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Averting a crisis due to lack of funding

Updated: Sep 17, 2021

Those of you who know me know that I’m a big fan of Thomas Friedman. His book, The World is Flat” changed all of my perceptions about the effects of globalization on marketing.

Tom (p. 357) warns that “niche businesses can get turned into vanilla commodity businesses faster than ever in a flat world.” Companies must constantly assess their competitive strengths and make critical decisions regarding products or services that aren’t differentiated from the competition. Friedman uses the example of the Bank of India. The Bank of India was facing increasing competition and realized that it needed to adopt Web-based banking and become more customer friendly. The Bank of India did an assessment of its core competencies and decided that it needed to outsource data warehousing, document-imaging technology, telebanking, Internet banking, and automated teller machines. Guess who got the outsource contract from the Bank of India? An American-owned computer company. Hewlett Packard.

Today’s marketing strategy is knowing your core competencies and knowing what you don’t do well.

Why do I bring this up? Because nonprofits need to perform, as Friedman calls it, an X-ray of their organizational capacity — before there is a funding crisis. The Virginia Treatment Center for Children (VTCC) was created in 1962 by the Virginia Legislature to provide state-of-the-art service, training and research in the field of child mental health. When the state faced budget cuts and told VTCC they needed to shut down, leadership needed to come up with a new strategy — fast. The lack of stable leadership in the past and fragmented, functional silos within the hospital had caused the staff to feel “under siege.” All were doing their jobs, but did not feel supported by other teams or the state bureaucracy. Asking two critical questions was a brilliant move by administrative leadership:

1. What are the most critical child and adolescent mental health needs and problems in the Commonwealth of Virginia?

2. Within its current resource base, what should the treatment center do to most effectively respond to these needs and problems

Instead of asking “What’s wrong with this institution?”, the leadership asked for people to identify what was right; what critical needs were being met, and how the VTCC could effectively build on those services. The right questions were asked to affirm what was working well. VTCC also sought to stop doing things that it didn’t do well.

Overall, the VTCC sought to establish connections with other human services agencies to provide the services that VTCC did not do well. In essence, the VTCC created a network of service support for the community to enable the VTCC to focus on what the VTCC staff did best. Staff were educated on the opportunities provided by an improved network of services; and a framework and processes to enhance staff communication was developed. As Cohen and Cohen note, “In an era of scarce resources, human services organizations are increasingly forced to establish priorities. The treatment center attempted to establish a balance between responding to a small group of children whose needs required intensive intervention and focusing on enhancing the knowledge and capacity of the broader community through research, training, and consultation.”[1]

[1] Cohen, R. & Cohen, J. (2000). Chiseled in Sand: Perspectives on Change in Human Services Organizations.


Sherry S. Jennings, PhD
Founder and principal of Sound Governance. Sherry started Sound Governance because board leaders need a safe space.

Read more about sherry.
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