By Melanie Lockwood Herman

While visiting family this week the subject of Bobby McFerrin’s song, “Don’t Worry, Be Happy” came up in a conversation about traffic on Cape Cod during the high season for visitors. “Don’t Worry, Be Happy” was released in 1988 and became the first a cappella song to reach #1 on the Billboard 100. The record won three Grammy awards in 1988, including Song of The Year. While I really have no idea why some songs wind up at the top of the industry charts, my guess is that an easy to remember tune and universally appealing message contributed to the success of “Don’t Worry, Be Happy.”

While discussing the “don’t worry, be happy” philosophy for coping with seasonal traffic patterns, I interjected that worry often inspires a closer look at risk management, which is a good thing for those of us in the worry management business. While acknowledging that worry is “good for business,” I agreed that on a personal note, I want to live in a world where happiness is on an upswing and worry is declining.

One topic that generates a fair share of worry on the part of nonprofit executives is the fear that the unhappiness of a key stakeholder group—volunteers, clients, board members and donors—puts a nonprofit’s mission and future in jeopardy. For example, last week I spoke with a reporter for the Cape Cod Times about a situation that is no doubt causing worry among leaders of a local museum: a donor’s demand for the return of a sizeable contribution. While few nonprofit leaders are facing unhappy stakeholders in all categories, and thankfully the request that donated funds be returned is rare, in many nonprofits it is common to find examples of discontent within at least one key stakeholder category. And our Internet Age is in part responsible for the unprecedented speed with which unhappiness travels throughout a network of members, volunteers, or donors.

Last week I explained to a senior leader at a new client organization that it is impossible to eliminate the risk of an unhappy stakeholder. Managing the risk of stakeholder discontent requires doses of risk management activity in two key areas: (1) planning, and (2) response. Risk management planning involves thinking broadly about how risks arise and the steps you are taking to maximize the positive benefits of risk-taking and minimize the potential downsides. Risk management response invites consideration of how you will capitalize on upside risks and respond when downside risks materialize. For example, on the planning side it’s important to reflect on the events, incidents or experiences that could give rise to stakeholder discontent or delight. The following questions will help you get started:

• What events or circumstances have triggered stakeholder unhappiness in the past?
• What events or circumstances have rallied strong stakeholder support?
• Are there one or more stakeholder groups (e.g., the volunteer workforce or board) where discontent seems to be brewing? What do we know about this group and the possible reasons for growing discontent? What do we know about the reasons for growing unhappiness? What practical steps might we take to turn unhappy stakeholders into strong supporters?
• Is there a group of stakeholders whose support and commitment is on the rise? What do we know about the reasons for this trend? How can we tap into what we know to strengthen support and confidence in other stakeholder categories?
• What aspects of our work or mission are often or sometimes misunderstood? Why?
• What are stakeholder groups saying about us in the blogosphere?

On the response side, ask:

• How do we rate our past responses to complaints from donors, consumers, employees, volunteers and board members?
• Who in the organization leads the charge in terms of responding to complaints or negative feedback from members of key stakeholder groups?
• How strong is our commitment to listen and learn from our stakeholders?
• What do previously unhappy stakeholders have to say about our willingness to listen?
• Are we proactive with respect to inviting departing board members, volunteers and donors to share their reasons for leaving?

Stakeholder unhappiness is good reason for worry. But worry won’t advance your nonprofit’s mission without the resolve to harness your worry into a plan of action.

Melanie Lockwood Herman is Executive Director of the Nonprofit Risk Management Center. She welcomes your ideas about any risk management topic, feedback on this article and questions about the Center’s resources at Melanie@nonprofitrisk.org or 703.777.3504. The Center provides risk management tools and resources at www.https://nonprofitrisk.org/ and offers consulting assistance to organizations unwilling to leave their missions to chance.