Hard Lessons in Hard Times

By Ellen K. Annala
President and CEO, United Way of Central Indiana

Leadership can be painful, especially when you know you have to do exactly what you don’t want to do. This would have been a different article had I written it a year ago. But, I’m writing now, after a week when I laid off seven talented colleagues.

United Way had a good fundraising year. The year before, we had a $2 million increase, and we were able to maintain most of that gain in one of the toughest economies in our history.

However, just as other investors and foundations, we lost 28 percent of the value of our endowment between 2007 and 2008. So in January, our executive staff began tackling the task of reducing our funding plan by nearly $3 million.

Leadership Lesson #1: Leading involves showing others that what seems impossible is possible. When it became clear to me that a large reduction was needed, I wanted to hide from the task. I had been through three other recessions where reductions were required, and they were painful.

As the signs mounted, I implemented some belt-tightening measures. When it was clear they were insufficient, I could no longer avoid the inevitable. I began stewing and losing sleep, a pattern that often helps me gain clarity, and usually in the middle of the night. Then, it was time to make the painful decisions – but, not alone.

Leadership Lesson #2: Leading is not about excluding others from the decision-making.

Though there are times when “the buck stops here” and a leader has to make a solo decision, getting different perspectives results in better decision-making.

While I needed to start the process, I sought my executive team’s involvement to make well-reasoned decisions. At the first meeting scheduled for this purpose, I asked everyone to bring suggestions. The task was daunting. After nearly an hour talking around the subject, I threw out suggestions of big cuts to get us started. At that point, the discussion became more productive.

Leadership Lesson #3: Leading means clear communications and honesty.

As key stakeholders, employees deserve to know what is happening and what they can say. In a changing environment, leaders may not be able to share everything, but recovery is easier when you share what can be shared, the processes you used, and when decisions will be made.

Once the decisions are made and implemented, it’s time to communicate with stakeholders – board, agencies, employees, public at large. In an all-staff meeting, I went over the facts about our endowment losses and the resulting decisions – whose positions were eliminated, who has left the organization and who was being reassigned. I asked our staff to be helpful to those who were laid off and ended the meeting by saying “I’m sorry.” We provided employees with a copy of the press release and a carefully prepared Q & A.

Leadership Lesson #4: Leading involves accessibility.

Younger workers especially need and want access to leadership. As hard as it is with a busy schedule, I had to learn the importance of walking around, asking about employee well-being, saying "job well done," letting employees ask questions and providing assurance that the "sun will come up tomorrow."

After the all-staff meeting, I asked the executive staff to “hang around” their areas to allow remaining employees to talk as needed. Four days later, in an all staff conference, we spent half the day with a facilitator who worked with employees to increase their agility in dealing with change.

Leadership Lesson #5: Leading means focus.

Noel Tichey (The Cycle of Leadership) says every great leader must have a “teachable point of view.” It’s the role of the leader to set the tone, be clear on goals, inspire greatness and model the values of the organization.

It’s now time for us to move forward and figure out how to accomplish our work with a workforce that is 88 percent the size it was a week ago. Our goals in fundraising, volunteerism, early literacy and service remain the same. Even as our employees continue to process the loss of their colleagues and their own feelings of insecurity, my job is to assure them that a year from now we will still be improving the literacy and educational outcomes of children. We will still be supporting vital human services for our neighbors who need help most and we will still be engaging more volunteers and raising more money to meet those noble ends.

After more than 40 years working in the nonprofit sector, I am reminded that it always comes back to mission. When that is clear, everything else falls into place.

Ellen K. Annala has served as President and Chief Executive Officer of United Way of Central Indiana (UWCI) since 1998 and is the first female ever to lead the organization. During her decade of leadership, United Way has committed to a new mission and priorities; dramatically expanded the funds under its management; and implemented significant efficiency, accountability and cost-effectiveness measures. Specifically, Annala’s leadership has resulted in focused collaborative strategies with Indianapolis Public Schools to increase the readiness of children entering school and increase the number of children performing at grade level by sixth grade. Fundamental changes have also been made to the way in which United Way conducts its due diligence responsibilities during Annala’s presidency. Additionally, to better serve UWCI’s rural areas, Annala deployed staff to the five counties surrounding Indianapolis, opened offices, established volunteer leadership and shifted some decision-making to the counties. Looking for new ways to improve stewardship, cut administrative costs and increase dollars available for the community, Annala assured UWCI was a founding member of a multi-state United Way collaborative to consolidate certain backroom operations and share services such as information technology and some accounting functions.

Twice (1996, 2007) the IBJ has named Annala to the area’s Most Influential Women list of women who wield power and influence in their respective careers. And, in 2002, the IBJ honored her with their Women in the Lead award in the Not-for-profit/education category. Born and raised in Arizona, Annala earned a master’s from Indiana University School of Public and Environmental Affairs and a bachelor’s degree in religion from Phillips University in Enid, Oklahoma.

Contact Ellen at ellen.annala@uwci.org to share your feedback on her leadership lesson.