The Stockdale Paradox
It’s not a surprise that I talk to a lot of nonprofits about the current economic environment. We’re all looking for any insight, advice, and guidance. Recently, I’ve been paraphrasing one of my favorite leadership quotes because it fits the moment perfectly – the Stockdale Paradox. To paraphrase:
You must maintain unwavering faith that you can and will prevail in the end, regardless of the difficulties, and at the same time have the discipline to confront the most brutal facts of your current reality, whatever they might be.
Vice Admiral James Stockdale was a prisoner of war in Vietnam for seven years. When asked by Jim Collins, author of Good to Great, how he survived, he described balancing hope and realism. Stockdale said that the optimists didn’t survive capture because they told themselves that release was right around the corner and they died “of a broken heart.”
What nonprofits can learn from this philosophy is to maintain the conviction that their work in the community is essential, vital, and will be valued. Carry this passion with you in advocacy, fundraising, and communications as you tell your story and share the impact. At the same time, confront the brutal facts of economic downturn and budget cuts by being disciplined about financial information, contingency budgets (with multiple scenarios) and cautious use of reserves. I’m afraid that the optimists who approach next year with an upbeat attitude that funding will arrive “because it just has to” will be the ones that fail. The survivors will commit to and believe in their mission and be realistic in their decisions.
This is also a good time to leverage the networks in which your organization operates. Nonprofits work together in many ways, and will be called upon to increase network activities for both mission and financial reasons. At the Minnesota Council of Nonprofits’ Nonprofit Fundraising and Economic Outlook forum this morning several organizations shared their experience working with peers and community to navigate the downturn. MCN also released the Nonprofit Current Conditions Report based on a survey conducted just this month. This report gives us some real time information about the immediacy of the impact of this recession on nonprofits and their clients. All of this information, research, and peer conversations will be important – and remember to be confident, hopeful, and honest.
A very timely comment. Being at the helm in a large organization through two previous recessions during what was, in the main, 30 years of uninterrupted growth for the nonprofit health and human services sector, I can say with conviction that even when things do bounce back they don’t return to their original form. Things are changing. The good news is, that this turbulence facilitates change. Difficult and sometimes overdue changes are helped along by economic stress. Opportunities to make a leap sometimes present themselves too…a merger, consolidation a sudden infusion of resources for an important project – think stimulus. And on the personal side, if you thought you were lonely at the top before…even the most transparent leader will find they have to hold information close, thinking deeply, often privately, about the full weight of their impending decisions. It’s a time to reflect, for sure, but it is also a time to act…to understand and rediscover the core of the organization’s mission, redouble the commitment to that which you are uniquely capable of providing, remove those activities that are not essential to your success, to your future and, in all likelihood, are not the areas where you are doing your best work.
Comment by Claudia Dengler — February 9, 2009 @ 9:09 am
Such great perspective, Claudia. Your comment about the loneliness and burden of leadership really hit a nerve and inspired an entry that will be posted today or tomorrow.
Comment by Kate Barr — February 9, 2009 @ 5:18 pm