Stage 11: Manage the Recovery Process
Leadership is required in a financial recovery in order to make the major changes in organizational performance necessary to pull out of decline. Good management is needed to keep the recovery process on track. The recovery manager must develop a recovery plan, manage project and government-wide budgets, organize people, monitor progress, and hold people accountable for results.
Develop a Recovery Plan
The recovery plan is a comprehensive document that lays out a detailed program of recovery. The plan is built around long-term goals that define what a recovery looks like. The goals are supported by strategies and detailed initiatives. Each initiative should describe the proposed action, who is responsible, the implementation schedule, required resources, and the anticipated impact on the recovery effort. The plan should also include a detailed financial projection for the first year and summary-level projections for the next three to five years.
Senior management should develop the plan. External consultants can help, but they should not play more than an advisory role. It is crucial that senior management own the plan.
A team approach is recommended for developing the plan. Under this model, cross-functional teams analyze different areas of the organization and suggest strategies. The recovery manager must define the objectives for these teams, the tools and processes they will use, and then help keep them on track.
Implement a Recovery Plan
- Project Management. Project management keeps all participants on-task and weaves various tasks from across the steps of the recovery process into a coherent whole.
- Progress Reporting. Successful implementation of the recovery process requires managerial discipline:
- Sticking to agreed schedules
- Agreeing to action steps and recording them
- Following up
- Communicating what you are doing
- Implementing Teams. Strongly consider using temporary, cross-functional work teams to carry out the implementation. In addition to providing support to the core recovery team, this will help the organization become more proficient at teamwork. Teamwork is essential to becoming a high-performing organization. Teams also help employees feel that they are part of the solution, thereby reducing their anxiety about the recovery.
Managing the Budget Process
There are special considerations when managing a budget during a time of financial distress and recovery.
- Line-item Controls
- Budget Amendments
- Position Controls
- Encumbrance Controls
- Budget Transfers
- Salary Savings
- Informal Contingencies
- Formal Reserves