Sunday, January 8, 2012

BIG’s Blog: Disruption

This year . . . 2012 . . . is going to be a critical “decision year” for a lot of fundraising organizations and their leadership.

What’s the scariest word for people managing businesses and organizations today? No, it’s not recession, depression, unemployment or the skyrocketing cost of healthcare. Those are big problems and worries, but nothing compared to Disruption.

Disruption is an existential threat. Disruption is a term economists use to define the effect of organizations failing to reinvent themselves for the digital future.

Sector after sector of the economy has faced the “changing force” of digital disruption.

The music industry was one of the first to face it when a couple of engineers created Napster. Napster allowed people to share their music back and forth without having to buy their own album. The reaction of the music establishment was to get Napster shut down. In this battle they succeeded, but they ultimately lost the war. Today, the old model of distributing music is, if not dead, certainly dying. Remember when Best Buy had a huge area of CDs? Today, the shelves of CDs are gone and Best Buy only sells music online. And now there is and other music sites that are practically like the old Napster.

Why isn’t the music establishment trying to shut down Because even they are seeing the explosion of new artists as the public demands the ability to get their songs online. And the big hook is free music. A new business model for the music industry is emerging and digital plus the Internet is at the heart of it.

And now disruption is coming to fundraising.

Years ago a wise person told me, “Hope is not a plan.”

Guess what? Having a website, doing email marketing or . . . the latest buzz word . . . “integrated marketing” won’t in and of themselves somehow miraculously transition your fundraising into a successful digital model.  

You think that bolting on digital tools to your current fundraising organization is going to carry you to the new fundraising Promised Land?

I cannot install a brand new state-of-the-art Bose sound system in my old 1986 Ford F-150 pickup truck. The electrical system can’t handle it.

Where’s the plan?

Every month we get email and mail requests for proposals to provide comprehensive reviews and evaluations of direct mail programs. Beginning January 1st of this year, we will no longer provide that service. Perhaps a better way of saying it is; “We will no longer waste your organization’s TIME or MONEY providing what is essentially a useless service.”

The gist of these requests comes down to the following: “Our direct mail program has been declining in effectiveness for some years; we need recommendations to make it profitable again.”

Our firm arguably has more experience in direct mail marketing (read direct mail fundraising) than many consulting groups. I personally have practiced direct mail marketing for over 35 years. We could make recommendations that would tinker around the edges and improve performance. But in helping you momentarily improve your declining direct mail fundraising performance, you only postpone dealing with the real issue which is fundamentally transforming the way you think about fundraising and practice fundraising in the new digital world.  

The real issue is that the digital future has arrived for fundraisers.

2012 is going to be a "critical decision" year for fundraisers.


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