Posts Tagged ‘non-profits’

Strategic Planning Culture Leads to Non-Profit Success

Tuesday, July 23rd, 2013

By Kathleen Hosfeld

As challenging as it is to find time to create and implement strategic plans, new research reinforces that it’s one of the keys to organizational success. Consistent strategic planning and implementation monitoring practices make the differencestrategic planning hosfeld between moderately and highly successful non-profit
organizations according to a study presented in 2013 at the annual meeting of the Association for Strategic Planning.

The University of Arkansas study surveyed close to 500 non-profits ranging in size from less than $1 million Annual Operating Expenses to greater than $5 million. Non-profits scored themselves on their success level (Low, Moderate, High) on the basis of their overall success and likelihood of success in the future.  What can you learn from their findings?

1. Don’t wait until there’s a crisis

According to the study, 60% self-described Low Success non-profits engage strategic planning reactively when there is either a significant risk or an opportunity, whereas 74% of High Success organizations engage in strategic planning as a matter of routine.

2. Research, metrics and mission/vision discussion key to effective planning

 High Success organizations are twice as likely to integrate evidence-based decision-making (through the use of research), metrics (performance outcomes, industry benchmarks) and mission/vision analysis into their processes. They are far more likely than their counterparts to engage stakeholders via interviews, focus groups or surveys.

3. Follow-through makes the difference

 It’s true in for-profit organizations as well:  Realization of strategic value comes through implementation. While 64% of Moderate Success non-profits had done either a somewhat successful or very successful job at implementation, 88% of High Success organizations had done “somewhat” or “very” successful implementation.

4. Regular progress evaluation and reporting against plan are associated with high success

High Success organizations were more than twice as likely as Medium Success organizations to engage in 1) progress updates in executive staff meetings, 2) annual review of mission/vision alignment with plan, and 3) periodic assessment and reporting. High Success organizations assess and report plan progress at least 3 to 4 times a year or more.

All organizations, small and large, struggle with aspects of strategic planning and implementation according to study. Time is a major consideration. 46% of the High Success organizations say lack of time is a challenge in the planning process; 33.8% say that staff is spread too thin to focus on plan implementation.  In what may seem counter-intuitive, the Higher Success organizations are more likely than Moderate Success organizations to report time constraints associated with both planning and implementation.

Medium Success organizations have different challenges that may also affect their overall success. They report a lack of high-level strategic thinking by leadership (37%) and higher resistance to making hard choices (35%) twice as frequently as High Success counterparts.

The study authors conclude that High Success non-profits have a “culture of planning” that involves a commitment and discipline for planning and implementation.  The evidence of the importance of planning to organizational success from this and other studies is so compelling that the authors recommend that funders emphasize these practices as a means to fulfilling mission.

What you should consider:

  • Develop a planning culture that is committed and disciplined about periodic strategic planning and implementation
  • Utilize research, metrics and mission/vision alignment tools as part of the planning
  • Create an implementation process that involves regular progress reports to the executive level
  • Communicate out progress at least quarterly if not more often to key constituents

The study report can be found here.

The Secrets to Communication in the Twenty-Tweens

Sunday, January 9th, 2011

By Kathleen Hosfeld

Working with a series of nonprofits in 2010, it came home to me that when clients say they want to work on “communication,” they are categorizing activities by the tools used rather than their purpose. Activities that utilized a web site, email, social media, advertising, public relations, or media relations were all grouped as communications, and approached from the same perspective.  The perspective from which these organizations viewed communication was that of “getting the word out.”

“Getting the word out” – essentially one-way communication – is in fact only one method of communication. Although important, it is possibly the least powerful. We call this either information sharing or information broadcasting. It’ the kind that is conveyed in newsletters and websites.  The organization writes and publishes information; the recipient does not revise or shape what is sent or published. At times, the information is shared purely for “awareness.” A reader or recipient is a “consumer” of the information.

In dialogue, by contrast, information is exchanged, and typically something new is created by the parties to the dialogue. Each party brings pieces to the conversation, they put those pieces together, and a new whole emerges.  The information or feedback shared creates something new, beyond information exchange alone. This type of communication is the type that takes place in work groups, teams and in stakeholder engagement.

Communication that seeks to create cultural or behavioral change is a third type of communication, and it begins with a point of view about the change that is desired. Behavior change and cultural change are two distinctly different outcomes, but the element of persuasion is needed to generate both, and this distinguishes this type of communication from pure information sharing, which is more neutral in tone.  Fundraising and development in nonprofits uses persuasive communication.  Many nonprofits’ mission is to create social change, and they do this with a form of communication called social marketing (not the same as social media marketing).  When we call this marketing, we imply a commercial exchange or money. However, in common parlance people apply the term “marketing” to any type of communication that intends to persuade. In the case of behavior change, the persuasive speech must include a call to action that is specific and intentional.

One of the secrets to effective communication is to recognize the appropriate use of these three different forms. Organizations must recognize that exclusive reliance on “get the word out” communication only works in markets where the audience has no other choices. For most for-profit and non-profit organizations those days ended in the 1960s. If you have competitors or alternatives, your ability to use dialogue and persuasive speech is a critical competence.

Effective programs generally blend all three types of communication together.  Increasingly, organizations are using dialogue as a way to improve their persuasive capacity and to discover unmet needs of their constituents. By engaging stakeholders, customers or donors in dialogue, they better understand what the other needs for a positive exchange.  This underscores the most important component – the ultimate secret – of communications: listening.

Rerouting the brain to enhance marketing performance

Friday, July 17th, 2009

By Kathleen M. Hosfeld

Creating improvement in performance, marketing or otherwise, usually involves change. Many of us are keenly interested in any thing that creates positive change faster and with lasting results. So, I was intrigued when I  read that the science of neuroplasticity has some implications for how individuals and organizations can change. The headline: Focus on Solutions Instead of Problems.

This is something I thought I already knew. In the spring of 2007, we worked with a non-profit board focused on generating earned income from events. In researching what would increase attendance at their events, we tapped market research that explored how similar organizations and similar events elsewhere managed to do well. But one board member was flummoxed. “Why didn’t you research why people don’t come?” he asked.

We had, in fact, studied the surveys that talked about reasons people don’t attend events like his. In fact, the Executive Director of the organization had ordered and studied three white papers on why organizations like theirs had failed. I read those, as well as national studies on the challenges of similar organizations.

In order to turn things around, we had chosen instead to look at best practices of what others had done to solve their problem. What solutions were out there? What was already working? Having practiced “appreciative” approaches like this to marketing for quite some time, I was pleased to learn this fall that the implications of neuroplasticity for creating change in organizations supports this approach. The study of neuroplasticity concerns how the brain can and can’t be “rerouted” to support new ways of thinking and behaving.

According to an article in the Autumn 2007 Special Edition of Strategy + Business, focusing on a problem (“why does this keep happening?”) builds stronger neural pathways associated with the problem. An appropriate metaphor might be that it wears the ruts deeper in the existing road. Making new ideas possible (and new behavior) starts with focusing on solutions instead (“what will create a different outcome?”). Focusing attention on solutions helps build the short-cut between the road we’ve been on and the road we want to be on. So, focusing on solutions that are working is a faster way to create change.
While the non-profit I worked with did not ultimately adopt all the best practices we identified, the result of the assessment was hope. They had previously convinced themselves that their prospects were small. Now they had compelling evidence that others similar to them were making similar transitions and accomplishing their goals.  Compelled by this hope and a vision of greater possibility than they had imagined, they were able to chart a new course, recruit a new Executive Director and embark on a more successful program.
Focusing what you want to achieve, and new solutions to get there, are the keys to faster change and faster marketing results. The full article on Neuroplasticity is here at the Strategy + Business website:  You must register to read it but registration is free.

The Transformation of Marketing

Monday, June 22nd, 2009

An emerging model from high-integrity organizations

By Kathleen M. Hosfeld

The phone rings at our house on any given evening. A member of our family looks at the caller ID. “It’s Evans Glass,” he or she calls out to the rest of the house. The call goes unanswered. This is one of between four to 10 calls we receive from Evans Glass each week. We made the mistake once of talking to someone going door to door offering estimates for window replacements. When we found out that the estimate process would take two hours, we said, “No, this isn’t what we want.” We asked that they not contact us again. They have continued to call. And call. And call.

This is one of the practices that have led to another kind of call – a call to “reform” marketing. These and other common marketing practices “work” for companies – they do result in sales. However, research shows that there’s a long-term consequence associated with intrusive and coercive tactics: cynicism and resistance on the part of consumers. Studies by the American Association of Advertising Agencies and Yankelovich show that from 1964 to 2004, the number of people who say their feelings about advertising have become negative grew from 15% to 60%. Forty-five percent of consumers say that the amount of advertising they are exposed to every day detracts from their experience of everyday life (Yankelovich). Yet, companies are spending more to overcome resistance, doing more of that which created the resistance in the first place. This is a vicious, self-perpetuating cycle.

What’s to stop it? Some believe that more regulation is the answer. While regulation and public policy always play an important role in systems change, a change from within – a transformation – will ultimately reach parts of the system that regulation can’t touch. Pioneering firms have been blazing this trail for almost two decades and research is starting to show that companies that take a higher road are achieving higher returns as a result (Studies by Sisodia, Raj, Jag Sheth, and David B. Wolfe in 2007; Sully de Luque et al. in 2008; Kearney in 2009).

The Emerging Model

Consider this article an introduction to a much wider conversation about how pioneering firms are transforming marketing. To start that conversation, I’m offering a 50,000 foot level management perspective of the model of marketing that is emerging as an alternative to the vicious cycle described above. This includes sustainability and the triple-bottom-line, but this is not a model of sustainability marketing per se. It’s meant to suggest a model of marketing that is emerging in companies who have made sustainability a way of life and are continuing to evolve. I have avoided references to tactical execution and, for now, case histories. I’ve avoided elements that might be more appropriate for specific industries (hard goods manufacturers), and tried to synthesize elements that are universal to all firms.

In working with clients, I often translate assessments into “Key Issues” for the sake of simplifying what must be addressed to accomplish their objectives. Key Issues are sheltering wings under which a variety of other issues or factors can find a home. In the following diagram and texttransformation-of-marketing-hosfeld-dot-com, I frame three “Key Issues” for transforming marketing, and some (but not all) of the factors they represent.

A Fundamental Assumption: The most important difference between companies that are transforming their marketing practice is their interpretation of the purpose of marketing. In traditional practice marketing is about “selling stuff.” This follows the perception of the purpose of the business, which is to create profit. In firms that are transforming or have transformed marketing, marketing is about creating value for stakeholders – not as a means to an end (profit) but rather as the end in itself. Within this shift, profit is the measurement of how well the organization is achieving that end.

Embracing a Systems Perspective – A competence required for this emerging model is the ability to navigate complexity and engage with diverse, complex, adaptive systems. In transforming marketing, this includes issues such as:

Adopting a Multi-Stakeholder Orientation – In transformed marketing, the organization enlarges its focus from stockholders to stakeholders who include investors, employees, customers, partners and society. The intent is not to “manage” stakeholders but to serve them.

Cross-Functional Collaboration – In the traditional paradigm, marketing is frequently siloed and given increasingly tactical focus. In transformed marketing, value creation for stakeholders (marketing) is everyone’s job and requires cross-functional collaboration across departments – finance, human resources, manufacturing.

Industry Collaboration and Partnerships – Organizations transforming marketing are not isolated competitors seeking dominance and hoarding information. Rather they participate in industry collaborations to advance standards or other initiatives for the benefit of stakeholders.

Reclaiming the Marketing Mix – In traditional practice, marketing has increasingly focused on sales and promotion due to an emphasis on measurement. Organizations that are transforming marketing seek to maximize stakeholder benefit through all aspects of the marketing mix (product, price, promotion, distribution/sales). These marketing decisions may not take place in the marketing department per se but through cross-functional collaboration.

Creating Social Good – A radical departure from serving simply the profit motive, to one that says profit is the measure of how much value or benefit the firm creates for stakeholders. This includes issues such as:

Purpose and Culture Founded on Ethics and Responsibility – There’s a constant focus in these organizations around “doing the right thing,” which begins with purpose and a culture that supports ethical action.

Defining Success Beyond Profit – Financial measures are insufficient determinants of success for many organizations who care deeply about their impacts on the environment, on customers, on employees, vendors and more. Whether it’s two, three, four or more “bottomlines” – transformed marketing evaluates success in more than financial terms.

Organizational “Calling” – Those practicing transformed marketing are guided by goals that serve a shared understanding of the organization’s “calling” or intent to create stakeholder (or world) benefit.

Sharing Power in Exchange Relationships – Transformed marketing seeks to create partnerships with stakeholders in which power is shared. This capacity separates these organizations from those that are merely well intentioned, yet feel entitled to cajole customers into decisions that are “good for them” or to “sell what we make” without meaningful input from the customer or market.

Living the Brand – From one perspective brands are “perceptions” that are created to influence purchase decisions. In organizations practicing transformed marketing, however, the brand IS the company, and the company lives the brand. It’s not perception. It’s reality. Branding campaigns seek to create awareness of that reality, not to create it virtually. Elements of this include:

Brand Rooted in Clear Differentiation Strategy – In transformed marketing the brand is rooted in a solid business model that articulates a long-term strategy for creating value for stakeholders distinct from that of other firms. By contrast, head-to-head competition or competition on perception alone reinforces the vicious cycle of promotion to compete, leading to ethical “trade-offs”, and a firm-centric view.

Operations Aligned to Fulfill Brand Promises – The “operational side of branding” means taking the brand deeply into every aspect of the organization. This requires translating the implications of the brand for the day-to-day functions of departments. Representative questions to ask in this process include: What type of person should we hire to reflect the brand values? How does the brand change what our office looks like? How do I need to share information with other departments in order to help them live the brand?

Commitment to Stakeholder Benefit – The “right thing to do” in a transformed marketing environment is a radical commitment to making sure all aspects of brand execution translate into benefit for stakeholders. This includes ongoing reflection and action concerning methods of creating products/services, their features and benefits, the materials they use and the transparency with which the supply chain is managed.

Continuing The Conversation

Although the era of sustainability shines a brighter light on companies who practice marketing in this way, many companies – including ours and our clients’ – have been marketing in the spirit of the emerging model for years if not decades – long before frameworks for sustainability or the triple bottom line were as accessible as they are today. As more organizations adopt social enterprise models and similar forms that blend mission and revenue creation, transformed marketing offers an approach that better fits their values.

Many of the companies who have been pioneering in this model have done so based on the intuitive conviction that it was simply “the right thing to do.” We are fortunate in this time that research, including the studies referenced above, is confirming their collective hunch that a seemingly radical commitment to marketing that works for all also turns out to be a good way to make money. Many today are trying to approach the triple bottom line from a single-bottom-line perspective. Perhaps now there’s enough empirical research to encourage such firms to explore this emerging model more deeply.

There are many stories to tell and many interrelated ideas to unpack as we continue our own exploration. We’d love to hear from you about your experiences, ideas and questions.

Marketing Strategy: No Small Change

Tuesday, April 28th, 2009

change-model-chartOrganizations Can Experience the Stress of Change When Implementing New Branding or Marketing Strategies

The dynamics of change are challenging for any organization.  Whether reacting to change or initiating change, the ambiguity and fear of the unknown that go with change create anxiety.  It’s made worse when leaders don’t acknowledge that the experience of change is as important to manage as the actual mechanics of doing business differently. The change doesn’t have to be a merger, down-sizing or process engineering to have significant impact. It can be as simple as creating a new marketing program.

In my work helping clients to explore, identify and implement new marketing strategies I’ve seen the effects of change in a variety of circumstances:

  • Addressing declining revenue in a down market
  • Implementing a new marketing plan during the transition of senior leadership
  • Adopting a new brand strategy as the CEO made unannounced plans to leave
  • Developing a new strategic direction when an artistic director and an executive director were fighting for control of an arts non-profit

The lessons that are emerging from these and other experiences reinforce a number of best practices of change management. Emotionally-intelligent and systems-oriented practices help carry organizations more successfully through change.

See the Whole System – A systems perspective is one that recognizes that our current situation is the result of the interaction of multiple elements. There are many lenses through which to see and define the elements of a system. One, the integral model, suggests that there are subjective and objective aspects of human systems. Objective elements are those that can be demonstrated and observed. Subjective elements are thoughts, beliefs and feelings.  Many organizations seek to drive change by attending only to the objective elements. Increasingly however, they are finding that success comes from attending to the subjective ideas, beliefs, passions and perspectives taken by individuals and shared culturally. Attending to those subjective areas – the “soft” stuff – means taking care of the emotional side of change.

William Bridges is known for his simple but useful model that highlights the emotional challenges of change. Organizations beginning a change start with an Ending. From there they move into a Neutral Zone where there is an intentional effort to move to a new end goal. Arrival at that end goal constitutes a New Beginning.

For organizations or individuals who have had change forced upon them, the first phase, Endings, is a phase of grief and loss. Time must be spent at this stage of change to recognize what is ending, and notice what is not ending.  For those who are initiating the change, there may be less unwanted loss, but something must be given up in order to move forward. As painful as this time can be, the next phase, the Neutral Zone, can be even more challenging. In the Neutral Zone, we enter the unknown, a time of new learning, where risks must be taken to find solutions that take the organization toward its goal.

Acknowledge and Mitigate Anxiety — Organizations facing the unknown experience anxiety. The members in these organizations act out their anxiety in a variety of ways. Finger-pointing, blame-shifting, detachment, passive aggression, aggression, and scapegoating are among the behaviors that show up in the Neutral Zone. Trust, or lack of trust, can be a significant factor in change. Many are suspicious of who is behind the change and who will benefit the most. A lack of clear leadership will bring out aggression as individuals seek to impose a sense of order. Perhaps most important to notice is a tendency to personalize the anxiety of change and make friction or problems experienced in the change process a particular individual’s fault.

A variety of techniques can be used to address these behaviors if they arise during the implementation of a new marketing strategy or program. Perhaps the most important step to mitigate anxiety is openly acknowledging it and providing safe places for that anxiety to be expressed.

Leadership Sets the Tone – How is the top leader (or leaders) in the change reacting? Are they anxious? Are they risk-averse? Do they love learning new things and taking on new challenges? If the leader is anxious, the organization will be anxious. If the leader is not clear, his or her direct reports will be unclear. They will believe he or she has a plan and just isn’t telling them what it is. If the leader feels comfortable taking risks and making mistakes, he or she will make that okay for everyone else. That’s important because transformational and adaptive change means stepping into the unknown. Mistakes will be made. That’s how we learn the new way.

So, leaders in change must be aware of their own receptivity to change. Those that are anxious should find outside resources for support and not expect emotional reassurance from their employees. Those leaders who thrive in change need to be sensitive to those who are less comfortable and not label them as “the resistance.”   Frequent communication about the change, clarifying where the organization is in the change process, and providing hope for a positive outcome are some of the greatest gifts leaders can give in a transition.

A more detailed unpacking of the Bridges model will provide additional insights for organizations going through change. John Kotter’s model for leading change in organizations also provides a series of action steps leaders can use to address the points above as they plan and manage the change.

Social Enterprise and Non-Profits: Holding Mission and Financial Sustainability

Monday, April 30th, 2007

By Kathleen M. Hosfeld, President

Anyone involved with non-profits – as an employee or board member – is concerned with their long-term financial sustainability. Increased competition among non-profits combined with declines in government funding and changing patterns in personal philanthropy have forced many to look at new sources of income to stabilize or strengthen their bottom lines.

Enter the concept of social enterprise. Technically, both for-profits and non-profits can be social enterprises. The new definition of social enterprise, adopted by the Social Enterprise Alliance is: “An organization or venture that advances its social mission through entrepreneurial, earned-income strategies.”

But, as Alliance board member Kirsten Gagnaire pointed out during the organization’s April 2007 national Gathering, for-profits that start out with a social mission (think Flexcar, Great Harvest Bread Company, Seventh Generation) frequently have the inherent entrepreneurial strengths to figure out how to balance mission and profit. Non-profits that have historically seen the world through the lens of those without ability to pay have unique challenges in learning how to court those who can.

Social enterprise is not a new phenomenon. Since the early 90s, our firm has worked with visionary non-profits seeking to change the traditional industry ratios of earned to unearned income. In the Pacific Northwest, there are a number of highly successful social enterprises including Pioneer Human Services and FareStart. Nationally, Goodwill Industries has been pursuing social enterprise since it was founded in Boston in 1902.

Today, more nonprofits than ever before are exploring models of social entrepreneurship in order to survive financially – as well as to expand their mission. Types of ventures include:

  • Developing mission-based products or services for those with ability to pay
  • Creating curriculum or training programs for sale or license to share core expertise
  • Enhanced corporate sponsorships – treated as earned income rather than corporate philanthropy
  • Retail or internet sales of donated, low-cost or mission-based products, and
  • Partnerships with corporations such as cause-related marketing campaigns.

Social entrepreneurship brings new tax and legal questions. When is earned income taxable? What activities threaten our non-profit status? For visionary social entrepreneurs there’s the challenge of financing growth. Where do we find patient capital to either start a venture or bring it to scale? For many non-profits there’s the difficult cultural shift from working only with those without ability to pay to working with people who can pay. How do we do that without feeling like we are “selling out?”

A common issue for those exploring social entrepreneurship is finding the right fit. Too often the earned-income venture can seem like a “thing apart” — separate from the “real work.”  That’s just something we do for money.

Through an appreciative analysis of an organization’s assets and competencies, however, would-be social entrepreneurs can align their income-generating initiatives with their mission, values, and constituents. Doing so brings earned-income initiatives closer to what organizations feel is their “real work,” serving both mission and the organization’s need for financial sustainability.