I recommend you work on two plans: a 10%-15% cut to be enacted immediately and a deeper cut that could get you through the rest of the year if situations do not improve. Keep the second plan in your back pocket. These are painful to even discuss, but as a leader your job is to make the hard calls. Your board will greatly appreciate you taking leadership here so they don’t have to bring it up. Once again, your goal here is to conserve cash so you can survive the downturn. Easy decisions should be things like cutting all non-essential expenses, hiring freeze, re-negotiation of all contracts and payment terms, voluntary cut of staff hours and accompanying salary reduction, etc. By the way, your donors will appreciate the steps you are taking to wisely steward your cash.

Third, communicate with your donors. Christy Singleton, the former Executive Director of Mercy Multiplied of America, told me that every donor conversation should follow this framework: your world, my world, and our world. In times like this, don’t bypass that first step. In fact, in several of my donor calls, we never made it past “their world.” This is where you show care and concern for them and what they are going through. Eventually, you want to get to the place where you know from them if their support will decrease, stay the same, or increase based on the crisis.

“Every donor conversation should follow this framework: your world, my world, and our world.”

A word to churches: most pastors are unaware of who their donors are. I believe this is wise practice, although some will disagree. Regardless of your beliefs on this, it would be wise for you to send a survey to your congregation at key times in this crisis asking them if they plan to decrease, maintain, or increase their giving. Let your finance committee analyze the responses and give you a projection.

You need this data to make decisions, especially around staffing. We just surveyed our congregation and are pleased with their responses.

Fourth, look for new money. In a crisis where most are panicking, get resourceful. Difficult times inspire great generosity in people. Non-profits have access to government funds right now through the stimulus package. Foundations are opening up emergency funds. Individuals are wanting to do something to help people in need. Craft an innovative fundraising campaign that stays true to your mission and correlates to the crisis and the upcoming recovery.

Fifth, create a COVID-19 line in your budget. You will have new income and expenses you were not planning on. At the end of the year, you will want to show what the crisis cost the organization. Also, as Foundations and donors contact you, you will now have clear initiatives where they can help in a time of need.

5. Decide on a strategy and form a plan.

Now that you have your team together and you’ve determined how to make decisions, determine your strategy. It’s easy to get strategy and tactics confused. About 2,500 years ago, Chinese military strategist Sun Tzu wrote in The Art of War, “Strategy without tactics is the slowest route to victory.

Tactics without strategy is the noise before defeat.”

If you’re a church, recording your weekend sermon and putting it online is not a strategy, it’s a tactic. A strategy sounds more like, “Continue to provide congregational opportunities for worship and teaching.” Pastors calling every member every two weeks is a tactic. Providing high quality shepherding care to your congregation during a crisis is a strategy. So, come up with 3-5 key strategic initiatives that will guide you during the crisis. Most of us only have time to think about the immediate strategy, but if you have time, start dumping ideas into a parking lot of a longer-term strategy – think 6 months and 24 months.

Forming a strategy might seem difficult right now, because the reality of this crisis is nobody really knows the future. In reaching out to trusted advisors, you’ll find that many of them have completely different perspectives. How do you know what to do when those you trust give opposing advice?

The scary part of leading in a Black Swan is that the wrong decision can lead to ruin.

Praxis, a faith-based entrepreneurship accelerator, published an article entitled, “Leading Beyond the Blizzard; Why Every Organization Is Now A Startup.3” In it they describe three ways of looking at the crisis: a blizzard, a season of winter, or a mini-ice age. Blizzards last a few weeks, winters last several months, and the mini ice age lasts 18 months. This analogy was helpful for us and gave us a framework to talk and develop a shared perspective. Our team’s strategy discussions were had on the premise that we are in for a winter season for our program and a mini ice age for fundraising.

Our next task was to form a specific strategy for the “season of winter.”

We brainstormed four strategic options for our non-profit: 1. As Is - Continue with our current programs and staff at full strength.

2. Shut down – Shut the doors, turn the lights off, lay off all staff, and cease program operations until the pandemic passes.

3. Pause – Provide services to existing participants, lay off a portion of the staff, cancel the class we were starting on May 4th, and revive the program in the summer.

4. Pivot – Continue to provide services virtually to current participants, trim budget and staff hours, delay May class to June, focus on alumni job retention/job placement, and pivot to an online model for upcoming class.

We graded these options based on the priorities we have as an organization. This is where your board is vital. Their job is to ensure the mission moves forward, the organization is governed well, the strategy and plan are sound, and the CEO is doing a great job leading the mission. Consensus is important. Our board had a good discussion and voted to go with option 4. Now, the job of our team is to put the plan together. Our goal was to have the plan written, communicated, and started in two weeks.

Black Swan leadership demands that you make a decision and go with it. Your team needs direction.

So, take all the external input, discuss it internally with your team and board, and make a decision.

Execution I’m taking it for granted that most leaders know how to execute as it is our most familiar modus operandi so Now, I won’t take up much space discussing execution because I’m taking for granted that it is a modus operandi for most of us as leaders. However, my friend Brandon Young made a point on this that I thought was worth sharing. He is a former Army Ranger who founded Applied Leadership Partners and has trained over 1,000 Ranger leaders, and he shared with me the eight steps of the Army’s Troop Leading Procedures. In brief, after orders are received, the leader sounds the warning to allow the troops to prepare. Then, the leader makes a tentative plan and initiates movement. Once the forces are moving, they conduct reconnaissance and then complete the plan.

In an ever-changing situation, perfection is our enemy. Get the forces moving and continue to build the plan. He said,

“We want perfection before progress.

Sadly, life doesn’t work that way.”

6. Multiply Your Communication Game.

A couple of years ago, I was working with an organization going through a severe crisis. A multimillion dollar organization was hemorrhaging cash, and nobody could find a financial statement. I recommended the CEO set up a daily meeting with his core team to just start gathering the data and developing a strategy and plan. It was hard for me to get a real good grasp of what was happening on the ground. He said he didn’t want to and referred me to a book, Death by Meeting. I was a bit shocked. I said something like, “You aren’t going to die because you are meeting too much. You are going to die because you have no money and no plan. You need meetings.“ He disagreed. Sadly, the organization shut their doors soon after.

You are in a war. Communication is vital. One of my mentors in an accelerator program was Jay Brown, the CEO of Crown Castle International, an S&P 500 company valued at $80 billion. He said, “The number one job of a CEO is communication.” In my spirit, I disagreed when I first heard it. “No way! It’s about getting the right people on the bus, leading the mission, fundraising…”

The more I’ve thought about that comment, the closer I’ve come to admitting he was completely right. Most of us non-profit leaders are poor communicators. We got into the game because we wanted to do good things. Writing newsletters, cutting videos, and making phone calls to board members were just more work on top of our heart and we rarely become proficient at it. On my annual reviews, this is an area where my board regularly tells me I need to improve.

For those who lead churches, I want to encourage you to not think that just doing a livestream weekend service and an email update is going to meet the needs of people in your congregations.

Your people need daily communication. We are doing daily video devotionals, daily prayer Zoom

calls, recorded sermons and songs for the weekend, phone call rhythms to members, etc. People need much more communication from trusted voices during times of crisis.

In a crisis, I believe you should 5x your communication strategy. If you’re a poor communicator, it’s probably 10x. Because this was a weakness of mine, I had to organize a communications calendar long ago. However, I had to re-do it for the crisis. I have pasted it below:

CEO Communication Plan Regular Communications

Black Swan COVID-19 Communications

Board Chair

Meeting 1x month

Meeting 1x month, Weekly Voxer update*

Board

6 Meetings/6 Voxer updates

8 Meetings/Weekly Voxer updates

Exec Team

Meeting 1x week

Meeting 5x week

Donors

Meeting 2x a year/Email-call 4x/yr

Call every major donor within 30 days

Staff

Weekly Meeting

Weekly Meeting, Daily Voxer update

Participants (88)

Casual, speak once a year

Meeting 2x month

Alumni (323)

None

Meeting 2x month

*Voxer is a vocal texting app our organization uses.

It’s rare that leaders get criticized for over communicating. Watch our national leaders right now.

The ones who are scoring points are the ones who are in front of the camera giving people as much information as they can. You don’t have to get everything right, but you do have to get everything out.

Communication is not just the transfer of information. Leaders have to move people with what they say. When it comes time to talk, I use the following framework: • Connect. Spend some time talking to people’s hearts. Endeavor to avoid platitudes and clichés.

Tell stories that relate to the moment.

• Open up. Be vulnerable with how you are dealing with the crisis. But remember, it’s not about you. You are not special. You are just one member on the team.

• Remind. Re-state your mission. Perhaps tell a short story of how important the mission is and how you’re delivering on it even during difficult times.

• Praise. My friend Paul Rudolph, who worked with Accenture, said “CEO” stands for “Cheering Everyone On.” Heap praise on people who are working to keep the lights on. Remind them they are spending their best hours working in a just cause.

• Update. Give your stakeholders the new information. Be honest. Bring team members to bear if necessary.

• Inform. Bring people along on decisions that have been made as well as the rationale behind them. People want to know someone is in charge, making decisions, and has listened to the people who have to live with them.

• Ask. Allow time or a venue for questions and follow up.

• Inspire. This is the most important step. Be a hope dealer. Give people a reason to pick their head up and smile in the difficulty.

Let’s focus on the last quality for a moment; before giving hope, make sure you have told people the truth. Nietzsche said, “All truth is bloody truth.” Jim Collins called it confronting the brutal facts.

People can handle the truth. If they think you’re spinning the truth, they will come up with their own.

And when you give hope, it needs to be the right kind of hope. Jim Collins made the “Stockdale Paradox” famous when he told the story of James Stockdale, a seven-year Vietnam POW who said the guys who didn’t make it out were the optimists. The ones who kept thinking they were getting out by the next holiday ended up dying of a broken heart. Stockdale said, “You must never confuse faith that you will prevail in the end — which you can never afford to lose — with the discipline to confront the most brutal facts of your current reality, whatever they might be.” This is a wise balance between truth and hope.

Last week, a friend told me he got this wrong as he brought his top team in to inform them the board was recommending budget cuts, including pay cuts, sooner rather than later. He painted the grim picture and his team was disturbed. After he unloaded the bad news, they gave him some raw feedback. They weren’t disturbed by the bloody truth; they were upset by the fact that it didn’t come with any hope. His mentor sketched this diagram out for him as a visual reminder of how communication in a Black Swan needs to feel.

As the drawing shows, good leaders need to operate in the middle ground between prepared & ready and hopeful & expectant.

7. Love Your Team.

The most vital aspect to moving the mission forward is the people who work to advance it every day.

These are trying times for staff; crisis adds to the stress every employee already handles. I told my wife it’s like you’re walking through the airport with your carry-on bag, and all of the sudden you are handed four suitcases to carry.

With COVID-19, every employee was loaded down with invisible suitcases.

When you have a meeting with a staff member, realize they are carrying an entirely new load.

These burdens are things like personal life and relationships, financial security, health concerns, and changing job responsibilities. Before the crisis, they probably fit in the carry-on. Not anymore.

To begin employee conversations, start with their life. Make sure they are safe. Listen to their fears.

Help them manage the anxiety. I have reached out to all 32 of our staff members to check in on how they are doing and asking if I can do anything for them or pray for them. The feedback I received ended up encouraging me and I gained new energy to fight for them.

The elephant in the room is staff layoffs. If nobody is bringing it up, be assured that everyone’s thinking about it. This is what causes me the most anxiety. Over twelve years, we have built a dream team of talented, called, and sacrificial lovers who give themselves on behalf of our neighbors. The thought of letting them go can send me to a dark place.

We tend to think layoffs will give us the best bang for our buck. However, the Harvard Business Review reported in the Great Recession of 2007, 2.1 million people were laid off in 2009 alone.

Companies that emerged out of the recession in the strongest position relied less on layoffs to cut costs, instead focusing more on operational improvements.4 So, you must make a wise decision to lay off or not to lay off.

I am a part of a monthly CEO group with 14 other CEOs called Convene. We went through an exercise last week where we looked at several scenarios: Would you rather cut 10% of employee positions or reduce paid hours by 10% or reduce compensation 10%? What do you see as the benefits and downsides to each option?

One of the best pieces of advice I received from the group was to bring our whole team into this process. Because I was raised in poverty, I generally do not want anybody on our team to feel financially insecure. I remember what it did to me as a child, and it hurts me to think of inflicting this on someone I love.

As CEO, you have decision-making power. During these times, try to imagine what it is like to not have that power and to have your financial stability in someone else’s hands. When you bring your team into the process, it helps when hard decisions have to be made.

Up until now, my overall demeanor in leading the organization has been to shield our team from the financial difficulties and distresses we face. Our development team knows more of the financial reality, but as our core team helps families in poverty, I don’t want them worrying about their paychecks. However, during a Black Swan, I was challenged to lead in exactly the opposite way.

Let them into your head space and use this time to build up their financial understanding of the organization.

We decided to start the conversation by offering a 60-day voluntary reduction of hours and accompanying compensation with our staff. The request alone caused anxiety and led to some difficult conversations. Some staff felt guilty they were unable to contribute, but I assured them it was completely voluntary at this point.

When I saw the finalized report, I cried. It was at this moment when I realized I was carrying significant stress around this issue. I was moved by the fact that our staff voluntarily cut work hours and compensation by 17%. For us, this equaled out to 4.6 FTEs. Several employees wanted to continue working full-time but decided to donate part of their salary, which ended up moving our savings to 5.6 FTEs for a total reduction in costs of over 20%. We didn’t have to lay one person off and we accomplished a 20% reduction in force. By the way, when it comes to pay cuts, upper leadership should model personal sacrifice. However, wisdom should be exercised here.

I was encouraged by our HR director to not make a bold, public statement about my cut. In his experience, he felt top leaders often come across as manipulative if this is not handled correctly. So, decide what that looks like in your environment.

Without a doubt, the longer the crisis lasts, the more likely it is most non-profits will have to enact layoffs. Luckily for us, we still are fully engaged in our mission and it makes sense to take a milder initial approach, but I’m preparing myself. Thankfully, the government is providing some great

aid through the SBA Paycheck Protection Program to help us keep our teams in place. However, if we reach the point of layoffs, my coach encouraged me to be careful and compassionate. The employees who remain often feel guilty and the people who leave remember it for a lifetime.

When you have finalized your strategy and plan, it’s time to re-think your team. Depending on your mission, almost every staff member should have some similar responsibilities, some new tasks, and perhaps some margin to take on new work. One idea we are implementing came out of Praxis Labs in New York City. They are working on two-week project timelines with every staff member. This allows them to be nimble, efficient, and responsive. While most organizations are still struggling to figure out how to have a productive staff in an online, home-based work environment, thoughtful leaders are not wasting time.

We are using a 60-day working time frame where we ask every staff member to think of their job description in 3-5 key responsibilities. Some of these will be similar to their norm, but almost every team member will have at least one new responsibility. These will be shared with the whole staff for sake of coordination and communication.

Your team brought you to this point. Now is the time for clear communication, re-alignment of responsibilities, empathetic listening and care, and thoughtful decisions around their financial wellbeing.

8. Invest Time in Innovation.

While some leaders are still licking their wounds, others are scribbling out plans. Much of Black Swan leadership feels like defense, and leaders are usually wired for offense. While caution is vital here, never waste a crisis. Innovation is necessary because this Black Swan has changed the world.

One mentor friend, Kurt Keilhacker, told a bunch of us non-profit leaders to take out a blank sheet of paper and ask ourselves,

“If you had to start over, what would you do and who would you do it with?” He said, “The world that was is no more.”

I found myself resisting his words as they sounded extreme. The homeless will still be homeless.

The jobless will still need jobs. He agreed, but challenged me to think of how people’s mindsets will have shifted. This Black Swan is going to impact how people think about work, travel, cash, higher ed, K-12, incarceration, social capital, healthcare, arts and entertainment, insurance, government intervention, sports, parenting, church, and economic theory to name a few. While this may discourage some, it’s an innovator’s Disneyland.

Before we jump into talking about new ideas, let me talk about providential destruction. Black Swans can act like a destructive fire and not all destruction is bad. Many of our organizations, especially older ones, have developed so much underbrush and vegetation that it chokes the ecosystem and leaves little oxygen for new growth. Part of not wasting a crisis is letting the fire do some good work for you. One of the more innovative things you can do is sit and watch a fire destroy some stuff and make room for something new.

Now, on to the fun stuff. In every challenge, there are some golden opportunities. The stock market naturally thinks this way. What is going up? What is going down? What are the opportunities in the movement? Verne Harnish, in Scaling Up, said that the primary job of top leaders is prediction.

While nobody can see the future, a sharp team should be able to garner collective wisdom to pencil out the phases the country will go through in the next two years. An article I read talked about thinking in “at least ‘two time zones’ – addressing the immediate crisis, (getting parts of the mission accomplished now and protecting assets) as well as looking to ‘after’ this moment is over (for longterm recovery and to maximize our opportunities).5” If you can think about your next steps in these time zones, you will find opportunities for innovation in crisis.

Present Time Zone Assess: What are people thinking and feeling? Who is losing? Who is winning? What are the strengths of our organization for this time? Where are new funds being generated? Is there an opportunity to do something new? How are similar orgs thinking right now?

Action: How can our program meet this need? How can we tap into new sources of revenue? What are we learning in this new environment of constraint?

Future Time Zone Assess: What will people be thinking and feeling 3-6 months from now? 12 months? Who is losing now, but will be winning in the recovery? What will the country need during the recovery phase?

Action: How can we posture ourselves to meet the need during the recovery? What does this mean for fundraising? Where will “new money” surface? What strategy will best meet the moment? Can some of our current staff start working on projects to prepare us?

In my organization, our mission calls us into workforce development. Here are a few areas we are discussing: • • • •

What career tracks will be hot during the recovery?

Can we move our core curriculum online for our present needs?

Can an online format provide us with an alternative program offering?

Could this generate revenue in the long run as fifteen other cities have come to our trainings to learn what we do?

• Which companies are prospering as a result of the crisis and would be open to funding us?

So, get out that blank sheet and start writing!

9. Lead Yourself.

When I finally realized I was dealing with a Black Swan, I found myself filled with emotions of sadness and anger. I felt anger that this invisible enemy had taken away so much of what we had diligently built over the past twelve years. When I stepped back to get the true view of the destruction, it soon became evident that the next two years was going to be spent rebuilding what we had just built.

We’ve spent the last six years helping 320 families in poverty get career-level jobs and exit poverty.

Our early data is showing 20% lost their jobs, another 20% have had their hours trimmed, and another 20% are afraid they may lose theirs. Half of what we have poured our lives into must be rebuilt! That may be optimistic. I was angry that this crisis has had such destructive power already.

But I very quickly moved from anger into sadness. I became deeply sad when I thought about our families and the anxiety and fear they must be dealing with, and when I thought how it could affect the great team we serve with and have spent 12 years building. If you’re a founder, there’s a piece of your life that you give to take something from an idea to sustainability. To go backwards in an instant is a tough thing to take.

To navigate these difficult times, I’ve found several personal disciplines to be important.

Intensify Spiritual Practices I’m a big fan of Pete and Geri Scazzero who teach a body of material they’ve entitled Emotionally Healthy Spirituality. They helped me deal with sadness and loss by encouraging leaders to “enlarge your soul through grief and loss.” They talk about three stages: paying attention to the loss and grief, living in the confusing in-between, and letting the old birth the new.

It’s important to pay attention to our grief. It’s real. Mourn what was. Jesus said, “Blessed are those who mourn, for they will be comforted.” Process this with those closest to you. It’s ok to be sad, and don’t be surprised if a low-level depression sets in. When we run into the crisis of limitations, the first answer isn’t to keep running at full speed. Pause and have a good cry.

Next, live in the confusing in-between. As a leader, I hate this stage the most. I like the fog to clear much faster than it does. However, we can’t fix this overnight, so we must reject the simplistic answers. Every time we reject easy answers, we open our soul to God’s deep truths that he wants to show us.

Finally, we let the old birth the new. The wound will eventually heal you and then turn around and bless you. New flowers will bloom. New strengths will rise. New intimacy on your team will develop.

New compassion will spring forth. Henri Nouwen said that,

“there is a correspondence to how we deal and process our grief and how compassionate we become as a result.

Black Swans, more than any other phase of an organization, can produce deep souls and empathetic sages.

Build Strength in Your Soul to Lead Leading through a crisis demands that we increase our spiritual disciplines and practices. I’m a Christian and I derive my strength from the Scriptures and prayer. In The Problem of Pain, C.S. Lewis said,

“Pain insists upon being attended to. God whispers to us in our pleasures, speaks in our conscience, but shouts in our pain: it is His megaphone to rouse a deaf world.”

In the Old Testament, coincidentally, I’m reading about Joseph, the plagues of Egypt, deliverance from slavery, and a God who redeems his people. When the children of Israel came out of Egypt, God led them through the wilderness with a pillar of cloud by day and a pillar of fire by night. As I reflected on this ancient story, I thought, “He’s here now, too.” Black Swans need the pillar of fire at night because the landscape is pitch black.

Lean In to Key Relationships

Your most pressing need is wisdom and strength. Most of the dilemmas you face won’t seem to have clear right or wrong answers. They’re wisdom calls. In twelve months, we’ll all know which calls were wise and which were foolish. So, the first group you need to tap into are some sages who are close to your mission and understand you. They will minister to your soul and encourage you. Second, tap into another circle of relationships who have no stake in your mission, but care about you. Some of the issues on your heart are best expressed here.

10. Love Your Non-Profit Neighbor Most of us struggle keeping our heads above water and even more so during a Black Swan.

However, now is the time to reach out to those who work in our vital sector. I jumped on a call last week with six other CEOs in our city and didn’t realize how encouraging it would be. Misery definitely loves company! As I write this, that group will reach out to another 20-30 leaders to provide them with support, prayer, encouragement, and information.

When you connect others who are in the same boat, you will find that you have something to give and something to get. That is time well spent.

Conclusion I was moved to write this article because I felt a deep desire to help leaders during a time of high anxiety. If you have the gift and position of leadership, I truly believe this is your moment. You are in your position in your organization on purpose. It is your time to lead wisely and courageously.

The first time I looked at pictures of black swans, I felt the darkness and mystery. The swans I’ve seen my whole life always struck me as beautiful and graceful, but these swans had a chilling and intimidating look. Their red eyes freaked me out. Yet the more pictures I looked at, the more I was struck by their beauty. They have their own sense of majesty and power. The season we are in is definitely rare and has taken us off guard, but in the end, it will make us better people, stronger organizations, and a better society. Hopefully, we will all look back and marvel at the beauty of the black swan and remember with fondness our failures and victories leading through it.

It’s timely that this also coincides with the Easter season, when we remember how the most horrific Black Swan in history unfolded as Jesus Christ was nailed to a cross. All looked dark as the King of the universe gasped his final breath and was buried in a tomb. But a few days later, darkness turned to light, death turned to life, and defeat turned to resurrection. My hope is that God will give you a resurrection story of your own in the days ahead.

References: 1

Payton, Robert L.. Understanding Philanthropy: Its Meaning and Mission (Philanthropic and Nonprofit Studies) (p. 46).

Indiana University Press.

2

https://hbr.org/2020/03/are-you-leading-through-the-crisis-or-managing-the-response?ab=hero-subleft-3

3

https://journal.praxislabs.org/leading-beyond-the-blizzard-why-every-organization-is-now-a-startup-b7f32fb278ff

4

Walter Frick, “How to Survive a Recession,” Harvard Business Review (HBR) (May-June 2019): 7

5

https://www.napalegalinstitute.org/post/leadership-leading-your-faith-based-organization-through-a-crisis