Most everyone has figured out that performance expectations keep going up. To put it bluntly, we face the challenge of doing more in less time. And that’s not about to change anytime soon. 

In the past, those with lots of experience fared well. But not today. Experience can hold us back, like running against a strong wind. Experience is about what we’ve done in the past and it has value in a never-changing environment. On the other hand, expertise prepares us for what we must do next so we can face the future with confidence.

The question, then, is how to transition from experience to expertise, from looking backward for answers to looking forward with solutions. Here are 17 ways to do it. 

1. Have the right mindset. Experience short-circuits the thinking process. We go from zero to 60 in a split second. We tear into tasks because we’ve been there before and know what to do. It takes an analytical mindset when entering uncharted territory.

2. Figure out what you need to know. More often than not, problems, misunderstandings, and confusion occur because we didn’t ask enough questions — or, more likely, any questions. We get off on the wrong foot by not knowing what we need to know.

3. Give yourself time. Some say they do their best work in a crisis or at the last minute. It’s also easy to deceive ourselves. Where does that leave us when we run out of time? The answer: In trouble and making excuses. And feeling overwhelmed.

4. Work on it and let it sit. The best solutions rarely, if ever, occur on the first attempt, whether it’s writing a report or working on a project. The human mind needs “noodling” time to work in the background without pressure. Remember, everything can be improved.

5. Avoid confrontations. It isn’t easy, particularly since we seem to possess an “urge to be right,” a gyroscope of the mind. When coming into contact with an opposing view, the mind pushes back to regain its balance. It helps to view it as a signal to take a closer look before having a confrontation.

6. Never assume things will go smoothly. Why do we never get over being surprised when things go wrong? It’s as if someone is playing cruel jokes on us or deliberately throwing us curve balls to cause us grief. It’s best to be prepared by anticipating what might go wrong.

7. Second-guess yourself. To avoid getting blindsided, ask yourself “what if” questions to foresee possible outcomes. Then, when asked about alternatives, you can say you considered various options and why you chose this one.

8. Learn something new. If you can do your job without thinking about it, you’re probably bored and underproductive. The human mind gets moving and stays active by coming up with new ideas, making improvements, and solving problems. 

9. Go beyond what’s expected of you. It’s easy to put up a “I’ve reached my limit” or a “I’m not paid to do that” sign. Everyone feels that way at times. If we do, we can count on dismal days ahead.

10. Be present. It’s easy to be at work and not be present. The average employee spends just under eight hours a week on personal stuff, most of it on email and social media. For those 18 to 34, add two hours a week, according to a survey by staffing firm Office Team. That’s one day a week of not being present.

11. Ask questions. Have you started on a task and get into it only to discover you’re on the wrong track? Most of us have — too many times. It occurs when we’re too sure of ourselves or reluctant (embarrassed) to ask questions. Asking the right questions is a sign that you’re thinking about what you’re doing. 

12. Look for possibilities. Instead of just doing your work each day, take it to another level and interact with it so you get feedback from what you’re doing. Ask yourself: Is it clear? Is it complete? Will the recipient understand it? Is it necessary? Will it make the right impression? What have I missed? Should I start over? Is it time for another set of eyes?

13. Take a chance. It’s invigorating to try something new. You may have been thinking about it for a long time and it doesn’t really make any difference what it is. By taking your mind off all the annoying daily irritations, it can help invigorate your outlook and improve your productivity.

14. Have clear goals. Tedium sets in on any job. One day you realize that what was interesting and challenging is now tiring and unpleasant. Perhaps it’s even intolerable. If so, it’s “goal think” time. Start by asking what you want to accomplish today, then add another for the coming month, and so on. When you know where you’re going, the tedium fades away.

15. Eliminate confusion. We may not be in a position to control the confusion around us, but we can avoid adding to it. We can make sure our messages are accurate and complete so there is no misunderstanding, our address book and other files are current so we don’t need to bother others, meet deadlines so we don’t leave others waiting, and so on. 

16. Raise your standards. Others respond to us based on how they view us. How do they see you? Do they see you as someone who gets things done, who takes quality seriously, and who demands a lot from yourself? Make a conscious decision about how you want to be perceived.

17. Take on a challenge. Nose around to see what you can find, drop a few hints, and even raise your hand. But be sure it’s something you want to sink your teeth into. If it is, you’ll have a great time doing it.

Not only will you get your work done, but it will be more than you thought possible, and you’ll be happier at the same time. Better yet, your employer and your customers will be happier, too.

As it turns out, happiness doesn’t depend on what others do for us, but what we do for ourselves.       

John Graham of GrahamComm is a marketing and sales strategy consultant and business writer. He is the creator of “Magnet Marketing,” and publishes a monthly eBulletin, “No Nonsense Marketing & Sales Ideas.” Contact him at jgraham@grahamcomm.com or visit johnrgraham.com

“This survival of the fittest implies multiplication of the fittest.” — Herbert Spencer

If I told you that virtually every Federal and state government Funding source is evaluating and monitoring the fiscal health and financial viability of your nonprofit organization, would you believe me?

If I asked the question above just five years ago, the answer would have been “maybe.” Now, the answer is a resounding “Yes,” and every tax-exempt organization must evaluate its fiscal viability and understand the financial evaluation methodologies of its funding sources. Unfortunately, as is true with many aspects of government funding, there is no single method used by either the federal or state government agencies. The same issue applies to foundations, grants, and major donors.

The answer to the question changed in 2015, after the collapse and bankruptcy of a New York City–based agency known as FEGS, with $250 million in annual revenue. The Human Services Council of New York City conducted a study after the bankruptcy filing and issued an excellent report entitled “New York Nonprofits in the Aftermath of FEGS: A Call To Action” (available at https://humanservicescouncil.org/wp-content/uploads/Initiatives/HSCCommission/HSCCommissionReport.pdf?q=commission/hsccommissionreport.pdf). In my view, each and every tax-exempt board of directors and management team member should read this report. The report is an excellent analysis of why successful and long-standing organizations can fail fairly quickly. Reading the report may help you to avoid a similar financial calamity.

My recent column demonstrated the increasing need for financial dashboards to be used for purposes of clear and thorough communication of monthly financial results to both board and management. This column will take a deeper dive into how and why financial ratios and operating performance indicators and key metrics can be used to achieve every organization’s goal of accountability and transparency in communicating with board and management.

Two of the most frequently asked questions in any business financial crisis are, “Why didn’t we know this was going to happen?” and “Where were the auditors in warning us about our financial decline?” Unfortunately, the answers to these questions are not readily available from a financial-statement audit or internal monthly financial statements. What can an organization do to provide this key information on a timely basis?

In my view, the most significant benefit in evaluating and anticipating financial decline is a financial dashboard tailored to your specific organization. Visualize, if you will, two sheets of paper — each having four quadrants. The eight quadrants that we generally recommend are the following.

a) Balance sheet financial ratios

b) Operating ratios and performance indicators

c) Salary and Fringe Benefit Ratios and Metrics

d) Billing, program revenue, and units of service

e) Human resources — recruitment, retention, and vacancies

f) Regulatory and corporate compliance reporting

g) Cash flow and capital purchases

h) Projected actual to budget variances and action steps required

This column will be the first in a series of four that will each address two of the dashboard quadrants suggested above. For the record, there is no requirement that you must use the quadrant descriptions above. However, for effective use and communication of your dashboard, we strongly recommend that you use color-coding, as follows:

• Red = a negative variance and possible action required

• Yellow = falling short of the expected target/metric, but not yet of serious concern

• Green = positive results in achieving the target or metric

A variety of research projects have focused on providing business owners and management with a financial-analysis model that can serve as a predictor of bankruptcy or risk of financial crisis. One of the earliest and most well-known models was developed by Edward Altman, a professor at New York University. Professor Altman’s Z-Score Analysis uses financial ratios to develop a score indicating the probability of bankruptcy or financial crisis in a commercial or for-profit enterprise. His model does not readily apply to nonprofit organizations.

Our firm has been providing nonprofit clients with a financial viability and sustainability methodology for more than 20 years. Known as A-Score, from the organization’s edited financial statements, we calculate 12 readily available financial ratios to develop a “score” as a predictor of financial stability and future viability. Each ratio is assigned a weight in the calculation. The resulting score is based on a 100-point scale. This assessment tool is most useful on an annual calculation basis. 

However, in the case of financial dashboards, they should be prepared monthly and most likely analyzed in-depth no less than quarterly. You will not be surprised to know that each ratio/metric in the calculation should be included in the first two dashboard quadrants listed above. The 12 ratios used in developing the A-Score are the following.

Quadrant 1 – Balance-sheet financial ratios:

– Ways cash on hand — This represents the number of days that operating expenses of the organization could be covered with existing cash reserves. The target is 30 days or more, and if the investment portfolio is included, the target should be at least 60 days.

– Ways outstanding in accounts receivable — This represents the number of days revenue that the organization has tied up in the process of being paid. The target in this case may vary depending upon the payer sources for your agency and their typical payment terms — for example, commercial-insurance companies may not pay as timely as government sources (example: Medicare, Medicaid) or vice versa. 

– Current ratio — This is a measure of liquidity/cash flow and represents the relationship between assets that are expected to be converted into cash in the next 12 months (numerator) compared to liabilities that need to be paid in that same timeframe (denominator). This ratio has a target level of greater than 1 to 1, with a preferable target of greater than 1.2 to 1. A ratio of less than 1 to 1 will always be red.

– Line-of-credit balance as a percentage of total current assets — The ideal target is to have a zero balance on the line of credit for at least 30 days each year. If a line of credit is necessary for cash-flow purposes, a target level of less than 10 percent is appropriate.

– Ways outstanding in vendor accounts payable — Most vendors expect to be paid in 30 days; therefore, the target ratio is usually between 30 days and 40 days.

– Total liabilities as a percentage of net assets — This represents a leverage ratio and the target level should not exceed 2 to 1. Bankers would generally prefer no greater than 1.5 to 1, unless there is a dedicated revenue source for debt repayment.

Quadrant 2 — Operating ratios and performance indicators:

– Debt-service ratio — This is commonly referred to as “banker’s cash flow.” This ratio calculates the ability of the entity to generate sufficient operating cash flow to pay principal and interest on its debt obligations. The desirable target is greater than 1.25.

– Ratio of net surplus to total revenue — The ability to generate operating and bottom-line surpluses in the nonprofit sector is the lifeblood of financial stability. The federal government is the only business enterprise that has demonstrated the ability to survive decades of continuous deficits. This is clearly evident now that our national debt is near $22 trillion. The desirable target for the operating surplus ratio is between 1.5 and 3 percent of surplus for every dollar of operating revenue. Every tax-exempt service sector may have its own realistic targets for operating surplus. However, the bottom line surplus target after non-operating items should ideally be greater than 2.5 percent. 

– Percentage of total revenue received from the largest single-payer source — Ideally, the target should be less than 50 percent. However, most Medicaid and Medicare providers may exceed 70 percent.

– Administrative expenses as a percentage of total expenses — Gov. Andrew Cuomo’s Executive Order #38 established a maximum of 15 percent. However, most government payors are expecting 10 percent or less. This is just one of the factors driving mergers and affiliations.

– Fundraising revenue as a percentage of total revenue — This target can also vary, but ideally, for mature fundraising activities, the target should be between 2 percent and 3 percent of operating revenues. 

– Fundraising revenue as a percentage of fundraising expenses — Depending upon the extent of and years devoted to fundraising, this target should be between 2 to 1 and 3 to 1. If planned giving through legacies and bequests are relatively common for the organization, a 5 to 1 target is not unreasonable.

You now have suggestions for two of my suggested eight dashboard quadrants. The remaining quadrants will be addressed in future columns.                                       

Gerald J. Archibald, CPA, is a partner in charge of the management advisory services at The Bonadio Group. Contact him at (585) 381-1000, or via email at garchibald@bonadio.com