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© 2020 Power of One Consulting.  305 - 1220 Blackfoot Drive, Regina, Sk  S4S 6T2   ken@powerofoneconsulting.ca

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  • Dr. Ken Thiessen

The Power of One


THE POWER OF ONE

A recent session with a client leadership team yielded surprising results as we worked through an exercise we Gravitas Impact Premium coaches call the Power of One Exercise related to an organization’s cash flow. If we increased our revenue by 1% what would the net impact be on our bottom line?

If we decreased our expenditures by 1% what would the net impact be on our bottom line cash flow?

The exercise involves a thorough review of the organization’s revenue and expenditures and asking the following questions.

1. If we increased our revenue by 1% what would the net impact be on our bottom line?

2. If we decreased our expenditures by 1% what would the net impact be on our bottom line?

Most nonprofit leaders wouldn’t think that a 1% change in position in terms of revenue and expenditures would have much of an impact on the bottom line but when you stop and think about it, a 1% change in position in revenue and expenditures shouldn’t be that hard for most organizations to find. But skepticism reigns supreme at the thought that this might actually have a significant impact on the net bottom line cash number in most nonprofit organizations

This client leadership team was no different. But they fully engaged themselves in the exercise with their financials in hand. By the time they had completed the exercise what would you guess they had added to their bottom line as a result of engaging this relatively simple exercise? $10,000? $20,000?$30,000? You’d be wrong with each of those numbers. They added in excess of $70,000 to their bottom line cash position. If you’re stunned they were even more stunned. Shocked would be a more appropriate term to characterize their response. What seems like a relatively simple and inconsequential exercise can actually have a profound positive impact that can dramatically change the financial future of your organization.

I’ve met few nonprofits who had too big a number in the bottom line cash position number. Okay to be honest I’ve met no nonprofit that had too big a number in the bottom line cash position number. Every nonprofit I’ve worked with and met has too small a number in the bottom line cash position number and most have very little in liquid cash reserves and aren’t sustainable long-term without a significant increase in revenue beyond 1% and an equally significant reduction in expenditures beyond 1%.

THE CHALLENGE

So here’s my challenge to you and your team. With your current financials in hand sit down and do the math for your organization and ask yourself the following questions and keep a running tally of what your financials would reveal in response to these questions.

If we increased our revenue by 1% what would the net impact be on our bottom line?If we decreased our expenditures by 1% in each expense category what would the net impact be on our bottom line?What’s your best guess at what you think the impact would be on your bottom line?

So here’s my challenge to you and your team. With your current financials in hand sit down and do the math for your organization and ask yourself the following questions and keep a running tally of what your financials would reveal in response to these questions.

If we increased our revenue by 1% what would the net impact be on our bottom line?If we decreased our expenditures by 1% in each expense category what would the net impact be on our bottom line?What’s your best guess at what you think the impact would be on your bottom line? So here’s my challenge to you and your team. With your current financials in hand sit down and do the math for your organization and ask yourself the following questions and keep a running tally of what your financials would reveal in response to these questions.


1. If we increased our revenue by 1% what would the net impact be on our bottom line?

2. If we decreased our expenditures by 1% in each expense category what would the net impact be on our bottom line?

3. What’s your best guess at what you think the impact would be on your bottom line? 4. How shocked were you at the actual number?



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