What Achieve Australia has learnt from leveraging the organisation’s most valuable asset
At the top of most board and chief executives’ list of challenges is to secure a sustainable future for their organisation. But this usually raises a couple of key questions that are at the core of the challenge.
How do you insulate your organisation from the cyclical nature of government funding and the intense competition for public support via donations?
And how do you pursue a change agenda and bold strategic plans without secure capital to do so?
It is hardly surprising therefore that the financial imperative for NFPs to put their assets to work is a compelling one.
Almost without exception, Boards and CEOs are looking at delivering strategic plans that aim to provide greater financial security, stability and sustainability. That means putting lazy or outdated assets to work and injecting some strength and resilience into the balance sheet.
Undertaking such a task, however, requires some unique skills and a very cohesive set of leaders who are willing to embark on a journey of intense and relentless scrutiny.
No doubt your organisation has a financial imperative. And it is compelling. If not, then you might want to carefully assess your plans as this journey can be testing and requires the utter commitment and unity of your senior team.
At Achieve Australia we are experiencing a complex and challenging journey to leverage an asset that became part of our organisation through a merger. This has brought its own legacy and ongoing tensions as we’ve taken on the task of gaining stakeholder support and implementing our plans.
Our asset is a 4 acre parcel of land in inner west Sydney where we operate a large residential centre for people with a disability. With the State Government’s push to devolve people with a disability to housing more reflective of community norms and standards, the opportunity presented itself to leverage this significant asset on the organisation’s balance sheet.
There are several key elements to the timing and execution:
- The asset is appreciating.
- The asset attracts a premium for its size and location.
- The asset will be converted into other housing/accommodation assets on site and off site and ensures our overall asset position is enhanced.
- The release of assets and funds is staged, allowing Achieve to manage the flow of work and benefits and fine tune plans along the way.
The opportunity for a step-change in our organisation’s plans and ambitions is exciting. The ability to deliver a more secure future for the people with disability we support is the key driver and motivator, especially useful given some of the challenges we’ve faced along the way.
However, the process has flushed out lingering membership and stakeholder issues. There are deep ties to the asset that have been formed over several decades that reflect the physical, emotional and financial contributions made by many people whose lives have become intertwined with the residential centre.
So, what have been our key learnings?
Engage expertise – the costs of external consultants and experts could well be substantial but they are essential to ensure your plans are realised.
Be very clear about the objectives – your organisation’s mission has to benefit, not simply your balance sheet. This will give you the compelling proposition you need to keep focused and counter opposition.
Make an honest assessment of board and CEO unity – your team will be tested on many levels and your strengths and weaknesses interrogated.
Articulate your rationale – get your story straight, clear and robust so that it stands up to scrutiny and makes sense each and every time it is told.
Many board members and CEOs often depart following an organisational transformation resulting from the intensity of this kind of process. So the parting lesson is to look at the succession plan for the executive leadership team in your organisation and spend some time making sure it’s current.