BIG’s Blog: Leaders in Changing Times

There are thousands of autobiographical and business books that speak about past and present leaders of successful organizations. The authors present the philosophy of these individual as they directed people through difficult times. A nonprofit can learn from past and present business leaders who survived the challenges of their time, while other organizations disappeared.

What are the leaders in today’s fundraising industry doing to help those who rely on you to provide services or jobs? Are you building an organization that will sustain itself even when you have moved on? How do you take the information learned from the past and apply it to today’s opportunities for change? 

It is the responsibility of leaders to make certain that the organizations' strengths of today are applied to the challenges and opportunities of tomorrow. Consider the long-term impact of your decisions. This is one example that affects nonprofits today.

In the late 90s and thereafter, many organizations made the decision to cut back on acquisition. At that time, its cost seemed to be the problem with declining net revenue in the budget. Yes, the costs were significant. The decision to cut back on bringing new names on the file seemed to be a quick and easy fix to meet revenue goals. Was this really a solution to the problem? Today’s donor files indicate the answer is 'NO.' 

Today, nonprofits face even bigger challenges than declining revenue. The result of decreasing acquisition now leaves the organization with a much smaller universe of donors. Postal increases, changing demographics, the threat of possible loss of tax breaks and decline in foundation support are just a few of the challenges of the nonprofit. This does not include the operational demands that confront leaders.

How will the leadership of your organization guide the efforts of your mission through these challenging times? One strategy best stated by David Ogilvy:

"Hire people who are better than you are, then leave them to get on with it . . . Look for people who will aim for the remarkable, who will not settle for the routine."

Nonprofits that look at change as an opportunity and reach out to those with experience to guide them through the process may enable their organization’s longevity into the future. 

-Gail 

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BIG’s Blog: Push Out Costs

You can’t avoid change, but you can avoid costs.


Obviously, Browne Innovation Group (BIG) and other strategic consulting firms can be agents of stability; as in “stabilizing and growing your donations” year-over-year in these times of disruptive change. There are successful models for transforming fund raising organizations.


As your fund raising organization transforms to accommodate change driven by generational shifts, technological communication changes and rising competition for donor dollars, the question is, "What can you learn from other industries that have already been disrupted?"


The New York Times article entitled, Amazon Signs Up Authors, Writing Publishers Out of Deal is just the latest news of a major disruption hitting the book publishing industry.


Amazon already sells more books (both printed and digital) than any other company in the world so they are already putting some book retailers out of business. They build and sell their own Kindle branded e-reader so they are effectively competing head-to-head with other digital devices such as the iPad. And now they are directly signing authors thus cutting out publishers and agents.


Aren’t you glad you’re not in the book publishing business?


We all know that this would not have come about without the Internet. As I have written so often . . . “The Internet changes everything.”


The Internet digital platform has disrupted the very definition of “a book” as well as changing the value-added relationship along the value chain from author to bookseller. Amazon now offers an end-to-end service connecting the author to the reader.


Amazon, in taking out these intermediary separate businesses that acted as a value chain of services in the traditional publishing business model has built a new business model that “pushes out costs.” This new business model allows the book to sell for less but also allows the author to make more money. And, of course, Amazon makes money all along the new value chain which they essentially control.


What can fund raising executives learn from this?


The same Internet-driven disruption that is changing the book publishing business will also affect the fund raising industry. As legacy modes of donor communication become less profitable, fund raising organizations will move more heavily into digital communications. The unexpected benefit of this will be pushing out costs.


Just like the authors that are the big beneficiaries of what is happening in the book publishing industry, so too nonprofits will see significant increases in net transfers from their fund raising groups as they push out costs.


-Mike


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BIG’s Blog: A Uniquely American Reaction

Something is clearly happening in our country and it is purely American.

This past week, I was traveling on client business. I don’t know about you, but, I can really concentrate and think clearly on planes. It must be the white noise.

I had just read Peggy Noonan’s Op-Ed in the Wall Street Journal entitled, This Is No Time For Moderation and then I read Tom Belford’s The Agitator blog entitled, Who Are The First Movers? In the space of time on one leg of my journey, the two disparate columns merged into a single insight that I want to share with you.

I’ll let you read each column, but here is my synthesis and insight that I gained from merging the two themes. We are all passing through a very significant “moment” where great change is starting to happen so quickly we can see and feel it.

Peggy Noonan points to the Republican Presidential debates and the Occupy Wall Street protests as social reactions to the selfishness and dishonesty on both Wall Street and in Washington. A consensus is coalescing around the fact that both are at fault and real change is needed and is coming. “Moderation is normally the American mood, and good thing too. But maybe on the economy we need something bigger – something more fundamental and dramatic – to get back the old dynamism.”

Tom Belford points to a recent article about idea merchant and author Malcolm Gladwell (Tipping Point, Blink, etc.) who says when it comes to innovation . . . don’t be first. Tom juxtaposes the nonprofit fund raising industry today against the cautious tact suggested by Malcolm Gladwell and asks, “Who gets the ball rolling? Who are the first movers? Personally, I don’t believe in sitting back and waiting.”

Both Peggy Noonan and Tom Belford are reacting to completely different issues, yet they are linked – the problems with our economy and the problems in our fund raising industry – in the moment we are in today in our country.


In both areas, we face turmoil and peril...in the economy, due to selfish and dishonest actions by the leadership on Wall Street, and in the government in Washington. And, in the fund raising industry there is turmoil due to generational shifts, technological changes and increased competition for donor dollars. And it’s all happening now and we live it and feel it daily in our guts.

So what’s happening?

The worm has turned.

We’ve hit a moment as citizens and professionals. We are determining as citizens to change the direction of our government and economy, though this will play out through the election cycle for another year.
But, we’ve also hit a moment as professional fund raisers where we realize incrementalism or inaction are not the traits that built our successful institutions. In this moment we are called to action.


When the real threat crystallizes, both are uniquely American reactions.


-Mike

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BIG’s Blog: Stability or Change?

As you think about the changes that are affecting your fund raising business – some call it disruption – which are you: an “agent for change” or “an agent for stability?”

I don’t know where you come down, but, at Browne Innovation Group, we try to be a stability agent. Our whole goal is that our clients do not experience declines in fund raising revenue even as modes of fund raising change dramatically.

The truth is most institutions are designed not to change. And though “change agents” might have a place in the fast changing commercial environment where a company can decline and fail rapidly, “change agents” are rarely successful in changing institutions. And every nonprofit organization I have come to know is an institution.

What is it that institutions want? One word: Stability. Every nonprofit organization I have worked with wanted stability, even though they knew the world was changing.

Just as fund raising organizations cannot afford to ignore messengers with bad news, they also can’t ignore the help of people and organizations like the Browne Innovation Group and others who are working to align their fund raising strategy to changing environments.

Today . . . more than ever . . . fund raising organizations should be embracing stability agents.

-Mike

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BIG's Blog: Statue-Quo

Can organizations continue to operate using current business strategies? Is it okay for your organization to remain status quo or is there a need for change?

Today’s fundraising world is going through a transformation. Changing demographics and technologies are just a few of the challenges nonprofit leaders face. Executives addressing these opportunities should be aware that a person’s decision making style can affect the success or failure of the organization.

We all have innate characteristics that guide us in our decision-making process. Status-quo is just one of many styles. Executives who make decisions based on status quo are more comfortable maintaining the current business environment instead of looking for alternative solutions.

Status quo decision-making goes back to an individual’s own desire to protect themselves from criticism or failure. This is a safer course of action and more people will follow this strategy when given the choice.

It is true that some decisions can be made using status quo but when making strategic decisions this approach can affect the organization’s bottom line. A status quo approach should not be the standard way of operating. Present alternative opportunities and lead others to carefully assess the pros and cons. Don’t let the organization take the safer course; instead, push the leadership team to think outside  of the box. Mark Twain said it best:

It is not best that we should all think alike;

it is a difference of opinion that makes horse races.

-Gail 

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BIG’s Blog: Who is creating jobs?

Why is it important for fund raisers to watch the number of jobs being created . . . or lost . . . from one media to another?

The U.S. Postal Service has already made one series of cuts to downsize its employee base in an attempt to stop the hemorrhaging of cash.

In another media, a new study entitled “The Facebook App Economy,” professors at Maryland’s Smith School of Business have calculated that 182,000 new jobs have been created in the U.S. by Facebook apps over the last couple of years.

Compare the current plan of the U.S. Postmaster General to downsize the postal employee head count to half of what it was at the beginning of 2011 to the expected growth of Facebook digital-related jobs.

Does anyone really believe that the Post Office is going to be hiring anytime soon?

Does anyone really believe that Facebook’s internal growth and the external growth of companies and individuals plugging into the Facebook ecosystem is going to decline anytime soon?

The point is to develop a strategy for your fund raising group that recognizes the leveling and decline of direct mail, as well as the growth and increase of online media including Facebook.

-Mike

Welcome to BIG’s Blog and yes, by all means forward our blog to your friends and co-workers.