Krcb

KRCB

Date: November 14, 2006

To: CEO

From: Vikas Doddapaneni

RE: Internal & External Strategy

This memorandum analyzes the internal/external concerns as well as the current and future concerns of our company. There are many challenges for management within nonprofit organizations. While the primary objectives and methods of operation differ between nonprofit and for-profit organizations, executives of nonprofit organizations should use a strategic approach to managing and positioning their organizations.

KRCB is facing numerous challenges due to their strategic plan. These include: intense regional competition, industry consolidation, increased operating costs, technology changes (digital conversion), a declining number of volunteers, a plateau in memberships, and a loss of underwriting from local businesses.

These concerns must be dealt with properly as we move into the future.

The issues that need to be answered within this memorandum are what changes we need to make on our strategic plan to improve our financial performance. KRCB is facing various problems externally and internally. The external problems consist of stagnating memberships by customers, increased regional competition, changes in digital technology, fundraising prospects, declining number of volunteers, and decreased underwriting from local businesses. The internal issues we are currently facing deal with our strategy for the future, cash flow, volunteers, and employees.

Our station plays classical music and in order to keep our membership up, we need to offer a various blend of music which will boost our value to our members and increase membership. Increased competition coming from KCSM, KTECH, KQED has resulted in a loss of members. We are currently losing the TV audience because of changing broadcasting model i.e. Dish network and devices such as TIVO are now enabling viewers to cut out commercials which are vital for our company.

As a company we do not have a strategy. Our present strategy is just a summary of intention and lacks well defined goals. Our scope is too broad and our strategy cannot be measured and does not have a timeline. As well our current strategy does not address the current environment. Our cash flow issues deal with increasing operating costs, flat membership base, cash underwriting is off target, poor advertising sales, underperformance of auctions, and the need to acquire funds for land purchase.

There is a decrease in number of volunteers can be attributed to increasing of fundraising cost. Volunteers are key in station operations and there has been a decrease in the number volunteers. This is due to the fact that volunteers have little or no motivation to volunteer. Also, the volunteer manager position is not filled and there is a weak volunteer recruiting program. There are also issues with operations and employees. There is a high employee turnover and essential positions are unfilled. There is also outdated equipment.

Recent changes have led to the need for a new strategy for KRCB. Our future strategy must assess the following: employee turnover, increasing membership and fundraising, declining volunteerism, and poor performance by the radio station. By changing the current cultural artifacts, we can seemingly change operations within our company for future success.

Employee turnover is too high and change must occur. There is no system in place to keep employees from leaving. We must make our employees feel valued which will Increase productivity. We need to set goals to be achieved, with incentives for performance. By adding an identifiable value system, new behavioral norms will be set in place. Employees now tied directly to the company's success. With an incentive program in place, low numbers would not be acceptable, and high numbers would lead to bonus for the employees. Exterior and design affects an organization. Improving such could lead to lower turnover and higher productivity. Outdated equipment and surroundings have direct effect on employees and moral. Updating technologies and keeping an aesthetic office place will decrease turnover.

Volunteers have a direct effect on the success of our stations, without them we can not survive. In order to keep volunteers, incentives must be offered. By offering incentives and programs, we can essentially offer reason to volunteer besides good nature. Fundraising is