Fiscal Crisis Management

Posted Wednesday, March 17, 2010 - 14:53
A crash course in taking the lead

A bad economy has resulted in a painful paradox for libraries: Government, institutional, and philanthropic funding for libraries has been severely cut across the country, while use is at record highs. Providing more service with fewer dollars is difficult and stressful for trustees, staff, and customers as they adjust to reduced expectations and services. Tough times, however, can bring out the best in people and lead to positive change, growth, and wisdom for individuals and institutions. Is this a fictional "Pollyanna" view, fraught with peril, or is there really a way to manage a crisis productively? Business and military experts have plenty of advice to share in the "crisis management" literature.

Most crises are preceded by signals and tremors. For libraries, declining government revenues were in the news long before budget negotiations, so leaders who listened and were in tune with political and economic headlines were able to mitigate funding blows. Other libraries were caught off-guard, since organizations often prefer equilibrium, the status quo, and avoidance of loss and pain until misfortune is certain.

Key questions: What clues did we have about the cuts in library funding? Were we prepared? Do we see further funding challenges down the line? How sustainable is our current budget?

When a crisis hits, leadership must be visible, open, attentive, and reassuring. Leaders don’t panic, and they can achieve a big-picture perspective and wisdom by "leaving the dance floor and going to the balcony"—which is a broad view appreciated by elected officials. Library staff will feel that the danger is retreating when they see the leader is paying attention and has a game plan. Customers will appreciate leadership transparency about the facts that led to service decisions.

More key questions: How have our library’s leaders been out-front, focused, and responsive? How have we addressed staff stress about library changes? What process do we use to make a planned response?

Should the library cut "hidden" costs (also known as salary or benefit reductions) or pass on the pain to the customers by cutting visible and popular hours and services?

History teaches that there can be both harmful and productive public backlash to decisions, particularly when libraries or bookmobiles are closed. The key to successful crisis management is to look to your core purpose, values, and goals as the foundation for every action and decision. Organizations and individuals that focus on their core purpose can weather any storm.

When all library activities seem to be connected to your core purpose, ranking them by use, popularity, and customer preference will dictate appropriate actions. Beware of analysis paralysis: Rock climbers caught in a blizzard know that when they are stuck, they have to move, although every bone in their body is telling them not to.

Yet more key questions: What are the core services we must continue to provide, no matter what? What is the most important thing the library does? What does a list of ranked library services look like—what’s at the top, and bottom? How much should the public be hurt by the services we cut and will they deride our decisions or be spurred to advocacy action?

Every library has important assets devoted to its core purpose. At the top of the list is staff. Many businesses have survived tough times by keeping passionate, customer-oriented employees who bond through challenge, and stay engaged and committed. They are close to the customer, know the community, and intuit the short-cuts to use when resources are scarce. Crisis is also a time for trustees, friends, staff, and supporters to come together in their passion for good library services.

Other top library assets include library buildings (valued community spaces), children’s programs (everyone supports children), and DVD borrowing (free/inexpensive compared to entertainment alternatives).

How can we support and celebrate the staff, volunteers, trustees and sustain their morale in tough times? What unique strengths do we have in the community? What assets should we showcase?

If customers feel important and buy into the library’s core purpose, they will be willing to support and sacrifice on behalf of the cause. Given the chance to comment, they may provide new insights. Businesses focus on keeping existing customers during tough times, a strategy that works for libraries—turning customers into donors and advocates.

How will we get stakeholder input to make budget cuts? How can we get them to support our difficult decisions?

Library service cuts provoke strong emotions and community backlash. Library leaders should inform staff and the public honestly and swiftly, with the rationale and reasons behind their decisions. Failure to communicate quickly may result in negative and unanticipated long-term consequences. Getting out front soon allows the library to frame the issues and can limit media scrutiny. Who speaks best for the library? What is our communication plan? How can we leverage media interest for community support? Do we have a plan if customers are outraged by our decisions, and how can we transform anger into action?

Either the library can let the crisis run and keep what it can, trying not to change, or it can use reduced funding as a catalyst to find efficiencies and improvements. We need to determine how our libraries can come out better at the other end of this funding cycle and how we can better prepare for these inevitable ups and downs.

Funding shortfalls and other challenges can be managed effectively by publicly funded libraries by employing these strategies, anticipating additional stresses, and preparing innovative and flexible adaptations and responses.