Sharing Power When Money is Tight

The manager had been told that the budget demanded she cut a staff position.  There were no obvious candidates.  After stomach-churning days and sleepless nights, she made her selection and called him into her office to deliver the news.  Even as they spoke, the institution cut off his email access.  He was escorted out as soon as he could collect his things.

I saw my colleague packing but didn’t understand what had transpired until the next day.  There were no goodbyes, no recognition of his dozen years of service. The impact on my supervisor, on the employee, and on his colleagues was uniformly destructive.

Many nonprofits are facing cuts that endanger staff positions, and are preparing for similar scenes. Surely, crises are the time when leaders must be strong enough to make unpopular decisions!  We fall back on familiar assumptions of centralized control: Information is sensitive and must be filtered carefully for anyone outside of management.  Non-managerial employees are not capable of making good organizational decisions.  There is one best answer, and the boss’s job is to identify and implement it.

In organizations that deliberately distribute power, crisis management draws on different assumptions.  Sharing quality information opens the door to multiple informed perspectives.  Multiple perspectives open up new possibilities.  Responsibilities can be shared, not loaded on one set of shoulders.  When the Post-Growth Institute faced a budget crisis, for example, they surveyed staff on their response to various cost-cutting ideas, and built on existing trust and outside-of-the-box financial systems to understand who was positioned to take temporary (voluntary) pay cuts.  While the situation was difficult for everyone, they were able to get through together without eliminating any positions.

Even when losing staff is unavoidable, it can be held by the organization as a whole.  When Viisi, a financial services company in the Netherlands, faced difficult finances due to a global downturn in the mortgage market, they began by pausing founder salaries and instituting voluntary pay cuts.  They soon recognized collectively that this would not be enough to maintain staff size.   Teams adopted neutral policies – last in, first out, and pay-to-quit – but even after that, they needed to trim a few positions.  The group considered options.  One young man spoke: he realized that he was imagining himself in that position for a few years, but then would want to move on.  It made sense for him to go now, so that the group wouldn’t sacrifice the people with long-term commitment.  Others had tears in their eyes.  They accepted his resignation.  Everyone felt their commitment to the organization’s values strengthen, including the man who was leaving.

There is no governance system that can transform crisis into comfort, but organizations have choices.  Management can shield employees from information and assume all the burden themselves.  They can inappropriately share the burden without creating paths for agency and engagement.  They can also find places to educate, listen, and collaborate.  Their missions, ultimately, will help them identify their best path forward.

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