There are many types of risks that schools face. In this article series we are considering the operational and financial vulnerability of schools. What are these risks and how do we reduce the impact?
There are some identification and prevention similarities with natural world disasters, like bush fires and managing fire danger. As Business Managers and Leaders we need to always have one eye on our school business operations radar, so we know when risk is low or high and can therefore react accordingly. But we can be smart too and implement best practice workflows that are able to reduce risks and prevent disasters occurring.
The impact of risk on critical roles in schools and the effective benefits of outsourcing are one area of reducing vulnerability which we have considered in another article ‘Business Risk & Critical Role Management in Schools’. What we would like to concentrate on here is the relationship between processes and financial risk.
Processes, workflows, systems…
There is always a vast ‘network’ of what we and our teams do at the school. So many, processes, workflows, systems… that have an impact on what we do, effect outcomes for the school and are all associated with some level of risk. All of these processes ‘sing to a tune’ directed by many levels of compliance and legislation.
- Employment law
- Funding deeds
- Contract law
- Privacy law
- Enterprise Bargaining Agreements
- Accounting Standards
Compliance requirements and issues that affect the school’s processes and workflows must be managed before impact of any crisis and processes must be able to adapt to compliance changes.
So, how do schools setup processes best to be crisis ready?
“In order for any business to succeed, it must first become a system so that the business functions exactly the same way every time down to the last detail” [Rick Harshaw]
In any context, success changes according to our priorities. It is especially the case in a business and no different in schools. When a crisis or fundamental event occurs in the school environment, often the definition of success is now a response to the current issue rather than the strategic objective at beginning of year. Also, many of the processes that occur within the school’s business function must still operate exactly as they did in a ‘normal’ environment. How automated and reliable are the business function processes in your school? The ability of reliable systems to adapt and, therefore reduce the vulnerability of change, is absolutely critical to the school’s success.
“Organise around business functions, not people. Build systems within each business function. Let systems run the business and people run the systems. People come and go but the systems remain constant” [Michael Gerber]
As we discussed in Part 2 of this article series, it is so important to analyse school business function activities, to establish which activities are best done onsite, collaboratively or outsourced. Not all processes need to be completed physically on site, neither manually or by school staff. People come and go…especially in crisis. Not just because of employment termination either, what about when your team are forced to work from home, what about extended personal leave, what about moving inter-depart or to another project to tackle another priority etc. Ask the questions about every business function, do the staff member need to be there to fulfill the process or can it be completed off-site or online or preferably can it be automated using software? The key is to have a system around each business function because then the people are able to adapt, change and respond to what is going on around them in the environment but the critical business processes remain constant.
“For a business to survive and thrive, 100% of all the systems must be functioning and accountable. For example: An airplane is a system of systems. If an airplane takes off and the fuel system fails, there often is a crash. The same things happen in business. It’s not the systems that you know about that are the problem – it’s the systems you are not aware of that cause you to crash” [Robert Kiyosaki]
Aeroplanes are indeed systems of systems and so are great metaphors for effective systems in any business organisation including schools. The risk presented when flying a plane is the same presented in business, systems you are not aware of are those that cause you to crash. The reliability of the plane’s systems and the information communicated by the instrument panels is most important for the pilot when there is a situation (e.g. bad weather) away from the normal operation of the plane. Same in schools. You need to know what isn’t working, the subsequent operational impact, which data needs to be reported on…and more so in a crisis.
“If you need a new process and don’t install it, you pay for it without getting it” [Ken Stork]
Opportunity Cost is the forgone benefit that would have been derived by an option not chosen. We see this happen far too often in schools. Its back to the ‘but we have always done it this way’ or ‘the impact of the change is too hard’. Also, the immediate cost outlay of implementing a system or automating a process is unjustifiably outweighed against the economies and efficiencies gained by completing the project. Complete a thorough cost analysis and ensure all factors are taken into account, including the effective reassigning to value-added tasks of staff. Schools that don’t implement automation where there is an opportunity, always pay for it and more so!
In the next part of this consideration of balancing competing priorities and preparing for the impact of a crisis, we will look at credible reporting of school financials.