How many times have we heard the statement, “We need to find a way to do more with less,” or, “These tough times mean we have to cut our budget.” Often, the phrase is said with a negative tone of voice as if we are being asked to do the impossible or sacrifice something precious.
The reality is that it in many circumstances can be done. Often times, we can do more with less. In many institutions our budgets and staffs have expanded and we now have a number of inefficient and outmoded systems. This may not be the case at every institution. However, even if you feel you have a very efficient system, when was the last time you sat down and really looked to see if there was a better way to accomplish specific tasks?
Build it from the ground up:
I believe the statement, “We need to cut our budget!” is fundamentally flawed. If we start with that mentality, we are doomed from the beginning. We need to stop thinking about how we cut things and start thinking about how we build things. Don’t think about reducing resources; think about how you would build your budget from scratch.
We’ve all heard the phrase, “Work expands to the time allotted to it.” My little variation of that is, “Staff sizes expand to the budget allotted to them.” Is your budget supporting a staff structure that is too large and cumbersome? I know your answer to that question is probably, “No, in fact I need more staff!” You may be correct. I would encourage you to think differently about what you do. Don’t think about cutting your budget, think about building it from scratch.
Not talking about Zero-based budgeting
When many people think about building a budget from scratch, they think of “zero-based” budgeting. While that can be helpful, the process for building a budget I am going to suggest is much different. A zero-based budgeting process starts with the same divisions or departments and then each line item starts at $0. I am asking you to do more than that. The question then arises, how do you build a budget and come up with something different than you already have? There are a few ways to approach that challenge.
Building a Budget
Think about value.
When building or rebuilding a budget, it can be helpful to think through every part of your institution and every process with a focus on value. Ask, “Does this process/function/single step in a process add value that students will pay for or donors will support?” If it doesn’t add value, don’t do it! If you are doing something simply because you feel a need to, that may not be a good enough reason. Everything needs to add value. Steps in a process that don’t add value can be wasteful. They waste time, resources, money, and often test the patience of students and staff members. One way to approach this concept is by using the “Lean” methodology. Another way is to ask three questions:
- Who is our customer?
- What do they value?
- How do we build a system that delivers only such value and nothing more or less?
Think about tasks, not jobs or titles.
Rather than thinking about departments or positions or job titles, try to think about tasks that need to be completed and the skills you have/need on staff; then match them. If that means a person would be doing a little with student registration, a little with DMin student advising, a little with financial aid, and a little work as an executive assistant then so be it. Instead of thinking, “We need a registrar,” try to think, “We need someone to track the courses in which a student is registered.” By doing this, you will find places in your organizational system where there is significant overlap in the skills required to do specific jobs. If you have a great data entry person who loves to do it, why not have him or her focus on the data entry for current students, donors and admissions? In large institutions, maybe you have a team of people that each do a little work in those three areas? There are many ways this concept can be worked out, but it is the approach that matters. If you are building a budget, try not to be constrained by the departments, job titles, and job descriptions that currently exist. Remember, everything is connected anyway. Is there a way to take advantage of that when you are building your budget?
Focus on increasing capacity
When it comes to building a budget which allows your institution to do more with less, the bottom line is that you need to build a system that allows you to increase capacity. Therefore, ask yourself, “What is keeping us from adding capacity? Where are our systems constraining the number of students/donors/alumni we can serve?” For instance, you may have 150 students enrolled at any one time. How do you create systems that allow you to serve 300 students without adding staff? The unfortunate reality in all nonprofit institutions, including seminaries, is that the majority of the budget is related to people. When finding ways to do more with less you will more than likely find ways to maintain or increase your current capacity while using less money on staff. In order to build a budget that allows you to do that, you need to find a way to increase the capacity of each person and process in your institution.
When I say “increase capacity,” I mean increase the number of “customers” an individual person or process can support or maintain. This could involve changing processes, eliminating steps in a process, and much more. The Theory of Constraints is a great way to approach the topic of capacity. It asks you to identify bottlenecks in a system and recognize that your maximum capacity is governed by the capacity of the bottleneck. Manual registration systems are great examples of bottlenecks. You can only register as many students as a human can enter into a system. You may be thinking, “Yes, but we don’t have the finances to automate processes or utilize technology in that way.” Don’t limit yourself to thinking technology is always the answer. Sometimes it isn’t.
There are many different ways to complete a task and set up a system. Many times technology will allow you to complete a task in a different way, but often you simply need to be creative with how the task is being accomplished. For example, at Northern, found a way to handle the financial aid process which simply used better and more synchronized record keeping in Microsoft Excel. We already used Excel, but simply rebuilt our system. By making the adjustments, we saved hours and hours of time for three of our staff members, improved communication, and created a more accurate way to forecast our financial aid budget.
Technology can be a boon – over time.
If there are ways to use technology to automate processes or create self-guided processes for students online, I would encourage you to utilize them. However, please recognize that it will take time for all changes, which require the implementation of new technology, to increase capacity. It will take time for people to get used to and trust the system. New bottlenecks will appear because of the technology. Technology can be very helpful, but don’t expect it to be a magic bullet. Creativity will have a more immediate impact. Technology will have a long-term impact.
Now build it, don’t cut it
I urge you to refrain from cutting your budget. Rather, take some of the information provided here and go build a new budget. If you try to cut your budget, you may be trying to fix a broken system. If you do what you have always done, you will always get the same results. If you merely try to improve what you have always done, you still may be starting with a flawed premise. Have you really looked closely at their systems, structures, and processes with an eye toward building something new. Up until a few years ago, our institution hadn’t. We have since rebuilt our budget twice.
I encourage you to think differently. Don’t think about what you could do to make things better. Think about what you could do if you started from scratch. How would things function? Who would you hire? What skills would you need? What would accountability systems look like? Would you have the same departments?
Let me know what you come up with? How would you approach this challenge? If you successfully managed this process at your institution, let me know what you did!