One of the most obvious symptoms of an organization in survival mode – or nearing survival mode – is a lack of margin for new ideas, programs, products or other innovation. A startup has little margin for new things beyond what it is doing – because everything is new. An established organization, however, with little or no resources allocated to new things – innovation, research, development, continuing education, outreach, and so on – is in trouble. When an organization gets to that point, it is entirely dependent on its established products, services and practices, with no room to adapt to changing conditions internally or externally.
Margin is essential to give organizations poise and an assertive stance. Margin allows organizations to respond to changes internally and externally with a level of forethought, forecasting, or at least a level of freedom to think things through before developing an approach to a set of issues. The need for margin exists throughout all sectors of the economy – whether businesses and enterprises, non-profits, charities and churches, or government entities. If there is no margin, any minor changes to the system can send ripples throughout the whole organization.
Financial margin comes about when organizations budget revenue greater than expenses. This allows for money to be available for unexpected opportunities or crises. In addition, over time, this builds reserves so that the organization can initiate more significant undertakings that would otherwise be impossible in one budget cycle.
Organizational margin comes about when organizations prioritize all of those innovative practices we listed above: research, development, continuing education, outreach, training, and even vacation time for staff. This means scheduling time in for people to decompress and do something new, cross-disciplinary or discover something they hadn’t known before. It even gives room for people to practice something that they aren’t as good at as they need to be, in a lower pressure environment – which aids in learning. As organizations staff their programs, services and products, this will require creating space for this kind of innovation in job descriptions, budgets, compensation, workspace and meetings.
Restoring margin will help move a survival-mode organization to a greater level of health and may help it to thrive again.