Tuesday, February 14, 2012

BIG’s Blog: “Built Here”

After selling the database marketing firm I founded in December of 2000, I decided to put my entrepreneurial and managerial experience to work helping launch start-up technology companies. From 2001 to 2005 I helped run two technology companies along with their tech-savvy founders.

What these young companies had going for them were their young engineering-types who were bringing innovative products and services to the market. What they didn’t have was business, finance, and managerial experience. It was a great fit and it was exciting to be a part of these young and fast-growing companies.

In both companies the engineers were constantly on the lookout for new ideas or variations on existing ideas that might be incorporated into their products and for new tools that would make them better. Most had worked for large aerospace or defense contractors. One of the engineers said it best, “If some company called and wanted to pitch us their product or service, we were all ears. We always took those meetings because you never knew what you were going to see. And if their product or service was better than what we were using, we always bought it.”

The opposite of this insightful approach is the “built here cultural mentality.”

The “built here cultural mentality” pervades the nonprofit fundraising sector. Nonprofit fundraising organizations may agree to a meeting with a potential vendor, but when they see or hear the product or service, their cultural reaction is, “we can build that in-house” . . . “built here.”

I see this cultural attitude playing out in fundraising organizations whether small or very, very large. How else do you explain why late into the 2000s, some very large fundraising organizations maintained – at significant expense – their own home-grown donor management database systems built on outdated computer hardware that in many cases the original manufacturer wasn’t even supporting anymore?

Most of these fundraising groups finally replaced these aging monstrosities but unfortunately the cultural mentality of “built here” still predominates. When the next issue of “change” comes up, the internal “built here” naysayers step up in unison singing the song that, “we can build it better in-house.”

The slight variant of the “built here” cultural mentality that still fits the “built here” thinking process is the use of favored “local” vendors. Forget the fact that the favored vendor may know just slightly more than the internal staff – which is very little – and clearly has no deep or rounded experience with the needed technology or service. And, of course, both internal staff and the favored vendor certainly know that hiring an outside firm would expose the favored local vendor’s lack of expertise and, more troubling, those internal staff that support them. So, the “built here” naysayers keep out new state-of-the-art products or services.

Who loses?

The “built here” cultural mentality has been debilitating to fundraising organizations during the last 20 years of direct-mail fundraising methodology. But, it will be deadly as fundraising organizations transform away from the familiar ways of doing things.

Fifteen years ago a home-grown donor database was a poor choice based upon the cost to maintain and update the inefficacy compared to off-the-shelf donor software solutions. But the organization could still survive.

But the challenges of today’s fundraising environment isn’t about transitioning, it’s about transformation. There is no internal naysayer cohort that can even pretend they can say it can be “built here.” But the cultural mentality of “built here” still rules.


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