Monday, March 31, 2014

BIG’s Blog: Who is Clayton Christensen? Part 1.

Over the last several years in both articles and blogs outside the nonprofit fundraising space, the references to Clayton Christensen are becoming more and more common. Yet virtually none of the 30 or so nonprofit fundraisers I have talked to recently have heard the name . . . hence the Two Part subject for this and the next blog.

Clayton Christensen, or, more correctly, Professor Clayton Christensen wrote a book that was first published in 1996 called The Innovator’s Dilemma.

The major theme of the book is that, from time to time, innovations (technological or otherwise) will arise. These innovations may have the possibility of displacing the existing product or business model of a company or even an industry.

When this happens, leaders face a dilemma because the new innovation never comes fully birthed and ready to displace the existing way of doing business. Therefore, adopting or incorporating the innovation into the business brings with it significant risk of disrupting current operations. However, it is also equally risky to the leader who sees the inherent value of the innovation to lose much long-term by not pursuing the innovation.

The leader thus faces a dilemma based upon this new innovation. The key decision then is how to incorporate the new innovation into the organization to minimize the disruption of current operations, yet allow the new innovation to find its feet so it can grow and achieve its potential.

Examples of both successful adoption and failed adoption are illustrated in the stories of Dayton Hudson Corporation and Eastman Kodak.

Dayton Hudson Corp., based in Minneapolis, was a major regional department store chain. In the late 1950s and early 1960s, a new retail innovation called “discount retailing” had come on the scene and had the potential to significantly impact department stores who were, at the time, the dominant form of retail with names like JC Penney and Sears being at the forefront.

The department store’s business model was to turn inventory twice a year with an average 40% margin. Discount retailing’s innovation was to turn their inventory eight times a year with an average 20% margin.

Dayton Hudson’s management decided that discount retailing was such a threat that if they did not react, their ability to grow as a company could be significantly affected. Rather than disrupt their existing department store business model, they chose to set up a separate operation with its own management team and business plan, and even created a separate name for this new division. Today we know that company as Target. Target has been so successful as the dominant profit generator for Dayton Hudson that the corporation officially changed its name to Target Corporation in 2000.

Eastman Kodak was the story of corporate success from its founding through the end of the 20th century. Kodak was arguably one of the most successful corporations in American history, and through the end of the 20th century dominated photography, owning 89% of the market for film in the United States alone.

In 1975, however, Kodak’s own engineers developed the breakthrough technology innovation for digital photography. Kodak’s CEO at the time, George Fisher, understood the implications of this innovation and the impact it would have on their traditional film business. He set a decade-long plan in place to shift the entire company to digital, even reaching out to young technology companies Microsoft and Apple in distribution partnerships. Yet Mr. Fisher and his successor could not overcome internal resistance to the plan since the film business was still such a dominant product and produced massive profits. Below the level of the CEO, resistance to shifting stifled digital product development. Digital photography product innovation was left to outside companies, and with the shift from analogue to digital post-2000, Kodak’s film business collapsed and are today in bankruptcy proceedings.


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Friday, March 28, 2014

BIG’s Blog: Baby Boomers and Gen-X to the Rescue

Today, baby boomers and gen-xers are closer to retirement than when we started working.

Here’s a contrast for you, though. We are the kings and queens of our fundraising organizations.  Baby boomers and gen-xers are the leaders, the senior people who are calling the shots and running fundraising organizations.

And yet, we are immigrants into this “brave new digital world.” Our kids in their 20s and 30s are the natives.

Because we are the immigrants, we are not as intuitive with the new technology . . . which means we may not see all its possibilities. But that doesn’t mean we can’t learn it … in fact, that is the strength of baby boomers and gen-xers. All our lives we have learned and adopted new technologies.

But this online, cloud-based, digital shift is changing people’s behaviors, including how they communicate and get information. We cannot underestimate how significant a change this is in how we attract and keep future supporters.

This means that our fundraising organizations are literally on-the-line. Digital disruption has already massively changed and affected other industry sectors. Now it is coming to fundraising.

But here’s the good news:

We baby boomers and gen-xers have adopted and adapted to technological change all our lives. We are the RIGHT people, in the RIGHT place, at the RIGHT time to lead our organizations through this transformation.

It’s time to begin setting your organization on the path to being 100% online.

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Wednesday, March 26, 2014

BIG’s Blog: Yesterday and Today

Greg Hampson, the CFO of a faith-based charitable organization in the Northeast that has been through our online program, sent me the following quote from Sovereign Bank’s weekly economic report.

“We stumbled on an old Radio Shack flyer. Featured on the 1990 cover were over a dozen items on sale, including a clunky cell phone, an answering machine, camera, video recorder, computer, monitor, radio, earphones, CD player, calculator, alarm clock and tape recorder. To buy all twelve back then would have put you back $5,200 (in 2013 dollars). Today, you get all twelve products in a $300 iPhone, along with countless other apps. We’ve come a long way.”


And while your head has been buried in the details of fundraising, something similar is going on in our industry. Have you seen what is happening to the prices of technology that fundraisers use? Websites, CRM donor management systems, social media, email systems, and analytic tools? For a fraction of what you used to pay for a donor database, you can build a full online infrastructure.

People … the supporters you want have already embraced online . . . and the tools to communicate, analyze, and engage with them are getting less expensive.

Some fundraisers worry about the “cost” of moving to an online model. Yet when your old fundraising model is in decline and people have already moved online, and the technology infrastructure has never been less expensive …

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Monday, March 24, 2014

BIG’s Blog: The Whole Definition of Building Relationships is About to Change

You see, most of the blogs, articles, association meeting sessions, and consultants you listen to live in the land of marketing . . . but the kings of tomorrow’s fundraising will live in the land of data. And data is uber important in the online world.

The whole definition of building relationships with supporters is about to change.

Yesterday, building relationships for fundraisers was about sending out marketing messages . . . primarily pushed out through direct mail and newsletters. This was how fundraisers communicated with 98% of their supporter base. For the Top 2%, defined as those who gave the largest donations, there were personal one-on-one meetings. In those one-on-one personal meetings, you could learn a lot about the donor, their life, their family, their desires, and what mattered to them.

But for the other 98%, it was pretty much marketing messages that told stories in a one-size-fits-all mode.

Did this work?

Absolutely … up until about 15 years ago.

The aughts were when IT and digital technology began to dominate. From 2000 through 2005, fundraisers didn’t really notice anything different; in fact, direct mail program results kept increasing. But the year 2005 was, for most fundraising organizations, their last really good direct mail program year. And though some organizations still see their top line growing with direct mail, their margins are compressing.


People are shifting their behavior online. Online shopping continues to grow, and online is not only what the public wants, but what it’s already embraced.

Online isn’t about marketing. Online connected to data is about personalizing your communications (a simple email) to supporters, driven by data telling you what the supporter cares about.

Online is interactive. People can actually reply to your message and begin engaging with you.

The whole definition of building relationships with supporters is about to change … for fundraisers.


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Friday, March 21, 2014

BIG’s Blog: My Mother the Car

On a Tuesday evening in 1966, the American television viewing public had a choice in the first hour of primetime programming: the WWII action drama Combat, Rawhide (featuring a very young Clint Eastwood), and the Jerry Van Dyke/Ann Southern comedy, My Mother the Car.

That was it!

Three network executives dictated this extremely limited menu of options. . . one from ABC, NBC, and CBS. These three men divined the taste of 200 million Americans. By the way, My Mother the Car is often listed as either the first or second worst television show of all time.

Compared to what we are used to today, it is almost hard to imagine such a limited offering. Of course, back then, we thought it was normal … and it was … back then.

Today, we still have the three networks I mentioned, but now Fox and public television are new players, plus all kinds of cable networks . . . and now online streaming offerings like Netflix, Amazon, YouTube, Hulu, FunnyorDie, DailyMotion, and Crackle have been added to the list.

And yet … most fundraising organizations today still share their stories primarily through printed direct mail and newsletters. Of course, all nonprofits have Websites, and more and more are using e-blasts and posting on social media. . . and for significant potential donors, some fundraising organizations send out a Major Gift Officer to tell their story.

But think about it from today’s “potential” donor perspective. Most of us look at the envelope of a nonprofit’s direct mail appeal, and if we’re interested, we Google the organization and go to their Website. And for a first time visitor, I would bet your Website gives a good amount of information. But when I come back a few days or a week later, has anything on the Website changed? Pretty static huh?

My mom still reads your newsletters and your direct mail, but my wife doesn’t. And if you send me an email asking for another donation … assuming I sent you one before … I’m probably going to delete it. Sorry.

Honestly, do you respond any differently than me? Sure, you’ve still got my mom as a donor, but she was acquired years ago. I am your present and my kids are your future. How are you doing acquiring baby boomer, GenX and Millennial supporters?

We are long since past that Tuesday evening in 1966. Today’s supporters of nonprofit organizations expect more from you. And the truth is, I know you want to give them what they want.

Over the weekend, go to Amazon and search for the book Difference by Bernadette Jiwa. It’s only $3.99 in the Kindle version. READ IT.

Then drop me an email next week (it’s a quick read) and let me know what you think.

I know you really do want to make a “difference.”

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Wednesday, March 19, 2014

BIG’s Blog: It’s a DIY World

My friend Tony sent me a note the other day with some key insights I think you’ll connect with.

Tony says, “We live in a DIY, a do it yourself, world. There are DIY stores, DIY Websites, DIY books and even a DIY network. And don’t forget the home improvement store that says, You can do it. We can help.”

Nonprofit organizations in general, and fundraising groups in particular, have been very adept at keeping overhead low by doing things themselves . . . and that self-sufficient attitude means that more resources can go to the mission.

But what happens when fundraisers face a situation where the landscape is changing? The brave new online digital world is a perfect example. Not only is it new and challenging to figure out how to operate in this new world, but there is a sense of urgency as they look over their shoulder and see the methods of fundraising they have used for years become less and less effective.

They need a new strategy . . . but to develop a new strategy means learning what they don’t know.

How does the DIY home improvement store help someone who wants to fix up their home? Answer: they offer classes to learn what they don’t know, so they can do it themselves.

So the first step is signing up for the classes . . . then actually going to the classes where you “listen” and “learn.” But listening and learning aren’t enough, are they? To make the change, you have to be “doers.”


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Monday, March 17, 2014

BIG’s Blog: Mobile Is …

Neil Rosen writes for MediaPost’s Email Insider. He recently wrote a post entitled Mobile Is The New Black.

Depending on the study source, mobile devices now account for up to 70% of all clicks and opens. That is astounding!

A year ago most of my readers would not have believed this percentage as we (you and me included) were still doing the vast amount of our opens and clicks on our computers. At a recent fundraising association conference, I asked people who stopped by my booth as well as those who attended my workshop if their habits in this regard had changed in the last year. A large majority said that their behaviors had changed, which adds anecdotal evidence to this finding.

This new reality has a couple of significant and important implications.

First, is your Website optimized for viewing on a smartphone? Try it and see how your Website stacks up. If your Website is merely a miniature (and by miniature, I mean you can’t read it) version of your regular Website … you are in big trouble!

Second, and probably of more strategic importance, is the fact that if you didn’t understand this most fundamental element of being online and how it could dramatically affect your organization’s ability to fundraise, what else don’t you as a fundraising leader understand?

But don’t think you are alone.

With few exceptions, virtually every fundraising leader who has taken our e-learning program started off in the same boat. We baby boomer and Gen-X fundraising leaders are all immigrants into this new online digital world. We’re not natives like those in their 20’s and 30’s, yet we are the ones who are responsible for creating the strategy and tactics to grow revenue in this increasingly digital online society. We have much to learn to be successful in this brave new digital world.

FYI … the oldest person ever to take our e-learning program is an 86-year-old Catholic priest. And today, he understands this and other online strategic issues as well as any 20 or 30-something.

Smartphones are falling in price and are now becoming near-ubiquitous across all generations. And as their use spreads, these mobile devices, including tablets, will dominate how people connect to your organization.

Are you ready to connect with them online?

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Friday, March 14, 2014

BIG’s Blog: Awash in Data … see Infographic

The difference between the professional (work lives) world we all grew up in and the world we are in today is the magnitude of “content” and “data.” It is actually the same in our private lives, but we don’t think about it as much. In our private lives we just call it “information overload” and leave it at that. But in our work lives we can’t say “overload” because that would mean we are not paying attention to something that may be important.

Your ability to use data effectively will quickly separate your organization’s results from those who think they can get by without controlling their data.

Data is the gold vein that we all must tap and it is building every second … every minute … every hour … every day.

How much data? Look at the infographic from the company DOMO (below). In every second of every day, loads of data are being generated.

Every minute …


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Wednesday, March 12, 2014

BIG’s Blog: Changing Habits / Changing Behaviors

A few weeks ago, I was talking to the president of a technology company who paid me the compliment that reading my blog was a part of his morning routine. We all have routines. I get up early and also begin reading my overnight email, blogs, and news.

We all have pretty set routines in our fundraising work as well.

But every single day, literally tens of thousands of people you should be reaching are changing their habits and behaviors where online communications are concerned. Our smartphones do more thanks to Apps. We are all purchasing some form of tablet … and if we’re not, we are disconnecting from where the culture (and our prospective donors) is, let alone where it is headed.

Here at Browne Innovation Group, we don’t make any bones about who our target audience is. Baby boomers and GenX fundraising leaders are the people who stand to gain the most from our online courses. Our habits and usage of online tools and technology is changing our behavior in our non-work lives, yet somehow we don’t connect the dots that people in the real world we live in are disconnecting from the traditional modes of how we connect and communicate with them. We are them!

Oh sure, you don’t want to start just sending emails to that 86 year-old long-term supporter, but what about that 50-something woman you stood in line with at the grocery store? She was scrolling through her smartphone, wasn’t she?

The changing habits and behaviors of your prospects mean you MUST change the way you communicate and connect to them.

With age and experience comes wisdom.

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Monday, March 10, 2014

BIG’s Blog: The Internet and Your Future in Fundraising

Last week Seth Godin wrote a short and pithy blog entitled: What does it sound like when you change your mind?

It was a masterpiece of insight wherein he admitted his own mistake in not originally “getting” the Web. Seth had recently started an Internet company called Yoyodyne.

At the time, we were working with AOL, CompuServe and other online services. The Web was in its infancy, and I notoriously said, “It’s just like Prodigy, but slower and with no business model. I don’t think the Web makes sense.”

Even today, with the exception of my readers who have taken our courses or have hired consultants to develop a REAL Web strategy, most of my blog readers are where Seth Godin was during his eighteen months in the wilderness of not believing in the Internet. You have a Website and even use social media, but you’re not bringing in revenue from Internet channels at anything close to what direct mail appeals deliver … assuming your direct mail is still profitable. So, you don’t trust the Internet.

And yet … there is Charity: water and Charity: water is a nonprofit that started in 2007 and raises 100% of their donations (mostly from small donors) 100% online. In their 2012 fiscal year, they raised close to $33 million dollars. From the commercial world, there is, the online merchant who began in 2000 and NEVER produced a catalogue . . . and today does well over a billion dollars in sales, 100% online.

I understand that this “Internet thing” seems to have been a fast-changing ride since all of us can remember the fundraising world long before the Internet. . . but the future of your fundraising efforts must soon be 100% online, or you won’t have a future.

Take a page from Seth Godin. Learn from his mistake. Change your mind about your future on the Internet.

I’ll let Seth close out this blog with his final thought …

This is one of the assets of youth, and something that’s worth seeking out and maintaining. That flip, the ability, when confronted with a world that doesn’t match the world in your head, to say, “wait, maybe I was wrong.” We’re not good at that. Science brings us overwhelming data about the truth of washing hands before surgery, the age and origin of species, about the efficacy of placebos, and the natural instinct is to push those facts away, rather than find the moment where we can shift our thinking.

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